Even before the Christmas turkey was stuffed and put in the oven, there were signs that next year’s holiday sales are going to be price driven in more ways than one.
With the Bank of England finally admitting to what you and I already knew – that the country had entered recession – providing value for money will be more important than ever as we enter 2009.
You only had to look at the high street in the run-up to Christmas to see that desperate measures were being employed to encourage us to part with our hard-earned cash.
Pre-Christmas sales have already become the norm, but this year the discounts were deeper and the offers appeared earlier.
With less discretionary spend available amid widespread concerns about the economy and job security, many people will be reigning in their outgoings.
Cruise companies and the travel industry in general will be acutely aware that price sensitivity will be driving consumer demand as we enter the new year – traditionally the peak selling period for summer holidays.
Customers will be looking for help in making their money go that little bit further in 2009 and I believe this presents an opportunity for cruise lines.
Cruises are the ideal pound stretching holiday option through their inclusive nature – yet I’m not entirely convinced that holidaymakers really understand this.
Reduced fuel supplements following the drop in oil prices will add to the affordability message.
But my new year challenge to cruise companies is to sharpen up their marketing in order to deliver a clear cost message to consumers, rather than presenting a myriad of different discounts that only lead to confusion and end up undermining the exceptional underlying value that cruises offer in the first place.
Don’t get me wrong, we all love a bargain and offers must play a part in the marketing mix, but clear and transparent pricing rather than fluctuating levels of discounts would certainly help those considering a cruise as their 2009 holiday of choice.
My understanding is that a number of cruise lines are seriously contemplating a change in the way cruises are priced.
They have been spurred on by rulings by the Advertising Standards Authority in the late summer which criticised deeply discounted cruise offers and questioned the validity of brochure prices.
In a nutshell, the advertising watchdog was responded to complaints that no-one ever pays the brochure price for a cruise due to discounting which is employed as soon as new brochures are issued.
It called for greater clarity in pricing – a message I believe will be taken on board, most likely for cruises booked in 2009, departing in 2010.
This will lead to early booking discounts being abolished in favour of an attractive ‘from’ price in brochures rather than potentially misleading discounts of 45% or more as soon as brochures are published.
At the same time, there will be fortuitous breathing space for the UK cruise industry in what will undoubtedly be a tough year in 2009.
While 14 new ships are due to be launched in 2009, none of these will be sailing from the UK, although their owners will be competing for fly-cruise passengers, not least Celebrity Cruises, which is deploying two new Solstice-class ships in European waters, as will Italian lines Costa Cruises and MSC Cruises, with two new ships each.
At the same time, Island Cruises will be halving capacity in the spring following its takeover by Thomson Cruises’ parent TUI; Cunard has already gone down from three to two ships for a year with the departure of QE2 to Dubai prior to the arrival of Queen Elizabeth in 2010; Ocean Village is being phased out over two years and Fred Olsen Cruise Lines is retiring its oldest ship, Black Prince.
With people widely expected to be cutting the number of holidays taken in 2009, such a reduction in capacity will help keep businesses afloat in choppy economic waters prior to a new influx of vessels from the end of the year, such as Royal Caribbean International’s 5,400-passengers Oasis of the Seas, the largest cruise ship in the world.
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