How To Turn Risk Into An Opportunity (Part 2)
Published May 11, 2020 in The Cruise Exmainer
(* This is the second instalment of a four-part series exploring perceptions of risk in cruising, with the aim of shining a light on positive ways the cruise industry can use the Covid-19 crisis as an opportunity to “come back stronger than ever”. The third article will explore “non-cruisers”, and why some people will never cruise as they perceive too much risk in cruising, and the fourth and final article will put forward recommendations for the future of cruising.)
This week will focus on specific risks that are more important than safety or health concerns for how people decide to go on a cruise or not.
Even after incidents like the Costa Concordia or the Viking Sky, which showed distressing images around the world, cruise bookings did not waver. This highlights how worries about health and safety may not be as important other concerns when people are thinking about choosing a cruise holiday.
Recent research reveals there are 3 main concerns that have a huge impact on buying decisions for a cruise, and these are risks related to finances, time, and self-concept. Managing these risks will have a positive impact on cruise bookings.
One of the main reasons many people choose not to cruise is because they perceive it as too expensive. Many studies show time and again, people who have been on a cruise perceive them as good value for money, and people who have not cruised see them as expensive. Potential cruisers also worry about transparency around potentially hidden charges such as extra costs for shore excursions or gratuities.
An opportunity exists by focusing on more all-inclusive style pricing packages and this would assist in reducing these perceived risks. Additionally, more focus should be on value, and providing more comparison of land holidays with cruise packages.
Worries about finances are fundamental to risk perceptions in cruising given the situation with Covid-19. Thousands of holidaymakers are now asking for refunds or credit for a future holiday. Some companies have handled this really well, and others have failed miserably. Most cruise lines have been keeping their booked guests updated, which is essential. Right now many travellers are worried about which companies are going to survive this pandemic.
More confidence needs to be instilled in customers for the incredible longevity and history of many cruise lines. Several cruise lines were founded in the 1800’s and have made it successfully through the Crimean War, World War I and II, the Spanish Flu, 9/11 and other global difficulties. Even in the 1960’s when many said the cruise industry was finished with the arrival of mass air travel and package holidays, the cruise industry not only survived but became the incredible success it is today. Focus now needs to be on the legacy of strength and resiliency.
A second important concern is risk related to time, with many cruisers specifically choosing to cruise because it reduces risks associate with travel. They can unpack once and wake up somewhere new every day, which is a huge benefit by taking out the hassle and waste of time of sitting at airports to see that many destinations on one trip. This should be a keen focus moving forward to highlight the incredible value for both time and money in cruising.
However, not only do potential cruisers have to factor in the actual time for the holiday, but also the planning. Booking a cruise can be a highly involved and complex process, with the need to select from a huge number of brands (at least 62 in 2019) with widely differing destinations and itineraries, varying cabin types and complex pricing structures.
Potential cruisers also need to consider transportation to and from the ship (which often includes international air travel), shore excursions, and a range of onboard aspects such as what is appropriate to wear, social expectations, dining etiquette, and staff gratuities.
It can be very time consuming to go through this process, find a cruise, book a cabin and then it gets cancelled, such as what is happening now with Covid-19. This is where the opportunity is for travel agents and cruise line sales teams – focus on the time and money it is saving by having an agent with expert knowledge help you.
What is essential is for people to feel they can trust the cruise lines and industry. This will be fostered by clear and transparent policies that detail specifically what will happen in case the cruise is cancelled or itinerary modified.
Recent research (https://www.businessinsider.com.au/cruise-ship-bookings-are-increasing-for-2021-despite-coronavirus-2020-4?r=US&IR=T) shows that overwhelmingly people would rather have a credit and use it for a future cruise rather than get a refund.
In that study, 76% chose to keep the credit, with only 21% choosing a refund. This should be reassuring to the industry. But clearly outlined information is key to building and keeping trust. Trust reduces the perception of risk.
A 3rd important risk which influences booking decisions more than any other is psychological risk. Ultimately, we choose holidays that reflect how we see ourselves or how we want other to see us. This is critically important. A cruise presents an opportunity to reinforce and express our self-concept, with many cruisers loving the sense of freedom and belonging onboard by being with other likeminded people. Research shows cruisers choose a brand they feel matches their self-concept, either as how they see themselves now or aspire to.
In the same way, noncruisers reject cruising as it does not match how they want to be seen or they don’t see themselves as the “type” of person to go on a cruise (which is explored in part 3 more in detail). With so many different kinds of cruises to appeal to so many different tastes, there is huge opportunity in educating potential cruisers about the huge range of experiences available. It’s about finding a way to tap into how they see themselves.
Research has found safety and health concerns are far less important when people are deciding whether or not to choose a cruise. While more research is needed now post-covid-19, this article provides some insight and practical recommendations to move forward to find opportunities in these uncertain times.
(* These articles are based on the research conducted in the UK which explored the influence of risk on deciding whether or not to choose a cruise for a holiday, and examined risk in cruising in relation to physical, health, social, psychological, time-loss, opportunity-loss, performance and functional risks.)