A novel way of incentivising agents to sell cruise based on yields could put an end to the discounting culture in the sector.
Fred Olsen Cruise Lines has started giving top agents quarterly targets based on the amount passengers pay per day, instead of the more usual sales volumes.
The cruise line said it had proved successful, helping it to achieve its yield targets for this year and drive early sales.
Lol Nichols, Fred Olsen general sales manager, said 2011 sales were eight weeks ahead of this time last year.
He conceded Fred Olsen had not had to go after volumes this year because of reduced capacity.
But he saw no reason why this approach could not work across the industry, particularly as capacity rises start to slow.
“We all want to maximise our yields,” he said. “It’s difficult if supply exceeds demand because there will always be a need to discount. But next year there is virtually no new capacity being added and demand will probably catch up.”
Nichols was speaking at last week’s UK Cruise Convention, which heard a demand for agents and operators to agree a solution to discounting to make selling cruise more profitable.
He said the yields-based approach had seen agents upsell more and concentrate on higher yielding holidays such as fly-cruise packages.
“When we introduced it there was a lot of scepticism – no one had ever asked agents to look at the average that passengers pay per day before,” he said.
“But it quickly took hold.”