The COVID-19 pandemic is pushing cruise lines to book direct

As a result of the COVID-19 pandemic, cruise bookings have shifted away from middlemen, with cruise lines choosing to book directly with the cruise line rather than through an online travel agent (OTA) or the main street.

Industry revenue from cruise intermediaries in 2021 increased 65% year-over-year (YoY), from $11.8 billion to $19.5 billion. However, cruise passengers have increased at a significantly higher rate. According to the Cruise Lines International Association (CLIA), cruise tourism grew 95% year-on-year, from 7.1 million to 13.9 million people.

Unlike other travel and tourism industries, the percentage increase in specialist middleman revenue is not correlated with cruise passenger growth in 2021, suggesting that cruise lines now prefer to cut out the middleman and book directly with the cruise line.

In a pandemic situation, passenger revenue and travel are generally expected to be broadly similar in their rate of growth, with only marginal differences. For example, if we look at global outbound travel in its entirety, total travel increased 95% YoY in 2021 and outbound revenue increased 99% YoY according to the database on demand and tourist flows. However, looking specifically at the cruise industry, it is clear that intermediaries are underperforming with revenue increases 30% lower than passenger growth.

On the other hand, this change in booking behavior reflects the current sentiment of consumers towards intermediaries. In a Q3 2019 tourism consumer survey, 44% of respondents said they usually book through an intermediary such as an OTA. However, in a survey from the fourth quarter of 2021, only 24% of respondents said they had booked their last vacation via this booking method. Additionally, respondents who said they booked directly with the supplier increased from 32% to 36%.

There’s a whole list of reasons why cruise lines now prefer to go direct, all of which are a result of the pandemic. Some want more flexibility and peace of mind, while others have seen their confidence shaken due to a poor customer experience, especially when it comes to refunds.

Additionally, skill shortages in the industry are also problematic, with many cruise sales agents being laid off during the pandemic and subsequently moving into different careers. However, these issues can all be resolved, indicating that this may only be a temporary change, but cruise intermediaries need to act now to ensure they can capture demand in 2022. .

Rate article
( No ratings yet )
Add a comment