NEWS
DEPOSITS
how can a company help you build your
business,” she said. “A company like ours
is about the individual business
and about us building relation-
ships with our clients, and this
is a tool that we can go out to
our existing client base and
say, ‘I know things are tough,
but here’s something that may
help you book earlier and book
smarter.’”
Promotions that offer re-
duced deposits are not uncom-
mon from cruise lines. And
during the peak of the econom-
ic downturn, many lines even waived de-
posits altogether.
Blecker said that in her experience,
when cruise lines waive or reduce depos-
its, “it definitely spurs bookings.”
Jack Mannix, a travel industry consul-
tant and former president of Ensemble
Travel Group, said that while he doubted
anyone booked a cruise solely because the
deposit was waived, it might get people
who were “on the fence” to go ahead with
a booking. In addition, it may help the
cruise lines get more early bookings.
“By reducing or eliminating
deposits, it may help the cus-
tomer to go ahead and book
sooner,” Mannix said. Refer-
ring to the number of depos-
its that “wash,” or don’t stick
all the way to final payment,
he said, “Assuming the wash
rate doesn’t change, the cruise
line puts more business on the
books sooner.”
Although he wouldn’t specu-
late about the effectiveness of
this particular campaign, Zuniga said that
promotions in general work well. He said
“our sales were up significantly” in re-
sponse to company promotions held last
year, such as offering onboard credit and
a free shore excursion.
Zuniga said the company would heavily market the promotion to consumers
through email blasts and through social
marketing, on its Facebook page and its
website, as well as through paid search.
Amber Blecker
Franchise Owner
CruiseOne
The Concordia on Jan. 13 hit rocks and
began taking on water just hours after
leaving Civitavecchia. As of last week, 16
people have been confirmed dead, and 16
more are still missing.
Images of the ship, half-submerged just
off the coast of the Italian island of Giglio,
were beamed around the world.
Because the Concordia accident happened at the start of Wave season, a period
of traditionally heavy booking from early
January through mid-March, Fain said it
was possible that Wave could be extended
by a few weeks.
A reassuring factor, he added, was that
cancellations have not been a big factor,
indicating that experienced cruisers have
faith in the product.
But new booking activity has been affected, Fain said. Across its brands, the
company said, first-time cruisers make up
about a third of all customers.
Fain made his re-
marks during the
company’s Q4 and
full-year 2011 earn-
ings report Feb. 2.
Both showed posi-
tive results and, be-
fore the Concordia
accident, 2012 was
getting off to a “pow-
erful start.”
For 2011, the com-
pany’s net income
rose 17.8%, to $607.4 million, and revenues
rose 10.3%, to $7.5 billion. Net yields were
up by 2.4%, it said.
For Q4 2011, net income jumped 14.7%,
to $36.6 million, and revenues increased
12.5%, to $1.8 billion. Net yields increased
by 3.5%.
Richard Fain
Chairman and CEO
RCCL
BOOKINGS
Continued from Page 1
net revenue yields, that are not possible to
reasonably determine at this time.”
At RCCL, Fain said that the Concordia
incident has put the cruise industry “into
uncharted territory” and that there’s “tre-
mendous uncertainty” for the future, but
he also said the recovery in bookings dur-
ing the latter part of January is an indica-
tion that there won’t be long-term effects
on bookings.
The short-term outlook is another story.
The company said that the second and
third quarters of 2012 are feeling the brunt
of the bookings slump; the first quarter already was solidly booked before the Concordia incident.
Without providing a specific percentage
drop, company CFO Brian Rice said bookings sourced from Europe are “depressed”
but are starting to recover.
“There are a couple reasons” why Europe
bookings fell, he said, including “greater
media coverage of the Concordia, the
proximity [of the shipwreck] and a weaker
economy.”
Pricing, he said, has held steady in the
wake of the accident, but the company
provided an exceptionally wide range for
yield improvement in 2012, between 1%
and 5%.
Dan Hanrahan, president and CEO of
Celebrity Cruises, added that cruise fares
are the same now as they were during the
first week of Wave season.
Rice said that RCCL has 16% less capacity in the Eastern Mediterranean this year
compared with 2011.
“That’s helping, and the geopolitical
tensions are not as escalated this year,” he
said. Strong destinations for 2012, he said,
appear to be Alaska, the Baltic and other
Northern European areas. Hanrahan said
that Caribbean pricing was holding up well
for Celebrity.
Fain said he believed that agents, along
with the trade associations and the cruise
lines, were doing a good job explaining
cruise ship safety and reassuring the public.
“The public gets it,” he said. “This is a
safe and secure industry. They can separate
the headlines from the [reality]. There’s
no such thing as perfect safety, but perfect
dedication to safety.
“It’s a matter of how well we get that
message out. We’re working to do that.”
With new execs, A&K seeks out new products, markets
By Michelle Baran
No long-term effect anticipated
In its statement, Carnival said it did not
believe the Concordia incident would have
a significant long-term impact on business.
It did, however, “anticipate other financial
impacts to our business, including lower
As Abercrombie & Kent celebrates 50 years in
business this year, Geoffrey Kent, its founder,
chairman and CEO, has brought in a new
group of executives that he hopes will pave
the way for the next 50 years with fresh prod-
uct, aggressive pricing and new markets.
The latest change came last month, when
A&K announced that former Tauck executive Phil Otterson had replaced Scott Wiseman as president of Abercrombie & Kent
USA. Wiseman had been with A&K since
2006.
Otterson left Tauck in 2009 after a 32-
year tenure with the company, where he
rose to the role of executive vice president
of external affairs.
Kent is hoping Otterson will help A&K
expand its product in the company’s existing destinations.
“He has the skills to get the right prod-
uct at the right price, especially price,”
Kent said. “We’re committed obviously to
the luxury category. But we have to make
some of our tour products, especially the
regular-departure, brochure tours, more
competitive and more in line with some of
our competitors.”
Priscilla Alexander, president and CEO
of New York-based Protravel International,
No. 17 on Travel Weekly’s 2011 Power List
and a top A&K producer, said that A&K is
“good partners with the travel agent com-
munity.” But she cautioned that if the com-
pany plans on expanding into new prod-
ucts, it should do so carefully.
WWW.TRAVELWEEKLY.COM
FEBRUARY 6, 2012
