Industry Forecast

industry forecast â?–

cindy bertram

CRUISE INDUSTRY FORECAST 2011 – INSIGHTS FOR GROUPS

Six cruise line executives discuss the advantages of ocean vacations and their strategies for attracting group business

Port of Miami

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espite the challenges that the economy has dealt to most areas of the travel industry, cruise industry leaders remain optimistic about continued growth and success in bringing groups to their ships.

Cindy Bertram from Leisure Group Travel spoke with cruise industry executives to get their input and ideas on 22 December 2010

positives they are seeing as well as tips and insights for group leaders.

Participating were Ron Gulaskey, director, corporate sales and charters, Celebrity Cruises; Mike Julius, managing director, U.S. sales, Carnival Cruise Lines; Richard D. Meadows, CTC, executive vice president, marketing, sales and guest programs, Holland America

Line; Richard Sasso, president and CEO, MSC Cruises; Janice Tully, CTIE, senior vice president, sales, Uniworld Boutique River Cruise Collection; and Maurice Zarmati, president and CEO, Costa Cruises North America.

Cindy Bertram: What advice would you like to provide to group organizers who are currently not LeisureGroupTravel.com

CRUISE INDUSTRY PANEL promoting cruise groups? Why should they consider organizing and promoting cruise groups as opposed to land tours?

Ron Gulaskey: Group business is an absolutely incredible revenue source for group leaders! Why focus on group business? It’s a way to increase your client base – new people you never would have found otherwise. It creates your future business pipeline, and it is efficient selling because specific policies and amenities are very organized for the group planner.

Mike Julius: If someone in the group has never sailed before, it’s important for the group leader to “set the stage” – do they want the prime rib or lobster or both? Our staff is trained to deal with groups, and there is an ease of pulling all the components together – from transportation and accommodations to destinations, meals and entertainment. This is where cruises excel.

Richard Meadows: For consumers, cruising provides the top vacation value today particularly relative to land-based travel and fluctuating currencies. For example, in Europe, you can’t beat being able to visit three to five cities and experience different cultures for the value of a cruise paid in U.S. dollars. Culinary groups are one of the biggest trends and, for Holland America Line, the trend falls right into line with the strengths of our premium brand. All our ships have a multi-million-dollar show kitchen at sea called the Culinary Arts Center presented by Food and Wine magazine. Building a group around a local chef, with food demonstrations and interaction with both the guest chef and our own shipboard chefs, is a wonderful way to create a unique experience for guests. We offer a special Culinary Group package.

Richard Sasso: Cruise groups are the easiest groups to control and manage. leisureGrouptravel.com

Mike Julius

RichaRd Meadows

Carnival Cruise Lines

Holland America Line

RichaRd sasso

Janice tully

MSC Cruises

Uniworld Boutique River Cruise Collection

MauRice ZaRMati

Ron Gulaskey

Costa Cruises

Celebrity Cruises december 2010 23

industry forecast ❖

Since 1990, the cruise industry has had an average annual passenger growth rate of 7.2% per year, according to CLIA —Cruise Lines International Association of “already planned” activities onboard, complete with meeting space nearby.

How important is group cruise business to your cruise line? What percentage actually makes up total sailings?

Gulaskey: Celebrity loves to have group business for many reasons and usually we limit group business to 2530% of our sailings. This allows a nice mix of groups/FIT and nobody feels excluded or left out.

Julius: At Carnival, group business is very important to us and we want true affinity business.

Meadows: Cruise group business can represent up to half of the guests on a cruise departure, depending upon the specific destination. A well planned and marketed cruise group contributes to the success of the sell and will return repeat business later.

Sasso: MSC targets almost 50% of our inventory to groups. We provide an attractive advanced rate with a host of amenities to offer the best value to the group guest.

Port of Tampa/Tampa Port Authority

Most of the details of the group’s needs are already included in the cruise operation, from meals, tours, services, attention to details and special events to on-the-spot customer service. Cruise groups are the foundation for return business year after year. Using the themes offered by many lines, like our Big Band and baseball cruises, provide a great opportunity to direct and target your sales efforts to a specific audience.

Janice Tully: We provide a “onestop” shopping experience for the group organizer. Our knowledgeable group reservations agents can guide them to the perfect river cruise; one phone call can secure the entire group booking. Our attractive group discounts are combinable with our brochure discounts (EBD, PIF and River Heritage Club discounts). Our onboard cruise managers take care of all of the shore excursions, so the group organizer can enjoy the trip without having to worry. All of the details are handled with no packing and unpacking getting from one place to another.

Maurice Zarmati: There is simply no better value for your clients than a group program at sea. On a cruise, not only will accommodations be included for your clients, but they’ll have their dining, activities and entertainment covered as well. Cruises also provide value for you, the planner, as there’s such a wide variety

Many Western Caribbean cruises depart from Tampa, a top Gulf Coast port.

24 December 2010

Zarmati: It’s very important to us and we pride ourselves on being group leaders. The percentage fluctuates based on the time period, but overall is around 30%.

Bertram: Do you have one brief success story or tip you’d like to share on how to build a successful group cruise in 2011?

Gulaskey: One travel partner that really has embraced growing group business has been Cruise Planners out of Coral Springs, Florida. They have proactively teamed up with us this year to offer many types of group trainings for their franchisees. They are trying to make sure all their members know about the benefits of group cruises.

Julius: The key word is affinity. The most successful groups are driven by the affinity, and not the ship or the itinerary. These are people taking this cruise because they want to be with their families, friends or people they share an affinity with – this can also include bank travel clubs, collectors or hobbyists, church groups, quilter groups.

Meadows: One of the best ways to get started is to get a copy of Holland America Line’s free guide “Developing Group Business.” For 2011, we’ve added five new items to our Group Amenities Program. The GAP menu now features 41 amenities, including the new Home City Air Credits. Guests purchasing Holland America Line Home City Air receive a credit of $50 per person for economy-class tickets and a credit of $75 per person for business class. The LeisureGroupTravel.com

credit is available for 2011 group bookings of five staterooms or more.

Sasso: Start small and think big. It only takes a handful of group leaders to get the ball rolling. The priest, the band leader or the disc jockey can be the headline for the solicitation. Fundraisers are always successful and doing cruise nights promoting the departure is very useful. Once you get one check from one guest the rest will follow. Always be alert to what clubs and associations are gathering in the area and try to contact the key person.

Tully: Uniworld offers an Epicurean Adventure Program on selected departures which has attracted many wine and culinary groups. We have family programs on selected departures, great for multi-generational travel. You see quite a few grandparents taking their kids and teen grandchildren on our cruises.

Zarmati: If you’re involved in an affinity-type community group, become more involved and build a group based from the relationships within. Some of our most successful groups are brought together by Armenian and Irish heritage, love of oldies music and even kosher lifestyles. People like to travel with likeminded individuals, and building a group based on this is a recipe for success.

Bertram: What cruise destinations seem to be the most popular for groups? On the flip side, what are good cruise group destinations your line offers that would be good for group organizers to consider?

Gulaskey: The Caribbean continues to be the leader in group cruises whether it is for organizations looking to get away to a warm climate in the middle of winter or a family reunion sailing in the summer because the kids are out of school. I have to be honest – every region of the world seems to host many group cruises for us with many reasons. We always recommend that group organizers work with their district sales managers to identify high-opportunity sailings.

LeisureGroupTravel.com

Julius: At Carnival, we “own the Caribbean, Bahamas and Mexico,” so to speak. Our seasonal destinations include Europe and Bermuda, along with different lengths of cruises. As a group leader, you need to have choices and we

more “cruise rookies” to sail with us, experience the excitement and then cruise with us again and again.

Meadows: Depending on the group, the most popular destination will vary.

Alaska and Europe always seem to draw

In 2009 the industry occupancy rate— consistently over 100%—was 103.9% for member lines of CLIA —Cruise Lines International Association provide incredible ones. Start with the number of nights along with your budget and pocketbook. The best part?

Our product delivers the same whether your group is on a 3- or 7-day cruise because our ships provide outstanding entertainment and food, with consistency throughout our fleet. Our goal is to get

attention from group planners. These two cruise destinations provide a great value to vacationers and also offer unique opportunities to customize the experience for group guests through tours and the on-board experience.

Sasso: The Caribbean is always a strong market, romantic and warm

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LEWISBURG

WHITE SULPHUR SPRINGS

RONCEVERTE

ALDERSON

RAINELLE

December 2010 25

industry forecast ❖

For 2010 the Caribbean and Bahamas represents the No. 1 destination with 41.3% of capacity deployment.

—Cruise Lines International Association weather. Alaska can also be a great target for experienced cruisers. Of course the MED has the most history, culture and variety. Wine, music, cooking and a host of themes attract a crowd that shows more interest in the exotic destinations like Europe and the Mediterranean.

Tully: All of our itineraries are perfect for groups. Our embarkation and disembarkation ports have easy air access and our pre- and post-cruise hotel options are professionally organized, with transfers included to and from the ship. The itinerary choice all depends

26 December 2010

on what culture the group wants to experience, from Europe, Egypt, Russia or China. Uniworld provides the “best of the best” in river cruising.

Zarmati: We are the group leader in the Mediterranean. We’ve been there for over 60 years, we know the ports inside and out, and we have numerous new ships there based year-round. So many groups have already “been there, done that” and are looking to try out a new destination. The Mediterranean is a unique option with surprising affordability.

Bertram: Today there is even more price sensitivity than ever before. In the past, it was more common for a group organizer to book their cruise group at least 12 months out, but with the current economy, the mindset has been to “wait til the price goes down.” This is a dilemma that group organizers are facing. What reassurance does your cruise line provide to group organizers as far as the actual pricing?

Gulaskey: Celebrity Cruises is always extremely fair with their travel partners when it comes to pricing.

Comparing group rates to FIT rates is like comparing apples to oranges.

Groups get the existing FIT rates, but they need to remember they also get tour conductors, group amenity points, first choice for staterooms and first assignment of dining times, table types

LeisureGroupTravel.com

and location in the dining room – numerous benefits right there alone.

Julius: When it comes to the question of price protection for all Carnival guests, we have found “the silver bullet,” so to speak, with our “Early Saver” program. Launched two years ago, this program encourages our cruise guests to book early, and it is the only rate code that we protect. For cruises six days or longer, the guest has to book at least five months in advance of the sailing date.

Although the “Early Saver” program is for an individual cruise booking, if a group leader blocks their group space on a particular ship and sailing date, they have the option of going back to individual reservations, having an “Early Saver” rate booked for a stateroom, and then get it transferred back into their group allotment.

Tully: Uniworld is 100% trade dedicated; we rely on our travel partners to support our product. Pricing integrity is essential to maintaining our business partnerships and customer satisfaction levels. If a lower individual rate becomes available and the group organizer/travel agent has an existing group on this date, they can switch to the lower rate and still earn the tour escorts and amenities (Europe and Russia only.) In most cases they can qualify for the group discount, which would give them the advantage over booking through individual reservations.

Zarmati: This is something that all lines face and one that we take seriously.

We understand the importance of price sensitivity and do our best to protect the travel agent partner and their clients in any situation they have. LGT

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Cindy Bertram has 15+ years of cruise expertise in sales, marketing and training, with an MBA from Loyola University Chicago. She can be contacted at cindy@ptmgroups.com.

Obtain Cruise Industry visitor guides and itineraries – and contact groupfriendly suppliers directly – at leisuregrouptravel.com/instant-info LeisureGroupTravel.com

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