Executives at World Travel Holdings, a major cruise distributor, are confident that cruises will only grow in importance to travel advisors, pointing to consumer trends and changing demographics. Given the value cruises provide, the executives also believe they are the most recession-proof form of travel.
Cruises, which have become the mainstay for many travel agencies over the past 20 years, will only continue to gain momentum as a revenue source for travel advisors over the next decade.
That’s the assertion of Jeff Tolkin, co-chairman and CEO of World Travel Holdings, which calls itself the largest cruise travel agency in the United States. It’s also one of the nation’s largest offline and online travel companies, with a portfolio of 35 brands that include the travel agency franchises CruiseOne and Dream Vacations, host agency Cruises, Inc., online sellers Cruises.com and CheapCruises, villa provider Villas of Distinction, and resort day-pass distributor Resort for a Day.
Brothers Jeff and co-CEO Brad Tolkin, former owners of the wholesaler Travel Impressions, founded World Travel Holdings in 2005, steadily launching new brands and acquiring others over the years. The Tolkins in 2008 established World Travel Holdings UK, which owns the UK-based cruise agencies Cruise 118, Six Star Cruises, and River Voyages. Rising to number 17 on the Travel Weekly Power List this year, World Travel Holdings posted $1.34 billion in 2018 sales.
Jeff Tolkin, along with Debbie Fiorino, chief operating officer and senior vice president of owned brands, and Jennifer Gasser, senior vice president of partner brands, sat down with Skift to discuss the outlook for cruise sales as well as the growing scope of World Travel Holdings.
Skift: Cruises have historically been a strong area for travel advisors. Do you see this continuing in the years ahead?
Tolkin: Cruises are the fastest growing vertical in travel. In the last five years cruises have been growing by 6.5 percent a year (among North American travelers, according to Cruise Lines International Association figures). Passenger volume will be over 30 million in 2019. Sales volume is over $30 billion a year, which has been growing at an annual rate of 10 percent. We expect growth to continue at these rates for the next five years.
Skift: What is behind this kind of growth?
Tolkin: A big driver of demand is how the new ships are redefining the cruise experience. Instead of one dining option, you now have ships with 30 restaurants, some of them important brand names. Instead of four stateroom categories, you have over 30 on some ships. Entertainment has morphed from things like passenger talent shows to Broadway shows and comedy clubs. There are also great activity options and private islands offering the best of the Caribbean.
A second driver of growth is that travelers are more interested in experiences than in tangible goods — this is true of millennials, boomers, and everyone in between. They are interested in exploration and enjoying activities in a variety of destinations, which is what cruises provide.
The third driver is the fact that cruises are the best value in travel — nothing else provides accommodations, transportation, entertainment, food, and activities for such reasonable cost. So even in an economic downturn, cruises are resistant to recession because people view a cruise as a better value.
Skift: Why do cruises present growing sales potential for travel advisors?
Tolkin: There’s been an explosion in the number of new ships and in the types of cruises being offered. There is now something for every type of passenger, from mass market to ultra-deluxe. We see this growing complexity as the travel advisor’s best friend. All this choice has increased the need for travel professionals to guide consumers to the choice that’s right for them.
Skift: Given all this new product, how is World Travel Holdings helping travel advisors to sell cruises to their clients and consumers to make better choices?
Tolkin: We spend millions of dollars each year investing in cruise technology, probably more than any other cruise distributor. Our job both for travel agents and consumers is to present the information in an easily usable way, including through mobile devices. We are enabling consumers to easily compare cruise lines, whereas if they go direct to a cruise line, they will only learn about that cruise line’s inventory. So we can better match the cruise product with the consumer.
Fiorino: Even the cruise lines want the right person on the right ship. Otherwise they might not come back. So technology can greatly help with this.
Skift: How are generational shifts and changing demographics likely to affect the future of cruise sales?
Fiorino: Millennials are now a big focus among the cruise lines, which is a good thing for travel agents. The percentage of millennials who use a travel agent is surprisingly high — they recognize the value of using an agent because they value their time. At the same time, they value experiences over things. They’d rather travel than be tied down with mortgages and possessions.
Boomers, who are retiring at the rate of 10,000 a day, are also a huge market for cruises. So is multigenerational family travel. Cruises are great for families because the ships offer so much for different age groups. Affinity groups are another big growth area — we’re seeing cruises for every kind of group, from motorcycle enthusiasts to knitters.
Skift: What is your strategy for further growth as a cruise distributor?
Gasser: We’re partnering more with companies who want to add cruises to their loyalty programs. A lot of their customers book cruises, so why not have them booking within their own ecosystem? For example, we’re the cruise vertical for American Airlines, where customers can earn mileage points by booking a cruise through the American Airlines Cruises website. Consumers think they are working only with American Airlines, but we’re actually handling the bookings.
Skift: World Travel Holdings earlier this year joined Travel Leaders Network, its first-ever partnership with a travel agency consortium. Why did you decide to do this?
Fiorino: We were already a large player, but now our access to additional travel programs and amenities is greater. Joining Travel Leaders gave us access to their preferred suppliers, including many that are non-cruise. This is enabling our travel agencies to better sell land vacations. Travel Leaders also gives us access to the American Express Apex loyalty program.
At the same time, we’ve become a supplier for Travel Leaders. The travel agents in the consortium now have a preferred supplier relationship with Villas of Distinction, Resort for a Day, and our other brands. The relationship works both ways.
Skift: What trends are you seeing among new travel advisors who are joining either your host agency, Cruises, Inc., or your travel agency franchises CruiseOne and Dream Vacations?
Fiorino: We’re seeing more people seeking to join the industry, including more young people. Many are coming in with no travel experience. The majority of our travel advisors want to work from home — out of our 1,400 franchisees only 25 or 30 are storefront agencies.
We’re offering travel agents every kind of option, whether you want to be a franchisee, host partner, or employee. In addition to the franchises, we have over 700 Cruises, Inc., travel agencies. On the consumer-direct side, we have 600 travel agents working as employees, taking calls for our partner brands.
Skift: What is your approach to education and training for travel advisors?
Fiorino: They go through an intense onboarding program to learn the products. We get them on ship tours. On the host and franchise side, we do five regional meetings a year so they can meet all the suppliers. We also do a weeklong conference on a ship that executives from all the cruise lines attend. There are also ongoing sales, product and technology training, virtual and live events. We also encourage participation in inaugural sailings and fam trips. The best way to sell something is to experience it.
Photo credit: Jeff Tolkin, co-chairman and CEO of World Travel Holdings, asserts that cruises will gain momentum as a revenue source for travel advisors over the next decade. Shown here is Royal Caribbean's Anthem of the Seas in Las Palmas. El Coleccionista de Instantes Fotografía / Flickr