Monday, 21 January 2013

World cruise means prestige for lines, profitability for agents

World cruise means prestige for lines, profitability for agents

By Tom Stieghorst
January is world cruise season, and this year a dozen ships are sailing on three- to four-month voyages around the world. It’s a time-honored tradition, especially for luxury lines.

So leave it to one of the industry’s iconoclasts to question whether the tradition makes sense.

“In my view, the world cruise is the itinerary of last resort,” said Frank Del Rio, chairman of Prestige Cruise Holdings. 

He said the long stretches of blue water and high costs make a world cruise less profitable than it might appear.

“We do very well in the winter without a world cruise,” he said.

Del Rio is swimming against the tide. At least nine cruise lines will offer world cruises this year, including six that will circumnavigate the globe. Three will last 115 days.

Proponents say a long, slow winter cruise to exotic ports is just the thing many cruise fans aspire to. Having the option of a world cruise cements loyalty with top customers, just as not having a world cruise opens the door for other cruise lines to steal a valued client, perhaps for good.

For travel agents, a world cruise sale is a nice bonus.

“It’s not that common an item, but it’s very profitable,” said Cruise Brothers agent Bob Newman, who has sold four world cruises in 15 years. “People love them.”

World cruises date at least to 1923, when Cunard Line’s Lanconia completed a 130-day trip that visited 22 ports. The institution remains strongest in the U.K., where two Cunard ships and three P&O Cruises ships leave Southampton, England, on world cruises this year. 

2013 WORLD CRUISE MAPThe longest world cruises, at 115 days, are those operated by Holland America Line, Seabourn Cruises and Silversea Cruises. (Click here or on the image, right, for a view of a map of 2013 world cruise offerings.)

Last year, Crystal Cruises simultaneously offered for sale world cruises in 2013, 2014 and 2015, including a full 108-day circumnavigation in 2015 that will mark the line’s 25th anniversary.

Mimi Weisband, a spokeswoman for Crystal, said about 400 passengers have booked the full 2013 world cruise aboard the Crystal Serenity, while the balance are taking one or more segments of the cruise.

“There are hundreds of guests for whom Crystal Serenity is their winter home,” Weisband said.

Those guests tell other guests about the voyage and act as brand ambassadors, she said.

A full world cruise has a rhythm all its own, Weisband said. Lines offer progressive enrichment programs that encourage passengers to take all segments of the cruise.

Weisband said today’s world cruise customer often doesn’t fit the stereotype. Some are entrepreneurs who can operate their businesses remotely. Others have children and tutors in tow.

“Years ago the image was some elderly person sitting on a deck with the blanket in their lap,” she said, but today’s world cruise passenger “is active and engaged.”

An active and engaged passenger is just the kind of cruiser targeted by Oceania Cruises and Regent Seven Seas Cruises, the two brands operated by Del Rio’s Prestige Cruise Holdings. And neither line is offering a traditional world cruise this year.

Del Rio said world cruises are hard to fill and that segments are more popular than the cruise as a whole.

“The most successful world cruise Regent had was only 40% full for the world cruise,” he said.

In 2011, Regent offered a world cruise from San Francisco to Southampton that ran from January to June. But this year, two of Regent’s ships are doing long cruises in South America and Asia, while the third is doing 10-day Caribbean trips from Miami.

Del Rio said that is a more efficient deployment than a world cruise, despite its eye-popping price. “Yes, it is a longer cruise, so they’re writing a bigger check, but the per diem yields are not as high,” he said.
Mary KleenFor travel agents, a world cruise can be a big payday.

“We love them,” said Mary Kleen, general manager at Pisa Brothers Travel, New York. “There’s no better sale in cruise travel.”

Pauline Power, director of cruises at Altour in New York, said the commission on a Queen’s Grill cabin on the Queen Mary 2 can amount to $30,000 to $35,000. “Those sort of bookings don’t come along every day,” she said.

The trade-off is that agents must be knowledgeable about a large number of ports and supply the kind of detailed, personalized service clients expect when they’re spending $250,000 on one super-long sailing.

“If you don’t know what you’re talking about with the client, they’re just going to go elsewhere,” said Newman of Cruise Brothers.

And even Del Rio agreed that once a cruise line has eight or nine ships, it can afford to deploy one of them on a world itinerary. At Seabourn, world cruising started in 2009 when it doubled its fleet from three to six ships, said John Delany, senior vice president of marketing and sales.

“We do one a year,” Delany said. This year, the Seabourn Quest will make a 115-day, westward sailing from Fort Lauderdale to Venice.

Delany said it is not only the size of the fleet but the size of the ships that can determine the profitability of a world cruise. Seabourn only has to fill 225 cabins on the Quest, he noted.

“Because our ships are small, we may not have the challenge of filling them to the same extent as some competitors,” Delany said.