AGENTS BEWARE

Viking Cruises Going Public: Wants to Boost Direct Sales and Pay Less Commission

Viking Cruises Saturn

Viking Cruises is going public, and it could mean a hit for travel advisors.

Viking Cruises’ parent company has filed for an initial public offering (IPO) in the US. Viking Holdings says it’s looking to expand from river and ocean cruises and do more land-based tour business. It also wants to grow direct sales, which would have a direct impact on travel agents.

“Direct bookings reduce commissions paid to travel agents, which reduces our distribution costs and improves our margins,” Viking said in its IPO filing.

“Direct bookings also provide an additional opportunity for direct contact with our guests, allowing us to build stronger brand awareness and deliver a more personalized experience for our guests.

“With a marketing database that includes more than 56 million North American households, we believe our direct bookings will continue to grow and add value to our business.”

TTG Media in the UK reports that Viking Holdings said it remains committed to travel advisors.

In the filing, Viking Holdings said travel agencies “generate a substantial amount of bookings for our cruises.”

“We are committed to maintaining and strengthening this distribution channel,” the company said in its IPO statement.

“We have preferred relationships with large travel agent consortia, and we employ sales managers in key markets to maximise awareness of our products within the travel agent community.”

Founded in 1997 by chairman Torstein Hagen, Viking has a fleet of nearly a dozen ocean cruise ships and 80 river cruise ships, with more on the way in the next few years.

In the U.S. filing, Hagen said having Viking go public is a “natural move to further solidify our position as a great company”.

“Looking toward the future, we believe there are a number of opportunities for growing Viking,” he said. “We have 24 new ships on order, with options for 12 more. We have also started to enter new markets, such as China and elsewhere in Asia, where we see significant growth potential over the long term.

“Additionally, just as we have expanded our travel platform throughout our history, we are exploring other products, such as safaris and land tours, that would allow our guests to explore more of the world in Viking comfort. Experiences that appeal to our guests’ interests can complement our cruise offerings and would continue to cover ‘white spots’ that still exist on the world map.

“We view Viking as the premier provider of travel experiences for thinking people aged 55 and over.

“Thoughtfully expanding our travel platform further with new experiences that are a consistent extension of the Viking brand would enable us to capture a greater share of our guests’ travel spend,” he said.

Reports suggest the public offering could raise as much as $500 million USD.

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