Value proposition

Reframe the value proposition of cruise travel

The demand for cruise travel is exploding. But that doesn’t mean people are ready to get on board at any cost. Value for money is always extremely important. In an environment of rising costs, how can we deliver the value customers are looking for while protecting the industry? By expanding reward programs and the definition of value.

Cruise travel is back in full force. In April, the two Carnival Cruise Line and Royal Caribbean reported record booking volumes between March 26 and April 3 – around the same time the US Centers for Disease Control and Prevention (CDC) eliminated pandemic-related travel warnings that were in effect. place since March 2020.

While this recent jump can in part be attributed to expiring future cruise credits, passengers are more than ready to sail. By a commentator on the Royal Caribbean bIog:

“We sailed 04/03 Oasis 4 night. Only because our FCC expired on 04/30 [sic]. But the excitement was there and many people booked another cruise on board. We ourselves are planning 2 more this year.

Arrivalit is recent research confirms this feeling. In a consumer travel survey conducted between the end of 2021 and the start of this year, 80% of respondents said they were planning a cruise or considering booking one within the next two years. These results are consistent with Cruise Lines International Association projections, which call for a full recovery by 2023.

As eager as they are to travel, consumers are not ready to go on a cruise at any cost. According to our investigation, ready to board, value is the main driver of a consumer’s decision whether or not to book a cruise: 25% of respondents said they had not booked a cruise in the 12 months prior to the survey period due to price, despite COVID protocols. But in an era of unprecedented inflation, it will be nearly impossible to keep cruise prices low. Cruise lines have already started raising their fares. In April 2022, the two Carnival and Norwegian announced increases for onboard services, including Wi-Fi, specialty meals and drink packages. They also increased the recommended tip by 50 cents per person.

Broad-based bulls will be a tough sell, said David Katz, an analyst at investment banking firm Jefferies Group. “…the cruise line is inherently a value buyer and therefore it’s increasingly difficult for Carnival to drive up prices in this environment,” he said recently. told the Financial Times. So how can we, as travel rewards providers, continue to deliver value to our customers in this context while preserving bottom line and supporting the cruise industry? By expanding reward programs and the definition of value.

More options equal better value.

According to our cruise survey, 18% of respondents plan to use their points to fully or partially pay for their cruise. It’s clear that the demand for this type of redemption exists, yet many rewards programs don’t include it in their redemption process, choosing instead to focus on the big three: the plane, the hotel and car rental.

By expanding their current rewards or travel options to include cruises, consumer-facing businesses, membership groups, and loyalty programs can all capitalize on the growing demand in this segment. Consumers will appreciate using their points to offset the cost of their cruise and benefit from member-only fares and experiences that are hallmarks of successful rewards programs.

But consumers don’t just assign value based on price. A lot of arrivia Cruise Consumer Survey Respondents expressed interest in luxury cruises. Although there are savings in this category, it is not traditionally defined by floor rates. But consumers want value for money, or in other words, experiences worth the cost. This can take many forms, from exceptional customer service and upgrades to time-saving workflows.

Imagine a Rewards member who wants to book a cruise. They log into their rewards platform to find that this option is not available. They get frustrated and go to an online travel agency (OTA), where they can book their entire trip in two or three clicks. To deliver real value, travel rewards programs need to become one-stop shops. This will allow them to offer unmatched prices, convenience and a better customer experience.

Even though prices are rising, member-based programs have a distinct advantage over public platforms such as OTAs: they can negotiate exclusive prices, which means that while cruise travel (and travel in general) can become more expensive, customers will always get more for their money. if they choose to book through their loyalty provider, whether they choose to pay with cash or points. It’s a powerful selling point and recognizable value proposition for loyalty marketers looking to attract new members and drive customer engagement.

Adding more travel options like cruising to your rewards program also provides a strategic advantage. For example, suppose a customer starts looking at flights through your platform. You can assume the customer has a family, so you send offers to a theme park even though the customer is more interested in a romantic cruise. You are providing a poor customer experience with little value by sending irrelevant offers. On the other hand, the more options your customers can access through your platform, the better a picture they will have of their future wants and needs, allowing you to create targeted offers that are much more likely to result in a conversion.

Value and Importance of Memory

There are so many reasons why we might book a vacation. We might do it to disconnect from our everyday life, to discover something new somewhere new. We might see it as a way to spend quality time with loved ones or to spend quality time alone. Ultimately, a vacation is about time, place, and the memories you create. That, in itself, has a lot of value.

For many, the pandemic has shone a light on the importance of travel to our overall well-being. Despite the looming threat of a new wave of COVID and geopolitical and supply chain issues driving up costs, we are seeing growing demand for cruises and other leisure travel. But this demand is not immune to these factors. To make sure this wave doesn’t die out prematurely, we need to redouble our efforts on what really matters to customers and give them the value they really want, even if that means redefining what the word means in a world that has not finished changing.

Jeff Zotara is the Chief Marketing Officer of arrivia, a travel technology company that provides loyalty, reservations and marketing solutions to consumer-facing businesses that want to deliver exceptional value to their customers, discover new sources revenue and drive growth with exciting travel rewards. and member benefits. With over two decades as a strategic and operational marketing leader, Jeff is focused on driving growth and marketing technology across brands and delivering the best member experience at the intersection of travel and technology. .

The return of cruises: reframing the value proposition of cruise travel