Cruise Lines Woo Corp. Mtgs., But Rates Up

With the major cruise lines planning and launching new ships designed to better appeal to the corporate customer and retrofitting older vessels with business-friendly features like wireless Internet and cellular phone connectivity, corporate interest in holding meetings on cruise ships is on the rise, according to corporate cruise consultants.

"Interest is ever-increasing," said Joyce Landry, president and CEO of Miami-based Landry & Kling Meetings at Sea. "The number-one reason is the confidence that corporations have in current business and the future. After Sept. 11, 2001, there was a dip in confidence. We're finding that's come back. In general, meetings and incentives are up across the board. As far as cruises go, there's more interest because there are more ships out every year that are high-tech with business facilities specific to the needs of corporate meeting planners, and there's a lot more publicity. There's more awareness. Meeting planners are starting to catch on that ships are really good alternatives to land-based hotels."

Steve Bloss, president of sales for Plantation, Fla.-based Worldwide Travel & Cruise Associates, agreed that corporate interest in cruises is increasing and has at least returned to pre-Sept. 11 levels.

"Interest in incentive cruises is very high," Bloss said. "Most incentive cruises have some meetings component to them. Newer ships are being built with more meeting space, addressing the needs of the meetings industry."

In the past, Landry said, corporate meeting planners were hesitant to consider booking a cruise "because they didn't want their senior executives to be away for long periods of time without being connected. That was a real sticking point. Now, connectivity on vessels has greatly improved, with Internet access in staterooms, wireless connections throughout the ships."

To better overcome such concerns, cruise lines have begun installing technology to allow passengers to use their cellular phones "in the middle of the ocean," Bloss said. "Norwegian Cruise Lines and Royal Caribbean just started it and the others will follow suit."

Meeting planners also traditionally have been put off because ship-based meetings are not tax-deductible, whereas those in hotels are, Bloss said. "Once you begin doing the math," ships often are less expensive because meeting space, audiovisual equipment, food, entertainment and other services are included in the price, he said.

"Cruise ships are really nirvana for meetings planners. They'll see a meeting room and find out all the audiovisual equipment, sophisticated lighting and sound is included," Landry said. "One of our key clients recently saved $200,000 in production costs by holding their big meeting on a ship," she said. "When you go into an empty ballroom in a hotel or resort, that's what you get—an empty ballroom. You have to build the stage, build décor and backdrops, bring in lighting. Everything costs money. On a ship, you're walking into a show lounge that's already dazzling. All you need to do is just tweak it. It becomes a lot less cumbersome and complex, and you can come across with something highly professional at a lot less cost."

Another reason companies are using cruise ships, Landry said, is security. "People have mentioned to us it's a criteria for wanting to go on a ship, because there's such a higher degree of security," she said. "Companies feel more secure when they know that everybody entering the ship has to pass through a series of security levels.

"If you charter a ship, you control who comes and goes," Landry said. "You know exactly who's aboard at any given time. We're doing more and more charters. I can't say it's specifically related to that. It just might be companies want the comfort of being by themselves. That way they get 100 percent of the customer service and everybody's attention on them."

Entire ships can be chartered for groups as small as 100 or as large as 3,000, she said. Popular destinations include the Caribbean, Mediterranean and Alaska, Bloss said.

While cruises are occasionally booked for pure business, "most of the work being done on ships is really recognition and incentives," Landry said. "A cruise lends itself more to couples then it does singles. If it's a meeting that historically allows spouses, then it's perfect. Generally, if meetings are held in resort-type destinations, then a ship is the perfect alternative."

Companies book cruises for the same reasons they would choose a resort in Hawaii over a hotel in Minneapolis, Landry explained.

"You generally want some golf involved and other resort-type activities. For people in that environment, it's a different kind of meeting. Usually it might be team-building, it could be a little bit of a reward," Landry said. "Companies do it for a reason. They want it be something more than just sitting in a room for eight hours a day absorbing meeting content. It would be a waste, actually, to do a cruise and have someone in a meeting room for seven or eight hours a day. You wouldn't be using the ship the way it was meant to be used.

"The perfect meetings on ships are multipurpose. You might have two to four hours of meeting content and then you have some team-building opportunities to get off the ship and explore together, or maybe you have a motivational guest speaker," Landry said. "We hardly ever recommend that somebody who's doing strictly business consider a cruise because you're paying for things you're not using."

With interest up, rates are definitely on the rise, Bloss said, and probably soon will return to or exceed pre-Sept. 11 pricing. Nevertheless, "there's still some wonderful opportunities and very good pricing out there," Landry said.

Because there now are available more ships capable of accommodating corporate groups, bookings no longer have to be made years in advance. "People are doing spontaneous meetings within three months, sometimes less. Typically, it's six to nine months. That's shortened greatly. It used to be a year to two years," Landry said. "Still, if it's very sophisticated, it does take longer."

In tandem with rising prices, contracts are changing. "The cruise industry has always had much stricter cancellation and attrition policies than hotels," Bloss said. "People don't drive by your ship and walk in, so historically, cancellation policies have always been more strict. They got lenient after 9/11, but now they're beginning to tighten up to pre-9/11 levels."

Added Bloss: "Everybody looks at a cruise ship and they see this big white box. And the box looks the same from the outside. But inside the box they're as dramatically different as the Ritz-Carlton and a Motel 6."