Cruise loyalists ‘first to return to travel and spending’

Cruise enthusiasts will be eager to embark on trips and spend in shops before anyone else when itineraries eventually resume, believes concessionaires.

Lisa Bauer, President and CEO, Starboard Cruise Services told TRBusiness: “I do believe that for at least the next 12 to 18 months the customers that are going to come back first are those that have already cruised and have already understood what an incredible vacation cruising is.

“The good news is from a retail standpoint, we have experience with the ‘experienced cruisers’, so that gives us some room for optimism.”

Noting past adversities, notably the September 11th terrorist attacks (2001), SARS (2002/2003), the global financial crisis (2007/2008) and the more recent Zika virus outbreak (2015/2016), Bauer points out that in those instances, price factored highly as a motivator to re-commence cruise trips.

A DIFFERENT RETAIL COMPLEXION?

Commenting on the current coronavirus (Covid-19) pandemic, Bauer continued: “I believe this situation is fundamentally different – it’s so much more about safety and the research I’ve seen has been very much about people wanting to take vacations, but they want to know it’s safe.

“Safety has always been the number one priority of the cruise lines and this is no different, so I am very confident that the cruise industry will rebound. It’s going to look different.”

Writing in TRBusiness‘ latest ‘Over to you’ column series, James Prescott, Managing Director at Harding Retail said: “We’re likely to see the seasoned cruisers on the established routes come back first, with those ‘new to cruise’ probably taking a little longer.

“Some of the PR we’ve seen hasn’t been at all helpful, but the initiatives the cruise lines are talking about are very impressive and I’m sure once the dust settles, people will come to cruise as a ‘sensible’ holiday option.”

The revival of a core, committed base of cruisers with a propensity to spend spells good news for brands.

One supplier listed with most of the major cruise retail operators – who preferred not to be named – told TRBusiness: “Those established cruisers are familiar with our brands already and have been buying the products over several years in quite high volumes, so we know the target audience. To hear the thoughts that they will come back first is encouraging.”

Royal Caribbean logo store onboard Celebrity Silhouette, courtesy of Starboard Cruise Services.

Asked how supportive cruise retailers have been with regards to inventory, stock management, understanding sales needs and general communication during the Covid-19 crisis, the supplier added: “The cruise lines have been very vocal, forthcoming and honest – not that there has been any groundbreaking information to share as we’re all in a foggy tunnel at the moment.

“It has been difficult, but they’ve come to us with terms and what they need. We’ve been very supportive with regards to the terms but they’ve [the retailers] been very vocal on the terms they are leading. It makes it easier to work with them.”

Cruise retail has, like all quarters of the industry, suffered the business brunt of Covid-19’s heavy blow to the global travel and tourism sectors in a calamitous scenario that has shut borders, grounded flights and docked/quarantined ships.

As reported, the US Centers for Disease Control and Prevention (CDC) extended the country’s ‘No Sail Order’ on 9 April ­– a move that drew concerns from Cruise Lines International Association (CLIA) on the ‘unintended economic consequences’ of ‘singling out the cruise industry’ – following an initial issuance on 14 March.

CLIA had announced on 13 March that its members would voluntarily and temporarily suspend cruise ship operations after the World Health Organization declared  Covid-19 a pandemic.

For suppliers, new orders and business has been shelved amid widespread shop closures onboard. The supplier source said: “We had a number of new brand launches verbally agreed. As soon as this happened, they were put on hold and understandably so.”

“We all believed this was a sort of ‘flash in the pan’ moment and we’d be back to some form of normality, but now we’re shifting our focus to the long term.”

Wild Tiger Beverages has products listed with Viking Line, Birka Cruises and Balearia Caribbean.

Gautom Menon, Founder and Chief Brand Officer tells TRBusiness that cruise interest in the Kerala-based company’s ‘Gindia’ Craft Gin and the coconut-flavoured rum Wild Tiger Coco had been positive, but promotional programmes fell into ‘disarray’ due to Covid-19’s disruption, with potential orders currently suspended.

However, its cruise partners have continued listing the brand’s original Wild Tiger Special Reserve.

‘PENT-UP DEMAND’

Starboard’s Bauer says that based on the research the company is seeing, the population that were considering cruise has shrunk by about 30%.

But while the future timeline with regards to the resumption of cruise travel remains decidedly uncertain, the travel and tourism industry appears upbeat on cruise’s future prospects, with 2021 bookings on the rise according to multiple reports.

Indeed, cruise has over the years crafted a well-earned reputation for recruiting young, adventurous guests intent on seeking unique experiences that has translated to retail spending.

Harding Retail spread onboard Virgin Voyages’ Scarlet Lady, which was delivered in February.

“The main customers for our products on cruises and ferries are of a younger demographic,” continued Menon. “It is highly plausible that younger people would look to travel within their home country and avoid confined spaces for some time, perhaps until a vaccine is tried and tested, so there is a huge risk element for us.”

Talk of a ‘new world order’ for travel retail across the globe, precipitated by the crisis, has been a topic of much discussion lately.

“I do believe it is going to be fundamentally different in the near to medium-term,” added Bauer. “Based on research and having been in the industry so long, we know that at least 50% of the people that are sailing are celebrating something – a birthday, a milestone, an anniversary. I don’t see that changing and believe there will be pent-up demand for that.

“What I do believe will change is the way we may have done things, like our marketplace where we have a big sail and groups come and gather at one time, with a bigger emphasis on digital and personalised shopping.

“I don’t believe that the cruises will be full at least in the near term and I see that as an opportunity. The reason I say that is because there will be staterooms available for us to put different pop-up and white space experiences on and test things to see what resonates with this new consumer.

“It’s not back to ‘business as usual’ – I don’t want it to be; we want to find out what we can innovate and test. By partnering with the cruise lines, it will give us more of an opportunity than we’ve ever had.

“I believe there will be an even bigger emphasis on sustainability in products and health and wellness, so we are very closing watching what is happening with different trends and using this time for discovery, so when we are part of the restart, we don’t start with a walk, jog or run but we’re ready to go with things that are tried and true to customers.”