You have been in the industry for a long time. How did you get interested in the cruise sector
I was born in the UK and emigrated to Canada as a young boy, something that started my interest in ships and shipping. Then when I went to university in Canada I spent my summers working on cruise ships, first on the Great Lakes and then between Vancouver and Alaska. Upon graduation, I went into international shipping, where I spent more than two decades, including two assignments in the UK, involved in world trade. It was on my last UK assignment that I saw an opportunity to sell cruises here, so in 1992 I moved back to London and established The Cruise People.
Tell us a little bit more about The Cruise People?
To start with I was going to buy the UK rights for a large American franchise cruise seller but instead I negotiated with the Canadian company of the same name to be able to use the name The Cruise People in the UK. I bought an existing retail travel agency, which gave me a London address, some furniture and some rudimentary computers. Within a year, I had closed down the general retail business and was doing 100% cruises and sea travel. Soon after opening we received an appointment to act as a wholesale (and retail) booking agent for a North American-based expedition company. That was followed by a request from a German company to put passengers on their container ships. In 1999, we took on the general passenger agency for the Polish Steamship Company, who had just built five passenger carrying cargo ships for service between Amsterdam and the US Great Lakes. And at the end of 2005, we dedicated one cruise consultant to selling nothing but the six most expensive cruise lines.
Are you a traditional brick and mortar travel agency or do you only specialise in selling cruise?
We are a brick and mortar agency in that we are a twenty-first century business working from eighteenth century premises, concentrating on cruises and sea travel. But more than that, we are an international business, dealing not only in sterling, but also in euros and US dollars. Almost half of our business comes from outside the UK. We opened our first website in 1994 and that helped us internationally. Since we started a blog, however, it has been attracting twice as many visits as our own website’s main page. Visitors to our blog in the first six months came from the US (47%), the UK (21%), Canada (15%) and the rest mainly from Australia, Germany and France. Visitors to the main page of our web site, on the other hand, are totally different. More than half, 52%, come from the UK, 29% from the US, and the rest mainly from Australia, Canada, Brazil and France.
Are there any particular segments of the cruise market your company targets?
Niche is key for us. We now target three markets: ultra-luxury cruising, small ship and expedition cruising and freighter travel. I have recently returned from visiting the University of Virginia, where we have started working with Semester at Sea, which as well as offering seagoing semesters for university students, offer shorter Enrichment Voyages for ordinary (or out of the ordinary) passengers. Their ship, the Explorer, which usually spends several nights in each port, will be sailing in Europe next year. In general, since we opened twenty years ago we have become much less mainstream and much more specialised, something that helps us when cruise lines cut commissions, as they are now. Our chosen product range generally pays well and, unlike the mass market, niche products are not afflicted by that peculiar British disease of rebating from commission to buy the business, something I regard as totally unprofessional.
What do you see as the major challenges and threats facing your business?
The major challenges we face are suppliers failing, a greater number of lines prohibiting cross-border selling and, more recently, commission cuts. On the financial viability side, it’s usually agents that get the scrutiny, but in
one year alone, 2001, we had five principals go out of business. This included American Classic Voyages, Renaissance Cruises and three small ship operators. More recently, we had Cruise West and Hebridean International, the ashes of which were picked up by All Leisure. Not only do we have to ensure that our clients are protected when suppliers fail but we also have to try to protect our own commissions. We are still waiting for the courts in Seattle to decide on several thousand dollars owed to us by Cruise West and we also lost money on Hebridean. So a warning to agents – always check out your principals. But what hurts even more these days is cruise lines restraining trade by prohibiting crossborder sales. Unlike others, we are not a local neighbourhood agent, nor do we operate a national call centre. Almost half our clients (and also our product by the way) come from outside the UK, so cruise lines prohibiting cross-border sales are an increasing problem.
Are there any areas that you believe cruise lines could improve on to assist your company to sell more cruises?
Yes, I believe they should allow clients to buy wherever they want, for one thing. And before you talk about consumer protection, the Consumer Protection Act itself provides quite explicitly for that. We highly recommend
that clients pay by credit card when they are booking offshore. Otherwise, the market should be free. The other thing cruise lines should do is to maintain base commission at 10% but offer incentives that allow agents to make more. I remind you that we will no longer support lines that don’t pay adequately as we have other products to sell that give us a better margin.
What is your favourite cruise destination and why?
My favourite destination was Bermuda, but with the advent of larger ships the experience of cruising to that island is no longer what it was. Until about five years ago, purpose-built cruise ships operated in the New York-Bermuda trade, sailing right in to Front Street. But because of channel restrictions into Hamilton and the increasing size of cruise ships, they now go to a place called Dockyard, a sort of shopping mall located 45 minutes away from Hamilton by taxi. This is no longer a great cruise experience. In Europe, my favourite is Venice, but Venice too is suffering from an increase in ship size, and there are moves afoot to stop cruise ships sailing along the Grand Canal and past St Mark’s Square. If this happens, there is still Santorini, where ships anchor in the caldera and where the sunset is one of the most spectacular in the world.
In your view what destination is emerging as the next big growth area for cruising?
In a word, BRIC – or in four, Brazil, Russia, India and China. Not only are these great destinations but they are also rapidly emerging consumer markets. There is not a week goes by when we do not get multiple enquiries from Brazil, and the same can be said of the Far East. There is a lot of money in these places. We get relatively fewer enquiries from India and Russia, but Mumbai and the Indian Ocean islands and St Petersburg and the Baltic are destinations that attract a lot of interest. We have clients doing a great tour of the Indian Ocean in December with Oceania, starting in Dubai and sailing to India, the Indian Ocean islands and East Africa before finishing in Cape Town. China too is growing, not only as western lines bring in newer and larger ships but also as the Chinese themselves prepare to build their first cruise ships. Popular ports in the Caribbean and Mediterranean are being spoiled as cruise ship crowds keep getting bigger, and there is in general more commission to be made by selling cruises to the BRICs.