Nobody ever risked losing a wager betting on Bob Dickinson's savvy. The president and CEO of Carnival Cruise Lines is a master at gauging the industry's pulse. To prove it, he...
Nobody ever risked losing a wager betting on Bob Dickinson’s savvy. The president and CEO of Carnival Cruise Lines is a master at gauging the industry’s pulse.
To prove it, he announced new one-size-fits-all fares across the board for sellers of Carnival cruises. His latest pronouncement could well translate into lower cruise fares and better service for a vacationer considering a Carnival cruise.
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In the simplest terms, Dickinson has leveled the playing field. No seller gets a better deal on cruise prices whether that happens to be your corner mom-and-pop travel shop, a mega-size international vacation provider or a company in cyberspace. In essence, Dickinson trimmed the competitive edge for some travel agents and eliminated the larger discounts once proffered to high-performer Web sites that discount cruises.
Limits the search
For the consumer, Carnival’s new policy will save having to hunt and peck for the best prices, says Anne Campbell, editor of the consumer Web site CruiseMates.com.
Georgina Cruz, author of the recently released “Fell’s Official Know-It-All Guide to Cruises,” agrees. “If everyone has the same low price to offer consumers, then suddenly we don’t have to be checking around for bargains.”
In recent years, with the flourishing of the Internet, vacationers searching for cruise bargains typically would turn first to one of the mammoth travel Web sites, where they would correctly assume prices are lower. That’s because large sellers of a cruise line’s cabins customarily get more favorable rates from lines for individual bookings.
But aside from lower prices on the Web, you also would get little if any handholding, at least compared with the service you can expect when you book with a bricks-and-mortar travel agency. Price vs. pampering was the typical Internet trade-off.
That was then, before Dickinson pulled the rug or the financial cushion, if you will from under online travel agencies.
After peering at the industry horizon, Dickinson divined rough seas ahead. He recently told the newsletter “Cruise Week” that, potentially, more than anything, the significant increase in online business “is a threat to many of the traditional agency models. … You look at the growth of Travelocity, Expedia, Orbitz, for example, in a three-four year time, and they’re just taking an enormous amount of share.”
So this is now: Carnival’s price to all retailers is identical no matter how many cruises an individual seller has sold. Dickinson explained it to Cruise Week this way: “If Bob’s Travel just opened up … and he wants to quote a rate, and he gets a rate from us for an October sailing, and it’s $699, Travelocity, who has been in business for four years, their rate will be $699. American Express, who has been in the business since God knows when, the rate we’re charging them will be $699. … In the past, the rate to Bob’s Travel may have been $799 and the rate to Travelocity may have been $699.”
The bottom line: Whether you now go to the giants or the little guys or even direct to the cruise line itself they all are competing on an equal footing for your cruise dollar, Dickinson suggests.
It all depends on one’s needs
Dickinson anticipates that vacationers who want more service for their money will seek a travel agent rather than an online colossus, especially now that they’re all paying the piper the same price.
Even with the one-price-fits-all scenario for sellers, you still could snare a better price by negotiating. To compete for your business, agents can voluntarily dip into their commissions and rebate part of a fare. Dickinson says, though, that that wouldn’t tip the scales by much more than $100 or so.
While Dickinson hails this as an industry innovation, other major lines say it’s the way they’ve been doing business all along.
Princess’ Dean Brown told Cruise Week, “In Princess’ case, we have not given any price advantage to large national Internet markets. In that sense, Princess is already there.”
Most travel agents, understandably, are thrilled with Carnival’s new strategy, which is mainly a means of reining in the Internet. In this case, though, the consumer wins as well.
In a similar vein, most cruise lines devise marketing strategies to help fill their ships. Some lines periodically offer special discounts for seniors, or, when a particular cruise is not selling briskly enough, may try to boost sales by offering regional discounts targeted solely to residents in certain cities.
Cruise lines now are getting tougher on those discounts since it’s not unheard of for some travel agents to book the deals for passengers who may not quite be seniors or permanent residents of the targeted geographic region.
Royal Caribbean International and sister line Celebrity Cruises are out to prove that fudging doesn’t pay. The lines informed travel agents that, effective immediately for new bookings, it will check at the pier for anybody booked with a senior rate or a resident rate. If the passenger doesn’t qualify, the difference in price will be collected at the dock.
Lisa Bauer, Royal Caribbean’s senior vice president of North America sales, said with 95 percent of its business generated from travel agents, the line wants to codify the compliance and rein in the mavericks.