25 February 2009

Price cuts 'stimulating cruise sales' despite recession

Price cuts in the face of recession have helped stimulate sales of cruises to greater levels than this time last year, according to Carnival UK.

The cost of the group’s 2009 cruises have been reduced by between five and ten per cent, resulting in improved booking levels in the January/February peak sales period.

Despite customers booking later, cruise sales are between 25%-30% up year-on-year depending on the brand within the company’s portfolio and overall capacity for 2009 is 85% sold. Sales of Cunard Line are up by 50%, for example.

Disclosing the figures, Carnival UK CEO David Dingle predicted that the organisation - which includes brands such as P&O Cruises, Cunard Line and Ocean Village - would come through the year in "reasonable shape".

Speaking at the release of the annual Carnival UK Cruise Report, which included findings of a YouGov poll suggesting that he majority of consumers plan to spend the same on their holiday this year as 2008 (see separate story), Dingle said: "People are booking later because they are feeling naturally uncertain.

"It is true that as an industry we are using price stimulation to encourage bookings with fares five to ten per cent down than the same time last year.

"Since Christmas we have seen bookings well above the same time last year."

The business has been fortuitously helped by ex-UK cruise capacity for 2009 being pegged at last year’s levels with no new ships being introduced.

There will be an additional seven per cent growth in 2010 with the introduction of P&O Cruises’ new ship Azura for the summer, Cunard’s Queen Elizabeth at the end of year and a new vessel from rival Celebrity Cruises yet this comes against average annual UK industry growth of 12%.

The inclusive nature of cruises coupled with keen pricing such as a sale by Cunard comes at a time when tour operators have cut 2009 capacity by 16% and raised prices by ten per cent, according to Carnival UK commercial director Peter Shanks.

This has narrowed the gap between standard holidays and cruises and highlighted the value attributes offered by cruise holidays, he claimed.

Sales of 2010 cruises across the majority group's brands start next month.

*See linked Carnival UK Cruise Report stories

by Phil Davies

Post your comment

Your Comments (1)

Payment by installment to help increase sales?

It's great to see some good news, and to see that the Great British holiday maker still has his/hers priorities sorted....... enjoy a good holiday 1st and worry about house prices second! In many cases there is not really a reduction in income, and for even more of us lucky ones we seem to have even more spare income due to the reductions in mortgage rates. Added to that, there is no pint in looking at houses at the moment, so we are left with just one option, which is to holiday. The only issue is a lack of confidence. We don't want to spend out such a huge amount in one go, and we are worried where we will be in a few months when it is time to complete the holiday payment. Credit cards are penalised with surcharges by most agents, and loans are certainly a no no at the moment. How about looking at paying in installments? If people were iffered the chance to pay a set amount per month, with the final payment due at the normal time, then I think that would be a great inducement to book. Even better, make this only available to early bookers (along with discounts). I do a very similar thing to this myself, but it involves me phoning up the agent, and making a part payment. I have to remember to do it myself, and schedule this in. If I had a diect debit or standing order for this to go out on pay day I am sure that I would hardly notice! It's just an idea, but worth a thought? Plus it gives another sales approach!

By Chris Lewis, Thursday, February 26, 2009