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Cruise Execs Say Early Wave Sales Position Industry For Strong 2017

post by Sharon at February 25, 2017
The cruise-selling climate in early 2017 looks as robust and trouble-free as it has in any year since the 2008 financial collapse, according to reports from select suppliers and travel sellers contacted by CruiseTrend.

"The Wave period is off to a strong start, with bookings trending nicely higher than last year," Jason Liberty, CFO at Royal Caribbean Cruises Ltd., said in a late January conference call.

"While trends have been strong from our key sourcing regions, we are particularly encouraged by what we are seeing in North America."

At Seattle-based Windstar Cruises, president John Delaney said, "We set a new record, with January 2017 being our strongest booking month in the history of the company."

Travel agents said the first four weeks of 2017 have been notably better than the same period last year.

"I'm busier this year than I have been in a few years, trust me," said Paul Casella, an agent at Master Travel and Cruises in Wellington, Fla. He said European bookings, in particular, have done well.

"The longer cruises have picked back up again, which means more money in our pockets," Casella said. "The 11-[day] coastal cruises, the Panama Canals, the higher-ticket items seem to be coming back."

A lot of people are definitely cruising, said Diana Poulson, an outside sales agent at Kahala Travel in San Diego. "Europe's at a good price right now," she said, mentioning Australia, the Caribbean, and the Mexican Riviera as other destinations that she has sold recently.

Poulson said Alaska is selling so well that she's having trouble finding the cabins that are most often requested. "All the midship balconies on the southbound land side, they're basically gone," she said.

An airfare tail wind is also helping sell European cruises. Poulson said she recently found a roundtrip San Diego-Rome airfare in mid-July for $800 per person.

Shelby Donley, president of Camelback Odyssey Travel in Phoenix, said her agency is outpacing last year's first quarter despite what she views as softer promotions from the luxury lines in which she specializes.

"For most of them, they didn't bring anything new to the table for Wave season this year," Donley said. "They either extended an existing offer or they're doing some kind of agent, rather than consumer, incentive."

Given the increase in inventory by several luxury suppliers in 2017, she said she hopes they have a handle on demand. But so far, so good.

"Despite the fact that the offers themselves are a little on the soft side, we are pacing very well," Donley said. "We've been very happy with the activity."

At Cruise & World Travel in Fairfield, Conn., president Nancy Yale said cruise and luxury travel sales were up 34% year over year in January.

"This year is off to a great start," Yale said. "World events last year delayed some travel plans, but clearly everyone is now booking for this year. We are seeing an uptick in Europe for the summer and a lot of close-in bookings for the Caribbean this winter."

Drew Daly, the general manager of network engagement and performance at Cruise-One/Cruises Inc. and Dream World Vacations, said he's been very happy with booking-trend results in early 2017.

"One of the numbers that resonates is a greater booking window," Daly said. "Anytime you extend the booking window, that means your agents are earning more on the ticket because prices are higher, too, which is nice."

Windstar's Delaney said he has been particularly pleased with the growth in bookings for the Greek Isles.

"We are experiencing excellent demand recovery compared to last year's industrywide challenges in the Eastern Med," he said.

At Royal Caribbean, chairman Richard Fain said the company's booked position is at record levels four weeks into Wave.

Fain said the booking window has been extended probably as far as the company's revenue managers would ever want it to be.

"Future years are likely to show the same or lower levels of bookings as they work to optimize with the broad pattern of when and at what level to take more bookings," he said.

Liberty said Royal has adjusted this year to account for a lower level of interest in eastern Mediterranean cruises, where Turkey, in particular, has become a lost destination for most cruise lines.

Overall, European capacity in 2017 was taken down 23%.

"We are now booked at much higher load factors than last year in both the Mediterranean and Baltics," Liberty said, adding that average per diems "are also up nicely even though we no longer have the high-yielding Harmony of the Seas in Barcelona."

Fain was ebullient in describing his company's prospects for 2017, suggesting that Royal Caribbean is hitting on all cylinders and market conditions are about as good as they get as long as geopolitical factors cooperate.

"Over the last few months, we have built a tone that is as good or better than I can ever remember seeing it," Fain said. "Life is good. Long may it continue."
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