For the first time in its history, 40 percent of cruise transactions taken last week by advisors of Dream Vacations, CruiseOne and Cruises Inc. were for cruise departures within the next 100 days, according to Brad Tolkin, co-CEO and chairman, World Travel Holdings.
That’s fueled by ship after ship returning to service, with many more coming through year's end. Most cruise lines say they’ll have all ships back in service by either the first or second quarter of 2022.
“I can tell you that we are having a phenomenal week,” Tolkin told Travel Agent. “We’ve never been close to that” for the number of close-in cruise transactions.
In his keynote address Friday to hundreds of travel advisors attending the “Together” conference on Celebrity Apex, and in a separate one-on-one interview, Tolkin outlined these other cruise trends, too. Here's what he had to say:
Increasing Optimism About Cruising: Always looking at the glass half full, Tolkin stressed that while he's been bullish on the cruise industry this year, he's now even more so, noting that the confluence of positive events for cruising and leisure travel “has never been greater in my 31 years in this industry.”
During the pandemic, WTH did not apply for a Paycheck Protection Program (PPP) grant, as the line in the sand to qualify for a company was below 500 employees. Rather than permanently getting rid of people to qualify, the company hunkered down. “The secret sauce is our people,” he acknowledged, noting that the organization made the right choice on staffing levels. Today, more than 80 percent of any furloughed WTH employees have been offered the opportunity to return to work.
Cruise Customers Need an Advisor: The pandemic and all its quirks and twists for travel, “reminded us that your customers will need you now more than ever,” Tolkin told the advisors. The consumer seeking to buy a cruise not only wants but needs the expert advice, comfort and professionalism that comes with a top notch travel advisor handling their vacation.
View Cruise FCCs as Opportunity, Not a Hurdle: As cruise lines cancelled voyages they offered FCCs (future cruise credits) to customers. Now many of those are expiring soon. So, travel advisors have had to navigate through a maze of options, spend hours on hold waiting to talk with a cruise line representative and “hold hands” with nervous customers eager to cruise again.
But when life provides people with lemons, it’s imperative to make lemonade, according to Tolkin. “If I told you in 2019 that I will guarantee you an additional sale with full commission, but you will need to wait for two hours on hold with a cruise line for your client, there would be many of you saying, ‘send them my way,’ he notes. “Those are moments that are a ‘green light’ for your to get closer to your customer.”
Change the Consumer's Cruise Perception: Hundreds of conference attendees and others cruised last week on Celebrity Apex, and all were vaccinated and tested prior to boarding. But “we need to work incredibly hard to change the perception [of consumers]," he stressed. "Cruising is the safest place to be for people to go on vacation," Tolkin noted. "There is no safer place that people can go to anywhere with the possible exception of a hospital.”
In addition, crew cleaned cabins several times a day and all crew also were vaccinated, tested and wore masks. All cruise lines have sizable health/safety protocols. For example, Travel Agent sailed on Viking Venus in September and dubbed it "the world’s safest ship when it comes to pandemic-era protocols."
There was one positive COVID-19 case discovered on Celebrity Apex late last week during routine testing for international travelers heading home. That said, as Lisa Lutoff-Perlo, Celebrity’s president and CEO, said in October, the line has specific, well-thought-out and approved procedures to handle any potential cases. On our cruise, it was a very civil process. The captain announced that the specific passenger was isolated and contact tracing was being initiated, and other guests (all vaccinated) went about their vacation day as normal.
During his keynote address, Tolkin talked about the experience of taking a recent hours-long airplane flight—essentially lots of people within an 11-foot-wide-area—and then going to a baggage claim jammed with people, dining in crowded restaurants, and walking through jam-packed hotels. “I have no idea who might be sick, might be tested, might be vaccinated,” he said.
“What’s amazing is that the consumer is accepting of this because it’s not a cruise.” He stressed that with 3,700 crew and passengers on Celebrity Apex, “look at how comfortable and safe we feel. But the consumer doesn’t know it.” He urged advisors to speak out, tell their experiences on cruise ships, talk about the protocols and educate the public.
Cruise Ships Are Fully Staffed, Unlike Many Hotels: Tolkin talked about how the “services” onboard cruise ships can also differ sizably from what’s happening at some hotels and resorts right now. While the cruise lines are holding capacity of guests to a certain level, their crew levels are at full staffing.
“All of the cruise industry has full dining, full staffing, full entertainment options, and twice per day housekeeping,” Tolkin said, quipping that he even got his shoes shined. Meanwhile, many hotels have cut services and do not have the staffing levels they had pre-pandemic.
Cruise Ship Satisfaction Scores are Soaring: Echoing comments of cruise executives, Tolkin mentioned that “every cruise line has told us that their customer satisfaction scores are at an all-time high. That’s because as we have experienced this week, cruise lines are knocking it out of the park.” But again, he noted, “the consumers do not know this, so it’s our job to educate.”
Cruise Sales Aided by Soaring Retirement and Personal Savings Accounts: For many consumers, spending is influenced by what’s happening with their IRA or 401(k) retirement accounts. “The stock market is at an all-time high…and these accounts have gone up, and up, and up,” Tolkin explained. In addition, while the personal savings rate is hovering at a 20-year-high, experts says it’s going to return to normal. “That means consumers are going to spend money on travel,” he said, noting that there is an unbelievable $3.5 trillion higher than normal amount of savings in those personal savings accounts.
Bottom line: Those aren’t funds that are in crypto or long-term investments, or alternatively, tied up in real estate. They're easier to access and cosumers with pent-up demand are often looking to tap into the excess funds for a cruise vacation.
New Ships Are Fueling Excitement: The new ship order book is now at 92 ships in the construction pipeline. While that level was at more than 100 new ships several months ago, many of those have just been delivered.
“There are more new ships than there are new resorts and the cruise industry is a fraction of the resort industry," Tolkin revealed. Those new ships are helping fuel marketplace/consumer excitement about cruising once again.
Optimism of Private Equity in Cruising: Proof positive that the cruise industry—despite the pandemic-era shutdown earlier this year and last—has a bright future is the investment of private equity companies. They’ve heavily invested in such cruise lines as Virgin Voyages, Azamara and others, too.
“Three different private equity houses have invested in the cruise industry and pressed the pedal to the metal,” emphasized Tolkin. He used Virgin Voyages as an example, saying it’s not just about funding one or so ships, but rather an entire fleet, “and they’re on the verge of completing their own terminal in Miami. They've plowed forward.”
Optimism of Travel in General: Citing a new aircraft order by United Airlines, Tolkin reported that in 2023, that airline will take delivery of a new plane every three days. “Leisure travel once again has proven to be the most durable and resilient type of travel,” and Tolkin, also talking about Hyatt Hotels’ $2.8 billion purchase of Apple Leisure Group.
“I have said for over a year that we are staring the face of the greatest build up of demand for travel that we have ever seen,” he believes.
More Retirees, More Time and Money to Cruise: The number of people who retired last year was 50 percent greater than the already high numbers forecasted. “That’s one reason we’re seeing our luxury sales just jump through the roof,” added Tolkin. “These people haven’t traveled yet and they are ready.”
Remote Work Changes Vacation Days: The pandemic has permanently changed where people work and how often they’ll be required—if ever—to be in a physical office location. That can change how they travel the world.
Yes, people still get their normal vacation time, but now, if a couple are working remotely from anywhere in the world, they can still sail on a global cruise adventure, work eight hours and take time to see and experience destinations during off-hours. They might head out for dinner in Monte Carlo, explore Hong Kong after dark, or take a dip into Antarctica waters in a submersible. They can be back at work in an hour and then do it all over in a different destination the next day.
Cruising is particularly well-suited to accommodate professionals working remotely as they can simply bring the laptop or other techie device and set up an office in their stateroom or suite. They can also count on such fare inclusions as food, entertainment, transportation to exotic locales and—depending on the cruise fare—even Wi-Fi or gratuities. It's an easy way to work remotely and see the world at the same time.
“This genie is never going back into the bottle,” believes Tolkin, who expects the "working remotely trend" to fuel travel sales over the next 30 months. Big companies have made it policy, even branding certain months as "April Anywhere" or "August Anywhere."
"This increase in vacation days is permanent," he told Travel Agent. For cruise selling agents, “that spells opportunities for us. I hear the slot machines paying out commissions as the amount of available vacation days has greatly increased.”
For example, he cited an example recently given at a conference by Vicki Freed, senior vice president of sales, trade support and service, Royal Caribbean International. She revealed that a 26-year-old man booked a cabin on Royal Caribbean’s first World Cruise as he can work from anywhere.
Opportunities Abound: From Tolkin’s perspective, “we are now at the beginning. We are at the doorstep to what could be our greatest moment.”
He predicted that when advisors open their newspaper or online news site on January 1, 2023, any articles will say that leisure travel was the number one business that people were successful at during 2022. His take? “We are back doing what we do best.”
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