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Are Mass Market Cruise Lines Losing Passengers to All-Inclusive Resorts?

Susan SchafferI know that I’m not the only one wondering if mass market cruise lines have seen a trend of losing passengers to all-inclusive resorts. I have not seen any formal surveys on the subject, so my observations are strictly based on anecdotal stories from my own clients, as well as from other travel professionals.

But here is what I’ve been hearing. Clients are getting tired of being nickeled and dimed to death by the cruise lines, no matter how little they are paying to get onboard. Walking off a ship after a seven night cruise with a stateroom bill exceeding $1,000 is not pleasant, but especially so if you had not budgeted for that size of a bill. When my own cruise clients have asked about all inclusive resort bookings, I do ask them why. Overwhelmingly, their answer has been that they want to know (and pay) the “true cost” of their trip upfront, and not be hit with a huge bill at the end of their vacation. One client specifically said, “there is nothing that ruins a vacation more than pulling out your wallet at check-out to pay a huge bill.”

So they are moving to all-inclusive resorts as an alternative vacation option. One price paid up front, and all food and beverages are included with very few exceptions, and no surprise bill at check out.

To be fair, cruise stateroom bills are not strictly bar tabs. They can also include shore excursions (which can be pre-purchased to avoid that “check out shock”) which are also an extra cost with all-inclusive resorts (and can be pre-purchased in that scenario, as well). Other non-bar costs on those accounts also include onboard purchases (souvenirs), art gallery purchases (which thankfully is not an issue at all-inclusive resorts), and spa services (also available at all-inclusive resorts). So all-inclusive resorts aren’t always a 100% paid upfront option if they shop, get spa services, or buy sightseeing tours on property. But many clients feel that is easier to manage and control (don’t shop; avoid the spa; and only do pre-purchased sightseeing tours).

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So is this why we are seeing more “inclusive” options from some of the mass market cruise lines now? Norwegian Cruise Line is offering specialty dining packages and beverage packages. Celebrity Cruise Line, Royal Caribbean, and Carnival all offer different levels of beverage packages, as well. The pitch to passengers is that you pay one flat fee and can drink without limits (almost). This at least gives an appearance of trying to be competitive with all-inclusive resorts in offering a complete upfront price so that clients can better budget and prepay for their bar tabs, leaving the same “extras” (excursions, spa services) that even all-inclusive resorts don’t include upfront.

One advantage the cruise lines are offering is that if you don’t drink on vacation, you aren’t paying for the all-inclusive model. You don’t have that option with all-inclusive resorts (we’ve all had the client ask if they can get a discount at a resort because they don’t drink).

Another advantage is that onboard cruise ships don’t have the timeshare presentation pressure. Most, but not all, resorts have some type of timeshare presentation, trying to steal your clients permanently. As much as we complain about certain cruise line practices that bypass travel agents by trying to snipe our clients, the timeshare angle is typically much more painful (cruise lines, don’t read this as an OK to continue trying to bypass us and going directly to our clients)

Disadvantages? To be honest, it’s the commission issue. With all-inclusive resorts, we are getting commissioned on the full price. No NCCFs (non-commissionable cruise fares), no separate non-commissionable beverage packages. We get commission (often times at 11% or more as the entry-level commission) on the whole package. And if we help clients pre-purchase sightseeing tours, those are commissionable, as well. So clients get the full “true price” upfront, and we get a healthier commission. Suggesting a cruise with a beverage package may be attractive to clients, but it doesn’t do much for the travel agents. So it may well be that some of this shift from cruises to all-inclusive resorts is also driven by the travel agents and their own bottom line.

So what has been your experience? Are clients driving the move away from cruises to all-inclusive resorts? Or are you driving the shift?


 

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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