Cruise Holidays - A Profile on this Thriving Enterprise

by Mimi Kmet

Agent@Home

December 7, 2010

The following article was written by Agent@Home magazine. You can read it in its entirety below, or read the article on Agent@Home's Web site.

Since Cruise Holidays came under the Travel Leaders Leisure Group umbrella about a year and a half ago, the travel agency franchisor has risen to become a thriving enterprise with a slew of new marketing tools, technology platforms, and training and support programs designed to help its franchisees. Those franchisees include a number of home-based agents who joined when their former group, SeaMaster Cruises, merged with Cruise Holidays. The company’s success is due in large part to the leadership of Mark Schiffner, Cruise Holidays’ vice president. We spoke with Schiffner during the company’s annual convention last month at the El Dorado Royale all-inclusive resort in Mexico’s Riviera Maya about the company’s programs for franchisees, as well as other travel industry issues.

How does Cruise Holidays help its agents sell more cruises? We do so in many ways. Our marketing program is very focused on the right message getting to the right client, and our operating system allows us to do that. We don’t just send everything to everyone. Our folks are able to go into a customer profile and not only have the historic information about how they travel but put in a future destination or a future vendor that they would like to have communicated to that client. It’s incredible how effective our marketing has become since we’ve been able to slice and dice that much. We’re also one of the few organizations with a centralized database of all of our franchise owners in one place, and all of our marketing is on their behalf. We’ve also layered our marketing approach, so if there’s a direct mail piece, there’s also an email marketing campaign and landing page posted on the franchisee’s site. From the technology side, I think our operating system is, if not the best, then one of the very best agency software tools there is. And again, that’s because of the integrated platform. Everything we do - even our website - is integrated. That platform helps them be more efficient, helps them handle their customers better with a customer relationship management tool, and makes them better from an accounting standpoint. You don’t need more technology; you need less technology that does more, and that’s what we’ve tried to do And, of course, training and support is ongoing. We believe our franchise owners are our customers, and we’re big on having trust and credibility with our customers, just like they have. It’s the trading of ideas; and frankly the best ideas come from our franchise owners, because they’re at the front. And when they say, "this is not working the way we’d like it to,” or "can we find a solution to this particular issue,” we’re all ears.

What percentage of your membership is storefront/office versus home-based? We have a little more than 100 retail storefronts and about 130 home-based agents. Many of the storefront retailers have numerous independent contractors and outside salespeople as well.

What does Cruise Holiday offer its home-based franchisees? Probably the best way to differentiate ourselves from many of the other home-based programs is that we’re not a host agency. We’re a full-service franchise opportunity in a virtual office setting, so many of the same programs, technology and marketing that we offer our retail storefronts we also offer our home-based agents. We are very excited about continuing to expand our home-based franchise network. With most of our folks, we look for previous business experience, but in another business. Lots of our agents are cruise enthusiasts, but they come from a different walk of life, so they bring a different sphere of influence with certain groups of people. Another way we’re different is that we focus on group business right from the beginning with our home-based folks. We have a home-based franchisee who had a corporate incentive group of 690 people booked at this resort the week before the conference, and they expect to have 1,000 next year.

What is Cruise Holidays’ stance on NCFs and non-commissionable shore excursions? We’re very aggressive at selling shore excursions through companies that pay us commission, like independent companies. Our position on NCFs is that the cruise lines make a large investment, and they’re looking for the best return that they can. We look at it from what we need to do, because we make a large investment into our business as well. And when NCFs don’t make sense at some point, you’ll see that we’re selling a lot more all-inclusives and tours now, and the river cruise industry is growing rapidly as well. We don’t like NCFs, just like everyone else, but you need to pick the products you sell, and you need to make sure you bundle those products for the client so you get a bigger share of the client’s business. NCFs are not going anywhere soon, so we need to adapt our business model.

With all of the issues around selling cruises today, such as NCFs and price slashing by suppliers, is selling cruises still profitable? Absolutely! It’s how you sell cruises and which cruises you sell. Cruise Holidays focuses on a bigger share of the customer, including pre- and post-cruise packages and travel insurance. We also place a lot of focus on affinity groups; and in the affinity group business many times you can determine your profit and be much more profitable than, say, with an FIT or an individual. We also focus on higher accommodations, so we’re not the type of folks to be out there selling that inside stateroom. Most of what we book are deluxe staterooms or suites.Longer voyages and destinations also make a big difference. This year, our yields have increased almost 20 percent in Europe alone. In the Caribbean, there’s a lot of new tonnage and it’s a very price-competitive market. But our franchise owners concentrate on many different destinations, and the Caribbean is just one of them. If you’re going to play in the Caribbean market, and you’re going to play that pricing game, then it’s very difficult to make money on a cruise.

What did you think of the news earlier this fall that Norwegian Cruise Lines sells 27 percent direct? Again, I think the cruise lines make a large investment, and they continue to introduce more and more staterooms. The fact is that there are a lot fewer agents selling cruises now. In 2006, if you were to go by every CLIA-appointed agency, you would have one agency booking every six staterooms. In 2010 it was one agency for every 12 staterooms. And in 2014, given that no other agencies close or come into the business, it will be one per 14 staterooms. My point is that the pie is growing substantially. Because of that, there’s now much more opportunity for a very focused, dedicated agency or agent to take a bigger piece of that pie. Moreover, I don’t think the cruise lines have any option. Cruise lines are looking to take more direct business, but to be frank, they have to. They need to fill the ships; and if we’re not going to do it, then they are. But I also believe that there’s no one who can do it as well as we do. A cruise line will never replace an agency from a level of service and support. So our focus is that rather than pine away about the old days, let’s talk about how we can make it work today.

For more information, call 800-824-1481.

Mimi Kmet is executive editor covering the U.S. Western States and the cruise industry for TravelPulse.com.