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Direct Channel

I have been fortunate to have spent most of my career as an agent, agency owner, and in consortia management. But as a former cruise line sales executive, I also have the luxury of the supplier perspective on many subjects that affects travel professionals every day.

Some years ago, while the owner of a successful cruise agency, I was interviewed by a major travel industry trade publication for my opinion, on what was and is still a very sensitive subject. The question put forth was “Do you believe that cruise lines should continue to grow their direct business channel?” My answer might surprise you. I responded, “Yes, absolutely.”

The reason, while not a popular one, remains as valid today as it did then. Cruise lines (and other suppliers) are not charitable organizations. They are for profit corporations – just like yours and mine. In most cases, they are part of very large public companies which demand ever increasing shareholder value.

In your business, you have the choice of many different brands & products to offer. A cruise line or tour operator has only one. As good stewards, their job is to depart with a butt in every bed. Cruise ship beds are perishable items. If the ship sails with an empty bed – it is lost revenue which can never be recovered.

If we, as the industry’s primary distribution channel, were filling those beds there would be little or no need to develop a direct business channel. The fact is, we were not then and are not now, which explains the rise in direct business.

According to Charles Sylvia of CLIA at their 2017 Cruise3Sixty conference, 73% of contemporary and premium cruises worldwide were booked with a travel professional. Twenty years ago, this number was reported to be higher than 90%. Contrast that with cruises priced $500 per person/per day and higher where 93% used a travel professional. The cruise lines (or any supplier) do not owe us anything more than a fair, level playing field in which to compete– the ability to offer the same product and amenities as they do to direct customers.

Many travel professionals fail to see the real opportunity, the golden nugget in all of this. The sole purpose of a travel professional is to add value to the transaction. All things being equal, prospect will buy where they perceive the greatest value. We must continuously prove our value to the consumer daily.

There are a few things we can do to capitalize on this situation. First, accept that suppliers will always have a certain amount of direct business. There are people who no matter what you say or do, simply prefer to book direct.

Second, the more specialized the product, the higher percentage of direct bookings. This is usually due to the fact our prospects and even loyal customers simply don’t realize we sell these products, or were not knowledgeable enough to add sufficient value.

Third, specialty cruise & tour companies have a few things in common – a specific audience, a high price point ($500/day +), and loyal customers. They all need the help in bringing new customers to their brands. Typically, their customers do not leave them for other products – they are literally dying off.

By now we are all familiar with the “Law of Attraction”. If a travel agency or professional is positioned as the expert in a specialized field, they will attract the customers they need for the brands or segments of their expertise. In addition, the financial rewards will be greater. Suddenly you are the “Big Fish in a Small Pond,” and your efforts will be rewarded with increased commissions, available co-op funding, lead generation and other benefits associated with being a valued partner.

There are those words again: “Specialist”, “Expert”, and “Partner.”  Maybe there is something to what you have been hearing over the years? These days, it’s not enough to just specialize in cruise sales or land vacations – the segments have evolved to be much broader.

As part of a long-term strategy, you should consider building your travel practice around a specialty that has little competition and become the go-to expert in that field. You will not lack for customers – they will eventually seek you out.

We need to stay focused on building our own business. While we should always be cognizant of the growth of the direct channel (as well as other competitors), we need stop wasting precious energy worrying about it. As an industry, we have very powerful people such as Mike Batt, Matthew Upchurch, Roger Block, Alex Sharpe, Matthew Eichhorst, Lindsay Perlman, & Libbie Rice to name a few, all working on our behalf to make sure the playing field stays level.

One of my favorite quotes is from Teddy Roosevelt, “Complaining about a problem without posing a solution is called whining.” The solution has been in front of us the whole time, we simply need to embrace it. Now, lets’ go make some money!

 


Dan Chappelle specializes in helping travel sales professionals and organizations achieve their full potential by thinking BIGGER, working SMARTER, and producing massive RESULTS.

He is in demand internationally as a professional sales coach, business advisor, author, and speaker, with a focus on strategic business development.

His training and consulting firm helps develop sales oriented business leaders. In addition to working with sales focused entrepreneurs, his corporate clients include AAA, Cruise Planners, Ensemble Travel Group, and Travel Leaders Group. His best-selling book, Get Your S.H.I.P. Together: The Wealthy Travel Agent Guide to Sales, is available on Amazon.com.

For information on Dan’s educational and new Sales Acceleration programs, visit: www.DanChappelle.com

©2017 Dan Chappelle, CCI Inc.

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