Selling Cruises, Where Did the Boat Go?

How to Make Money Selling Mass Market Cruises?

By Tom Ogg

I wrote the first edition of “Selling Cruises, Don’t Miss the Boat” back in the late 1990s. The cruise industry was exploding with opportunity, new ships were being launched almost monthly, new itineraries and ports were opening up, the cruising public was sophisticated and everyone that specialized in selling cruises was making tons of money.

Fast forward 15-years and the cruise selling business for mass market cruises is no longer the golden niche it once was. Cruise fares have tanked, NCFs (Non-Commissionable Fares) have cut real commissions (percentage of gross sale price) from double digits to now falling somewhere between 6 and 7%.

It is no wonder why cruise specialists are abandoning ship at alarming rates and moving on to greener pastures such as, river cruises, luxury cruises, all inclusive resorts and land based tours. Even CLIA recognizes that the situation is serious. Here is an excerpt from Travel Market Report regarding the diminishing enthusiasm for selling cruises among the travel agent community. “Even former cruise agency exec Dwain Wall, now CLIA’s senior vice president of agent and trade relations, has said that the most profitable portion of a non-luxury cruise sale can be commissions on the non-cruise portions of a booking, such as travel insurance, pre- and post-cruise itineraries and custom shore excursions.”

So how can agents still make a reasonable amount of money selling mass market cruises? Here are some thoughts.

Charge a Consultation Fee: When a client starts talking about possibly booking a cruise break out your “Plan to Cruise Agreement”. If you do not know what this is or do not have one, you can download one from the Travel Professional Community that you can modify and use for your agency. Explain that commissions on cruises are minuscule and you are aware that most clients like to price shop their cruise on the Internet. Your fee will cover sharing your expertise in helping them find just the right ship and itinerary, as well as helping them make their best shore excursion selections. If they balk at signing the Agreement, don’t waste your time with them.

Package the Cruise into an All-Inclusive Vacation: Even the most rudimentary itinerary can be packaged with exciting inclusions. If you are selling the Western Caribbean, as an example, why not negotiate full beach days inclusive of all you can eat, drink and sun. You can market this vacation in a way that no one can ever price shop you and you will be offering a unique vacation experience where the cruise is just incidental to the vacation. You can also mark this up to allow for excellent profitability.

Add Value that Can’t Be Duplicated: If you sell a lot of the Caribbean, write a book about it. You can easily have it published for free at CreateSpace.com. Sell the book for $29.95 retail and that will be the price that amazon.com offers it for. But, you can buy copies for around $2.00 each to give to your clients. This is just one idea that creates value and substantiates your “expertise”. Think of ways that you can serve the client that has substantial value to them.

Sell Third Party Travel Insurance: Selling insurance for cruises is mandatory. So many things can happen that not having insurance could change someone’s life forever. Doing a medical evacuation off of a ship can easily cost into the tens of thousands of dollars. And, doing a medical evacuation from a foreign country can easily cost more than that. The best thing about selling insurance is that it generally pays a welcomed 30% or more commission. It is a win – win for you and the client alike.

Package Pre and Post Cruise Vacations: If you sell a lot of a particular port of embarkation, try negotiating net rates from a transfer company, hotel or resort and local tour company. Package all-inclusive pre and post vacations before and after the cruise. Think creatively and see what you can package that would motivate clients to book with you. Remember, value is what is important, not price.

Sell Third Party Shore Excursions: Only two cruise lines pay commission for shore excursions that are booked prior to the cruise. Oceania pays a 5% commission and MSC pays a 10% commission. All of the other mass market lines pay no commission at all. While there are some folks who love to travel in large groups on motor coaches, a good number of cruisers would much rather have a more intimate shore excursion experience. Companies like ShoreTrips, Port Promotions and the Shore Excursion Group among others all pay at least a 10% commission and offer either a private, or small group shore excursion experience. Generally, clients can see more, spend less and have a better time with a third party shore excursion. But be aware that there are some cruisers that still feel more secure taking the cruise line’s shore excursions.

Think “Groups”: While commission are depressed selling individual cruises, you can make excellent money selling cruise groups. It really doesn’t take longer to sell a group than it does an individual and there are so many opportunities to add profitable elements to a group and the cruise lines also reward groups with all kinds of options. packaging, marketing and selling groups is an excellent way to use mass-market cruises to generate high profitability.

Get Creative:  Just booking a low yield cruise for the commission only is certainly a great way to lose money. Think of the cruise as simply a part of a much larger travel experience that encompasses all aspects of a client’s vacation experience. Can you earn more by referring a jeweler, tanning salon, dry cleaners, luggage store or other compatible business that may serve the client’s needs? Can you negotiate directly with local operators in the various ports and provide unique and high yield services? If you approach selling mass market cruises with a business plan including average acceptable yields, you might be able to turn an aging market into a brand new opportunity.