In the past, cruise line executives have argued that cruising is a better value than land vacations.
It looks like that has never been more true. The price difference between cruises and land-based vacations has more than doubled, according to analysts.
The CEO of Royal Caribbean said during the company's third-quarter earnings call that land-based vacations are 40% more expensive than cruises.
Cruise executives are looking to close the gap by increasing guest frequencies, incentivizing travel advisors with more commission, and going after new cruisers.
Liberty said that the gap served as motivation for them to go after it.
The introduction of Perfect Day at Co CoCay, Royal's private island in the Bahamas, and the modernization of its fleet helped close the gap. He wants to improve its loyalty program now that it has widened again.
He said that they need to be more one-to-one so that they can put offers in front of their guests that are relevant to them.
The price gap is similar to Royal's, according to the Cleveland Research Co. During Christmas week, New Year's, spring break and Easter, the group found a 45% gap between hotels and resorts and new ships from Carnival Cruise Line, Royal Caribbean International and Norwegian Cruise Line.
Frank Del Rio told travel advisors to push the value proposition of cruises. The Norwegian Prima is pictured. The photo was taken on the Norwegian Cruise Line.
Frank Del Rio was not a fan of land-based vacations. The price of a seven-day NCL sailing from Miami to the Caribbean against a four-star resort stay in the Caribbean and a four-star hotel stay in Miami Beach was less than at the resort or hotel.
NCL is trying to close the gap by courting travel advisors who were not as engaged in the cruise industry as they were before the Pandemic. NCL's plan to pay commission on parts of the cruise fare that are not commissionable is an attempt to draw advisors back and boost sales. At least 120 days before departure, you must make a booking.
Land vacations are being sold by agents today. They needed to make a living because they couldn't sell a cruise for 500 days. It's time to start selling cruises again, and we want to make sure they can make the most money possible.
The offer comes with strings attached, including the sharing of a marketing plan with NCL.
The program was soft-ran by NCL to see if it worked. He said that using a relatively good-sized sample, he found that advisors who were paid commission on NCFs increased their business with NCL and the revenue they generated over time more than offset the commission increase. He said that they think of it as an return on investment.
Del Rio said that travel advisors are important because clients can be introduced to the value of cruising if they are cautious about their vacation spending.
A cruise is a real thing. He told the audience that they had to press on the value proposition when things got soft.
30 million people go on a cruise every year, and 2 billion people go on vacations around the world.
Sommer referred to other cruise lines as Brand X and Brand Y. The brands are Marriott, Hyatt, and Hilton.
Royal Caribbean's newest ships, including the upcoming family-focused Icon of the Seas and Perfect Day at CocoCay, allow Royal to compete with land-based experiences. Royal Caribbean International CEO Michael Bayley said during the earnings call that the products are "squarely standing shoulder-to- shoulder" with destinations. We're on that direction.
Land vacationers are being pursued by Carnival Corp. brands. The price gap was anywhere from 25% to 50% according to the CEO of Carnival Corp.
We are too much of a value. We shouldn't be priced at a large discount to land.
The carnival is hard after first-timers. The carnival celebration is pictured. The photo was taken on the Carnival Cruise Line.
There is a way Weinstein wants to close the gap. Heading into Wave season, Carnival plans to increase marketing to drive demand and increase advertising to target new customers. One-third of Carnival Corp. passengers have never been on a cruise ship.
Weinstein said the lines have seen an improvement in first-timers and are two-thirds of the way back.
The analyst for Truist Securities said that the cruise industry is showing positive traction in its recovery and that its value proposition is a driver.
"With demand coming back, people are less fearful to take a cruise, and you see these crazy record room rates." The value vacation is what people are looking for.
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