Do low cruise prices affect travel advisors?

Seven Nights Celebrity Cruises for $399. Fifty percent discount on cruise prices from the Holland America line. Forty percent discount on Virgin Voyage cruises. Thirty-five percent off NCL cruises and third and fourth guests for just $99 each.

The cruise has never been less expensive than it is in the rest of 2022. Some analysts say the 2023 voyage may be affected as well.

“While 2023 pricing continues for the time being with seven months remaining from the first 2023 departure, the cumulative booking pace for 2023 continues to slow and is well below comparable 2019 levels,” Truist analyst Patrick Scholes said in a note last month. “Unless the 2023 pace is reversed, we believe significant promotional/price activity will be required for vessel filling, a scenario similar to what happens in 2022.”

But what does all this mean for travel advisors?

The Travel Market Report reached out to many cruise vendors to see what impact, if any, low prices have had on their business. The answers were not as consistent as you might expect.

“Things are great,” said Jesse Morris, owner of We Book Travel, LLC, an independent agency in the Avoya Network, adding that his dollar turnover between May 1 and June 15 was three times what it was in 2019. “Almost nothing From this is by way of future travel credits as those in my wallet are already booked in. The current price environment along with people who have been sitting on the sidelines waiting to take a flight and not being able to drive so much volume. After the past two years, there is a dire need for this “.

Benny Rushing, owner of another Avoya member agency, owner of Four Points Travel, agreed.

“Cruise lines have lowered their cruise fare a bit from what they used to be to start taking interest in cruises again. My total turnover last year was the highest in my five years with Avoya. This year, I’m about 20-25% ahead of that pace” .

While Morris said he sees how lower rates mean lower total profits, he doesn’t view it that way. “I see this as a marathon and not a sprint. I gain new clients who will book with me year after year and refer more people to me. This is very good for my business overall.”

More work
Other TMR consultants they spoke with said that lower cruise prices make managing a reservation more difficult and time-consuming.

“Before COVID, we weren’t dealing with a lot of price cuts after final payment,” said Richard Steiff, franchisor of Cruise Planners. “They are back which is just as frustrating as everyone else,” especially since the consultants and cruise lines were touting the idea that the earlier you book, the better the price. “This has been the case for a long time – until now.”

Dream Vacations franchise owner Rhonda Day agreed. “Reserving and serving clients is taking a long time now… a lot of guesswork. A lot of rechecking, etc.”

But Amy Madsen, who is also the owner of Dream Vacations, said that many of the lower-priced cruises are close bookings and actually take very little time.

“They largely choose the cruise and hand it over to us to confirm the best rates and to make the payment. It’s a quick sale,” she said.

less money
The current situation reminds us of the early days of COVID-19 when consultants were working day in and day out to cancel and rebook cruises without getting paid for their work.

“We are again in a position where we are working and allocating more time in custody in exchange for reduced compensation,” Stieff said. “Most of the time after the final payment, not only can we adjust prices, we have to call and adjust them manually by the cruise line. This can mean hours in waiting.”

However, having upcoming reservations, even if they don’t pay as they should, is better than not having reservations.

“Don’t get me wrong,” Stef told TMR. “I’m so grateful that there are these kinds of issues versus the ‘season canceled’ issues we’ve had over the past two years.”

Better than no bookings / no commission
Justin Smith, president of The Evolved Traveler, a member of the Ensemble Travel Group, agreed.

“I look at it this way, lower commissions right now beat the ‘no commission’ days we were all having in 2020 and 2021. I think this is another way to get around this now. The cruise industry has always been good partners to the advisor community. Now we need to help each other get back on our feet.”

Smith also told TMR that being a member of a national host association, franchise or group can help mitigate some of the losses that come from lower prices, because these groups usually give agencies and consultants access to higher commission rates.

Ultimately, Rushing said, the lower commission rates are balanced out by the higher number of bookings. “With lower cruise fare prices being offered, I do the same amount of work for a slightly lower commission per sale, but as noted above, my total sales are higher.

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