Advantage Travel Partnership’s John Sullivan critiques Viking Cruises’ shift towards direct sales, emphasising the critical role of travel agents.
- Viking Cruises intends to expand into land-based tours and is increasing its direct sales, aiming to reduce distribution costs and improve margins.
- Sullivan from Advantage argues this move overlooks the valuable role of agents as gateways to new customers who might be unfamiliar with river cruising.
- He asserts the importance of agents in upselling and highlights the sector’s growth, questioning Viking’s strategic direction.
- Advantage is enhancing its marketing tools to support agents in the cruise sector, particularly focusing on river cruises.
Advantage Travel Partnership’s head of commercial, John Sullivan, has raised concerns over Viking Cruises’ decision to emphasise direct sales. Sullivan argues that this strategy bypasses the significant benefits that travel agents provide, such as attracting new customers unfamiliar with river cruises. He asserts that agents serve as a crucial gateway, offering sector expertise and personalised advice.
Viking Cruises has recently filed for an initial public offering in the US, signalling its intent to expand its offerings from solely river and ocean cruises to include land-based tours. Alongside this expansion, Viking aims to increase direct bookings as a way to reduce the commissions payable to travel agents, ultimately lowering distribution costs and boosting profit margins.
In response, Sullivan claims that Viking’s approach is contrary to trends observed among Advantage’s partner companies, which are looking to enhance their share of trade business. This is due largely to the lower cost of customer acquisition through agents and the agents’ ability to upsell products effectively. He emphasises that understanding of brand distinction is key in the fast-growing river cruise market.
To support its members, Advantage is launching a revamped cruise marketing tool. This tool is designed to leverage the growing interest in river cruising, allowing members to showcase their expertise and enhance customer engagement by promoting their knowledge of the sector. Sullivan believes that while Viking may have valid reasons for shifting to direct sales, there exists a strong case for the value added by travel agents, especially considering the ‘halo effect’ created by substantial advertising spends that drives potential customers to agents.
The debate on direct sales versus trade engagement continues, but the value of agents remains prominent in driving customer growth.
