“You can’t grow your business without ... changing dynamics.” — Bob Dickinson, Carnival Cruise Lines
Cruise Holidays gathers eight execs for power panel
By Johanna Jainchill
Cruise Holidays, the cruise-only franchise network, demonstrated its considerable muscle when it gathered eight
current cruise line presidents, several who flew into
Miami just for the event, for an audience of 130 Cruise
Holidays franchise owners.
Holding its 2006 annual convention in the cruise industry’s backyard, downtown Miami, also helped; it is usually
held on a cruise ship over several days, which doesn’t enable the head
honchos to duck in and out.
“That’s why we did it on land,” said
Roger Block, executive vice president of
the Carlson Travel Franchise Group, Cruise
Holiday’s parent company. “You can’t get
this level of participation on a ship; 100%
of the invitees showed up.”
Many groups could never get this level
of participation. Cruise Holidays calls itself the largest cruise-specialty franchise
network in North America and said it sells
more cruises than any travel network with
the exception National Leisure Group.
“The reason [the executives] come is
because of the support we give them
day in and day out,” said Peter Thomson, Cruise Holidays’ vice president
and COO.
Block, who also moderated the
panel, did not let the opportunity go
to waste. Many of the franchise owners in attendance later said he raised
important issues, even if the executives
skirted some of them or, as per Securities and Exchange Commission rules,
couldn’t address them.
He asked the executives what was going
on with yields and what the future held for
pricing. He also asked about the perception
among cruise sellers that the rate of noncommissionable fees, or NCFs, is increasing.
But not all the questions put the executives on the hot seat: Block also asked
them to give the cruise sellers tips on
improving productivity.
As usual, the pricing question drew
several “no comments” from the public
companies, in addition to the now quarterly echo that, yes, the Caribbean is soft,
and, yes, Alaska and Europe are strong. But
Adam Goldstein, president of Royal Carib-
From left, Adam Baker, owner of Cruise Holidays of Morris County in Whippany, N.J.; Frank Ball, owner of Cruise Holidays in
Hawthorne, N.J.; and Celebrity Cruises President Dan Hanrahan.
Some of the topics at the Cruise
Holidays forum: yields and
pricing, noncommissionable fares
and commissionable tours,
market strength, sales tips.
bean International, cautioned Block that he
might want to reconsider asking the public
cruise companies about pricing and yields.
“It’s not appropriate,”
he said after the panel. “At
Seatrade [the annual cruise
industry convention in Mi-ami] we have the same issue.
We are public companies,
and we have four chances a
year to give this information
out, and at no other time.”
adding ships,” he said. “You can’t grow your
business without adding people or changing dynamics.”
The executives brushed off the
NCF question plainly; Colin Veitch,
CEO of Norwegian Cruise Line,
called the issue a red herring.
He said that mathematically, NCFs
couldn’t possibly be much of an issue to cruise sellers except to the ones
who focus on the least expensive accommodations.
“Sell balcony cabins and suites,” he
advised audience members. “If your
business is three-day inside cabins, then
NCFs are a big deal.”
But the franchise owners later said that
despite selling only premium cabins, the
growing NCFs are a challenge to their business, especially in a climate of lower costs.
“The cruise lines say, ‘We haven’t lowered
commissions’, and that’s true,” said one
franchise owner. “But they put more of the
money in the NCF category.”
But the executives were adamant that
“Stevedores, port fees. Let’s get the cruise
cost [to consumers] up, because our costs
don’t change.”
Shore pay
Sasso earned the biggest applause of the
morning when he said MSC would offer
5% commission on its shore excursions.
The other cruise lines defended their no-commission policy.
Mark Conroy, president of Regent Seven
Seas Cruises, said the profit on shore excursion is marginal. “We want to pay commission but need to earn profits, too,” he said.
Rounding out the panel were Princess
Cruises President Alan Buckelew, and Stein
Kruse, president of Holland America Line.
In an interview after the event, Block
said that one of the great benefits of having
such a panel discussion is the morale boost
it can provide to franchise owners.
“It’s an opportunity for these folks to
build relationships at the senior level,”
he said.
“It gives them the idea that at Cruise
Sales advice
When it came to giving
advice on making sales, the
cruise lines were more forthcoming and the executives
commended the Cruise Holiday sellers for being among
the best.
“Cruise Holidays agents
on the front line have always
been very knowledgeable,”
said Goldstein.
Bob Dickinson, Carnival
Cruise Lines’ president, said,
“Successful agents create a
database and manage it” and
proceeded to quiz agents on
whether they did. In most
cases, they didn’t.
“We grew our business by
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T W PHO TOS B Y JOHANNA JAINCHILL
Joe Jiffo, left, NCL national director, key account business development and
Maurice Zarmati, Carnival Cruise Line’s vice president of worldwide sales.
that wasn’t the case, and many franchisers said Veitch’s and the other executives’
points were valid.
Goldstein said the rate of NCF has been
stable over last few years.
Dan Hanrahan, president of Celebrity
Cruises, said the issue is “blown out of
proportion” and that since 2003 the multiple on yields far outstrips the NCFs, and
in that time, Celebrity has paid its highest
commissions in history.
“NCFs are things that happen outside of
ships,” said MSC Cruises President Rick Sasso.
Holidays they have one-on-one access to
the top. That’s worth the trip itself.”
Despite the success, it may be hard to
replicate the stature of this panel again next
year. The event will be held on the Celebrity
Mercury, out of Seattle.
But despite having to possibly give up
the lofty pedigree of the panel, many Cruise
Holiday franchisees were happy about
this news.
The cruise ships, they said, were more
intimate and fun, and the close quarters led
to more mingling.
