The picture isn’t bright for travel advisors selling small luxury cruises on brands such as Regent, Seabourn, Crystal, Silversea, Viking Ocean, Oceania, Ponant, and Windstar. Most haven’t seen a decent payday in the past two years. Many have gone into debt trying to keep the doors open by spending countless unpaid hours processing cancellations, rebooking, and trying to attract new clients when they have little to sell.
The cruise industry sages predicted that Asia, Australia, New Zealand, South America, and Canada would open to cruise ships carrying fewer than 1300 guests long before now. Then, along came omicron and problems with the domestic airlines. Recent reports of hundreds of infected crew members from the resort ships in the Caribbean being warehoused on other cruise vessels refute the cruise lines’ contention that cruising is now safe.
Many of the guests sailing on the small ships are past retirement age and particularly vulnerable to COVID-19. Most are wealthier, better educated, and have more time to travel than their resort ship counterparts. These old salts are aware of the problems related to cruise travel. They have many other high-ticket vacation options including renting small, private estates in secluded areas, planning stays at Relais et Chateaux properties, and booking small luxury tours by Tauck and Abercrombie & Kent. These options are comparable in price to high-end cruises and now enjoy a better reputation.
Many hardcore cruisers are saying they have gone on their last cruise. The host agencies and travel consortia are trying to help, but there is little they can do to spark 2022-2023 sales because funds for aggressive marketing and technology are so tight.
Those advisors who are independent contractors are in much worse shape. Many ICs are considering closing their doors. What’s motivating some of them try to stay in business is having debts to repay and needing to fund their retirements.
The small ship cruise lines are in somewhat better shape. They have their databases of past cruisers and the financial support of the publicly traded corporations and investment syndicates that can help them survive until 2024. But sending email blasts and one brochure a week to their most promising prospects will not fill the ships.
Their clients expect the personal touch and hate to discuss vacation options over “800 lines.” Most want to know the person at the other end of the line before laying out $30,000 for a family vacation. Equally important, they need to know that the phone rep has at least as much knowledge and experience on small ship cruises as they do.
Many clients want assurance that the cruise consultant who answers the phone is a certified expert who cruises on the small ships at least once a year, and can speak knowledgeably about competing lines. Many of these high-net-worth clients will choose other options, if this kind of cruise advisor isn’t immediately available. Just as important, no one in local communities will do the “missionary work” needed to assure that potential younger small ship cruisers will “drink the Kool-Aid” if local ICs disappear.
The answer is clear: The small ship cruise lines and the independent contractors must join forces to an unprecedented degree. They must each bring the assets the other needs so that the small ships can sail full within two years.
- The cruise lines need travel advisors who are certified as Travel Experts in their brand and have cruised on their ships for years. They need to reorganize their business and specialize in a few brands that don’t compete directly with each other (think GM vs. Ford dealerships).
- The IC’s participating in such programs need to have leads directed to them from the cruise line’s incoming 800 lines and Chat inquiries, weekly payouts on commissions, and most data entry handled by cruise line associates.
- IC’s participating in these programs would have their commissions capped at 10-12% to make this arrangement attractive to both parties. This is about 30% less than the commissions paid to the top host agencies but is likely more than the amounts paid to the cruise lines’ internal sales staff.
Would qualified ICs go for such a deal? If it means relief from generating leads, paperwork, and a predictable cash flow—you bet they will!
This concept isn’t new. It takes a leaf from insurance companies’ playbooks that permit ICs to function as “Approved Advisors” for a limited number of companies. The cruise industry could adopt a similar sales model to supplement those they use presently.
Most of the Approved Advisors will have grey hair. They will be the ones who have cumulatively spent more than a year onboard small ships and diligently read publications like this one.
To become an Approved Advisor of a cruise company, the participants should agree to devote about a third of their time to promoting the brand. The activities would include taking inquiries on the cruise company’s 800 lines and Chat board, solving clients’ problems, and doing outreach activities in local communities and online.
They will also have had to achieve the brand’s highest level of certification as a Travel Expert, and agree to sail at least 20 days a year on the company’s ships at its expense.
Under this arrangement, the cruise lines would only permit, at first, advisors to represent one luxury and one premium small ship brand. This would assure that both parties’ interests would be the same. The transactions would not go through a host agency. The Approved Advisors would also sign non-disclosure agreements that would pertain to the marketing materials and business strategies that the companies deem confidential.
The beauty of this arrangement is how quickly it can start. It would take 3- 5 years for small ship cruise line to build an internal sales network as effective as this one, and the cost would likely be monumental. An Approved Advisor network can be rolled out in as little as 90-days, since the software, marketing data, and the necessary expertise already exists.
The internal sales managers would determine which inquiries their staff would handle directly, and which go to the Approved Advisors. Initially, the cruise lines would only transfer sales inquiries to the advisors when the issues are more complex, the internal staff member is running into difficulties, or the cruise line is likely to lose the sale to a competing company.
The system can be self-sustaining,if most prospective clients are charged a $200-300 consulting fee. The fee could be split between the advisor and the cruise line and would help to ensure that advisors aren’t wasting their time.
However, all sales inquiries from clients who’ve obtained Silver, Gold, or Diamond status with the cruise line could automatically go to the Approved Advisors—since a unique telephone number to call for future reservations and problem solving could become part of the clients’ benefits package.
The host agencies and travel consortia will make out too. Many small ship travel advisors are now a drain on their agency’s resources. If revenue generated by ancillary sales (hotels, insurance, airfare, etc.) go through the host agencies they will also see net increases in their sales. Besides, all these inquiries were made initially directly to the cruise line.
Guests will benefit from these arrangements. They will have access to certified experts who love small ship cruising as much as they do. They will also probably benefit from price competition since in most industries a providers selling into wholesale and retail channels is considered an unfair business practice.
Hopefully, implementation of a plan such as this one will not only provide ICs with immediate relief, but will lead to even greater parity between the cruise lines and travel advisors. Sometimes it takes a crisis such as a pandemic to remedy inequities that have existed for more than a century.
Dr. Steve Frankel and his wife have cruised on most of the Seabourn, Silversea, Crystal, Azamara, Oceania, Regent, and Windstar ships. He writes a weekly column, Point-to-Point, for Travel Research Online (TRO) that’s read by more than 80,000 travel advisors and industry leaders. Steve is the founder of Cruises & Cameras Travel Services, LLC. He has been recognized as a “2021 Top Travel Specialist” by Conde Nast Traveler magazine and a “Travel Expert Select “by the Signature Travel Network. His specialties are luxury small-ship cruises and COVID-19 safety measures, and has a doctorate in Educational Research with minors in Marketing and Quantitative Business Analysis. He’s also earned a Certificate in Epidemiology from Johns Hopkins University. Previously, he managed qualitative and quantitative research in the private & public sectors. He’s a member of the Los Angeles Press Club, and has written 13 books and hundreds of articles. His email address is steve@cruisesandcameras.com.