Summit News

Online travel sees offline touch for cruise

LOS ANGELES (Reuters) - Online travel companies trying to make inroads into the burgeoning cruise market are finding best results by involving human sales people rather than pushing resistant travelers to book expensive trips on the Internet.

Expedia Chief Executive Officer Dara Khosrowshani is interviewed at the Reuters Hotels and Casinos summit in Los Angeles, California February 12, 2008. REUTERS/Phil McCarten

The chief executives of two of the largest online travel agencies -- Expedia Inc and Inc, -- this week said that despite the ease of online travel bookings and the wealth of helpful travel reviews, cruise buyers still want a flesh-and-blood travel agent to help them plan those trips.

Expedia has invested in an offline cruise company and an online discussion site rather than focusing on pure online offerings.

“It lends itself to a more hands-on sale,” said Expedia CEO Dara Khosrowshahi at the Reuters Travel and Leisure Summit in Los Angeles. “The more complex the product the more difficult it is to sell that product online.”

Data from Phocuswright, a travel research company, show total U.S. cruise revenue from ticket sales for 2007 was $13.4 billion. Only about 7 percent ($994 million) of that amount was derived from online bookings.

That compares with the broader U.S. travel industry where about half of all leisure bookings are made on Web sites.

Phocuswright projects growth in online cruise bookings will grow to $1.3 billion in 2009, but that amount will still represent only 8 percent of the cruise bookings market.

Of the total online cruise bookings, 70 percent were made through online travel agencies in 2007 as opposed to cruise company Web sites.

“Although OTAs (online travel agencies) represent the lion’s share of online cruise bookings, the cruise lines themselves are playing a good game of catch up,” said Douglas Quinby, senior director of research at Phocuswright. “We expect the split to be 60/40 by 2009.”

Priceline CEO Jeff Boyd said at the Reuters Summit buyers want help with all the variables of a cruise vacation such as food, lodging, visits to ports, on-board entertainment and fellow passengers.

“What kind of restaurants does this cruise ship have? Do I have to wear a necktie when I go to dinner? It’s stuff like that that people really want to know,” he said.

“Consumers tend to be more reluctant to basically shop online and plop down 1,500 bucks without talking to a human and getting an assurance that yes, this is a nice ship.”

Priceline, the travel agency that built its reputation with its “name your own price” auction, and Orbitz Worldwide list phone numbers for shoppers who need help with cruise bookings.

Expedia, the largest online travel agency, also lists a customer service phone number on its main Web site for people who need help with cruise bookings. Khosrowshahi said travelers often use Expedia’s research to get cruise ideas but make their actual reservations on the phone.

Thus Expedia has invested in offline cruise sales company CruiseShipCenters.

Both Priceline and Expedia executives said that sites for travelers to swap advice and reviews could be helpful. Online companies can make money off of advertising as well as transactions, and Expedia in January bought