Cruise market online – Cruisers find it’s still good to talk

The cruise market is experiencing a massive surge in popularity but the number of bookings made online is low compared to those for flights and airlines. LISA JAMES asks some of the sector’s leading players why the Internet is still a turn off

Once the domain of the blue-rinse brigade, cruising has opened up in recent years to become a holiday of choice for families, adventurers, couples and young people.

It’s the fastest-growing sector of the travel market, with more than one million UK holidaymakers choosing to take a cruise last year.

The phenomenal rate is showing no signs of a slow down, with analysts predicting the next few years will continue at around the current 13% year-on-year growth rate.

And as the client base has changed, so has the product to include rock-climbing walls, spas, gourmet-class bistros – and on-board Internet cafés, complete with classes for passengers who are unfamiliar with the web.

Sending e-mails to friends and family back home is now a way of life for cruise passengers, yet, when it comes to booking the fact is very few actually do so online, preferring to talk to an agent or call centre.

Current figures suggest online cruise sales for most cruise operators account for only 1%-2% of bookings in the UK, a rather lowly figure compared to other sectors in the industry.

That’s not surprising, according to the operators. Carnival UK director Peter Shanks says: “Cruising is a growth market, but it is still an immature market in the UK. The level of penetration of cruising of total holidays is still only 3%-4% and the general customer awareness of what cruising is all about lags behind what they know about other holidays, such as a city break.

“The value of a cruise booking is £3,000-£4,000 and that is a substantial outlay. Clients are looking for reassurance, advice and security. It’s different to a £29 airfare.”

Royal Caribbean International sales and marketing director Jo Rwymowska says UK online bookings are in single digit figures.

She explains: “Because it’s still a growing market, there are a lot of first-timers coming into cruising. When you are doing any holiday for the first time, especially when it is a high-value holiday, you need reassurance.”

However, Shanks is sure cruise bookings made online will increase.

“Of course more people will book cruises over the Internet in the future, but you can’t put cruise in the same category as the airlines,” he says. “We often say that the UK cruise market is three to five years behind the US, and over there more than 90% of bookings for cruise are booked through agents.”

Island Cruises managing director Patrick Ryan agrees. “Online bookings make up 1.5% of our total sales at the moment. It is going to change over time,” he explains.

“Currently, 55% of our passengers are new to cruise, but as repeat passenger business builds up, people will become more confident about booking online. I don’t think first and second-timers will want to do so, but as they buy their third and fourth cruise, that’s when they will go on the Internet.

“We have seen significant uplift in new visits to the Island Cruises site since the new year.

“We have gone through a detailed search optimisation and usability study, getting us higher ranking with MSN and Google, and we are also driving traffic from the [sister company] site,” he adds.

Meanwhile, Norwegian Cruise Line does not currently offer an online booking facility for its brochure packages, but does allow operators and agents that dynamically package to book cruise-only online. The service was launched 18 months ago but still only accounts for less than 1% of its UK business.

“Most agents still prefer to use the phone and usage of the Internet is still some way off,” admits managing director Francis Riley. “We signed up to global distribution supplier Amadeus Cruise in September 2005, and, while it is very easy to use, it still accounts for less than 20% of bookings. It should be 80%.

“As for the web, we are doing much more to ease the life of the travel agent. They can check availability and download window cards and flyers and we will add more functionality to the site this summer.”

Tour operator and tailor-made specialist Gold Medal began selling cruise a year ago, but while it encourages agents to use its website to dynamically package other travel products, cruise is not yet on there.

Instead, agents make bookings through Gold Medal’s Travel Centre.

Group director David Robinson says: “Agents are trying to find a better way of selling cruise rather than the traditional way of buying a package from a cruiseline. Our aim is to make it far more dynamic, but the complexity of the cruise product creates difficulties.

“The whole ship design, type of ships, whether you want an outside cabin, makes it more complicated. We don’t believe that the challenges are insurmountable, but I wouldn’t have thought that we would have anything in the short term.”

Unlike airfares, which agents have been able to book on global distribution systems for decades, it’s not the same for cruiselines.

Currently, the only option is Amadeus Cruise, launched five years ago, and which now contains real-time itineraries for 14 cruise suppliers. A 15th cruise line, Oceania, is joining soon, while EasyCruise is distributed through its web portal, Agentnet.

Amadeus Cruise signed up 65 agents last year, and is now used in 391 cruise locations in the UK.  Later this year, Galileo UK will launch a rival system.

Cendant vice-president for leisure channel international markets, Alison Bell, says: “We will be using a product offering out of the US, that our sister company Gulliver’s Travel Association is already using, but it needs some adaptation.

“We will address the areas of user interface, work flow and processes linked to the systems that allow the customer to feel confident about making the correct choices. But it won’t eradicate the need for intervention and advice.”

The intermediaries are also starting to dip a toe in the water., for example, wants to treble its cruise sales in 2006. Holidays and flights director John Bevan says: “At the moment cruise holidays are a small part of our business but one which we plan on growing considerably this year. We are starting from a small base but we believe this sector will become increasingly important as the British public become savvier about taking holidays at sea.

“We work with all the major cruiselines at present, from EasyCruise to the mass-market brands such as P&O Cruises and Royal Caribbean International to luxury niche operators like Windstar, and offer short weekend breaks, Nile cruises, world voyages as well as the full range of Mediterranean and Caribbean itineraries.

“Over the past few years, consumer confidence in buying long-haul, high-value holidays online has soared, a trend which is being mirrored by cruise sales. The public are getting more familiar with the notion of cruising as a mainstream holiday choice and therefore they are more confident and are consequently increasingly choosing to click to buy.”

Opodo sells cruises on its French and recently launched Italian sites, but UK country manager Neil Mott does not have plans to introduce a similar product to the UK market in the immediate future.

He says: “We launched cruise in France in autumn 2005 and in Italy from day one. It’s early days, and we are watching the two markets with interest.

“In France, we have had great success in the package market and it is a natural step from that into cruising. In the UK we have been very focused on our air and hotels offerings, which we have grown by 83%.

“We try to stay close to our clients and to understand what they are asking for. We did some research in October which suggested that cruise is a bit further down the priority list for our UK clients. Less than 3% said they booked a cruise in the past 12 months, and although it is increasing, numbers are still low.

“Our audience is generally aged 28-45, ABC1, quite affluent and urbanite, and while the cruise companies would have you believe that that is a massive growth area for cruising, the fact is it is off a very low base.

“If we see changing priorities, we will certainly adjust, and I wouldn’t rule out working with a product such as EasyCruise, but we are not at the stage of selecting a provider.”

Meanwhile, Yahoo! is currently developing a cruise search capability, to be launched in the next few months.

General manager for Yahoo! Travel in Europe, Tim Frankcom, says: “We are looking to work with one information supplier to put content on our site and we’ll be announcing the name in March.”

While the quantity of bookings made online may be low, compared to flights and hotels, where the Internet is working for the traditional cruise operators is as a research tool.

Royal Caribbean’s Rzymowska explains: “It’s great to research online because it allows customers to do virtual tours around the ships.

“The site is very much geared to first-timers – deliberately so – because if you have never been on a cruise, you really want to know what it’s all about. There is lots of information about the atmosphere on-board, what to wear, what to do, etc.

“We launched an I-brochure facility in September 2005, and it is phenomenal how many people are using it. They tell us they love to choose the bits of information relevant to them and put them into their own, personal brochure.”

Royal Caribbean also has a similar product for agents,

Visitors to the Ocean Village website can see live footage via webcam of the ship, be it sailing or in port, while some of the Princess Cruises ships have webcams inside the on-board wedding chapels, as well as the bridge.

It’s an added selling point for the rising number of couples choosing to marry at sea – their family and friends can tune in and see them tie the knot.

A key feature for cruisers – and a big revenue earner for the cruiselines – is the in-port excursions. Although traditionally sold on-board, some cruiselines are now experimenting with prebooking options on-line.

Island Cruises introduced the service six months ago, and is now selling 10% of them over the Internet.

Island Cruises’ Ryan says: “It has proved very popular because people know that excursions are generally limited and demand is high.”

NCL’s Riley said: “It won’t be long before our customers can order and prebook excursions and restaurants and put it against their room number before they go on the ship.”

The web plays a valuable role in marketing communications, according to Carnival’s Shanks. “What is changing fast is the way in which advertising and communication is being carried out.
“All the cruiselines are making a significant move away from the consumer press to the likes of Google. These days, people will naturally go to the search engines to research cruise and will be referred to cruise products.”

But despite the slow take-up for online cruise bookings generally, most predict there will be steady growth. As the operators will always testify: they are by no means no-frills airlines, so don’t expect the same pattern.

The major cruiselines

Norwegian Cruise Line
Cruise-only bookings can be made, in sterling.

Royal Caribbean International
Package holidays can be booked online, in sterling.

Island Cruises
Package holidays can be booked online, in sterling.

Ocean Village
Package holidays can be booked online, in sterling.

P&O Cruises
Package holidays can be booked online, in sterling.

Thomson Cruises
Package holidays can be booked online, in sterling.

Carnival Cruise Line
Package holidays can be booked online, in sterling.

Holland America Line
Bookings can be made for cruise only, in US dollars. UK site being launched later this year.

Cruise-only bookings can be made online, in sterling.


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