Are We Turning Cruises into a Commodity?

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Susan SchafferAccording to Meriam Webster, one definition of commodity is “a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price.” Years ago, travel professionals saw air flights slowly slide into the realm of becoming a commodity. As the airline profit margins shrank, the airline companies began to react by cutting costs wherever they could, including travel agent commissions, meal service on domestic flights, etc.

Today, you may find that it is difficult to sell a flight to a client without price being a major determining factor (if not the sole factor), because clients do not see a noticeable difference between the various airlines. A plane is a plane. It might be painted like an animal or with a professional sports team logo, but the interior and service is the same in the client’s mind. Also, because clients view flights as a commodity, they think booking their own flight is easy, just click and pay. No need for a travel agent, right? Although we can point out better schedules and other differences (i.e. baggage fees versus bags fly free), price still can be the only and final deciding factor for many.

Are ocean cruises heading down this same route? Travel agents who have been in the industry long enough witnessed when airlines eliminated commissions, reduced amenities, then started charging for what used to be standard amenities. In talking to veteran agents, they think ocean cruises are heading down the same route as airlines. I am not convinced, yet.

Those arguing that cruises are following airlines down the road to becoming a commodity point to cruise pricing as being the issue. Since the economy tanked in 2008, cruise lines have done anything and everything they can to fill berths. As a result, one tactic has been to lower prices, have WOW sales, introduce last minute specials, come up with early saver rates, etc. Unfortunately, the tactics have worked too well. The traveling public has learned to wait for sales and last minute reduced pricing. And when it comes to picking one cruise line or ship over another, clients look more at the prices, treating the ships as a form of transportation between ports.

As much as the cruise lines have reinforced this problem by focusing passengers on price, I do not think they are guaranteed to slip down the road to becoming a commodity. The cruise lines have worked hard to market their ships as destinations as much as the individual ports, as well as innovating new ideas that differentiate ships and cruise lines. Whether it is flexible dining, rock climbing, bowling, zip lining, riding a carousel, bumper cars, playing pool on self-leveling pool tables, having staterooms built specifically for single occupants or ones created for larger families (without forcing them into expensive suites), or staterooms with virtual balconies, all these differences make the ships unique, and not a simple form of transportation to ports.

As travel agents, however, we can help cruise lines avoid the stigma of becoming a commodity, thus ensuring our future ability to partner with the cruise lines in selling their products. More importantly, do not allow clients to drive the decision of cruise line and ship selection based solely on price. The mass market lines can meet the budgetary needs of most clients, so refocus clients to consider the itineraries, ship amenities, and overall experiences.

As the cruise lines start moving ship capacity out of over saturated markets (i.e. the Caribbean) and into new markets (like China), supply will be better matched to demand. This will help cruise lines stabilize prices (and stop eating into our commissions with constant price drops) and retrain passengers to book earlier, not expecting last minute deals or sales. As travel agents, we will need to work with, not against, the cruise lines in retraining our own clients and continuing to direct them away from making decisions based on pricing.

In the end, the cruise lines do not want to become a commodity like the airlines. It is in our best interests to help them avoid that pitfall. What are your thoughts on what we can do as a collective to help the cause?

Susan Schaefer is the owner of Ships ‘N’ Trips Travel (www.shipsntripstravel.com) located in Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations (www.kickbuttvaations.com) she focuses on travel for 18 to 23 year olds. Susan can be reached by email at susan@shipsntripstravel.com or by phone at (888) 221-1209.

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