Heavy discounting comes under fire

Senior cruise representatives have defended moves to aggressively discount fares to attract customers, while others have signalled a need to change the dialogue surrounding cruise marketing to increase yields. Bringing the prickly topic of discounting to the fore during a panel discussion at Cruise3sixty, travelbulletin publisher Bruce Piper questioned the sustainability of cruising in the face of heavy discounting such as $99 fares for six and seven-night cruises offered by Webjet earlier this year. APT earlier this year also offered a twofor-one river cruise deal with savings of over $13,000, but APT later stressed the deal was a “limited sale on out of season cruises” released through retail and online partners. Moderating a panel on sustainable growth, Piper questioned how cruise lines could make a profit off such lean margins. But cruise lines were quick to hit back. Royal Caribbean Cruise Lines vice president commercial Sean Treacy said discounting was simply a tactical move to gain a competitive advantage in a crowded marketplace, while Princess Cruises vice president Australia and NZ Stuart Allison described attractive pricing as a “marketing device to create demand”. But P&O Cruises senior vice president Tammy Marshall – who is set to exit the company following a recent restructure – was more vocal on the topic, noting that sustained lower yields could hamper industry growth. While P&O’S yield has remained higher than usual in recent years, Marshall Debra Fox, APT global head of sales and marketing

highlighted the need for increased investment to facilitate meaningful growth. She also stressed the need to change the dialogue with consumers and focus marketing on the cruising experience rather than the price point. “As an industry we need to stop selling the hardware and start selling the experience,” she said. “To keep yield up we need to increase investment. We are looking at the full package and hopefully we won’t see yield drop lower than $99 for a quad cabin.” Carnival Australia director of marketing and distribution Simon Cheng also weighed in on the matter during a later panel discussion, claiming that competitive deals were the “commercial reality” of the cruise sector. But he was more candid on the reality of aggressive fares and the sentiment whereby cruise lines price to fill. “Our dream would be not to discount as much as what’s happening at the moment. We need to improve the value proposition and stop promoting how cheap we are and focusing on the value we offer,” he said. APT global head of sales and marketing Debra Fox echoed his calls, claiming cruise lines have to “break the misconception of cruising”. “We need to add value for the customer because there’s nothing cheap about the price point for APT,” she said. Carnival Cruise Line vice president Australia Jennifer Vandekreeke focused on the potential of the cruise sector, claiming there was “lots of room to grow”. However she added that discounting would be an ongoing reality of the cruise industry and stressed that selling discount fares was more favourable than empty cabins. “I hope we don’t focus on those two cabins that were cancelled and we needed to fill,” she concluded.