Last week, I discussed how to find viable group business, I briefly mentioned that you need to be prepared before approaching groups with a proposal. So now we’re going to cover two critical components of preparation:
1. Knowing supplier group policies and how to work with them
2. Having a group contract
Knowing supplier policies
Before educating your prospective groups about group travel, you need to have a basic understanding of what suppliers offer and any limitations they may have. Here are some of the basics you should be familiar with:
- Tour conductor (TC) policies – most cruise lines offer 1:16 or 1:15 TCs, meaning that for every 15 or 16 full fare passengers (basically 8 staterooms) the group earns one TC (free cruise fare only). Be familiar with which cruise lines offer reduced TC ratios, or if you can “buy down” the TC ratio with amenity points.
- Amenity points – most cruise lines give group amenity points which can be used for onboard credit, bottles of wine, cocktail parties, photo coupons, etc. Understand how the cruise lines give points to groups, and that the points diminish as you block space closer to sailing (so eventually no points are given). It is also important to understand that some cruise lines do not protect amenities from the first room booked (a minimum of 5 or 8 rooms may be required in order to receive amenities). And be aware of which cruise lines will allow you to buy additional amenity points by marking up the cruise fare.
- Increasing cruise fare – this is not possible to do with all cruise lines, and it’s easier to do with some than others. If your group wants to charge extra for private parties, celebrity appearances, or as an additional charity fundraiser, you need to know if it can be collected through the cruise line or if the group will need to collect it separately.
- Deposits – you need to know which cruise lines require a bulk deposit (usually $25/berth) within 30 days of blocking space, and under what circumstances a bulk deposit may not be required. Additionally you need to know when full deposits are required, and the amount required.
- Recall dates – each cruise line will be different on how they recall space, and how much time they give you between reviews for recall. It’s important to understand recall policies, and communicate them clearly to the group.
- Cancellation policies – you need to know how much the penalty amounts are, and when penalties begin.
Pulling individual (FIT) bookings into group space – not all cruise lines allow you to pull individual bookings into group space, and others set limitations on when/how it can be done. If a cruise line does not allow FIT bookings to be pulled into a group, it is important at the beginning to block enough space in the desired categories for your group.
- Pricing – know how the different cruise lines set their group prices. For example, on the day you form a group with some cruise lines the group pricing is identical to individual pricing (this is important to know in case you are increasing the cruise fare, because clients will be able to see that your pricing is higher than FIT pricing). With other cruise lines on the day you form a group the pricing is usually less than FIT pricing, sometimes between $20 to $100 per person.
- Prepaid gratuities – some cruise lines allow prepaid gratuities at the individual stateroom level, while other cruise lines have an “all or nothing” policy.
- Meeting space onboard the ship – if your group is a small family gathering you may not need private meeting space on the ship. But a larger group, like a 24 stateroom Mahjong group, may want meeting space onboard the ship for private functions. In those instances, you need to know how to request and confirm space in advance of sailing and get written confirmation well before boarding.
- BDM support – don’t ask your BDM/DSM for help securing a family group of 10 cabins – but do involve them if you’re trying to secure a group of 100+ cabins. Having the cruise line visibly involved in the proposal process may help you clinch the deal.
Have your own group contract
Every group you work with, no matter how small, needs to sign a group contract with you. You can include as little or as much in the contract as you want, but I recommend erring on the side of caution and including as much as possible. Note that as this is a contract, have your attorney review it before you start to use it. Here are some suggestions that you may want to include:
- Clearly define the responsibilities of the group leader and yourself:
- Who is responsible for marketing the group?
- How often will you provide updates to the group leader (i.e. how many rooms have been booked/deposited, how many are left in the group space, when cancellations take place)? Make sure to specify what you will NOT report on (i.e. who has paid how much).
- Can all group members call you with questions, or do you want to deal only with the group leader as a single point of contact for anything that isn’t an actual booking?
- Will you conduct cruise nights for the group? If so, where and how often? If there are expenses involved, who will pay those?
- The cruise line, ship name, sail date and itinerary – include a disclaimer that the cruise line can change the itinerary without prior notice, and without compensating the passengers.
- Outline the group prices – break it down by stateroom category, and give a total price per person (don’t break down the pricing elements). Make sure to include cruise fare, port charges (NCF), government taxes & fees,. Also include optional costs like the cruise line’s vacation protection plan, transfers, or prepaid gratuities. And include a disclaimer about how prices are subject to change until fully deposited, quoted in USD, and whether third/fourth passenger rates are included.
- Specify how many rooms you are holding in each category.
- Amenities offered and a disclaimer about how amenities are tied to the number of rooms booked into the group space.
- TC policy – outline very clearly how they can earn TCs, how many they can earn, how TCs will be compensated (i.e. refunding after the cruise is completed), and about how TCs can be revoked based on cancellations.
- Escort policy – outline the requirements that the group needs to meet in order to have you personally escort the group (i.e. how many TCs do you need for your room, will you mark up cruise fare to cover your NCF, taxes, tips, insurance and airfare?).
- Individual bookings – be clear that anyone booking direct with the cruise line or through another travel agency will not be counted towards the TCs for the group, and they will not receive any group amenities or be included in any special group functions.
- Payment schedule – specify when deposits are due (and specific amounts), when final payment is due, and the consequences of missing payment deadlines. Clearly explain the cruise lines recall policies and how they are affected by bookings and full deposits. Note: it’s recommended to move up deadlines by two weeks when quoting them to groups.
- Address any event fees, upcharges, etc. that the group might want to add to the cruise fare through the cruise line – how will they be collected, used, or refunded (in the event of cancellations).
- Detail the cruise line’s cancellation penalties as well as your own penalties
- Travel insurance – include a clause about how you recommend travel insurance to all clients, and that clients are responsible for all expenses incurred resulting from not taking out insurance or from occurrences not covered by insurance. You might also want to outline the differences between cruise line protection plans and third party insurance plans (i.e. the cruise line will not reimburse clients for your cancellation penalties).
- Your customized booking form which the group leader can print and disperse to group members.
- Have the group leader sign and return the contract to you before you proceed with any bookings.
When approaching your group prospects, it is imperative that you are prepared, Boy Scout or not. You will exude professionalism if you are knowledgeable about cruise line policies, and if you have your own group contract.
Susan Schaefer is the owner of Ships ‘N’ Trips Travel (www.shipsntripstravel.com) located in Brentwood, Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations (www.kickbuttvacations.com) she focuses on travel for 18 to 23 year olds. Susan can be reached by email at firstname.lastname@example.org or by phone at 888-221-1209.