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Rulers of the skies, airlines would love to rule the waves too

Carriers want to lure more cruise shoppers to their websites, but beware the drawbacks of such bookings.

August 01, 2004|Jane Engle | Times Staff Writer

Coffee, tea -- or cruise?

No longer content to sell only plane seats and package tours, air carriers are peddling hotel rooms, rental cars and, increasingly, ship berths. And they're doing it from their own websites.

Tapping new markets for online sales is a smart strategy for the airline industry, but it may or may not be a smart purchase for you, especially if you're shopping for sailings.

Before wading into the practicalities, let's pause for a moment of irony: Airlines, which once paid millions in sales commissions to travel agents, now collect commissions from hoteliers, cruise lines and others. In effect, they have become travel agents.

"It is a total turnabout," said Mike Driscoll, editor of the industry newsletter Cruise Week.

When I asked Driscoll why someone would book a cruise on an airline website, he replied, "Because you don't know any better."

Driscoll's reaction had more to do with misgivings about online cruise marketing than with airlines' websites. There can be advantages to booking a cruise through an airline, such as convenience and, sometimes, frequent-flier miles.

But Driscoll makes a good point: Buying a cruise is a complicated transaction in which the consumer often benefits from human contact. You may have a dozen or more cabin categories to choose from, plus scores of shore excursions; air travel to and from ports; transfers; and pre- or post-cruise hotel stays.

Each line has its own personality, so a travel agent who has been on the ship is invaluable. On a voyage last month on Norwegian Cruise Line's recently launched Pride of Aloha, which sails the Hawaiian islands, Driscoll said he encountered many "mismatched" cruisers who had booked online from third-party sites, expecting a luxury experience a la Radisson Seven Seas.

"One person complained about the cabin being so small," Driscoll said. "He was shocked."

Some airlines' websites have online cruise tutorials that answer such questions as "Are all ships similar?" But if you have to ask that, you're probably too much of a novice to book online.

Driscoll's advice: "You do a lot of research on the Internet, and you book [the cruise] with a travel agent."

So few people arrange their voyages online that less than 4% of the cruise industry's revenue this year is expected to come from such sales, said Henry Harteveldt, vice president for travel research at Forrester Research, a Cambridge, Mass.-based company that focuses on technology trends. Three years from now, he expects the figure still to be at less than 6%.

For a variety of reasons, airlines are nonetheless rushing to offer cruise sales on their websites. Among those adding them in the last few months have been Southwest and United.

Earning commissions, or as the airlines prefer to call it, "revenue sharing," puts wind in their profit sails, although the carriers are elusive about how much they earn from these. Industrywide, Driscoll said, cruise lines typically paid about 13% of the fare amount to retailers, on- or off-line.

But given the paucity of online bookings, a bigger reason for selling cruises is to drive more customers to the airline's website, the least expensive way for companies to handle reservations. The more we book online, the more they save in personnel and other costs.

At Southwest Airlines, for instance, it costs less than $1 to process an online seat booking versus less than $5 for a phone booking, according to a report issued last month by Unisys R2A, an Oakland-based airline consulting firm.

Adding cruises and other services encourages people to visit the airline's website, said Angela Vargo, Southwest spokeswoman. While they're at, they may book a plane seat too, to a cruise port or elsewhere.

"With the growth in regional cruising ... it's certainly a logical tie-in," Harteveldt said. Low-cost carrier Frontier Airlines, for instance, which has offered online cruise bookings since 2001 at, flies to 17 U.S. ports, said spokesman Joe Hodas.

And then there are the frequent-flier rewards. United, for instance, awards one frequent-flier mile for every dollar spent on a cruise. If you book online at its new (which can be linked from by the end of this month, you'll earn 2,500 bonus miles, or 1,000 extra miles if you book after that. Delta, which in June introduced, awards 1,500 to 10,000 miles for a cruise booking.

At United, you can also redeem frequent-flier miles for all or part of the cruise cost, providing you use at least 10,000 miles to do so -- a unique benefit, said Scott Garner, the airline's managing director of travel products. Whether you'd want to do so is another question.

Redemption rates vary. A $1,000 cruise, he said, might require you to relinquish about 150,000 miles -- enough to get you six round-trip domestic coach tickets in United's Mileage Plus program.

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