Corporate meetings and incentive travel on Cruise Ships

Posted By Cruise Market Watch / 21st June 2009

Oprah Winfrey is with her employees this week on a cruise.  At the same time, she has become part of a marketing trend.

According to Jo Kling, Founder and President of Landry & Kling, Inc, a premier cruise event services company “We anticipate the number of corporate and incentive cruise programs and meetings at sea to triple.”

And here at Cruise Market Watch, the trend is our friend.

How can one take advantage of a trend?  It begins by identifying the market, then developing strategies to win it over.

How big is the market for corporate meetings and incentive travel?  Annual estimates range from $175 billion to $40.3 billion.  I prefer the Incentive Research Foundation’s $77.8 billion.  If cruise acquires 2% (roughly its same share of the overall world-wide travel market) it would represent $1.6 billion in revenue or about 6% of all cruise revenues.

How to Win them

As one can see from our chart below – providing superior meeting experiences aboard a cruise ship at a competitive price will lead over time to market share gain from the competition.

The cruise lines are doing their part by building conference facilities on ships to rival those in hotels.  For example, Royal Caribbean’s Freedom of the Seas boasts dedicated conference meeting space with breakout rooms and reception area accommodating up to 400 people.  It also includes high-tech presentation rooms with color touch screens, wireless remote controls and teleconferencing equipment.

With the basic physical needs of corporate meetings taken care of, it is up to branding to communicate the message to corporate planners.  The experience of a corporate meeting on a cruise is more exciting, motivating and rewarding.  In addition, a cruise ship adds to employee camaraderie and bonding (ask Oprah).

Jo Kling and her team are going a step further.  By understanding the habits of the target market they are re-engineering the group quote process online with a new venture called Seasite.  Since nearly 80% of corporate meeting planners use the Internet for research, Seasite will for the first time consolidate cruise information online from strictly a meeting planners perspective.  It also facilitates a single RFP and quicker quotes.  The goal is to make the cruise booking experience equal to or better than the hotel experience.  Speaking the customer’s language is always good thing.

“At Seasite, we understand that cruising for many planners is virtually uncharted territory. Seasite demystifies the entire process by providing easy access, depth of knowledge and the tools and resources needed to successfully plan and execute corporate meetings” says Kling.

I like the strategy.  The Seasite slogan “One-Third Land, Two-Thirds Meeting Space” successfully evokes the question in a corporate planners mind – why not at sea?  And Seasite accomplishes this without going directly to price (maintaining the brand and margins) or using a picture of a cruise ship (we know what a ship looks like – create the desire by selling us on the emotion).

And price?  According to Kling, the cruise lines can offer meetings for up to 40% less than traditional hotels.  A study by TNS about non-cruise corporate meetings taken outside of North American by U.S. companies states costs typically run from $750 to $570 per person, per day and average 4 days in duration.  This breaks out roughly as

• 30% airfare
• 20% lodging
• 20% activities/entertainment
• 15% food
• 15% ground travel

The competitive cruise pricing structure, favorable meeting facilities and overall cruise experience leaves plenty of opportunity to deliver on the promise – rich and rewarding meetings that motivate and inspire employees.  This will help cruise lines continue growing market share.

For more on our “growing cruise markets” series see:

• Relax – cruise lines can go after the spa business
• Finding new passengers – keep the spa, toss the cruise
• Spa trends for the cruise market

Online traffic for cruise travel May 2009

Posted By Cruise Market Watch / 18th June 2009

Our monthly Cruise Search Index reflects change in cruise demand as measured by the number of visitors to online cruise websites.

For the month of May 2009, U.S. online search for cruise travel is estimated at 9.8 million monthly unique individuals. This represents a -15.5% decrease from the month prior (typical for the season) and a 3.2% increase over the same time last year (May 2008).

The chart below illustrates the unique visitors to cruise sites by month over time.  Reflected in the chart is the decline in demand beginning in August 2008 (below previous year levels), the steep increase in interest beginning in January 2009 and a waining into the summer months albeit slightly ahead of the same time last year.

The following chart represents traffic for the top four visited Cruise Line websites.

The following chart represents traffic for the top four visited Cruise Line booking sites.

Source: Comscore

The Tipping Point for Cruise Industry and Social Media

Posted By Cruise Market Watch / 14th June 2009

You would normally worry about seeing the words “tipping point” and “cruise” used in the same sentence.  No such worries here.  The phrase tipping point, coined by Malcolm Gladwell, refers to when small numbers of people (or businesses) start behaving differently and that behavior ripples outward until a critical mass or a ‘tipping point’ is reached, changing the world.  Contemplate some recent activities of cruise lines:

• Disney Cruise started delivering podcasts on iTunes.
• Yachts of Seabourn announced CEO Pamela Conover would be tweeting from Venice Italy for the launch of the new Seabourn Odyssey.
• Royal Caribbean posted a job opening on LinkedIn, with a position requirement of having at least ten LinkedIn recommendations.

I think it is safe to say the term “tipping point” wholly applies.

Why Now?

Ten years ago (April 1999) Chris Locke, Doc Searls and David Weinberger wrote The Cluetrain Manifesto.  It was a call to arms signed by a few thousand people (including me).

The manifesto declared the web would require businesses to engage consumers at their level and really listen and react to their voices.  Consumers had reached the tipping point of web usage in 1998 – 26.2% of U.S. households had Internet access.  Today, 16% of Fortune 500 companies have a public-facing blog.¹

Why Get In?  B.C.O.N – Branding, Customer care, Opportunities and Networking.

Branding. Product evangelists can spread the good word farther, more effectively and more efficiently.  Compare the initial interest as measured by Google search in two new search engine launches.  The small start-up Wolfram Alpha garnered nearly as much initial interest as Microsoft’s bing.  The former used blog buzz and resulting news coverage, the later has upwards of a $100 million ad budget.

Your brand online can be more like the transparent, friendly, one-to-one human connections you expect with family and friends than the faceless issuance of a corporate press release.

Customer care. What I see developing is traditional customer service departments breaking down and going social.  There will come a day when, if I say something bad about Bank of America on Facebook, I’ll expect someone from BOA to contact me and make it right.

Opportunities. Social media is leveling the playing field for entrepreneurs in the long tail of niche.  Bloggers for little or nothing provide information in topical areas that big media can’t cover.   It is no longer a news or broadcast business – but an audience business and audiences are made up of millions of small groups.

Demos are dead.  Are you female 18-35?  If you are reading this blog, you are more likely a member of the cruise community with an intense interest how lines market and communicate.  It is about shared values not age or stage. Want to create something for everyone?  Welcome to the middle of the road.

Networking. Email usage will decline like “snail mail” has in favor of “wall to wall” posting on social media networks like twitter and Facebook.  From a marketing perspective, direct mail and “email blasts” (I’ve always hated that word) will give way to engaging with consumers where they live online.  Direct marketing will be become Network marketing.  Foreverism, from trendwatching.com, means the relationships being created virtually today are lasting and lifelong links.  Isn’t that more powerful than a one-off email blast?

How to Get In? L.E.A.P – Listen, Encourage, Advocate and Participate²

Listen. Don’t monitor.  That means hear what customers think about your products, services and the competition.  Discover within the conversations emerging trends and do something with that instant feedback.  Tweak your product, respond to complaints – get your hands dirty by getting in the mix. Dazzle customers by acting.

Encourage. Develop new ancillary products and features that allow people to do more of what they already like to do.  Facilitate making your customers experience around your product and brand even more fun and easy (contact me, I have some ideas).

Advocate. Show support for social activities, sponsor local tweet ups, social media events and contests, bring new services to light, partner and create opportunities.

Participate. The 10 commandments as so well put by Lon Safko of Fast Company:

1. Thou Shalt Blog (like crazy).
2. Thou Shalt Create Profiles (everywhere).
3. Thou Shalt Upload Photos (lots of them).
4. Thou Shalt Upload Videos (all you can find).
5. Thou Shalt Podcast (often).
6. Thou Shalt Set Alerts (immediately).
7. Thou Shalt Comment (on a multitude of blogs).
8. Thou Shalt Get Connected (with everyone).
9. Thou Shalt Explore Social Media (30 minutes per week).
10. Thou Shalt Be Creative (go forth and create creatively)!

You can find more on how the cruise lines are engaging on the Social Media page of Cruise Market Watch.  The landscape is an ever-changing fluid environment, so if you notice a cruise line doing something new please alert me and I’ll update the page.

¹ Society for New Communications Research. ² The acronym LEAP was liberally borrowed from my friend Harish Bharadhwaj

Cruise Pulse Agent Survey – International Edition

Posted By Cruise Market Watch / 26th April 2009

The third edition of the Cruise Pulse Agent panel survey focuses on U.K. trends in addition to cruise bookings in the U.S.A. Special thanks to the over 660 travel agents world-wide for participating in these important surveys. 

Among the findings:

• Price stabilization – there is evidence pricing is stabilizing.  
• The “close in” booking trend is becoming a permanent way of cruising for North American passengers.
• Optimism increasing - particularly in growth regions such as Australia and New Zealand.

Download Cruise Pulse April 2009 – International Edition

Download Cruise Pulse February 2009 – Second Edition

Download Cruise Pulse January 2009 – First Edition

Spa trends for the cruise market

Posted By Cruise Market Watch / 29th March 2009

In 2009 we launched our series of discussions about niche market opportunities – markets where cruise lines can grow market share and revenue.  The first niche in the series was the spa market.  We sized the spa market for revenue potential and subsequently blogged a marketing strategy for how to successfully acquire share.  This is the final post in the spa series, covering current cruise industry trends in the spa market. 

Undoubtedly the oncoming demographic waves of boomers have an appetite for new senior lifestyles that emphasize active travel experiences and spending on rejuvenating the mind, body and spirit.  Cruise lines are quickly positioning to take advantage, with the primary spa trend being the development of special spa cabins.

For example, the newly launched Holland America’s Eurodam has 56 spa cabins, staterooms located close to the Greenhouse Spa that offer special in-room amenities. They include a designated spa concierge to book treatments and four exclusive spa packages. Passengers can choose from Spa Staterooms on the Observation (floor-to-ceiling windows and scalloped verandas) and Panorama Decks.

Celebrity established an “Aqua-Class” for its new ships (Solstice, Equinox and Eclipse).  Guests have unlimited access to the spa’s relaxation and thermal rooms, plus services of a spa concierge and free dinner in Blu. Other perks include upgraded robes and slippers along with in-room aromatherapy.

The Carnival Splendor offers 68 spa cabins connected to the ship’s 21,000-square-foot spa, and include free access to the spa’s relaxation suite. The new 3,646-passenger Carnival Dream will include spa staterooms with priority reservations, free access to fitness classes as well as the steam and sauna in the thermal suite.

Two new ships from Costa, the Luminosa and the Pacifica, will have special staterooms that allow guests to access a spa via a private stairway or elevator. Two spa treatments are built into the cost of these rooms along with meals at a restaurant serving healthy cuisine.

On NCL’s upcoming Epic a new category of spa staterooms will also be introduced.   With cabins located near the spa, guests will have access via an exclusive key card.  The 39 staterooms will also have 24-access to the thermal suite and each spa suite has its own whirlpool.

Another new ship, the Seabourn Odyssey, will introduce the largest spa facility ever on a luxury cruise vessel, at 11,400 square feet (spanning two decks).  There will be seven private treatment rooms that (along with ocean views) have a dry float bed to envelops the user in a warm cocoon of relaxation once the body wrap ingredients are applied. Seabourn ships have always offered the “Firmatone Aroma Spa Ocean-Wrap” that smartly ties in the ocean/water healing experience by combining the richness of sea plants and marine algae with aromatherapy.

The Odyssey will also feature a separate spa deck above the main spa housing two private spa villas available for half-day rentals complete with dining areas, bathing areas and wraparound terraces.

World’s first iPhone application for cruisers

Posted By Cruise Market Watch / 17th March 2009

Wanted – 288,000 cruisers with an iPhone. That is the estimated number of annual cruise passengers who currently own an iPhone. How do we get there? First, let me state 100% market share is unreasonable – even being the first in a niche and having a really cool product.

There will be 16 million cruisers in 2009, so lets assume 90% own cell phone and 2% have an iPhone or iTouch¹. The maximum total market potential in 2009 is 288,000 or about 24,000 per month. Assuming 10% success that is 28,800 user sign-ups per year.  FYI smartphones are growing at an annual rate of 21%.

What is the marketing plan?

a) Talk about the app to everyone I can at Seatrade (Cruise Shipping Miami) conference
b) Develop social media relationships using Twitter, Facebook etc,
c) Drop the low $1.99 cent price point for version 1.0 for travel agents who are participating in the Cruise Pulse Survey Panel and bloggers interested in reviewing the iPhone application.²   All version 1.0 users will receive free upgrade to version 2.0 which will have more sophisticated “who’s cruising” features and launch about two weeks later.

What exactly does this thing do? Not ready to reveal, but I welcome your guesses in the comments field below. The app will be submitted to Apple store soon. You can pre-register now to be notified when we make the app live. We will also provide a flash demo at www.alwaysbecruising.com when launched.

Stay tuned; I’ll be posting progress reports and user numbers here.

¹Estimated number of iPhones and iTouches at end of 2009, 60 million, about 2% of cell phone market. (1)

²Hello bloggers! Are you interested in reviewing the Always Be Cruising iPhone application?

Ryan Wahlstrom, founder of www.cruisemarketwatch.com, teamed up with Mplugged.com to develop the world’s first iPhone application for cruisers. We’re looking for a few good bloggers who would like to receive it free (only an iPhone required). All we ask is that you use it and review it.

What does it do? You will have to try it to see. If this sounds like fun, go to www.alwaysbecruising.com and enter your name and email address. (We’ll never use your information in any way other than to get the iPhone application to you). One confession, these pennies come out of our pockets and we just can’t afford to give the app away to everyone. But if you are a blogger with an iPhone and the cruise bug, expect your notice to download the app in you email first part of June.

Cruise retains strong year over year online search growth

Posted By Cruise Market Watch / 15th March 2009

Cruise Pulse Travel Agent Survey Panel Results

Posted By Cruise Market Watch / 8th March 2009

The recently completed February edition of the Cruise Pulse travel agent survey panel analyzed responses from 254 travel agents gathered from February 22 to March 3, 2009.  Findings provide further insights into wave season cruise booking trends. Highlights include:

• Cruise bookings have picked up significantly from January 2009
• On average, the price per booking per passenger has declined 16% to $1,580
• Travel agents are remaining optimistic

Download the entire study to see the details,  plus:

• Which line was ranked the “the hottest cruise line?”
• Which line did agents choose as “most agent friendly?”
• Which the line would agents most likely recommend to clients?

Cruise Pulse is sponsored by Latin Capital Market, The Online Center for Latin American Stock Investing and Trading.

Cruising past recession island

Posted By Cruise Market Watch / 7th March 2009

This recession is proving the cruise industry incredibly agile and able to successfully cruise past recession island.  With an average annual growth rate for nearly two decades of 7.4%, the industry has a history of phenomenal success. Today cruising reaches a much broader market than the retirees of old. While diversification greatly expanded the market, it also exposes the industry to impacts in the mainstream economy.

For those who can take advantage of the tremendous deals being offered, Norwegian Cruise Line has introduced a job loss protection program in its insurance policy. For the one-week period ended March 1, 2009, Carnival recorded the highest number of net weekly bookings in its history.

CruiseMarketWatch.com estimates passengers carried will still increase by 2.6% in 2009.

Navigating four oceans

The industry will continue to chart the navigation of four oceans to cruise up the revenue growth curve.

1. Get consumers to start spending again (Pacific Ocean)
2. Absorb the new build passenger capacity (Atlantic Ocean)
3. Find new cruisers (Arctic Ocean)
4. Get prices moving up (Indian Ocean)

1. Get consumers to start spending again

Tighter consumer budgets mean shorter holidays (cruising to closer destinations), departing from closer homeports, booking closer to departure dates, and less onboard spending at the bar, casino and spa. When these trends reverse, we will have traversed the first ocean. Economists recently surveyed by Reuters forecast a 0.8 percent gain in U.S. gross domestic product during third-quarter of 2009 and 2.0 percent in the fourth-quarter.

2. Absorb the new build passenger capacity

One can’t help but be excited by the development of new and exhilarating ships. Oasis of the Seas, Odyssey, Dream, Equinox, Luminosa, Splendida, Luna, and others have jaw dropping wow factor. Most likely you already know that by the end of 2011 a total of 29 ships with passenger capacity of 70,390 will be added to worldwide fleets. This new capacity is projected to help add 2.4 million cruisers to the annual passengers roles.

3. Find new cruisers

Hotels, resorts and casinos are slashing prices to lure guests and be competitive. Cruise’s continued growth requires reaching out in new and creative ways to acquire market share from the likes of destination spas (such as Celebrity’s spa concierge and spa cabins on Eurodam and Spendor), weddings, family reunions, casinos, and singles.

Ships are sailing full due to the cruise value proposition relative to other vacation options. But we are seeing a higher percentage of former cruisers onboard because they are the ones who understand best the value, and are taking advantage of the aggressive pricing. In the long term, the goal is to find new passengers by maximizing trends in consumer behavior.

4. Get prices moving up

While oil prices remain low, cruise lines can offer striking cost savings for the consumer over comparable land-based alternatives. This is a great strategy for acquisition of market share and the cruise industry is undoubtedly growing its piece of the travel pie in 2009. As more people cruise, more will tell others and they will want to cruise too. The cruise industry is in an enviable position for the imminent economic recovery. This leaves the final stage of re-establishing the upward revenue growth trend – the ability to raise prices in the face of increasing demand and limited supply with positive impact on profit margins.

Long-term prospects are bright; it is an exciting and challenging time to be in the cruise industry. I love a good cliché. So grab the rails, we are riding this storm out. Industry leaders are charting the navigation of the four oceans for future prosperity and the vacation enjoyment of millions.

Cruise online search sees dramatic increase in January

Posted By Cruise Market Watch / 21st February 2009

Our monthly Cruise Search Index reflects change in cruise demand and online search market share. For the month of January 2009, U.S. online cruise search is estimated at 14.0 million monthly unique individuals. This represents an astounding increase of 47.8% versus last month and 15.0% versus the same month last year.  This seems an indication that the Internet has come of age for the cruise line industry, and the recent proliferation of cruise deals across the Internet and traditional media have prompted a lot of window shoppers.  This is good news for the cruise industry, as when the broader economy begins to stabilize the window shoppers will begin to convert to cruisers.