It’s the season for discounts in the cruise industry; if you were planning on a 2016 cruise, now’s the time to book.
MIAMI — Cruise lines are getting closer to perfecting the formula of what vacationers want: Take one part all-inclusive resort, add one part multi-destination stress-free vacation, float it at sea and you’ve got a trip consumers will be eager to book.
That’s the thinking this year, as cruise lines refocus their Black Friday-esque “Wave” season and inject their early-year promotions with extras such as drink packages and free Internet, instead of the price discounts of years past.
“The cruise lines have really gotten it right more than ever before,” said travel agent Ralph Santisteban, a CruiseOne franchise owner based in Kendall, Fla. “I’ve been in this business more than 20 years and I’ve never seen the cruise lines do anything that has the impact this does.”
These “value-added” deals increase the perceived value of the cost of the cruise. For those who purchase a better cabin, for example, some cruise lines are including a choice of packages, such as free shore excursions, credit for specialty dining or onboard credit. They create a worry-free experience that vacationers are buying in droves this year, travel agents say.
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“They are offering something that is a value for the consumer, draws in business for them and continues to make them profitable,” Santisteban said. “Everybody is winning here.”
In the past, discounts were more nominal, with offers for reduced deposits, for example, but not the “slew of deals” offered now, Santisteban said.
“It was more like a promotional season than a true discount season,” he said. “They wouldn’t actually be discounting heavily in advance.”
Take a drink package on Norwegian Cruise Line: The unlimited beverage package — soft drinks, beers, spirits, cocktails and wine — costs $69 per cruiser per day. For a couple on a seven-night cruise, that is about $1,140 with tip, in addition to their cruise fare. But under Norwegian’s “Free At Sea” promotion, travelers can choose to include a beverage package with the cost of a studio, inside, ocean view or balcony cabin. For about $1,900, that same couple can purchase their inside stateroom and their drink packages on an April western Caribbean cruise.
“Our absolute goal is to present a proposition to the customer where they are super excited about the product so that the last question they ask is, ‘How much is it?’” said Andrew Stuart, president and chief operating officer of Doral, Fla.-based Norwegian Cruise Line.
The approach has proven successful for Norwegian, which reported that bookings were “in a very good position” going into 2016, Stuart said.
A customized experience, specifically, seems to be the value consumers are most attracted to, said Michelle Fee, president and CEO of home-based travel-agent network Cruise Planners-American Express Travel.
“People don’t remember saving $50, but they remember a shore excursion that they took at a port of call. They remember, ‘Oh my gosh, we had unlimited drinks, we didn’t have to think about it,’” she said. “You don’t remember five years from now what you paid, but you remember the experience you had.”
While value-added packages are not new this year — one of Miami-based Royal Caribbean Cruises Ltd.’s premium cruise lines, Celebrity Cruises, jump-started the concept in 2012 — it’s caught on with more fervor than ever before.
“It changed the industry and it took the industry a little while, seven to 12 months, and a year later you certainly saw that we started to see (an industry) shift to this,” said Dondra Ritzenthaler, senior vice president of sales and support for Celebrity Cruises.
Now, almost every line has a value-added package, Ritzenthaler said. The strategy has translated to dollars for Celebrity, whose Wave season this year is off to a “very positive” start, she said.
The deals extend to river cruising as well, where Los Angeles-based luxury line Crystal Cruises has experienced booking success. Crystal, which is debuting its river cruises this summer, offers savings on ocean or yacht cruises when vacationers book a river cruise by Feb. 29.
The luxury line has achieved 90 percent of its revenue goal for the year thanks to a combination of Wave season promotions and other deals, said President and CEO Edie Rodriguez.
Part of that success is creating a greater incentive for travelers to book early, Rodriguez said.
Typically, cruise lines book nearly 40 percent of the year’s reservations during Wave season — the first three months of the year. But some lines have offered their best sales starting in December — generally a low sales month due to the holidays — to entice consumers to plan their vacations early.
“We are seeing a substantial increase in cruise sales in December over the past two years,” Santisteban said. “Some cruise lines offer in December and very early January things they are not going to offer again this year,” such as value-added packages with more than one perk for interior cabins.
Value-added deals have fueled earlier bookings, giving cruise lines more security that they won’t sail later in the year with empty cabins.
For lines, the results are stacking up. In December, Carnival Corporation announced it is already 50 percent booked on 2016 cruises — most in the first and second quarters of the year. Across its 10 brands, the company is “well ahead” of last year for the first three quarters of 2016 — and at higher prices.
Royal Caribbean also reported a “solid” Wave season during its fourth-quarter earnings report this month.
For the first half of Wave season, it offered a combination low price/value deal — book one traveler, get the second traveler’s fare half off plus onboard credit. The deal is the line’s most successful promotion. The company offers the promotion during Wave season when consumers are looking to book with added flexibility, said Vicki Freed, senior vice president of sales at Royal Caribbean International.
The deal was so good that 59-year-old Mike Vidal booked his first vacation in a decade.
Vidal reserved a southern Caribbean April cruise for this year with his wife, Lyse, during last year’s Wave season when Royal Caribbean had a similar buy one/get one half off offer.
“When we saw the pricing on this, I said, ‘Jesus, at that price, yeah!’” Vidal said. “I’ll jump on it for an eight-day cruise, that makes it more cost effective.”
Vidal, who booked in February last year, benefited from Royal Caribbean’s move away from last-minute deals. The Miami-based company finalized that move this month when it announced it would end flash sales 30 days prior to sail date, further incentivizing consumers to book early.
During a recent call with analysts, Royal Caribbean Cruises Ltd. Chairman and CEO Richard Fain said last-minute deals “cheapen” the company’s brand and upset loyal customers who book cruises ahead of time.
And many do book early. According to a survey conducted at the end of 2015 by the Cruise Lines International Association, a cruise marketing group, travel agents say “passengers are booking further ahead than in the past, with the strongest growth seen in pre-booking nine to 12 months ahead.”
The report’s conclusion? “New ships, especially larger ships with all-inclusive pricing, seem to be having a positive impact on the demand for cruising.”