Luxury Cruise Market Follows The Bouncing Stock Market
Cruise Week

After bouncing back strongly beginning last November, the luxury cruise market took a big drop in April — so big a drop that Crystal Cruises sent a survey to over 2,500 travel agents to try to find out why.

More than 150 agents responded with reasons why their luxury clients were not booking with the same fervour as they had during the first half of the year: 34% cited client concerns of economic uneasiness, 22% cited price, 19% cited disruption of flights due to volcanic ash and 18% cited fear of flight cancellations.

With economic uneasiness being the primary factor, it’s perhaps not too surprising that both Crystal Sr. Vice President Sales & Marketing Bill Smith and cruise sellers attending a recent gala event aboard Crystal Symphony told Cruise Week that sales are tracking in tandem with the stock market. "Whenever the [stock] market is up, we know we’re going to have a [good] booking day," Smith said. "When the market goes down, close the door. It absolutely tracks right on top of [the stock market]."

"Starting in November, business was great; it was blowing off the charts," Smith told gala attendees. "During the first half of the year, Baltic cruises sold out – the first time that I’ve seen it sell out that far in advance. And with really good yields. The Mediterranean went really well, then all of a sudden, come April, the bottom just fell out, for the whole market, not just for Crystal."

The objective in such a market is to communicate value, so Crystal presented analyses comparing the luxury line to its competitors, though such stats seem to depend on who’s brandishing them. For instance, Crystal showed Seabourn with a per diem of $932, but there are Seabourn sailings out there at

$300 per person, per day.

Nonetheless, it’s important that cruise sellers communicate specific components of the value message. "It’s more than just the per diem, it’s what’s included in the value message," Smith told delegates, citing enrichment activities and the $1,000 As You Wish onboard credit as Crystal-added values.

One reason behind the booking slowdown and consumer caution is that people are re-evaluating what is important to them, Smith says. "They’re being more centred; they’re more focused on life; they’re living more in the moment; they’re making their plans more spontaneously," he told the audience. "Wealthy consumers are exiting the luxury ghetto. Bling is out. They’re being much more cautious and much more conservative in what they’re doing and what they’re purchasing."

Again, that’s where the ability to communicate the value message comes into play, and many cruise sellers are not succeeding in that regard, according to numbers cited by Smith. " 65% of wealthy consumers think most salespeople don’t know about the specific products or why the product is worth more," Smith said. "Salespeople should be able to communicate product differences.”

 

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