Cruise lines are getting closer to perfecting the formula of what vacationers want: Take one part all-inclusive resort, add one part multi-destination stress-free vacation, float it at sea and you’ve got a trip consumers will be eager to book.
That’s the thinking this year, as cruise lines refocus their Black Friday-esque “Wave” season and inject their early-year promotions with extras such as drink packages and free Internet, instead of the price discounts of years past.
“The cruise lines have really gotten it right more than ever before,” said travel agent Ralph Santisteban, a CruiseOne franchise owner based in Kendall. “I’ve been in this business more than 20 years and I’ve never seen the cruise lines do anything that has the impact this does.”
These “value-added” deals increase the perceived value of the cost of the cruise. For those who purchase a better cabin, for example, some cruise lines are including a choice of packages, such as free shore excursions, credit for specialty dining or onboard credit. They create a worry-free experience that vacationers are buying in droves this year, travel agents say.
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“They are offering something that is a value for the consumer, draws in business for them and continues to make them profitable,” Santisteban said. “Everybody is winning here.”
In the past, discounts were more nominal, with offers for reduced deposits, for example, but not the “slew of deals” offered now, Santisteban said.
“It was more like a promotional season than a true discount season,” he said. “They wouldn’t actually be discounting heavily in advance.”
People don’t remember saving $50, but they remember a shore excursion that they took at a port of call, they remember, ‘Oh my gosh, we had unlimited drinks, we didn’t have to think about it.’
Michelle Fee, president and CEO of Cruise Planners-American Express Travel
Take a drink package on Norwegian Cruise Line: The unlimited beverage package — soft drinks, beers, spirits, cocktails and wine — costs $69 per cruiser per day. For a couple on a seven-night cruise, that is about $1,140 with tip, in addition to their cruise fare. But under Norwegian’s “Free At Sea” promotion, travelers can choose to include a beverage package with the cost of a studio, inside, ocean view or balcony cabin. For about $1,900, that same couple can purchase their inside stateroom and their drink packages on an April western Caribbean cruise.
“Our absolute goal is to present a proposition to the customer where they are super excited about the product so that the last question they ask is, ‘How much is it?’” said Andrew Stuart, president and chief operating officer of Doral-based Norwegian Cruise Line.
The approach has proven successful for Norwegian, which reported that bookings were “in a very good position” going into 2016, Stuart said.
A customized experience, specifically, seems to be the value consumers are most attracted to, said Michelle Fee, president and CEO of home-based travel-agent network Cruise Planners-American Express Travel.
“People don’t remember saving $50, but they remember a shore excursion that they took at a port of call. They remember, ‘Oh my gosh, we had unlimited drinks, we didn’t have to think about it,’” she said. “You don’t remember five years from now what you paid, but you remember the experience you had.”
While value-added packages are not new this year — one of Miami-based Royal Caribbean Cruises Ltd.’s premium cruise lines, Celebrity Cruises, jump-started the concept in 2012 — it’s caught on with more fervor than ever before.
“It changed the industry and it took the industry a little while, seven to 12 months, and a year later you certainly saw that we started to see [an industry] shift to this,” said Dondra Ritzenthaler, senior vice president of sales and support for Celebrity Cruises.
Now, almost every line has a value-added package, Ritzenthaler said. The strategy has translated to dollars for Celebrity, whose Wave season this year is off to a “very positive” start, she said.
24 million Number of people expected to cruise in 2016, up from 23 million in 2015.
The deals extend to river cruising as well, where Los Angeles-based luxury line Crystal Cruises has experienced booking success. Crystal, which is debuting its river cruises this summer, offers savings on ocean or yacht cruises when vacationers book a river cruise by Feb. 29.
The luxury line has achieved 90 percent of its revenue goal for the year thanks to a combination of Wave season promotions and other deals, said president and CEO Edie Rodriguez.
Part of that success is creating a greater incentive for travelers to book early, Rodriguez said.
Typically, cruise lines book nearly 40 percent of the year’s reservations during Wave season — the first three months of the year. But some lines have offered their best sales starting in December — generally a low sales month due to the holidays — to entice consumers to plan their vacations early.
“We are seeing a substantial increase in cruise sales in December over the past two years,” Santisteban said. “Some cruise lines offer in December and very early January things they are not going to offer again this year,” such as value-added packages with more than one perk for interior cabins.
Value-added deals have fueled earlier bookings, giving cruise lines more security that they won’t sail later in the year with empty cabins.
For lines, the results are stacking up. In December, Carnival Corporation announced it is already 50 percent booked on 2016 cruises — most in the first and second quarters of the year. Across its 10 brands, the Doral-based company is “well ahead” of last year for the first three quarters of 2016 — and at higher prices.
The cruise lines have really gotten it right more than ever before.
Ralph Santisteban, CruiseOne franchise owner
Royal Caribbean also reported a “solid” Wave season during its fourth quarter earnings report this month.
For the first half of Wave season, it offered a combination low price/value deal — book one traveler, get the second traveler’s fare half off plus onboard credit. The deal is the line’s most successful promotion. The company offers the promotion during Wave season when consumers are looking to book with added flexibility, said Vicki Freed, senior vice president of sales at Royal Caribbean International.
The deal was so good that 59-year-old Mike Vidal booked his first vacation in a decade.
Vidal reserved a southern Caribbean April cruise for this year with his wife, Lyse, during last year’s Wave season when Royal Caribbean had a similar buy one/get one half off offer.
“When we saw the pricing on this, I said, ‘Jesus, at that price, yeah!’” Vidal said. “I’ll jump on it for an eight-day cruise, that makes it more cost effective.”
Vidal, who booked in February last year, benefited from Royal Caribbean’s move away from last-minute deals. The Miami-based company finalized that move this month when it announced it would end flash sales 30 days prior to sail date, further incentivizing consumers to book early.
During a recent call with analysts, Royal Caribbean Cruises Ltd. chairman and CEO Richard Fain said last-minute deals “cheapen” the company’s brand and upset loyal customers who book cruises ahead of time.
And many do book early. According to a survey conducted at the end of 2015 by the Cruise Lines International Association, a cruise marketing group, travel agents say “passengers are booking further ahead than in the past, with the strongest growth seen in pre-booking nine to 12 months ahead.”
The report’s conclusion? “New ships, especially larger ships with all-inclusive pricing, seem to be having a positive impact on the demand for cruising.”
6 cost-saving Wave season deals
Carnival Cruise Line “Short Cruise Sale”: Discounted rates on select two- to five-day sailings through April and a free upgrade within the same cabin type to a better location on the ship. Offer valid through Feb. 21.
Celebrity Cruises “Go big, go better, go best”: Choose two of four packages — classic beverage package, $150 onboard credit, prepaid gratuities or unlimited Internet — in cruise bookings through Feb. 28.
Crystal Cruises “Book Now”: Book a cruise on the luxury line’s new river line by Feb. 29 for sailings in 2016 and 2017 and get additional savings when combined with an ocean cruise. For example, travelers who book a seven-day river cruise, leaving Oct. 3, 2017, from Bordeaux through France’s wine country on the Crystal Ravel and combine that with a back-to-back trip, leaving Oct. 10 from Lisbon on ocean cruise Crystal Symphony save 15 percent.
Emerald Waterways (river cruises): Free airfare when booking a panorama balcony, grand balcony or owner’s one-bedroom suite on an Emerald Waterway river cruise before Feb. 29. Applies to flights from 20 U.S. airports, including Miami International Airport and Tampa International Airport, to Europe. Travelers flying from other airports will instead get $1,000 per person air credit for suites and $500 air credit per person for all other cabin categories. Offer valid through Feb. 29.
Norwegian “Free At Sea”: Choose one, two or four of Norwegian’s add-on amenities — shore excursion credits, specialty dining credits, free Wi-Fi packages or ultimate beverage packages — with the cost of the cruise depending on cabin size. For studio, inside, oceanview or balcony cabins on any five day-plus cruise, passengers can choose one add-on package when they book at least 30 days before sailing. On bookings for mini-suite staterooms on any five day-plus cruise, passengers can choose two add-on packages when they book at least 30 days before sailing. On reservations for Haven or suite staterooms, get all four amenity packages. Offer valid through Feb. 29.
Royal Caribbean International: Get 30 percent off bookings for every ship in the Royal Caribbean International fleet departing on or after March 16.