Carnival Cuts Air, Hotel Programs

Citing low consumer demand, Carnival Cruise Lines told Travel Market Report that it is canceling two of its current air programs. Most agents were not surprised as these were program that few of them had booked. Several also saw Carnival as being on the leading edge of a trend and predicted other lines would soon follow.

The line will eliminate the Deviation Air Program and will discontinue offering pre- and post-hotel packages. Changes take effect today (May 24). In addition, after an unsuccessful beta test of a dynamic air program, the line has decided not to continue with it.

Carnival had not publicized the program as of presstime, but confirmed information that TMR had heard from several sources. The line stressed that its FlyAweigh program will remain available for guests, and emphasized that the line will continue to support Hotel Packages that have already been accepted. However, the line is closing off all future hotel packages for all future Carnival bookings.

Carlos Garcia, vice president, Travel Services & Guest Logistics, explained the reason for the canceled programs: “Over the past several years the number of guests choosing to purchase these ancillary products from us has been decreasing for a myriad of reasons,” he said, citing guests’ use of hotel or credit cards points as one way in which they book their own pre- and post-hotel nights.

Regarding the Deviation Program, which a Carnival spokesperson said was the most active of the two cancelled programs, Garcia said that most guests who purchase air from the cruise line do so through the FlyAweigh Program (which is continuing). “They choose a regular program and do not need to make changes. Most of them are interested in flying in to meet their ships on the day of sailing.”

Dwain Wall, senior vice president and general manager of CruiseOne and Cruises Inc., told Travel Market Report he wasn’t surprised. “We anticipated this as an overall industry trend heading into 2010,” although he said he could not comment specifically on Carnival’s move to discontinue the pre/post packages program.

Jackie Johnson, CTC, executive vice president, Cruiseexpress, a proprietary cruise booking engine and cruise services company, (owned by the same parent company as Travel Market Report) agreed, pointing out that the cruise lines wouldn’t discontinue any program that was in demand. “If these programs were popular but, as an example, expensive to operate, they might increase prices to a level the market would tolerate, but they wouldn’t cancel them. Therefore these are, logically, not high demand programs.”

Better Pricing, Selection Through Agents

Joan Papst, CTC, MCC, owner of Travel Planning, Inc, had some ideas about why the cruise programs weren’t popular. “Cruise line prices for hotels tend to be much higher than what a travel agent can book the hotels for. When I price their hotels, the prices are too high, so unless the client doesn’t care about the price or wants the comfort of booking in one package, I don’t book hotels through the cruise lines.”

“Some of our Cruise Planners do use Carnival’s air, pre/post hotel programs of course, however the cruise lines are not very competitive in this space.  We work with other suppliers such as American Express Vacations for pre/post hotel, and we’ve added a third party booking engine on each of our agents Web sites for air, car and hotel which lets the customer book these on their own and our agent earns a commission ‘while they sleep,’” said Michelle Fee, co-founder and CEO of Cruise Planners.

But while most travel sellers TMR spoke with indicated their clients rarely, if ever, use the cruise lines pre- and post-stay options, at least one disagreed.

Doug Anderson, a travel specialist at Salt Lake City-based Cruise and Travel Masters, said that many of his clients like their pre- and post-hotels booked through the cruise lines because they like the convenience of having the transfers and the cruise hospitality desk.  However, he noted, “when we do the booking, the client can opt for staying at any property, and usually get a better price.”

Not all cruise companies appear to be falling in line behind Carnival to eliminate hotel packages. According to Tavia Robb, manager of public relations for Celebrity Cruises and Azamara Club Cruises: “Our pre/post hotel packages continue to do well for all brands.  We see this program as a service to our guests and travel agent partners; it provides an easy way for guests to book hotels that have been selected by the cruise line itself.”

And a spokesperson for Holland America Line told Travel Market Report, “We currently offer pre and post hotel packages and don’t have plans to stop. Our packages provide a level of service and value that our guests enjoy.”

Owning the Process

Although so far no cruise lines have said they will follow Carnival’s lead, CruiseOne and Cruises Inc. said they had rolled out a proprietary pre/post stay program in response to the anticipated industry trend of cruise lines eliminating their pre/post programs.  “We believe taking ownership of our own pre- and post-hotel initiative will alleviate any potential impact on our agents caused by the elimination of cruise line pre- and post-programs,” Wall told TMR.

Cruiseexpress’ Johnson added that agents should take ownership of these services and should, in fact, view the cancellation of the two programs as a positive. “There are benefits to agents who offer their own dynamic product and service. They can book hotels, air, insurance, and transfers, including car services, at more competitive rates for their clients and better margins for themselves,” said Johnson.

For example,  clients often like the fact that the cruise lines provide transfers when the air is purchased through them. “Cruise lines sell transfers as well. But one of the best services a retailer can offer is the comfort of moving from airport to port in a private car. At the end of air travel, people are tired, and usually in a different climate. Any service to enhance their comfort should be offered, and it is a nice profit for the travel agent. Plus, it’s a way to develop their own value proposition,” stressed Johnson. 

Another reason clients sometimes lean towards buying air from the cruise lines is the fact that the cruise lines are responsible if they miss their sailing. However, the right insurance can also cover that eventuality. Johnson said she recommends agent sell their own insurance. “It’s usually neutral and often better for the client and at a more profitable rate for the agent.”

Booking the Flights

Travel sellers seemed even less concerned about the elimination of Carnival’s Deviation Air Programs, which allowed guests to pay more for the ability to choose carriers, routings and upgrades. None of the agents TMR spoke with had ever used that program with Carnival, or any of the lines.

Papst said that while her clients often book air through the cruise lines, none have ever used the Deviation Program. A lot of clients don’t want to pay the deviation fee, and if they need more choice they always have the option of booking their own air.”

Only when clients don’t want to fly in for their cruise the day before does Papst typically advise clients to take the cruise line’s air. “Usually a cruise line has a block of air space which is less expensive (though often less convenient) than the client or I could book. I tell clients if they fly in the same night as the departure, they could be very nervous about their flight arriving on time. I personally would rather change planes where I didn’t want to rather than losing my cruise. The lines are good about getting clients where they’re going.”

“When it comes to air arrangements, most people want to be in control. Often they prefer to book their own flights,” she said, noting that she only books air for clients who can’t do it themselves.

Similarly, Cruise and Travel Masters’ Anderson said that he rarely uses air from the cruise lines. The exception is on cruises that require flying in and out of different ports because one way prices can be punishing.

“Planning the air on our own provides clients with a better selection of carrier, times and seat assignments,” he noted. “Even though some cruise lines have dynamic air, it’s an extra step. We research flights, and at that point it is easier to book it. Plus, if we do the air, then schedule changes show up in our system. Even with dynamic air, I’m always a little nervous that we won’t be updated in case of equipment or schedule change. Usually, the previous seat assignments get dumped at the back and we wouldn’t know to check that unless we book it.”

Stephanie Turner, CTC, president of Brentwood Travel, agreed with Anderson. “We do most of our air – especially with any deviations – as the cruise line prices were way out of line…also when we do cruise line air it is harder to add on a booking fee. It’s a perception on the part of the clients that you are getting paid on cruise line air since it is often more expensive. When we do our own air – this is not a problem.”