By Donna Tunney
As the corporate incentives and meetings market finally bounces back, agents who specialize in the niche report that cruise lines are getting a bigger piece of the pie.
Thanks to a combination of pent-up demand, designated meetings spaces onboard newer ships, stern-to-bow Internet access and inclusive fares, more companies are booking events and employee-reward programs at sea.
“It’s very significant,” said Jo Kling, president of Landry & Kling, the Miami-based cruise event specialist firm. “The upturn in corporate cruising incentives we’re seeing is about double compared with this time last year. There are more people in the pipeline, more people signing contracts and more people looking for proposals.”
A 2010 PhoCusWright report suggested that 6% to 8% of meetings planners intended to book their 2011 event on a cruise ship.
“That percentage represents an increase of about a third,” Kling said. “It’s a very positive thing that cruising is being included in these studies now, because they weren’t several years ago.”
Kling, whose firm will mark 30 years in the business in 2012, said corporations and companies with incentive programs are continuing to minimize expenses by finding ways to get the most bang for their buck.
“The budgets for meetings and incentives are there,” Kling said. “But with cruising, many businesses are just now seeing the advantages that a cruise ship offers. Activities, entertainment, sports events and food are all included, for example, and we’re seeing land resorts that are now trying to mimic what the cruise lines have had all along.”
In addition to meetings spaces, she said, cruise ships can offer theater spaces for large award ceremonies and other formal corporate gatherings.
At Maritz Travel, the Fenton, Mo.-based retailer of meetings and incentive services, there’s a “cruise element” in almost half of the requests for proposals coming in to the agency, said Mike Budrovich, vice president for client and supplier relations.
“It’s hard to get statistics this early in the year, but in talking to the people engaged in these bookings, they are seeing a lot of requests and opportunities to put cruises into the mix,” he said. ‘And this applies to clients who haven’t used cruise ships before.”
An overall “bounce-back” is a good way to characterize the incentive-travel business today, Budrovich said, adding that Maritz customers are thinking beyond traditional meeting places.
“They’re looking for a comfortable and safe way to experience multiple destinations,” he said. “One of the great things about cruise ships is that they move. If there’s political unrest, they change the itinerary. If you have a group in a hotel somewhere and something happens, it isn’t always so easy to move them.”
Budrovich said some clients have multiple programs for incentives that enable employees to choose from a set of options.
“There is a higher desire from participants to go on a family cruise,” he said. “We’re seeing more people sign up for that option. So in an environment where the employee chooses, there is heavy interest in cruising.”
For their part, cruise lines are eager to grab a heftier share of the meetings and incentives market.
Joni Rein, vice president for worldwide sales at Carnival Cruise Lines, said her company’s strategy is to put corporate meetings and incentive sales directors in the field, “close to our partners and their clients.”
“Instead of having our CMI sales team located at the Miami headquarters, we have them across the country,” Rein said. “They are attending CMI conferences and trade shows, meeting our partners and helping develop more business in their specific regions.
“We understand that this expertise with meetings and incentives, combined with firsthand knowledge of successful programs, is tremendously valuable to our partners and their clients. “Every program has unique requirements, and at Carnival we are ready to offer recommendations to suit each and every program.”
Rein said Carnival Cruise Lines has been seeing increases in the number of inquiries for meetings and incentive business.
“The economy is improving,” she said, “and corporations are becoming more active in trying to secure meetings and incentives on our ships, given the sheer value of our cruises that many companies have discovered over the last few years of tighter budgets.”
Rein said the line has also seen a significant increase in inquiries about its individual incentive program, Preferred Awards, which enables businesses to reward employees with cruise certificates or Fun Ship Dollars that can be spent onboard.
“Corporations are recognizing the importance of motivation rewards and seeking quality products that offer tremendous value for their dollar,” Rein said.
Rick Sasso, president and CEO of MSC Cruises USA, said the meetings and incentives business has been climbing for MSC.
“In 2010 they started to make decisions to come back, and in 2011 we have a lot of that business on the books now and for 2012 and later,” Sasso said.
The inclusive nature of the product and the wide variety of entertainment options have always been an advantage for cruise lines, he said. “That’s nothing new, but what’s new is that it’s on everyone’s mind. The incentive dollar goes farther on a cruise.”
For that reason, Sasso said, events at sea “bring a lot of comfort to meeting planners. They get spoiled, because it’s one-stop shopping.”
Jeff Wagg, who operates Boston-based Absolute Cruising in partnership with his father, Joseph Wagg, said he has been gearing up to begin specializing in the meetings and incentives cruise market.
“I see a lot of potential there, and all agents need to develop revenues outside of the commission stream,” he said. “People are sick of sitting in conference rooms, and cruise ships are great places for groups that want to do bonding exercises — climbing rock walls or ziplining, for example.”
For agents, he said, planning events and incentive trips “is much more interesting than working our butts off for an individual cruise customer who’s probably going to end up booking on the Internet anyway because he gets a $10 coupon.”
Kling said that in her experience, most incentive cruisers find themselves on a cruise ship for the first time.
“When a corporation dangles a cruise as a carrot, it really captures the imagination,” she said. “And that’s what it’s all about.”