At one time, travel agents accounted for the vast majority of all cruise passengers booked -- for some lines, it was greater than 99%. Travel agents were important, respected, a key part of the team.
In 1999, that began to change as a burgeoning fleet of ever-larger ships sailed into service and cruise line executives became increasingly concerned about the ability of the retail channel to keep them full.
Direct booking became a way of life for cruise lines, to varying degrees. Today, estimates of passengers booked direct range from about 10% or 15% for some lines to as high as 60% for others. Travel agents simply aren't as crucial a part of the team as before.
That trend continued through the past two years, even as a shrinking global economy and a series of misfortunes at sea caused cruise booking volume to drop and in some cases caused cruise prices to decrease.
In their most recent earnings call, Carnival Corp. executives reported that bookings and pricing, excluding the Carnival Cruise Lines brand, were up. Other cruise lines have also reported year-over-year improved results, although not perhaps at the pricing levels they had hoped for.
Carnival Corp. also announced that former Carnival Cruise Lines president Bob Dickinson had been retained as a consultant to examine the company's four U.S. brands, in part to look at ways of improving relations with the retail channel.
Shortly afterward, Carnival Cruise Lines announced Carnival Conversations, a series of meetings between select executives and agents to be conducted over the summer to gather input on improving and repairing relations with the retail channel.
How did this fork in the road develop in the first place -- i.e., how could one business model strongly support and rely on travel retailers while another minimizes the retailer's role, seemingly with the aim to disintermediate the channel as thoroughly and rapidly as possible?
Over his 35-year career with Carnival, Dickinson stayed on message about many things concerning the cruise industry. One of those messages was that retailers should strive to keep the cruise experience and buying process from becoming commoditized, reducing it to little more than a financial transaction.
Yet, to far too great an extent, that is exactly what some cruise lines, especially contemporary cruise lines, began to do, driving prices so low that travel retailers couldn't provide the level of service they had in the past.
Further damaging the cruise line/agent relationship was that for some lines, the road to profits became focused on cutting costs through compulsory automation, eliminating collateral sales material, reducing commissions and other measures.
The strategy did maximize short-term profits. But what about the long term?
What happens if the business mix changes from a 50/50 ratio of repeat passengers to first-time passengers to a 67/33 (or even higher) ratio?
What happens if a series of mishaps causes past passengers to postpone a cruise or select a different brand?
What happens when the first-time cruise prospect decides not to cruise at all?
The answer in each case is that sales will decline for cruise lines, though more for some than for others.
Suddenly, the agent's role in the cruise business is important again because they are perceived by consumers as unbiased information sources that first-time cruise prospects can depend on and trust. The cruise line is not their employer, so they can offer any brand that they feel meets the client's needs.
More particularly, traditional travel agents are more important again. The business models of large online travel agencies generally prevent them from answering the multitude of questions and concerns raised in the qualifying and sales process.
Which is why Carnival Cruise Lines wants to rebuild its relations with travel agents. But will they?
The first of the Carnival Conversations was held in New York on July 12. The 50-minute session was characterized by those in attendance as civil, with attendees more puzzled by than angry about Carnival's policies, although some answers were not necessarily well-received.
One takeaway is that some of Carnival's problems stem from communication issues (witness the commission tier structure announced earlier this year with little notice), ineffective internal communications between sales and operations (and even between internal trade and direct sales managers), as well as certain rate codes being visible to direct sales reps but not to retail agents.
It remains to be seen how effective subsequent Conversations will be in other cities. Agency owners with whom I spoke have voiced various reactions to the Conversations initiative, but for the most part those reactions have been negative, ranging from "They don't need a conversation to know why we're not selling them" or "It's too little, too late" to "When things improve, they'll just kick us to the curb again."
The great majority indicated they had no plans to attend any of the events because they believed they would be a waste of time. If that turns out to be the case, the likelihood of Carnival accomplishing its objective will be reduced substantially.
Of course, agent relations are not the industry's only challenge. Even with a return to better retail channel relations, Carnival and other cruise lines will need to make a more comprehensive and broader effort to fill current and announced tonnage in years to come.
But a big part of the solution is that the industry needs more first-time cruise passengers, and the agent channel can uniquely play a key role in guiding the choices and perceptions of first-time cruisers.
It's like this: With actions we take or don't take in the coming months, the retail channel has an opportunity that will likely never be available again to demonstrate its market influence. That opportunity must not be lost or squandered. But it will be if we don't at least consider grasping an olive branch when it is offered sincerely.
Charlie and Sherrie Funk, inducted into the CLIA Hall of Fame in 2012, own Just Cruisin' Plus, a past Carnival Cruise Lines Agency of the Year, located in Brentwood, Tenn.