Direct sales grow in importance for cruise lines

Clear shift towards direct sales but lines stress importance of agents

Cruise companies are becoming more open about how much of their total sales are made direct to consumers, as opposed to being made through travel agents. Norwegian Cruise Line says it has doubled the business it takes direct over the last three years, to 27%. Carnival Corporation’s direct-to-consumer sales in 2009 and 2010 made up around 17% of its revenue – an average for Carnival Cruise Lines, Princess, Costa, Holland America, Seabourn, Cunard and its European lines.

However, over 90% of Celebrity Cruises’ business continues to come from travel agents, while the brands belonging to Royal Caribbean Cruises see direct business that is only in the “mid- to high teens”. Carnival executives say that its brands are less aggressive than other lines in terms of selling direct. NCL says that passengers who book direct tend to book earlier and in premium categories that provide higher net yields.

Direct sales are “at a significantly lower cost” for the company and have grown from 13.3% of ticket revenue in 2007 to 27% for the first nine months of 2010. NCL expects to increase this further in the future “through investments in our brand and our website as well as increasing our direct-sales force.” However, even Norwegian acknowledges that most sales come through agents. “A major focus of our marketing strategy is motivating and supporting our travel agent partners,” it says, particularly though its Partnership 2.0 initiative.

Agents aren’t convinced. “It’s no secret that for years NCL and Carnival have been going after direct bookings,” comments Laure Hristov, owner of Just Cruises and Tours. “Carnival even had kiosks in malls, which wasn’t a success. I have lost several NCL customers.” As a result, she sells more cruises on Celebrity, Royal Caribbean and MSC Cruises, which “go out of their way to work with agents.”

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