When Cruise Week speaks to agents about Regent Seven Seas Cruises, the first question is always the same: Will the line continue its inclusive shore excursions policy? Regent President Mark Conroy assures that not only will they continue to provide free shore excursions, but the success of that policy is paving the way towards more inclusive packaging.
Regent's program was launched in the darkest days of the recession after the stock market tumbled. "Only 35% of our customers were retired, so a lot of them were still working, but they had big portfolios," says Conroy. "Those portfolios were getting smaller by the moment, so they pulled back and stopped spending money."
Regent was forced to respond in kind. "Nothing was working," explains Conroy. "Nothing made the phone ring. So we pulled back on marketing."That raised a new question: "How can we create value without discounting ourselves into oblivion?"
Conroy’s big idea was to adjust the packaging of the product. "From my perspective, the value proposition of shore excursions was never very good," says Conroy. "It's embarrassing what the premium and contemporary guys charge for some of these tours. So we said: 'Here's an opportunity. We're going to give up some onboard revenue, but the value proposition is great. Our clients are experienced cruisers who recognize how much a tour costs.'"
Not all RSSC excursions are included in the cruise fare, but the line offers discounted pricing on even its most expensive shore tours. "We included every tour that sold for somewhat less than $200," explains Conroy. "Anything that sold for more than that or had a limited capacity, we charged for [Regent Choice tours], but we always gave a similar savings to those people. So the Alaska dog sledding - most cruise lines sell it for $599; we sell it for $399."
Since the program launched, over 800,000 shore excursions have been booked, 100,000 of those Regent Choice offerings. "It's created a better value proposition for the more exotic tours," says Conroy.
As customer usage of shore excursions soared under the new program, Conroy says client satisfaction for the overall cruise experience climbed. As Conroy notes, for many ports of call, "If the customer doesn't go on a tour, they miss so much."
Conroy gives two reasons why offering a more inclusive product makes good business sense: "1) We're a product that has to be sold, not bought, and 2) We need the agent to be there to show the difference."
Conroy says that if the agent explains all the things that Regent includes, there’s a better chance of convincing the customer. The end result is that many agents who used to tell Conroy they didn't have a Regent customer are now finding some.
With agents earning commission on a more inclusive price, it also deters them from trying to sell independent excursions. Some Regent passengers still take independent shore excursions, but not as many as before. "The vast, vast, majority are taking our tours," Conroy says.
The success of free shore excursions has led to a new program: pre-cruise hotels included in the price. It's meant to address passengers' concerns about getting to the cruise on time. But one difference from the free shore excursion program is that people may not want a pre- hotel.
"A lot of people book their own private tours prior to the cruise, plus some of our great agents are great organizers of extended tours," explains Conroy. "So we decided to give them an option: if they don't take it [the pre-cruise hotel], they get a $300 reduction in the price of a cruise. If they take the package, the agent gets the commission on full price; if they take the credit, it reduces the fare by $300, and the agent loses commission on $300."Conroy says that since the pre-hotel program launched in October, 70% of bookings include the option.
