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cruiseco2010

cruiseco2010

THE WORLD'S CRUISE LINES HOME IN ON

AUSTRALIA ­ AND CRUISECO

By Ian McMahon THE world's cruise companies have turned their attention to Australia which has emerged as the growth market at a time when other markets around the globe are in the doldrums. And Australia's cruise agency consortium, Cruiseco, is taking advantage of the availability of attractive product to develop a range of exclusive packaged product and charters for its members. Dramatic evidence of this was provided earlier this month when a cluster of senior cruise company executives travelled from their overseas headquarters to woo the 150 Cruiseco agents who gathered in Canberra for the consortium's national conference. They were joined by the cream of Australia's local cruise company executives. And the message from all of them amounted to this: Australia's buoyant cruise market is producing passenger growth and yields like nowhere else in the world. We want to work with you to develop further growth and grab a bigger share of this bonanza. Silversea's Miami-based executive vice president and chief operating officer Ken Watson identified Australia as one of his company's three key growth markets and the highest-yielding of all. Also in Canberra from Miami and echoing similar sentiments were Azamara's president and chief executive Larry Pimentel and his vice president of sales and marketing Edie Bornstein, Oceania Cruises' Julie Rose, Seabourn's Doug Seagle and Regent Seven Seas' Alex Sharpe. From London came Voyages of Discovery and Swan Hellenic's Geoff Lawrence and Hurtigruten's Kathryn Beadle who told the Cruiseco agents: "You're professional agents who understand the importance of selling the right products to the right customers. And as our product is different we need your expertise." Carnival Australia chief executive Ann Sherry said her company's global brands (including Princess, Cunard, Seabourn and P&O UK) have sent their ships here because of "the excitement and energy aboard RCC's Rhapsody of the Seas. This charter, which includes tickets to Rugby World Cup games, follows the success of a 2007 Cricket World Cup charter in the Caribbean. Passengers will be able to combine New Zealand sightseeing and usual shipboard activities with rugby events and will be able to mingle with numerous former Wallaby players and other rugby personalities who will be on board at various times. Other major charters being undertaken by Cruiseco include two seven-night themed cruises for music fans (also aboard Rhapsody) ­ "Cruise and Country" and "Blue Suede Shoes". Additionally Cruiseco is organising a Mexican Riviera incentive cruise charter, in conjunction with NCL, for Phil Hoffmann Travel's client, Adelaidebased electrical appliance company Clipsal Australia. Asked about further charter opportunities in the immediate future, Cruiseco chief executive Steve Lloyd said the consortium currently has "more than enough on its plate" and he doubted if it would take on another big ship charter even if the opportunity arose. Nevertheless he and Cruiseco co-founders, Kevin Dale (National Network Travel) and Phil Hoffmann (Phil Hoffmann Travel) value event-based and special interest charters not only because they provide the consortium with exclusive and unique product but also because they introduce many people to cruising and this widens the market. On the river cruise front, Cruiseco will renew its charter of 43 Pandaw Vietnam cruises following a virtual sell-out of the current program (through to September this year). It has also chartered five 12-night Viking Russian river cruises and two 14-night Amadeus river cruises. Meanwhile it is continuing to collaborate with a range of cruise principals on brochures detailing product offers exclusive to the consortium ­ for example, a brochure detailing 12 packages combining Silversea sailings with additional land content and other inclusions.

Cruiseco joins Ann Sherry's crusade for massive cruise infrastructure upgrade

CRUISECO has pledged full backing for Carnival Australia chief executive Ann Sherry's campaign for massive upgrading of Australia's cruise infrastructure. Cruiseco chairman Kevin Dale delivered the pledge after Sherry made an impassioned plea for support during her keynote address to the cruise consortium's national conference in Canberra earlier this month. "I've taken on the navy," she quipped in a reference to her push for passenger vessels to share facilities at Sydney's Garden Island. "I'll continue to campaign but it needs more voices. It's time for you to make your voices heard as well." Sherry's speech also included a ringing endorsement of travel agents as the long-term cornerstone of Carnival Australia's distribution. Her words amount to one of the strongest affirmations of the key continuing role of bricks and mortar agencies delivered by a major travel principal in many years. (See separate story on page 18.) Sherry told Cruiseco's agents that infrastructure investment is perhaps the greatest shared challenge confronting Australia's cruise industry. `We need to be talking to all levels of government to emphasise the need to upgrade cruise facilities, particular in Sydney, which is so vital to our industry's long-term viability," she said. "Much of the `conversation' about infrastructure is pitched with a long-term timeline but I really feel there needs to be a much greater sense of urgency because the need for infrastructure improvement is far more pressing. "Let's put the issue in perspective. "Princess Cruises recently announced some new builds ­ two 3600 passenger ships each 139,000 in tonnage ­ two more ships that won't be able to sail under the Sydney Harbour Bridge. Within 15 years, 85 per cent of the new generation of mega-liners worldwide won't be able to fit under the Sydney Harbour Bridge. We are reminded of that issue every time Queen Mary 2 visits our city. "To be brutally frank, if Sydney's cruise facilities are insufficient to accommodate international cruise traffic, the big ships won't come to Australia and that would be a tragedy for Australia and the entire region. "So much depends on Sydney. Our (Carnival's) global brands have sent their ships here on world voyages because of the excitement and energy of the local cruise industry. And, in turn, their ship visits have helped inspire Australians to cruise. "So much hinges on achieving a solution for east of the Sydney Harbour Bridge with, as we have long advocated, shared use of Garden Island the obvious solution. "We will continue to press for this commonsense decision with the Federal Government and the Royal Australian Navy." However Sherry did not confine her comment to Australia's gateway port. She said she was "horrified" by Townsville's local government's failure to co-operate with Queensland's state government to upgrade port facilities. "Even when we get one level of government across the line another one lets us down," said Sherry. She castigated the Port of Geraldton's stance that ships cannot book berths more than two days in advance. "What nonsense! We're planning itineraries two years out. We're losing opportunities to sell parts of Australia that are just magic," she said. Cruiseco chairman Kevin Dale told Sherry: "You've struck a chord with us. We, as a group, would like to get involved." He said the consortium will discuss with her "what we can do consistently and professionally so that one clear message is coming through".

Cruiseco chairman Kevin Dale assures Ann Sherry that she has the consortium's support in her fight for better cruise infrastructure.

Azamara Cruises' Edie Bornstein gets to know Travelrite's Neville Walliss.

of the local cruise industry" (translation: dramatic growth in passenger numbers and yield at a time when other markets are in a slump). "Australians are the biggest market for Holland America outside North America and the line will be investing more in marketing and promotion here," reported Michelle Taylor, director of sales and marketing for HAL's Australian representative Travel the World. Royal Caribbean Cruises Australia managing director Gavin Smith said Cruiseco was his company's biggest single charter partner and he congratulated the consortium for recognising opportunities to develop business. Centrepiece of Cruiseco's charter program is its 2011 Rugby World Cup cruise to New Zealand

Former banker Ann Sherry vouches for value of bricks and mortar outlets

CARNIVAL Australia chief executive Ann Sherry has drawn on her past experience as a senior Australian banker to warn the country's travel industry against abandoning bricks and mortar travel agencies in favour of internet options. A former chief executive of Westpac New Zealand and the Bank of Melbourne, Sherry said: "We can learn a lesson from the banking industry which thought customers would migrate en masse to the internet and that branches would no longer be needed." This has proven to be "one of the great fallacies of the past decade", she said. "Customers made it clear they would make those choices and these days the banks are reinvigorating their bricks and mortar branch networks. I think we need to take the same approach when it comes to our multiple contact points." While the internet provides many opportunities for engaging with customers, "it's also true that they (customers) want to see the whites of someone's eyes and that someone is you," Sherry told agents attending this month's Cruiseco conference in Canberra. Delivering the conference's keynote address, she provided a ringing endorsement of travel agents as her company's primary distribution channel. Sherry opened her speech with the line: "Apart from our passengers, I can't imagine a group more important to Carnival Australia than travel agents." And in a demonstration that this was more than polite schmoozing of her audience, Sherry returned to the theme later in her address. She acknowledged that agents comprise only one of several channels through which Carnival Australia maintains contact with customers in a "consumer democracy" that also includes online and call centre options. "We have a simple philosophy when it comes to the cruising market ­ we want to keep growing and we want our customers to have every possible opportunity to book a cruise via multiple contact points," she said. "Ultimately people themselves will decide how they wish to make contact whether it is online, via call centres or travel agents... "And quite frankly they are always going to put their faith in travel agents. You are very important to our passengers and you are exceedingly important to our business ... It is my hope that we will be able to build even deeper business relationships." Pointing to the setting up of the P&O Academy and the hosting of 5000 travel consultants on familiarisations, ship walkarounds and onboard functions in the first four months of 2010, Sherry said: "I want to look for more opportunities for us to build these close relationships."

Sherry is optimistic that the industry can make its voice heard on infrastructures issues which, she says, are a threat to cruising reaching its full potential. Her optimism that the threat can be overcome is reflected in exuberant predictions of growth for an industry which already was contributing $1.2 billion to the national economy in 2007/08, according to Access Economics. ("That was a 54 per cent increase on the previous year," Sherry pointed out.) "The number of Australians cruising anywhere in the world increased by 26 per cent in 2008 ­ that was five times the growth recorded in the US market and double the of the UK market," said Sherry. "Yet even after all that, there is still even greater potential for growth. We have barely scratched the surface when it comes to market penetration with around 1.3 per cent here compared to 2-3 per cent in more mature markets." She predicted this season will see the number of Australians taking a cruise holiday go past the numbers travelling to any single overseas destination "eclipsing traditional destinations such as the UK and the US". Sherry brushed aside "conservative" predictions that the Australian cruise industry will reach one million domestic passengers by 2020, based on what she called "the most modest growth prediction of seven per cent". "When you combine international transit passengers we will hit that million passenger mark by 2017," she said. Earlier in the conference Don Clark gave an indication of the sales goals being set as Carnival Australia strives to meet Sherry's ambitious targets. Clark is director of sales for Australia and New Zealand of Complete Cruise Solution (CCS) which markets Carnival brands including P&O Australia, Princess Cruises, Cunard, Seabourn, Costa and P&O UK. He said CCS is aiming to increase travel agents' unprompted recommendation of cruise holidays to 25 per cent in 2010. CCS regularly undertakes "mystery shopper" surveys of Australian agencies and two years ago only 10 per cent of surveyed agents included cruising among their recommendations in response to a general holiday enquiry. By the end of last year, this had grown to 18 per cent "and we're aiming to get it up to 25 per cent this year", said Clark.

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cruiseco2010

You can take the girl out of Adelaide, but you can't ... Esther Fraser (Green Travel), Cheryl Scanlan (National Network Travel) and Christa Kinnear (Phil Hoffmann Travel) forged their friendship back when all three of them worked in the SA capital.

cruiseco2010

The inexact science of cruise pricing

SENIORS Holiday Travel managing director Perry Morcombe knows what he and his fellow cruise agents want from the cruise companies ­ the best deals released to the market first with prices going up over the selling cycle. Leading off a Cruiseco conference panel discussion, Morcombe pointed to the pitfalls of last minute offers that undercut the prices paid by early bookers. "On cruises passengers discuss what they've paid for their `cruise deal' and how long ago they booked and paid, often to find out that the last to book has paid the lowest prices," he said.

Discussing next year's business plan? Excell Travel and Cruise's Robyn Sinfield, centre, swaps notes with Keiran Cromie and Julie Avery from Excell's parent company, Brighton Travelworld.

Cruiseco director Phil Hoffmann, right, says Spirit of Adventure's Captain Frank Allica conducted the most absorbing and enjoyable Antarctica cruise he has sailed on. But these days, Captain Allica, who spends about six months every year at sea, is taking adventure cruises to other destinations. Sunniest smiles at Complete Cruise Solutions final night dinner belonged to Wendy Ellis (Alpha Travel), left, and Karen McLaren (Cruise Lovers).

A hero of Australia's 1999 Rugby World Cup win, Richard Harry, shares the excitement and passion of the event with Cruiseco delegates. The consortium has chartered Rhapsody of the Seas for the 2011 Rugby World Cup in New Zealand.

`If passengers who book late pay less, this is not good. If passengers who book late and pay less get upgraded, this is very not good!'

"This only trains passengers to book late ... If passengers who book late pay less, this is not good. If passengers who book late and pay less get upgraded, this is very not good!" Morcombe said his company's consultants try to encourage clients to book early, pointing out to them, for example, they will have access to the best cabins and choice of dinner sittings. He acknowledged that cruise pricing is an inexact science and 2009/2010 was "a tough year that no-one saw coming". Cruise companies had expected to sell more staterooms at higher prices but failed to do so because their traditional markets, such as the US, UK and Europe, were in financial meltdown. Because they need 100 per cent occupancy to generate maximum onboard revenue, the cruise companies then dropped their prices towards the end of the booking cycle. Morcombe urged them to change passenger behaviour by offering lower early bird deals, moving their prices up over time, even if only marginally, so that early bookers are rewarded. "It would even be worthwhile being too cheap at first, as offers can be withdrawn at any time, so they can put their prices up as the selling season progresses," he argued. He commended P&O and Princess Cruises for initiatives which have changed buyer behaviour. "About four or five years ago, they had a huge number of last minute bookings to fill their ships, which they did with huge discounts. Everyone knew what to do ­ just wait and save," he said. However the lines turned this around with the introduction of the "Select Sailings" system giving passengers onboard credits and a price guarantee. "Our staff now understand and believe this and confidently use it as a sales pitch to encourage early bookings," said Morcombe. He added that the ability to see how many cabins are available through the Polar Online system also helps. It enables staff to "create a

Enjoying the hospitality of Viking River Cruises at Canberra's National Portrait Gallery, from left, Beth Malcolm (Travel Masters), Adrienne Witteman (Trendsetter Travel) and Gerd Wilmer (Landmark Travel). Left: Enjoying pre-dinner drinks ahead of the final night gala dinner hosted by Complete Cruise Solution. from left, Melinda Gregor (Gregor & Lewis Bespoke Travel), Julie Denovan (Seadream) and Marion Picot (World Travel Professionals Southport).

Karin ordinaire iser extra nce organ tches up with Cher Confere ligt, left, ca van der P elcall). e (Trav Rosco

Relaxing after a long day at the conference, from left, Steve O Odell (Silversea), Ken Watson (S (Silversea), Kaye A Asker (Croydon Travel), Kevin D Dale (Cruiseco) and Phil Asker (Croydon Travel).

The singing cruise executive ... Viking River Cruises' Teresia Fors surprised and delighted Cruiseco delegates by bursting into song at the conference's Viking-hosted dinner. Turns out Fors' first paid employment was as a professional singer (at 13 years of age touring her native Sweden in a stage musical company). She is pictured receiving congratulations on her performance from Cruiseco's Steve Lloyd, left, and Brighton Travelworld's Keiran Cromie. We're not sure what Andrew Millmore (Travel the World) said to Karen Christensen (Silversea) but she could clearly see the funny side.

Pandaw River Cruises' John Boyd, right, tells travel scribe David Ellis that Pandaw has one crew member for every cabin.

valid sense of urgency in advising passengers that there are only two or three ­ or however many ­ cabins left and suggest to them to `lock it in Eddie'." "So now, when passengers get on board and meet their new friends, both those who booked a long way in advance at the lower prices and those who booked later at higher prices, will be trained to book early in future for the best deals and the best choice of cabins and dinner sittings." Morcombe was less complimentary about some Europe river cruise companies. He commended one for its refusal to discount during the selling cycle, adopting a "first deal is the best deal" business model. But he said a rival of this company last year offered Seniors Holiday Travel ­ and presumably many other agents ­ a late "two for one" deal. This year, he said, the first company is sold out until October while its competitor has just launched some "celebrity" cruises in an apparent attempt to stimulate sales in the prime month of September. "I just wonder if the `two for one' deals offered last year had an impact on their early sales this year," said Morcombe. He continued: "Like a number of Cruiseco agents, we get offered a half or full charter on European river cruises by wholesalers, but we're not game to undertake these, because those same wholesalers, or their competitors, then come out with better deals along the selling cycle." Gina Maitland (Alpha Travel) said retail agents have to deal with the fall-out of pricing fluctuations ­ "We have the clients in front of us" ­ and, echoing Morcombe, she challenged the cruise lines "to bring out your best deal and pledge this is our best deal and it's not going to get any better". Complete Cruise Solutions' Don Clark assured: "We work very hard to get it right. The last thing we want to do is lower prices. "It's not as though we keep 100 programs up our sleeve and dump them in the market just to screw things up. But at the end of the day we have to sail full. There are onboard revenues that we have to earn." Regent Seven Seas' Alex Sharpe quipped: "I ran revenue management for nearly 10 years. Now I'm in sales and I hate the guys in revenue management. "We absolutely have a plan where we start low and go high and we try to do that gradually." Sharpe said it can sometimes work to the benefit of agents in a market like Australia if a cruise line has to use a special offer to sell a relatively small number of staterooms at the last minute. By restricting the offer to, say, Australia it can be viable for the line also to drop the price for the people in that market who have already booked. However he acknowledged this can hit agents' commission. "Is that disruptive or is it an opportunity (to widen the market)?". Silversea's Ken Watson reiterated his line's new policy that the launch price of a cruise will always be the best available and will gradually increase over the booking cycle.

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