John Howell, managing director of travel technology firm Multicom, explains why it developed its new cruise API
Nobody can deny that it has been a bad period for the cruise market with headlines and PR disasters that would have left many businesses fighting for their survival.
At the same time cuts in commissions for agents and OTAs has also left those trusted with selling cruise holidays facing less return for the investment of their time and efforts.
The recent problems started that fateful night in January last year when the Costa Concordia hit rocks off the coast of Italy tragically claiming 32 lives and leaving Costa Cruises’ parent company Carnival Corporation facing a potential financial meltdown.
Within a week more than £1 billion had been wiped off its stock value and its share price fell by 30%.
The usual hawks predicted doom and gloom, forecasting a collapse in the market for cruise holidays.
When Carnival reported fourth quarter profits down 55% to November 2012, down for the year as a whole by 23%, things were not looking too good for the sector and its investors.
It wasn’t just Carnival who suffered from the bad publicity. First quarter profits for Royal Caribbean almost halved to $47 million, against $78 million in the same period in 2011.
As the first anniversary of the Costa Concordia disaster came and went it appeared that Carnival might have weathered the storm.
But a string of further high profile troubles for the group in February and March has once again put them under the glare of the media at the worse possible time.
In February an engine room fire on the Carnival Triumph left it stranded in the Gulf of Mexico, more technical problems struck Carnival Elation in March while Carnival Dream had a back up generator fail when docked in St Maarten and passengers were flown home early.
Twenty-four hours later the Carnival Legend had to cancel a call in Grand Cayman after limping back to Tampa when one of its propulsion units failed.
And we’re not out of the choppy seas yet. The impending indictment of the captain of the Costa Concordia, Francesco Schettino, along with seven members of the crew and other staff will put the tragedy back on the front pages.
Further reminders will continue to haunt the industry when the salvage operation to refloat the stricken vessel gets underway in the summer.
However, the cruise industry maintains that it has an excellent long-term safety record, with Carnival alone carrying 4.5 million passengers on thousands of cruises without incident.
But just how much impact have these problems had on the UK market?
Surprisingly there are reasons for agents to be cheerful as it is a reassuring picture when it comes to the resilient British holidaymaker with figures indicating growing demand for cruising.
The number of Brits taking an ocean cruise rose 20,000 to 1.72 million in 2012 and the Passenger Shipping Association predicts this upward trend will continue to 1.76 million in 2013.
Although these figures don’t filter out those who take more than one cruise annually, it remains positive news.
However, in order to capitalise on that demand and turn it into solid profitable bookings everyone in the industry who has a vested interest has a role to play.
We all need to adapt and innovate in order to capitalise on that demand and ensure the cruise market remains buoyant, confidence in the market returns and commercial viability delivers for our businesses.
Innovation is always key in any market sector and any product’s life cycle. You only need to look at some of the recent retail losses to see what happens when companies either ignore or don’t see the dangers of a change in customer behaviour.
The key to survival is identifying the need to change and reacting accordingly.
Technology in today’s world is often at the heart of that change and businesses like our own at Multicom need to work with everyone in the industry to give you the tools you need to keep pace with demand.
Creating a platform to enable cruise to compete with other holiday choices means agents need to be equipped with the technology that eliminates cumbersome search and book procedures and streamlines the process from start to finish, giving them a competitive edge when they most need it.
We need to work with the cruise sector to help it, and agents, meet the challenges ahead and maximise the opportunity while also improving efficiencies to leverage better margins.
The industry also needs to be more flexible, learn the lessons that the traditional package holiday has had to face up to. There is a degree of catching up to be done but now is the time to embrace that challenge.
At Multicom we are committed to playing our part, which is why we have recently invested in the development of a cruise API.
We felt that it would be beneficial to agents and customers alike to provide a cost-effective single source for cruise information, to hide the complexities of the cruise journey while supporting a standardised and flexible user journey
There were some technical challenges along the way as it was an entirely new product and a journey type that was different to the typical FinandBook model that came with its own unique risks.
It’s a niche topic with very little standardised knowledge across the industry and therefore a complex journey with multiple paths to completion.
Each stage of the journey is highly dependent on preceding stages and every supplier has a unique approach to the journey and multiple revisions were needed to the API as new features were discovered and new suppliers added.
However, for cruise companies, dealing with us means working with a company that has built a clear understanding of the cruise journey, with solid technical skills and a flexible approach and for users, it delivers a fully supported product and a stable, flexible API.
The cruise market has had to endure some very damaging press in recent months but far from being in terminal decline the forecasts remain buoyant and the future is more ship shape than some would have you believe.
Working together we can turn those negative perceptions around and start to deliver a brighter outlook.