Coffee, tea–or cruise?
No longer content to sell only plane seats and package tours, air carriers are peddling hotel rooms, rental cars and, increasingly, cruise reservations. And they’re doing it from their own Web sites.
Tapping new markets for online sales is a smart strategy for the airline industry, but it may or may not be a smart purchase for you, especially if you’re shopping for sailings.
Before wading into the practicalities, let’s pause for a moment of irony: Airlines, which once paid millions in sales commissions to travel agents, now collect commissions from hoteliers, cruise lines and others. In effect, they have become travel agents.
“It is a total turnabout,” said Mike Driscoll, editor of the industry newsletter Cruise Week.
Why would someone book a cruise on an airline Web site?
“Because you don’t know any better,” Driscoll said.
His reaction had more to do with misgivings about online cruise marketing than with airlines’ Web sites. There can be advantages to booking a cruise through an airline, such as convenience and, sometimes, frequent-flier miles.
But Driscoll makes a good point: Buying a cruise is a complicated transaction in which the consumer often benefits from human contact. You may have a dozen or more cabin categories to choose from, plus scores of shore excursions; air travel to and from ports; transfers; and pre- or post-cruise hotel stays.
Each line has its own personality, so a travel agent who has been on the ship is invaluable. Some airlines’ Web sites have online cruise tutorials that answer questions like “Are all ships similar?” But if you have to ask that, you’re probably too much of a novice to book online.
Driscoll’s advice: “You do a lot of research on the Internet, and you book [the cruise] with a travel agent.”
So few people arrange their voyages online that less than 4 percent of the cruise industry’s revenue this year is expected to come from such sales, said Henry Harteveldt, vice president for travel research at Forrester Research, a Cambridge, Mass.-based company that focuses on technology trends. Three years from now, he expects the figure still to be at less than 6 percent.
For a variety of reasons, airlines are nonetheless rushing to offer cruise sales on their Web sites. Among those adding them in the last few months have been Southwest Airlines and United Airlines.
Earning commissions, or as the airlines prefer to call it, “revenue sharing,” puts wind in their profit sails, although the carriers are elusive about how much they earn from them. Industrywide, cruise lines typically paid about 13 percent of the fare amount to retailers, on- or off-line, Driscoll said.
Adding cruises and other services encourages people to visit the airline’s Web site, said Southwest spokeswoman Angela Vargo. While they’re at www.southwest.com, they may book a plane seat, too, to a cruise port or elsewhere.
“With the growth in regional cruising … it’s certainly a logical tie-in,” Harteveldt said.
And then there are the frequent-flier rewards. United, for instance, awards one frequent-flier mile for every dollar spent on a cruise. If you book online at its new www.unitedcruise.com (which can be linked from www.united.com) by the end of this month, you’ll earn 2,500 bonus miles, or 1,000 extra miles if you book after that. Delta, which in June introduced www.sky milescruises.com, awards 1,500 to 10,000 miles for a cruise booking.
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Edited by Cara DiPasquale (cdipasquale@tribune.com) and Kris Karnopp (kkarnopp@tribune.com)
