Are cruise lines prioritising direct sales at the expense of travel advisors?
This was one of the big questions that reared its head (again) recently.
Last week, Cruise360 returned to the Royal International Convention Centre, Brisbane, in front of record delegate numbers – well done to CLIA on a great event.
Like 2024, I had the privilege of moderating a panel – the State of the Industry panel on Wednesday morning, featuring some of the biggest hitters in the cruise industry.
These included: Peter Little, Senior Vice President and Country Manager, Carnival Corporation and plc and Chair, CLIA Australasia; Gavin Smith, Vice President & Managing Director, Royal Caribbean; Ben Angell, Vice President & Managing Director APAC, Norwegian Cruise Line; Deb Corbett, Chief Executive Officer APAC, Ponant Explorations; and Lisa Pile, Vice President Sales & General Manager APAC, Regent Seven Seas Cruises.
This is where the direct sales topic first re-emerged – in my ears (or eyes) anyway. Let’s be real, it’s not a new topic.
Up on stage, there were two large monitors directed towards the speakers that were used to show questions the delegates submitted through the Slido app.
Towards the end of the session, the AV desk threw up a significant collection of questions, and immediately there was a theme – direct sales.
The wording of a few of the questions submitted seemed pointed, insinuating that cruise lines were definitively cutting the grass of advisors.
I’m too old, cynical and have been a news journalist for far too long, to get overly excited about a story that is born from small groups of people shouting loudly and banging drums, but the volume of questions around direct sales submitted via Slido made it initially feel like this was something more.
Were cruise lines really starting to hone in on direct sales? And how could advisors ensure that they were front of mind for them and had the best chance of locking in clients?
I asked the panel, but focused more on practical learnings – if advisors thought that they were truly competing against cruise lines, perhaps on an uneven playing field, what did they have to do to ensure that this wouldn’t happen?
Direct sales will always be a reality, and a necessary one, but it doesn’t need to be aggressive.
Pile was adamant that the opportunity was there for advisors to grab, and that there was one important step they needed to take.
“Turn up to the events we put on,” she insisted. “We invest a lot of money in events, we need your support, and believe it or not, most of the clients who turn up to events are not working with a travel advisor, so please turn up to the events and support your cruise lines.”
Corbett agreed, with an addition.
“Please use our sales teams, they’re dedicated business development managers and they can create customised marketing and sales campaigns with you and sit down and do a business plan with you.
“They can forward-plan the lifecycle of your clients for one, two, three years out, and I really feel that if you work with them individually, you’ll get so much out of it.”
Little added that context around the consumer was difficult to get via a website, so the advisor has a huge role to play that cruise lines respect.
He said it was “about understanding the customer”. Knowing what the customer wanted, and that “you only know that by having a conversation – [getting that information] can be more challenging to attain through a website”.
“We rely on you to understand the products you’re selling and get the right guests on the right ships,” Little said. “As I said earlier, if we get the right guests on the right ships, they’re going to come back.”
After the panel, one of the panel members said, not in jest, that we could have run an entire panel on direct sales. I have no doubt we could have.
But why does this topic keep rearing its head?
Asking a few advisors of different seniority levels both at the conference and away from it brought out some interesting points that I was not entirely ready for. Most of the conversations were under Chatham House rules – as in, I could use the information but not attribute a name to it.
The first very senior advisor came out swinging…in defence of the cruise lines.
“I mean, this is the problem – you can’t expect these massive organisations to rely on 60% of what we were pre-COVID,” they said.
“I’m not trying to defend them, but they have to come up with ways to continue to sustain and grow and push the business forward. There are less consultants these days and more people wanting to travel than ever before, not to mention these are large businesses headquartered overseas that place very high KPIs on the local teams.
“As if you wouldn’t want to make some direct sales. But here’s the thing – the majority don’t do it at the expense of advisors. They just mop up what the advisors don’t grab – most of the marketing they do points consumers to travel advisors first.”
Another one that I spoke to was more adamant that there were only one or two bad eggs in the industry – we won’t name names here.
“Cruise lines providing discounts if clients go direct? I think it’s happening more and more and it’s not just a 10% discount they are giving – I know that there are those that are actively going after advisor clients, but thankfully it’s just a handful…not even a handful. One or two.”
That executive felt the power was in the collective hands of advisors though, suggesting that because it was such an uncommon situation, advisors should just stop selling that brand and collectively, it would be a very strong statement.
The bigger problem for the industry though was that “once it comes out, you know, you paint everyone the same colour, everyone gets tainted with that brush, right?”
Someone who did go on record was the well-known and established Robyn Sinfield of Home Travel Company in Tasmania, who shared that she had seen some direct sales undercutting.
“They say, ‘oh, yes, it shouldn’t be happening’, but we all know it’s happening…they say within 30 days if you get your client to deposit with us, we’ll hand it over. That’s not the point – it makes the agent look like they’re ripping the client off,” she said.
Sinfield admitted that she had no problem with direct sales, so long as it was on an equal playing field.
“Direct business should be on an equal playing field. [If] the direct price is $5,000, then my agent price should be $5,000. No problem with that at all, there’s a stream for everybody, but when it’s $4,500 direct and $5,000 from the agent, there’s something majorly wrong.”
Importantly, Sinfield suggested there was potentially a lack of discussion going on between advisors and the cruise lines, and urged advisors to pick up the phone more often and have a conversation.
“It’s a real crossroads I think we’re at with cruises at the minute, and you could ring around the country and I think if there was a barometer of feeling, it’d be a negative one, not a positive one.
“Personally, mine’s very positive – if I’ve got an issue with a cruise line, I’ll just pick up the phone and go straight to them and sort it out.”
I managed to have a brief chat with itravel CEO Steve Labroski as well, who had a few observations that were more than relevant.
“Cruise will continue to grow and for us, it’ll only become a bigger part of our business, but we also have to make sure that we’re engaging the right partners to grow that part of our business – we can’t be everything to everybody.”
He said that if advisors were confident in who they were and what they did as a business, then nine out of 10 times, they will get the business and the clients will keep coming back.
“We’re only scratching the surface here with the potential of cruise.”
The rest of the week
We’ve not heard the last of direct sales but it’s time to move on for now.
Friday was an interesting day on the news front, not least because we had three staff out at different conferences across the country.
In the morning, Qantas dropped its annual report.
Depending on the business, these can at times be non-events if the meat of the story has been revealed when the FY results drop.
But this was Chairman John Mullen’s first report so perhaps his introduction letter would provide some fodder.
It sure did.
“I also want to acknowledge the impact the recent cyber incident had on customers,” he wrote.
“While management took immediate action to contain the breach, support customers and put additional protections in place, in recognition of the seriousness of the incident, we decided to reduce 2024/25 short term bonuses by 15 percentage points for the CEO and executive management.”
Oooft. But good on you, Qantas. Is this the start of some genuine culture change and customers coming first? Mullen said it was in his letter, let’s see where else this goes.
Travel Daily editor Adam Bishop, meanwhile, reported on Flight Centre Travel Group cutting 100 IT jobs.
The company said it was making strides to enhance its service delivery and customer experience through a better service integration and management model.
Meanwhile, the news story that keeps on giving this year, Koala Airlines, gave a little more, with the revelation it may not have regulatory permission to fly its newly leased trio of Boeing 737 MAX planes.
Popular travel leader Brent Hill also officially announced his new role after departing Tourism Fiji as its CEO.
Hill will be charged with leading the marketing of Brisbane 2032. If his time at the South Australian Tourism Commission as its marketing boss was anything to go by, there should be some very interesting campaigns for the upcoming 2032 Games.
And back to advisors, support for a new travel agent council has already received 50 submissions from interested parties who want to participate, The Cruise & Travel Store founder Belle Goldie confirmed to Travel Daily.
Take a read of Thursday’s and Friday’s issues of Travel Daily for the response from ATIA and CATO.
And to round off, in cruise, Celebrity Cruises announced its two new river ships. You can read about that here.
Another big week of travel down.
Enjoy your weekend.
Damian Francis
