Chapter 16 Cruise pricing and selling.
At the conclusion of this chapter, you should be able to
* identify several ways to increase your knowledge of cruises.
* understand what influences the price of a cruise.
* accurately calculate the price of a cruise.
* identify elements necessary to make a cruise reservation.
* describe important after-sale functions for a travel agent.
* identify what is involved in embarking and debarking.
* explain cruise line security measures.
* understand other types of sea travel.
bon voyage gift
guaranteed share rate
passenger departure tax
In Chapter 15, you learned that the cruise industry is booming. New ships with ever-increasing arrays of superior features mean growing numbers of cruisers every year. You now know the benefits and disadvantages of cruising, and that cruises have an exceptionally high percentage of satisfied customers. Yet, while more people are cruising, the percentage of vacationers who choose to cruise is relatively small. That means there is an enormous market of potential cruisers waiting to discover the romance, pampering, and value of a cruise.
Becoming as knowledgeable as possible about selling cruises is vital to tapping this vast resource and realizing an increase in profits. There are several things you can do to boost your cruise knowledge and become an effective cruise salesperson:
1. First-hand experience of every cruise ship would be the ideal way to develop your product knowledge. Unfortunately, though some try, it just isn't possible to achieve. Do take part in familiarization trips, ship inspections, and special events sponsored by cruise lines. These provide great hands-on experience.
2. Research individual cruise lineWeb sites and CLIA'sWeb site. Take a virtual ship's tour and investigate facilities available on each ship. Travel sites like Expedia.com or Travelocity.com allow you to compare and contrast cruises based on destination, cruise line, and length of cruise. The Internet has made information gathering much easier for travel planners. It's also easier for customers to do research. Travel counselors have to stay on their toes just to stay ahead of their customers.
3. Take advantage of training offered by CLIA, ASTA, and individual cruise lines. Whether it's a group training session or a video you can view at home, you will gain not only product knowledge, but also information on how to sell the cruise product.
4. Gather information from your clients. If they have cruised before, find out what they liked or didn't like about a particular ship. Most importantly, understand the importance of two-way communication. Is everyone a potential cruise client? Does everyone prefer a megaship? Does every client want the same cruise experience? Does every client want a "budget" cruise? The answer to all these questions is, obviously, "no." Because there are so many choices available, you can find a cruise product to fit almost any client. As with lodging and tour packages, a bad choice of product can lead to a ruined vacation for the client.
WHAT DOES A CRUISE COST?
Generally, the major determinants of the price of a cruise are cabin category and season. Other determinants include cruise length, the ship, and discounts.
All cruise pricing is based on a cabin category (see Figure 16-1). A cabin category is a group of cabins that have a common price. As with most other travel products, selecting the lowest priced product may not offer the value the client expects, so it is important to assist the client in selecting a cabin category that not only fits in his budget, but also his expectations.
At first glance, a lower cabin category may look good, but the least expensive cabin categories, while having the advantage of lower prices, have some disadvantages:
1. They usually have upper and lower berths instead of one or two beds on the floor. As you might imagine, cabins with upper/lower berths may not be practical for many clients, especially older clients, honeymoon couples, or travelers who are physically challenged.
2. They are located in less favorable areas of the ship. Unfortunately, lower priced cabins are often located in the forward and aft sections which experience more pitch. (Larger cabins and suites are usually located on the higher decks. These cabins provide wonderful views of the sea and the ports, but may experience more roll than cabins on lower decks.) Cabins that are located midship offer a smoother ride, plus they are closer to common areas. Lower priced cabins are also usually "inside," without a window or porthole. For a ship illustration see Figure 16-2.
3. They cannot accommodate more than two people. Anyone expecting to squeeze a third person, adult or child, into the least expensive cabin will find it's not possible. Three friends, or a family, simply can't qualify for the lowest priced cabins.
[FIGURE 16-2 OMITTED]
Cruise prices are also based on travel season. Some cruises have two seasons, while others may have three. Generally, more popular travel seasons are higher in price and less favorable seasons are lower in cost.
Since cruise length is a variable in pricing, it's sometimes more meaningful to determine the cost per day by dividing the total cost by the number of days. By doing this, it's easier for a client to compare a four-day cruise price to a seven-day cruise price.
Another factor that affects cruise pricing is the ship itself. Newer ships often command higher prices, as do ships that offer more space or more crew members.
Yet another factor that affects the price of a cruise is discounting. Nearly all cruise lines offer discounts of varying amounts based on the cabin category. In fact, there are so many discounts that a cruise is seldom sold for the price printed on a Web site or in a brochure. Early booking discounts are available if a cruise is booked far in advance. How far in advance isn't always easy to tell from published information, so it often requires contacting the cruise line. Special programs are nearly always available for selected ships, sailing dates, and perhaps cabin categories. The reason for specials is to boost sales on ships and sailings that have low bookings. Specials can be a flat dollar discount or they can be something as impressive as a "two for one" offer. Some cruise lines have loyalty programs that offer discounts to past cruise customers. Others offer discounts to organizations such as the American Association of Retired Persons (AARP). Regardless of the nature of the discount, the fact is that the amount shown for a cabin category is the maximum fare that could be applicable.
BASICS OF CRUISE FARE CALCULATION
It would appear that establishing a client's cruise fare is a simple matter of selecting the ship, the season, the length of the cruise, and the cabin category, and then applying any applicable discounts. However, there is more to consider.
Prices quoted for a cabin category are per person, and usually assume that two people will occupy the cabin. A single person must pay a single supplement, or an additional charge to occupy the same room. If a single traveler wants to avoid paying this charge, some cruise lines offer a guaranteed share rate which pairs single travelers of the same sex in the same cabin. This often represents a big savings, but the idea of sharing a cabin with a total stranger usually outweighs the savings in the mind of most clients. When more than two passengers occupy a cabin, the third and fourth travelers pay a lower rate than the first two. Dividing the total cost by three or four will reduce the per person cost for all.
The current trend in cruise pricing is that the amount shown in the cabin category chart includes port charges but not airfare or other taxes. Port charges are taxes levied by the government of each port of call against the cruise line. These taxes are shown as a total per person, and are then included with the cruise price. Note that port charges are not commissionable and must be subtracted from the cruise sale before the agency commission can be calculated.
All cruises that depart from or return to a U.S. port are subject to other taxes as well and these taxes are not included in the cabin category price chart. As part of the travel counselor's fare calculation, a per-person passenger departure tax must be added. Passengers on cruises returning to the United States are subject to a customs fee per person. These taxes are established by the U.S. government and are, of course, subject to change. Like port charges, these items are not commissionable to the agency.
Cruises that begin and end outside the United States may be subject to a variety of other taxes and fees. These are not usually included in the cabin category price. Generally, the total of all other fees and taxes is shown somewhere on the same page as the cruise fares and must be added to the fare when calculating a client's total cost. Any tax or other government fee is not commissionable to the travel agency.
Most cruise passengers require air transportation from their hometown to the point of embarkation. This can be booked through the cruise lines, or it can be booked separately by the travel counselor. Most travel counselors find that the advantages of booking air transportation with the cruise line far outweigh the possibility of booking a somewhat lower fare obtained separately. Consider the following:
* Purchasing airfare from the cruise line usually includes transfers from the airport to the pier for cruises around North America and may include transfers for cruises in other parts of the world.
* Purchasing airfare from the cruise line safeguards the clients should there be flight delays. The cruise ship will delay departure as long as possible when flights are delayed. Should the ship sail, late arriving passengers will be transported to the ship's first port of call and the passengers may receive some form of compensation from the cruise line.
Making the Calculations
Because commission is not paid on the total amount, we have to divide the calculation into commissionable and noncommissionable totals. Use the following steps to calculate the total amount of the sale (the amount you will quote to your client):
1. Add all commissionable items together.
2. Subtract included port charges.
3. Multiply by two (assuming there are two passengers).
4. Add all noncommissionable items together and again multiply by two passengers.
5. Add the commissionable total and the noncommissionable totals together to obtain the total sale amount.
A cruise reservation can be made by phone, in the agency GDS, or via individual cruise line Web sites. Most cruise bookings are still made with a phone call, but the GDS and Web sites are improving their offerings in order to attract more travel agents to make automated bookings. One example is Sabre Cruises, a browser-based cruise shopping and booking tool for travel agents that includes several cruise lines. In addition to being able to custom-fit a cruise to customer requirements, Sabre Cruises has more than 200,000 pages of graphical content, including descriptions of ports of call, ship views, deck plans, attraction information, maps, itineraries, and more. Several cruise line Web sites have agent-only sections that encourage agents to book online. The Web site http://www.vaxvacationaccess.com, which began as a tour booking tool, allows travel agents to make real-time bookings, access discounts, and search for cruises by customer interests for several major cruise lines.
Regardless of the method used to make a reservation, the travel agent must have all necessary information about the client and the selected cruise before beginning the booking process. Some agents prefer to use a reservation worksheet to make certain they collect everything that is necessary. Information needed includes the following:
* Names, exactly as shown on driver's license or passport.
* Age and citizenship.
* The ship, date of sailing, and departure city.
* Cabin preference.
* Special dietary requirements.
* Is air transportation required? If so, from where?
* Do they want trip insurance?
* Are they celebrating a special occasion, such as a birthday or anniversary? Many cruise lines provide special amenities, usually at no extra cost.
* What are their dining preferences?
* Shore excursions.
In general, cruises should be booked as far in advance as possible to ensure your client the best rates and first choice of cabin category. If a cabin category is sold out, the client may be offered a guarantee instead of an actual cabin. This means that the price is guaranteed, but a cabin will not be assigned until the day of sailing. If the client is willing to take this chance, they will receive a cabin that is at least equal to what they paid for but may be an upgraded (more expensive) cabin. Another booking option that leaves a great deal to chance is waiting until a few days or weeks prior to a sailing to book. If cabins are available, they may be offered at substantial discounts. On the other hand, if the departure is mostly filled, last-minute bookers won't receive any discount and will be assigned to whatever cabins are left.
After the reservation has been made, an option date is assigned. This is the date by which the cruise line must have the deposit. Option dates are usually seven days from the date of booking. Prior to the option date, the client can cancel without any penalty. A confirmation number is also assigned at the time of booking. This number makes it easier to access reservation information if changes need to be made.
Web Activity Access the following cruise lines' Web sites to learn if they have an "agents-only" area: Carnival, Disney, Holland America, Norwegian, Premier, Princess, and Royal Caribbean.
Most travel counselors create a file folder for each cruise sale. Within this folder should be the reservation worksheet, a hardcopy of an automated booking, and an action summary. The action summary is used to record all conversations, correspondence, payments, and transactions for the sale. In addition to being an ongoing record that covers all aspects of the sale, the action summary serves another important function. Should the booking counselor be out of the office, any other travel counselor can easily see what has been done, answer questions from the client, process payments, and so on.
As invoices are received from the cruise lines, these items should be kept in the folder as well. Keeping all paperwork about the sale together and in an orderly fashion substantially cuts down on the possibility of misplacing something, errors, and missing payment deadlines.
AFTER THE SALE
Once the cruise reservation is made, it's time to turn your attention to customer service. Cruisers have come to expect a superior level of service onboard and a total vacation that meets and exceeds expectations. Travel professionals know that offering this same value to their customers is key to retaining their business. Selling cruises offers many opportunities to enhance your value in the eyes of your client.
The first thing a travel agent should do after the reservation is send a follow-up letter to confirm to the client exactly what has been booked, what is included and not included in the price, cancellation policies, and trip insurance information. If a mistake has been made, it may very well be caught because of a confirmation letter. It's also important to thank the client for trusting you with his business. You might also include information on shore excursions, attire, weather forecasts, and the like.
Two to three weeks before the sailing date, the cruise line sends cruise documents to the travel agent. The documents include cruise tickets, air tickets, baggage tags, debarkation forms, general information about the cruise, and vouchers for transfers. E-documents are sometimes sent directly to the client, depending upon the cruise line. An e-document can be reproduced by the customer and contains all the components, including Web links to information about shore excursions and frequently asked questions.
Many travel agents like to send their cruise clients a bon voyage gift. These can be ordered through the cruise line. A bottle of wine makes a nice gift that can be delivered by the waiter at dinner. Snack trays, flowers, and fruit baskets can also be ordered and placed in the client's cabin.
A follow-up phone call or letter from you once your client has returned home is a great way to get feedback about the cruise experience, and it communicates to the client that you care. Most cruises are unqualified success stories, but if there were problems, this will give you an opportunity to deal with them. If the problem was a simple mishap that no one could control, sympathizing with the client may be all that's needed to soothe ruffled feathers. On the other hand, a problem of some severity that could have been avoided should be addressed. A letter to the cruise line, clearly identifying the problem and perhaps requesting compensation, may be in order.
Case Study Your clients have decided to take a cruise and they have selected one of the least expensive cabin categories. They want to wait to make their reservation, thinking the rates may go down and they will be able to save a lot of money. 1. Is this reasoning justified? 2. Would you recommend that these clients wait to make their cruise reservation? 3. What risks do you see in waiting to make the booking and what advantages might there be in making the reservation now?
Most cruise vacations begin with the passenger flying into the port city. What happens next? First, a passenger must claim their luggage. Near the baggage claim area of the airport, there is usually a cruise line representative holding a placard announcing the cruise line. The passenger should take their luggage to the representative. There may be several buses or vans outside the airport, and the representative advises the passenger which one to board. Baggage is usually taken to the pier in luggage trucks and is then delivered to the passenger's cabin. How does the cruise line know which baggage goes with which cabin? Remember the baggage tags that were part of the passenger's cruise packet? These tags identify the ship, sailing date, passenger's name, and cabin number.
Once at the pier, the passenger checks in. This procedure involves showing the cruise ticket to the cruise line agent on duty. Meal times and table assignments may also be made at this time. On some cruises, however, the meal time and table assignments are indicated on a card in the passenger's cabin.
The passenger is now ready to go onboard. In the movies, bon voyage parties are shown with friends and relatives celebrating the passenger's departure. In real life, most cruise lines do not allow nonpassengers onboard the ship. This policy is a security measure necessitated by the fact that we live in times of terrorism.
On completion of a cruise, most lines have a standard debarkation procedure. Each passenger is assigned a debarkation time, usually indicated by colored tags. This is to avoid having all passengers attempting to leave the ship at once.
When the ship arrives at her home port, the ship and crew members must clear customs (providing, of course, that the ship sailed into international waters). Customs officials board the ship for this procedure. Once the ship and crew have been cleared, it is the passengers' turn.
Some cities have customs offices at the port, others do not. In cities where there is a permanent customs office, passengers take their carry-on bags to the office for processing. In cities that do not have a port customs office, customs officials set up a temporary office, usually in the largest public room of the ship. Passengers and carry-on bags are processed in this temporary customs office.
Certain items are forbidden by the U.S. customs laws. Forbidden items are called contraband. Plant material is not allowed because insects and disease-causing bacteria and fungi may be present on organic products. For the same reason, fruits and vegetables are not allowed to be brought back into the United States.
On cruises throughout the Caribbean, passengers may purchase turtle shell products and Cuban cigars, both of which are contraband, but for different reasons. Turtle shell and all turtle products are forbidden because the turtle is on the endangered species list. Cuban cigars--and any other products of Cuba--cannot be brought into the United States because there are no diplomatic relations between Cuba and the United States.
Other examples of contraband include animals (without special licenses), certain ceramic tableware manufactured abroad with a high lead content, drugs and drug paraphernalia, medicines not approved by the Food and Drug Administration (FDA), firearms and ammunition, food products, and any animal or animal product on the endangered species list.
A very helpful booklet you can provide your client with is "Know Before You Go," published by the U.S. Customs Office. This free booklet contains information on duty-free allowances, restricted items, the percent of duty on excess purchases, and other helpful hints. Another method of accessing "Know Before You Go" is on the Internet. The Web site is http://www.cbp.gov, select "travel publications".
Cruise Line Security
As with other segments of the travel industry, the cruise lines have also responded to issues of safety and security. Many of their security procedures are confidential, but in general, passengers will be faced with additional luggage screenings and more visible security personnel, including canine inspections. According to CLIA's Web site, "cruise ships are inherently secure because they are a controlled environment with limited access."
At U.S. cruise terminals, procedures are similar to those found at airports, including requirements for photo identification and use of metal detectors for anyone who boards any ship. The following documents are required for all cruise passengers who are U.S. citizens: a passport or birth certificate (original or certified copy) plus a picture ID issued by a federal, state, or local government agency (except for children under age 16). Non-U.S. citizens are required to have a valid passport and visa (when needed) and an Alien Registration Card (ARC or "green" card) if the individual is a resident alien living in the United States.
In some parts of the world piracy has been an ongoing concern. Here again, the cruise lines have responded by placing additional people on watch and implementing strict policies to identify other vessels traveling close by.
There is quite a large untapped market of potential cruisers offering travel professionals many possibilities for increased profitability. Selling cruises, however, requires a great deal of expertise. There are many ways that a travel professional can gain knowledge about cruising without actually having to take every existing cruise. The price of a cruise is determined by several factors, primarily cabin category and the season. Matching the cruise, and especially the cabin category, with the customer is important to his overall satisfaction. Calculating a cruise price involves understanding that prices are quoted per person and that many discounts are available.
? What Would You Do? Your clients are sailing in three weeks and the cruise documents have just arrived. Air transportation was booked through the cruise line and the tickets are in the document packet. The only problem is that the flights are departing from Kansas City instead of St. Louis (where your clients live). 1. Do you call your clients and explain that they must fly from Kansas City instead of St. Louis? 2. Do you book and sell separate air travel from St. Louis and try to get a refund on the other tickets? 3. Do you contact the cruise line and see if they can remedy the problem?
A cruise reservation is most often made by phone; however, automated bookings are being encouraged by a number of innovations and improvements. Regardless of how the reservation is made, there are several things the travel agent must know about her client when making the reservation. Because cruises offer customers a superior level of service, clients expect no less from the travel agent who books their cruise. Adding value for your clients is the key to retaining their business.
For additional Travel and Tourism resources, go to http://www.hospitality-tourism.delmar.com.
EXERCISE 16-1 Cruise Pricing and Selling
1. Define the following terms:
Guaranteed share rate
2. Identify some possible disadvantages of selecting the lower priced cabin categories:
3. What cabin location would you suggest to a client who is concerned about seasickness?
4. Why is it often advantageous to purchase air transportation from the cruise line, even if it means paying a slightly higher fare?
5. List five things a travel agent needs from a client in order to make a reservation:
6. Use the information on the seven-day cruise from Miami in Figure 16-3 to answer the following questions. Your clients are two adults who are interested in the July 25 sailing in cabin category 4, including air from Erie, Pennsylvania.
a. How much is the total cost?
b. How much deposit is due?
c. How much is the total final payment amount?
d. How much commission will be earned?
7. Your clients are two adults who live in Miami and want to sail in cabin category 2 on the June 6 sailing.
a. How much is the total cost?
b. How much deposit is due?
c. How much is the total final payment amount?
d. How much commission will be earned?
7-day Cruises from Miami Category & Deck Value Base High 12--Upper 2,039 2,139 2,239 11--Verandah 1,839 1,939 2,039 9--Empress 1,399 1,499 1,599 8--Upper 1,379 1,479 1,579 7--Verandah, Empress 1,359 1,459 1,559 6--Upper, Riviera 1,339 1,439 1,539 5--Main 1,239 1,339 1,439 4--Riviera 1,219 1,319 1,419 3--Empress 1,159 1,259 1,359 2--Upper 1,139 1,239 1,339 1--Riviera 1,119 1,219 1,319 3rd & 4th guest 12 & under * 599 599 599 3rd & 4th guest 13 & over * 649 649 649 Cruise Vacation Protection Plan 89 89 89 All rates quoted in U.S. dollars, per guest, double occupancy (except as noted), and include Port Charges. For all guests, Passenger Departure Tax additional $3 per guest, Customs Fee additional $6.50 per guest. Air transportation available from major cities throughout North America. See Air Program for details. Holiday Sailings: December 19 and 27, add $500 per guest. Special Single Guest Programs: Categories 1-3: 150% of double occupancy rate Categories 4-12: 200% of double occupancy rate Guaranteed Share (4 guests per cabin) $770/guest Cruise Vacation Protection Plan: children 16 years or less are covered at no extra charge providing the Plan is purchased by accompanying adults. Value Sailings: May 2, 9; Sep. 5, 12, 26; Oct. 3, 10, 17, 24, 31; Nov 28 Base Sailings: Jan 4, 11; Apr. 25; May 16, 23, 30; Jun. 6; Aug. 29; Nov. 7, 14, 21 High Sailings: Jan. 18, 25; Feb. 1, 8, 15, 22, 29; Mar. 7, 14, 21, 28; Apr. 4, 11, 18; Jun. 13, 20, 27; Jul. 4, 11, 18, 25; Aug. 8, 15, 22; Dec. 19, 26 Deposit is $250 per guest. * Sharing stateroom with two full-fare guests. FIGURE 16-3 Information contained in a typical cruise pricing section of a brochure or Web site that will be used to calculate cruise pricing. Air Program Departure Tampa/ Los New City Miami Canaveral Angeles Orleans Cincinnati, OH 309 319 459 279 Erie, PA 339 339 499 309 Fargo, ND 479 469 499 549 Indianapolis, IN 299 299 429 289 Departure Panama City Alaska San Juan Hawaii Canal Cincinnati, OH 699 479 659 479 Erie, PA 749 439 689 399 Fargo, ND 479 609 699 489 Indianapolis, IN 649 469 669 459 Note: The cruise rates shown in the chart include $119 port charges, which are not commissionable. Please subtract the port charges from the cruise rate, then add insurance (if applicable) before you calculate 10% commission. Air add-on is not commissionable.
8. Your client is a single adult who wants to travel in a cabin by herself on the September 12 sailing in cabin category 5, no air.
a. How much is the total cost?
b. How much deposit is due?
c. How much is the total final payment amount?
d. How much commission will be earned?
1. What methods can travel agents use to make cruise reservations?
2. What should be included in a confirmation letter?
3. Why is agency follow-up important?
4. What type of person might be interested in traveling on a freighter?
5. List four things you can do to increase your knowledge of cruises:
6. What five factors influence the price of a cruise?
7. Explain what a cabin category is and why it is important to match it to the client's budget and expectations.
8. What are e-documents?
9. Describe some cruise line security procedures that passengers will be faced with.
FIGURE 16-1 Two factors that affect cruise pricing are cabin category and seasons. This chart indicates the range of pricing. Cruise-only rates--rates include port charges Cabin Value Regular Category Season Season Suites $2,459 $2,679 Ocean View $1,459 $1,659 Ocean View $1,379 $1,589 Porthole $1,289 $1,489 Interior $1,269 $1,459 Interior $1,239 $1,439 Interior $1,189 $1,379 Upper/Lower $1,129 $1,299 3rd & 4th guest $879 $879 3rd & 4th guest $989 $989 Vacation Protection $59 $59 Vacation Protection $99 $99 Your calculations will look like this: Per-person cruise fare $1479 Per-person airfare 329 Per-person insurance 99 Per-person discount -200 $1578 x 2 $3,156.00 (commissionable amount) Per-person port charges 129.00 Per-person air charges 65.95 Per-person departure tax 3.00 Per-person customs fee 1.75 $199.70 x 2 = $399.40 (noncommissionable total) $3156 + $199.70 = $3,555.40 (total sale amount)
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|Title Annotation:||SECTION V: Selling the Cruise Experience|
|Author:||Gorham, Ginger; Rice, Susan|
|Publication:||Travel Perspectives, A Guide to Becoming a Travel Professional|
|Date:||Jan 1, 2007|
|Previous Article:||Chapter 15 The basics of cruising.|
|Next Article:||Chapter 17 Practical advice for international travelers.|