Cruise: A Travel Anomaly
18th January 2019 - Glasgow, UK
In many ways, cruise is a bit of an oddity within the travel industry. While more travellers are turning to digital sources to book their travel, in cruise, distribution is predominantly managed offline. Phocuswright’s U.S. Online Travel Overview 2018 predicts online penetration for air/hotel/ancillary travel services will increase from 50% in 2018 to 53% in 2022 whereas online bookings account for just 20% of overall cruise revenue, split about half and half between cruise line websites and intermediary websites.
But the reliance on agents doesn’t seem to be a negative factor. Quite the contrary. While both air and lodging markets are growing, the cruise industry is outperforming all others. According to Phocuswright’s U.S. Cruise and Packaged Travel 2018 report, the cruise segment in the United States jumped 10% in 2018, its third consecutive year of double-digit gains. We see this trend in other countries globally, with the UK showing a 5% growth between 2017 and 2018 and Asia showing a whopping 20.5% increase in the same time period, according to Cruise Lines International Association (CLIA). And the industry still has substantial headroom for growth. CLIA reports that 26.7 million people cruised in 2017 – and that number is expected to reach 30 million in 2019.
The combination of these impressive growth statistics and the fact that most ships operate at nearly 100% capacity, gives cruise lines the confidence to believe that if they build it, travellers will board it. All major lines are adding to their fleets, with a steady supply of ships due to set sail in the next few years. In 2019 alone, about two dozen new berths are scheduled.
Travel technology specialist, Traveltek, takes a closer look at cruise distribution to understand not only the ways in which the industry remains dependant on agents, but also to uncover the developments in the online space that would suggest that the tides might be changing.
Ask anyone doing work related to the cruise industry about the sector’s reliance on offline, agent-assisted bookings and you’ll likely hear a similar explanation: booking a cruise can be a very complex process, with multiple layers of decisions involved. And with each new mega-ship setting sail, the options can be overwhelming. Years ago, there were only a few cabin categories with the main decision coming down to whether you wanted the early or late dinner sitting. Now, you can compare a cruise booking to reserving flights, hotels, activities, entertainment and meals all in one go; a task with which you could certainly require some help.
Complicating the decision process is the fact that the majority of consumers are not familiar with the cruise products. Only 24% of the U.S. population has ever taken a cruise, and in 2017, first-time cruisers made up 31% of the UK and Ireland market.
This inexperience explains the continuing reliance on the agent as source of expertise.
However, there are some signs of a change, albeit a much slower evolution in distribution processes and habits than in other sectors of travel.
Statistics globally suggest that the average age of cruisers is decreasing year on year and with a younger market and a vast pool of first-time cruisers, a number of big players within the cruise industry are noticing that an increasing number of customers are using the web to research and filter. For this reason, it’s more important than ever that cruise businesses offer a content-rich website, providing travellers with the information they are looking for at their fingertips.
“In order to succeed within this competitive market, it’s clear that cruise distributors must be aware of this shift towards online platforms when it comes to researching cruise,” says Kenny Miller, CTO at Traveltek.
“Here at Traveltek, we predicted this move and created a unique cruise booking engine that offers consumers a vast array of content, updated on a daily basis. With everything from comprehensive cruise line and ship descriptions, to detailed cabin information and supporting images to bring the product to life, our software gives the modern cruiser the guidance they are looking for and maximises cruise selling opportunities for cruise lines.”
End-to-End Online Bookings
Moreover, many in the cruise industry believe that, sooner or later, cruisers will be comfortable booking end-to-end online, provided that agents and cruise lines have the correct technology in place. Artificial intelligence, such as chatbots, could prove to be a game changer within the cruise industry, allowing potential cruisers the opportunity to remain within the online space, but still seek advice from a (seemingly) human source.
Traveltek are again ahead of the competition in this sphere, being one of the few technology companies to provide travel specialists with a B2C advanced packaging and booking module. This software gives users the opportunity to tailor-make their own unique cruise packages, displaying the results on a B2C website as one single package price with a streamlined booking process. When you combine this functionality with Traveltek’s unrivalled content of 190+ ocean and river cruise lines, plus multi-currency and multi-language capabilities, the technology experts are taking a major leap forward in helping the industry drive more cruise sales via all distribution channels.
Miller highlights that, while there should be a focus towards fine-tuning cruise packaging and booking software to suit an online audience, it’s also important, while the demand for agent assistance remains, to ensure that the technology used by agents is fit for purpose.
“The software Traveltek has to offer is so advanced that, not only does it equip travel and cruise specialists with the tools necessary to capitalise on the emerging digital disposition of cruisers, it also gives front-line agents the flexibility to use their own expertise to provide customers with a complex, personalised cruise itinerary in seconds.”Book a Demo