Celebrity Cruises to eliminate NCFs on some June bookings

By Tom Stieghorst

Celebrity EquinoxCelebrity Cruises will pay commission on what is typically invoiced as noncommissionable cruise fare (NCF) on some cruises sold in June by travel agents in North America.

The extra commission applies to 2015 sailings, if agents book veranda cabins and above. NCFs can account to 10-15% of the total cruise price.

Celebrity’s offer to agents coincides with a renewal of its 123Go! promotion to consumers. The offer to agents is being styled as “123 Thank You.”

Payments on the NCF portion of the sale are on bookings of all duration and every geographic area, said Dondra Ritzenthaler, Celebrity’s senior vice president of sales.

Dondra Ritzenthaler“We have never done anything like this before,” Ritzenthaler said.

Ritzenthaler said that 2015 bookings were not notably behind or in need of a boost.

“It’s a 30 day way to say thank you to all of our travel partners who have really supported us through all of our promotions,” she said.

New data show booming sales for travel professionals

By Kate Rice

Growth chartDespite lingering perceptions that travel agents are a dying breed, newly released industry figures reveal that business is booming for agencies of all types and sizes. The greatest challenge to their growth, in fact, is not a surfeit of online competition but a deficit of manpower.

The data were part of a report ASTA released last week based on a survey that found more than half its members reporting increases in revenue — i.e., commissions and fees — as well as growth in numbers of both transactions and customers for the second year in a row.

At the same time, major agency marketing groups, from regional consortia to global enterprises, are reporting double-digit increases in sales of suppliers’ products, many of them high-margin products.

The new data fly in the face of a persistent myth that the Internet is putting agents out of business.

“To paraphrase Mr. Twain, the reports of our death have been greatly exaggerated,” said Mike Estill, COO of the Western Association of Travel Agencies (Westa). He said his members’ total sales for 2013 were up 10% over 2012, itself a banner year. In some segments, such as luxury cruises, he said, they were seeing better than 25% growth rates, and 2014 is already well ahead of 2013.

John Werner, president and COO of the Midwest consortium MAST Travel Network, said that in 2013, total sales for all suppliers were up 17%, and 2014 sales are currently up 10% to 30%, depending on the supplier.

“Agencies are reporting that customers are coming back to them after having tried planning some of their trips themselves,” Werner said. For many agents, the problem is not a lack of customers but a lack of travel professionals.

“Many of our members have said to me they could handle more business if they could hire another experienced travel agent,” Werner said.

Likewise, Steve Loucks, chief communications officer for the Travel Leaders Group, said the biggest challenge for retail travel was not online competition but a lack of manpower.

He said Travel Leaders Group, which includes the Travel Leaders franchise, the Vacation.com consortium and the host agency Nexion, has been “vigorously working to attract new talent.”

Travel Leaders Group has grown from $6 billion in sales in 2007 to more than $20 billion in 2013. Some of the growth resulted from acquisitions, but much was organic, as illustrated by its Tzell Travel Group brand, whose sales volume doubled from just over $1 billion in 2010 to more than $2 billion in 2013. That growth, Loucks said, did not include Tzell’s merger with Protravel International in 2012.

Retail travel is growing across the board, regardless of whether an agency’s business model is corporate or leisure, brick-and-mortar or home-based.

For the survey, ASTA assembled a panel of agencies that was a representative sample of its members. Corporate agencies reported the strongest performance in 2013, with 65% reporting increased revenue and 57% reporting an increase in clients.

Among leisure agencies, 56% reported increased revenue, while 59% reported a growth in number of clients.

For the purposes of the study, ASTA defined independent agents as owner/agents, independent contractors or hosted agents. Among this group, 44% reported increased revenue, and 46% reported an increase in the number of clients.

Sixty-four percent of all travel agencies reported a profit in 2013. That included 72% of corporate agencies, 62% of retail leisure agencies and 57% of independent agents.

For 2014, leisure agencies were forecasting an average 11% profit, independent agents a 13% profit and corporate agencies a 10% profit, according to the ASTA study.

Agency consortia and franchises numbers, cited independently, appear to support ASTA’s data in showing continuing sales growth into this year. These are not sales that represent a recovery from the recession of 2008 and 2009 but sales coming on top of that recovery.

Westa’s Estill said that 2012 marked the consortium’s best year post-9/11. And while gross sales increased 10% in 2013 over 2012, revenue also was up by several percentage points more, due to performance bonuses, he said.

Consortia reported increases both in high-margin products and mass-market products.

Luxury is Signature Travel Group’s fastest-growing segment, with high-margin cruise and tour products up nearly 10% in 2013 over 2012. More than 70% of Signature members reported higher cruise, tour and land products over 2012, according to Executive Vice President Ignacio Maza. He said that an increasing number of Signature members are selling high-margin cruises, complex FITs, custom-tailored groups and family travel.

Maza added that a “large segment” of Signature members charge an hourly fee or planning fee for their work, an increasingly common practice industrywide, which also contributes to higher revenue.

Ensemble Travel Group reported that its preferred supplier sales (the only sales it tracks) were up about 10% in 2013 over 2012, and it is forecasting similar growth in 2014 over 2013.

Host agencies for independent and home-based agents also said last week that they were seeing double-digit sales increases.

• Avoya Travel, an American Express Travel Representative Agency, said that 2013 was the best year in the company’s history, with overall sales up 30% over 2012.

• Cruise Planners, another American Express Travel Representative that also is a host agency, said it saw a sales increase of 24% in 2013 over 2012, to $217 million. It said its first quarter this year was 32% ahead of the same quarter in 2013.

• World Travel Holdings, which has sales volume of more than $850 million, said it was seeing double-digit booking growth across its more than 40 brands, which include CruiseOne, Cruises Inc., Cruises Only and private label cruise programs for entities ranging from American Airlines to Orbitz and Priceline.

MSC Cruises lays out plans for increased agent outreach

By Tom Stieghorst

FORT LAUDERDALE — MSC Cruises unveiled several marketing initiatives under a new “Serving You” theme.

Rick Sasso, CEO of MSC Cruises USA, said at the Cruise3sixty conference that the line intends to emphasize the human connection in its dealings with travel agents. It is in the process of filling 22 new sales positions to extend outreach to agents.

RickSasso“There will be more people on the ground face to face to be the partners with the travel seller, so together we can create new business,” Sasso said.

He announced that marketing and sales vice president Ken Muscat had been promoted to executive vice president of sales, marketing, public relations and guest services, and that several other executives had been promoted to strengthen oversight.

MSC will hold a joint promotion with Fiat to give away a $21,000 Fiat convertible to a consumer and a travel agent. An entry for the drawing will be made for each booking on MSC Divina from April 4 to May 18, good on departures from Aug. 2 to Dec. 27. Winners will be announced around the year-end holidays.

Muscat said a new bus wrap advertisement has been installed for April on 14 buses running a freeway route between Miami and Fort Lauderdale. The wrap includes a travel agent call to action.

Under the “Serving You” banner, MSC will launch a 20-city road show in May to talk to travel agents on their home ground. There is a tentative list of cities to be visited, but it could change, Muscat said.

He also said MSC will offer a new wedding program on MSC Divina that for the first time will enable legal weddings to be performed onboard or in a number of ports, including Miami, Cozumel, St. Maarten and Falmouth, Jamaica.

Muscat said details of the program, which launches Aug. 2, will be available in the next several weeks.