Cruise Baltic’s Claus Bødker says destinations must work with cruise lines to increase profitability
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This article was first published in the Autumn/Winter 2015 issue of International Cruise & Ferry Review.
With an ongoing series of increases in global cruise passenger numbers over recent years, the cruise industry expects that 23 million people worldwide will spend all or some of their annual vacation on a cruise ship. At the same time, however, the cruise lines often complain that ticket revenues do not reach a satisfactory level – many cut costs to achieve profitability but it becomes harder to cut any further without jeopardising the passenger experience.
According to the 2014 annual accounts for the Carnival Corporation, the Carnival Group achieved operational profits just below US$23 per passenger per day. Profits for both Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. are higher (but with higher financial costs). These three cruise companies and MSC Cruises are investing massively in building new cruise vessels and the financial costs for these huge investments need to be taken out of the operational profits as well. Therefore, the cruise lines are under significant pressure to increase profitability.
As cruise ships are obviously mobile assets, which can be deployed anywhere in the world, it is – as a destination network in the Baltic Sea region – our responsibility to work together with the cruise lines in order to increase their profitability. Although the ticket revenue question presents a challenge to a destination network and how we can address this specifically, there are, however, several other ways of increasing the ancillary revenue for the cruise lines.
Here at Cruise Baltic, we have launched a new and innovative website, featuring all the essential information for the cruise lines, including detailed port and pier information, suggestions for shore excursions, port and destination contacts and copyright-free photographs from each destination, which the cruise lines can use free of charge in their sales material. All these elements assist the cruise lines in generating more revenues from, for example, shore excursions.
Moreover, we have asked all the 27 partner destinations in Cruise Baltic to identify and highlight on their websites at least 10 local events taking place in 2016, 2017 and 2018, so the cruise line itinerary planners can include these when planning itineraries in the Baltic Sea region. This event calendar has been received very positively by the cruise lines, as they often wish to schedule a specific port of call during events such as these.
Cruise Baltic also assists the cruise lines in selling the Baltic cruise product. In April 2015, we launched cruisebaltictraining.com, which is an online training platform for travel agents. It consists of five modules, and when the travel agent passes the fifth module, he/she becomes a Certified Cruise Baltic Expert. By the end of May, only six weeks after the launch, nearly 400 travel agents have become Certified Cruise Baltic Experts, which is significantly beyond our expectations.
As a destination network, we believe Cruise Baltic can offer to the cruise lines not only the most diverse cruise experience in the world but also our commitment to providing a very profitable cooperation.