There are not many people in the world who understand cruise sales better than Michelle Fee, head and a founder of Cruise Planners, with over $100-Million in cruise sales annually, she sees the trends and knows instinctively what the marketplace is saying.
I spoke to Michelle on August 26, 2009 to see what the cruise market is telling her right now.
Paul: Hi Michelle, we have met a few times, the last time we spoke was in Genoa, Italy after the Costa Magica inaugural. How are you?
Michelle: I am doing great, although the economy certainly could be better.
Paul: I understand what you are saying. Michelle, I have been seeing a lot in the press about "last-minute cruise bargains" lately. Is that a real thing?
Michelle: Yes, it is. We started seeing the trend about a year ago, when the economy started melting down. It's all about "visibility," and specifically the ability of the cruise lines to see what kind of cruise plans people have for the future. Right now we see a lot of people buying cruises at the last minute which also coincides with what are sometimes the best prices.
Paul: Now by, "last minute" how much time are we looking at? 90 days, 30 days or maybe even as little as just a few days before the ship sails?
Michelle: Well, it can be that close, but to be specific I am referring to about 60 days ahead of the sail date, that's "last minute."
Paul: And that coincides with the time when the final payment is usually due on a cruise, correct? The point being that a number of people may decide they are not going to take that cruise, they lose their deposit and a number of cabins suddenly become available.
Michelle: That's right, 60-days out usually corresponds with the final payment due date for most cruises, but prices may fall before or after that time. Every cruise is different.
Paul: So, we don't really see them dropping significantly as the sail date gets closer and closer?
Michelle: No, not by much if any. The prices actually start to go up again as the ship sells out. Most ships are still sailing at near full capacity these days; they are just selling out later than usual.
Paul: So, 60 to 90 days out is when they are cheapest.
Michelle: In general and if all you care about is price, but most people want more value for their money. They want a nicer cabin and more amenities. There is another factor I want to bring up about this "last minute" stuff...
Michelle: That you have price protection up until you make your final payment anyway. So there is no reason not to book as early as you want. If the price goes down you pay the lower price. I say "book that 2010 cruise right now." If the price goes down before you make your final payment that is what you pay.
Furthermore, some cruise lines will give you price protection after your final payment, like Royal Caribbean and Celebrity, so there is little to no risk to book your cruise in advance. Carnival even has an "Early Savings Plan" where they offer a up to 25% discount and guarantee you will pay the lowest advertised price on your cruise until the ship sails. You just have to book three to five months in advance - depending on the length of your cruise. However, the deposits are non-refundable.
Paul: The whole idea is that the cruise lines want more visibility so they can plan for the future. But people are afraid to make a commitment.
Michelle: It is consumer psychology. Many people don't want to make a large financial commitment. You know, their stocks are down and their house is only worth half of what it was.
Paul: And is that the cruiser psychology you are feeling from the calls Cruise Planners is fielding right now?
Michelle: Well, no. I was feeling that, but lately I actually feel things are turning around - that people are feeling better about the economy already.
Paul: You sense consumer confidence?
Michelle: I think some of the uncertainty has been taken out of the market. People are starting to sense their jobs are still secure and their stocks are up again. I think most people really value their vacations. They mean a lot to us.
Paul: Have you seen a change in the cruiser profile? Are cruises selling to experienced cruisers picking up bargains, or are new people trying cruises now because they are so cheap?
Michelle: We are seeing experienced cruisers shopping for value.
Paul: Are those experienced cruisers trading down to cheaper cruises?
Michelle: No, not really, people usually won't settle for less quality, but they do shop for value prices for what they really want to buy.
Paul: So they aren't switching brands, they are sticking to their favorites.
Michelle: Yes, experienced cruisers are sticking. But we are also seeing a lot of first time cruisers who have discovered cruises are a great value vacation. After all, we are seeing amazing prices.
Paul: It reminds of what Bob Dickinson used to say about 9/11, "It's been an incredible opportunity to get people who have never considered a cruise to try one."
Michelle: Yes. There are similarities, but it is economic instead of a fear of flying, and we also emerged from that. Getting back to the economy, right now we are entering what is called "the value season," that period after school starts and leading up to the holiday cruises in December. This is usually the slowest sales period of the year.
Paul: There should be some real bargains out there right now, right?
Michelle: Yes, and it could be your last chance because it leads into wave period starting in early January. Cruise prices will probably stay low or get lower, but if the economy picks up just when wave season starts we could see prices could go up quickly. I think buyers should be locking in their 2010 cruises right now.
Paul: It's price-protected until you make the final payment. What other tips do you have for cruise buyers who really want the best deal?
Michelle: A few things, first of all I really recommend shopping the sales. And I don't mean across the board sales from the cruise lines. I mean "keep an eye out for agents with onboard credit offers, free perks like restaurant reservations or gratuities included." You generally never see those offers from the cruise lines, only from travel agents.
Paul: So you don't recommend buying a cruise direct from the cruise line?
Michelle: No! There is no reason to do it. You aren't going to see those special offers direct from the cruise lines, and they'll never take care of you the way a travel agent will. No cruise line is going to pick up the phone on a Sunday night, but a travel agent will.
Paul: So, better offers and better service, right? What about booking onboard a cruise ship? I have heard that is a good deal.
Michelle: Yes, we encourage customers to book their next cruise while onboard, or just put down a deposit for a new cruise. That is one time when a cruise line will give you incentives to book, usually shipboard credit. But just make the deposit and you usually have 18 months to apply it to a specific cruise. It's a good deal and all you have to do is call your travel agent and tell them about your deposit. They can take it from there.
Paul: Tell me about yourself and CruisePlanners
Michelle: Well, it was started by three people including myself. We are a host agency which turns people into travel agents after extensive training here in our Fort Lauderdale training center. Afterwards we support our agents in lots of ways, cruise sales, marketing, technology.
Paul: American Express affiliated?
Michelle: We are an American Express member agency. Personally, I became a full-service travel agent 28 years ago, so I think I know the travel sales business.
Paul: Thanks for the tips!