Advantage Travel Partnership’s head of commercial John Sullivan has questioned Viking Cruises’ decision to focus on direct sales, saying it will be “missing out” compared to lines that work with the trade.
Viking Cruises’ parent company filed for an initial public offering in the US last week, saying it was looking to expand from river and ocean cruises into land-based tours and grow its direct sales.
The line issued a statement saying it believed its direct bookings would “continue to grow and add value to our business”, adding: “Direct bookings reduce commissions paid to travel agents, which reduces our distribution costs and improves our margins.”
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Sullivan said the consortium was seeing the “complete opposite approach” from its partners, which are “looking to increase their share of trade business due to the lower cost of acquisition and the agents’ ability to upsell”.
He questioned Viking Cruises’ approach, saying travel agents are the “gateway” to potential customers who had not thought about taking a river cruise before, making “sector expertise and first-hand knowledge essential”.
He claimed river cruise is the “fastest growing” cruise type within the sector, and said a “clear understanding of brand distinction is absolutely key”.
Sullivan went on to say Advantage is launching a revamped cruise marketing tool for its members which will have an increased focus on river cruising “to help members promote their expertise and knowledge within the cruise sector to their customers”.
He said: “Viking clearly have their own reasons for looking at increasing their direct sales, but for those who chose to spend significantly on TV advertising, two things spring to mind: firstly, and surprisingly, their cost of acquisition direct versus trade is lower when they spend on expensive routes to market, and secondly, their TV advertising creates a halo effect for our members. It drives potential customers to agents to find out more about river cruising, and in this case our members then switch sell these customers to trade supporting brands.
“So the question remains, we we see this sector continue to grow strongly via the trade, are those who decide to increase their direct sales missing out? I would say they are.”
Comment: Cruise lines that don’t see the trade’s importance will miss out