21 July 2008

What's Behind Carnival's Sudden U Turn on Agents?

It is interesting to see that Carnival - the world's largest cruise company - is suddenly rediscovering agents, at least in the USA market.

Why are they making such a big deal about this when they had been going down the direct path for quite a few years and why now?

I believe the answer could possibly lie in a number of factors over and above the stated reasons.

Obviously there is the simple issue of the product complexity. You should talk to an expert before plonking down your cash. But there are two very good reasons that lurk behind.

1. Risk of Buyers's remorse. Given the number of calls that a cruise generates - it is clear that the buyer wants to minimize the risk of making an incorrect decision.
2. Lack of air capacity.

The cruise companies are now just starting to see the impact of the lack of air. Having heaved a huge sigh of relief last year when they gave up commissions on air, the process this year has been - "don't bother us with air - get it yourself." I have spoken to several cruise lines reservations centers over the last few weeks and that is the standard answer from their call centers.

Well this has come unglued when the airlines cut back capacity. So paying full wack for the airline tickets is discouraging a lot of people from buying a cruise.


So back to the trusty agents to put that right since agents have more patience and will actually do the searching for the customer for a seat to match the cabin. Thus its a win for everyone - the consumer gets someone to handle the hassle, the cruise supplier gets a willing and able partner and the agents get a rise in sales.

So everyone is happy right? Sure - at least until the buyers return and the air capacity comes back - then, well I am sure you can figure out what happens then.



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