A digital opening to sell cruises

Arnie Weissmann

I’ve attended many travel technology pitch events, from large competitions like sister company Phocuswright’s Battleground to smaller events designed to put entrepreneurs in front of potential investors.

At these events, there will reliably be apps, websites and software designed to help sell hotel rooms or streamline back-office hospitality operations, plan or memorialize trips and book various forms of transportation.

But innovations for those interested in selling or taking cruises? Nada.

Despite the spurt in shipbuilding and geographic expansion among cruise lines, cruising is still small-scale compared to hospitality and aviation. All the cruise cabins put together doesn’t equal the number of rooms in any one of the five largest hotel groups. It’s a question of size-of-opportunity, and developers would rather have single-digit market share of hotel reservations than double-digits in cruise sales.

Layered on top of that is the cost of a cruise (versus a few nights at a hotel) and the overwhelming diversity of cabin categories. Cruising is, in the words of Avoya co-founder Van Anderson, “a considered sale,” and even most technologists who study the opportunity to sell cruises would conclude that if they themselves were to book a cruise, they’d likely call a travel advisor and outsource the task of weighing all the options to him or her.

So I was curious when I was contacted by Titus Keuler, co-founder and chief technology officer of the Germany-based startup Cruisewatch.com. He said his young company uses artificial intelligence to predict cruise prices, helping potential guests save up to 70% of the cost of the cruise by booking at the moment when prices are lowest.

This sounded to me to be similar to the app Hopper, which has attracted significant attention and funding by claiming to predict when to buy air tickets by tracking historical high and low pricing.

Keuler said he and his colleagues have been collecting historical data on cruise pricing going back five years, crawling websites and having direct access to partners’ application programming interfaces. They then create algorithms to identify pricing patterns.

The algorithms picked up some interesting patterns, he said. For Hawaiian cruises, prices were likely to drop about 20 days before a sailing, but for an Alaska cruise, it’s 100 days out. (The algorithms also produced some interesting trivia: In 50 U.S. cities, people can charge more money to rent out their house on a home-share platform than they’ll pay for a cruise — if booked at the right time.)

Making decisions “as easy as possible” was critical, he said, noting the intimidating number of options.

To keep potential cruisers from being overwhelmed by the diversity of ships, itineraries and cabin types, he said, a “Tinder-style” decision tree on Cruisewatch combines cruise reviews and ship data to help consumers narrow down their choices. (If you think photos of entertainment choices on ship A are more attractive to you than those in the photos of ship B, swipe or click right?)

Cruisewatch belongs to an accelerator in Hannover, Germany, and has raised a round of angel funding. It has approached cruise lines with the proposition that it can save them money by selling cabins at the low price it predicts is coming earlier in the selling cycle, saving the cruise line the money that it would eventually spend trying to market the lower-priced cabins.

While I’m not surprised that pitch didn’t fly — cruise lines aren’t in a rush to offer discounts, even if they suspect that they’re likely coming — Keuler said the door wasn’t slammed in their face. “Their reaction has been, ‘You’re a tiny company. Make the first million, then come back to us.'”

Keuler and his team have other business and partnership models they’re exploring. They’re happy to work with travel advisors and OTAs, with options to split the difference between current pricing and the lower price they predict is coming, which their research leads them to believe will be more profitable than standard commissions for both themselves and advisors. Keuler believes there’s also a business-to-business opportunity licensing software to travel agencies to predict pricing in-house.

I’m certainly not qualified to evaluate the underlying technology, but I do think we’ll see more and more price-predictive guidance technology in the travel industry. And if so, why not for cruising?

And I do see another opportunity here, perhaps buried in Cruisewatch’s trove of trivia: Someone — a travel advisor? — could build a business that matches home-share rental prices in various parts of the world against the cost of various travel products, thus guaranteeing “free” vacations for clients while generating revenue from commissions on the travel products for themselves. I see lots of ancillary business possibilities for this, too: fees to help the client prepare the house for renting; cleanup service before the client returns; and possibly concierge services for the home-share inbound renter (city tours, event tickets, restaurant reservations).

Just thinking out loud here: Is OurFreeVacation.com still available?

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