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Front Page » Top Stories » Cruise Industry Expects More Online Bookings

Cruise Industry Expects More Online Bookings

Written by on June 3, 2004

By Marilyn Bowden
With Internet bookings predicted to take the cruise industry by storm in the next few years, some cruise lines are gearing up to compete with online services by offering booking options on their Web sites.

According to a study conducted this year by PhoCusWright, a tourism and hospitality research group, 95% of cruise sales are now booked through travel agents. But the study concludes that the three top online travel sites – Travelocity, Expedia and Orbitz – will probably take over 10% of the market within the next year.

"Changing the Channel: A White Paper on Shifting Cruise Industry Dynamics," published by Credit Suisse First Boston for its investors, says "traditional agencies’ share of the cruise market will shrink from 90% to 60% by 2006, while supplier-direct sales (Web and phone) will reach 25% by that time."

Web-based sales, the white paper forecasts, will account for 15% of cruise sales by 2006.

Some South Florida-based cruise lines are anticipating the trend by making it possible to book cruises on their websites.

For Carnival Cruise Lines, "the focus and No.1 business objective" of its new website, launched about five weeks ago, "was to enable and support the decision-making process and to capture the 93% of North Americans who have not cruised," said Daniel Alpert, marketing strategist in the Fort Lauderdale office of SBI.Razorfish, which redesigned the site for Carnival.

SBI.Razorfish, a global marketing and technology consulting firm, lists on its client roster a variety of travel-related services, including Delta and Northwest airlines, Starwood, Marriott,, Club Med, Budget, Interval International, Alamo and

"Travel," Mr. Alpert said, "is the fastest-growing online segment. Fewer people are using it solely for research because the technology allows the process to be more comfortable."

For Carnival, the key, he said, is not so much to generate online sales as to provide options.

"It’s a lot more complex than booking an airline ticket," he said. "There are several intersecting customer segments, including Carnival loyalists, first-time cruisers and cruise enthusiasts who are not loyal to a particular cruise line. There are families, singles, couples and event-based cruisers.

"Each needs to be communicated to differently."

While Royal Caribbean Cruises’ website allows customers to book directly, said Barbara Shrut, vice president for customer loyalty and e-marketing, "it’s totally up to the consumer how they want to handle it.

"A very small percentage book on line, but a significant number – 60%-70% of all travelers – research on line."

More than 90% of Royal Caribbean’s business, she said, still comes from travel agents – either bricks-and-mortar firms or on-line agencies.

"We totally support that," Ms. Shrut said. "For the percentage that want to make a booking directly, we have inhouse people willing to help. We don’t have a preference, because we want to book future guests in the way they find most desirable."

Carnival’s new site has a similar set-up, Mr. Alpert said, allowing consumers to book directly, through the travel agent of their choice or with the help of an inhouse vacation planner.

According to PhoCusWright, 50% to 60% of sales closed by online retailers are completed over the phone.

An increase in direct sales could hoist cruise lines’ profits substantially, according to Credit Suisse’s white paper. By selling 25% of all cruises directly to consumers by 2006, Credit Suisse computes Carnival and Royal Caribbean would reduce commission costs by $138 million and $75 million, respectively.

Online reservations could also boost the local economy. Ms. Shrut said Royal Caribbean’s site has online options, once a cruise is booked, to customize it by "adding on additional days in Miami, Hawaii or wherever, booking shore excursions and so on."

Among Carnival’s add-ons, Mr. Alpert said, are bon-voyage floral arrangements or gift-baskets, snorkeling equipment and other products from South Florida suppliers.