Cruise lines' direct sales keep rising, but travel advisors are unfazed: Travel Weekly

The increase in direct bookings that cruise lines first noted a year ago has not only continued, it appears to be intensifying. 

Norwegian Cruise Line Holdings told investors this month that it expects direct consumer sales to surpass bookings from travel advisors in 2023. Other lines are also reporting an uptick in direct bookings.

And while travel advisors theorize there are a number of factors behind the shift — including consumer confusion over future cruise credits (FCCs), fewer advisors and more capacity — those agents are largely unconcerned, and cruise lines continue to emphasize their support of the trade.

During Royal Caribbean Group’s second-quarter earnings call, CEO Jason Liberty said the company was experiencing a “record level” of direct bookings, but he also said travel advisors were generating bookings greater than 2019 levels.

Jody Venturoni, Carnival Corp.’s chief communications officer, said the company has seen an uptick in direct bookings but also said that travel advisors “will remain critically important to our business … their knowledgeable advice and personalized service are vital in helping guests, especially first-time cruisers, find the right cruise experiences based on their preferences, budgets and needs.”

Norwegian said that while advisors are “an incredibly important distribution channel for us,” it is investing in its online direct business because the channel is both “attractive” and “low-cost.”

But while the direct channel may be low-cost, so are many of the bookings it yields, both cruise executives and travel advisors have said over the past year.

Jackie Friedman, president of Nexion Travel Group, said many consumers who shop for a cruise online “are just transactional shoppers.” They are seeking the best deal, business that many travel advisors aren’t interested in. Instead, they want to serve travelers looking for added value and informed decisions guided by an advisor.

Importantly, Friedman said, while Norwegian is investing in its online direct business, it is not reducing its investment in the travel agency channel.

“From what we’re seeing, they are investing in marketing, they are investing in coming to events, they are investing in compensation for travel advisors and in their own education programs, their own support models,” she said. “There doesn’t seem to be any pulling back in investment in the trade.”

Friedman added that with the number of ships slated to hit the water in the next several years, there are a lot of cabins to fill.

Tom Baker, president of CruiseCenter in Houston, agreed. 

“I don’t see this as a threat but a necessary move for the lines, as I don’t think there is enough agent support to fill all the ships being built, and the lines must do what they need to do to fill the behemoths that keep on coming,” he said. “I believe there is enough good business for retailers who play their cards right and are professionals with a strong value interpretation matching the client to the right product.”

The cruise lines need advisors 

Brad Tolkin, co-CEO of World Travel Holdings, said a “confluence of events” has led to the rise of direct cruise bookings.

First, since the pandemic began, some travel advisors have permanently left the industry. Second, there are a record number of FCCs still in consumers’ possession.

“A lot of people might have been under the assumption that in order to use that future cruise credit, they had to book directly with the cruise line,” Tolkin said, adding that this was not due to any communication or promotion from the cruise lines but to consumer confusion. 

That combination has led to the current environment, Tolkin said, but he believes it “will correct itself over time.”

Tolkin is optimistic about the future, citing a statistic that cruise industry inventory is on track to grow by 8% each year for the next five years. “The cruise lines are going to need an army of travel advisors across the United States, across the world, to fill that inventory, and the product is getting better,” he said.

Andrew Jones, director of leisure partner relationships for Flight Centre Travel Group, said he believes that as the cruise industry continues to recover and booking patterns normalize, consumers who communicated directly with cruise lines will come to realize the value of travel advisors.

“Working with an advisor is always going to paramount experience versus booking with the cruise line directly,” he said. “I think that we’re always going to have that value to be able to talk to what we have done and what we’re going to do in the future.” 

Andrea Zelinski contributed to this report.

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