Why Leisure Travel Advisors Should Consider Cruise Ship Chartering (Plus Tips)

A cruise you get to set the price for? Plus, set the itinerary, onboard activities and inclusions, making it something clients can’t shop around for and no other travel agency can replicate?

If it sounds too good to be true, it’s not. That’s what chartering lets you accomplish, and while there are inherent risks, the payoff of a charter well executed, goes beyond money in your pocket. Charters build loyalty, creating groups of people that want to travel together and who look forward to your next charter sailing.

Charters Are Win/Win for Clients & Advisors
One of the things Claudia Mace, co-owner of Commodore Travel, an Oasis Travel Network agency, loves about doing charters is that there’s benefits for both her clients and her agency.

“When you full charter, you own the itinerary,” she told Travel Market Report. “I can customize it. I can tweak itineraries and stops.”

On her last full river cruise charter, she had the cruise line stay in Linz for two days and added sightseeing in Lake Hallstatt and the nearby salt mines.

“I’m not aware of any river cruise that does that. They stay in Linz for one day and they go to Salzburg and that’s it. We stayed for two days… so you have the ability to really fine tune and own the ship and do what you want and have lectures… every single person in the lounge or in the dining room are my people. It’s the most intimate experience.”

As for the benefits for the agency?

“When you charter, you are given ‘net rates’ and you determine the inclusion and the selling price,” Rick Carlson, owner of a Cruise Planners franchise explains. “It can be very lucrative.”

You also build a loyal group of travelers who look forward to your trips.

Versus Groups?
For advisors who are familiar with putting together groups, charters are similar. Think of them as groups on steroids. There are inherent risks, but the benefits are greater.

As mentioned above, you get to set your own price, something you can’t do with groups. The more value you add to your charter, the more you can charge.

You also don’t have to worry about the cruise line recalling your group space. The space is yours and yours alone.

Which is where the risk comes in. You own the space and you’re on the hook for paying for it.

“If you don’t sell it out, you have to pay for it,” Mace said.

“The other major component is that when you charter, a deposit is due to hold the ship and sail date,” Carlson added.

That deposit is rarely small.

Furthermore, charters are non-refundable, which may scare off some cruisers. But it’s the only way to protect your investment. You never want to be in a situation where you have to return clients’ money, yet still owe the cruise line.

Mitigating Risk
There are a few ways to mitigate the risk inherent in chartering.

One, try to stick with smaller boats, either river boats or small yachts. That way you’re on the hook for paying for much fewer cabins.

If you can, try to find a “pied piper” that will take on the responsibility instead of you. It’s not that common, but it can happen.

“An advisor that I know, she just did a charter, but she had a client who was very wealthy who paid all of the deposits… And all the clients came in through him. But it was on a small 40-passenger Croatia yacht,” Made told TMR.

Another alternative is to do a part-charter, Carlson said.

“This way you could charter say 40 cabins and receive the charter rate for the sailing. In this way, you are not required to fill the entire ship and can build to a full ship charter on another date.”

But Mace warns that by doing part charters, you lose the ability to customize the sailing, which she considers a huge loss for clients.   

“You’re still doing a non-refundable deposit for your clients and they’re not getting any of the benefits of having that intimacy of having a full charter and I couldn’t customize the trip if I was part chartering… It is still a financial commitment without the major benefits [for clients],” she said.

Finding Charter Clients
Whether you’re looking to do a full or part charter, you first need to find a so-called “pied piper,” someone or something that potential clients are highly motivated to travel for.

“Most charters in my experience have a theme or a group leader that draws people’s attention to join the trip,” Carlson said. “For example, one very successful theme for us has been Christmas Market trips in Europe. They always sell out quickly and are very well-received.”

Both Carlson and Mace pointed out that the choices are endless.

“Think about a food and wine river cruise and include two or three local chefs,” Carlson offered. “No you have more people you can draw on to fill the ship.”

The most important thing is to find somebody with a large following first, Mace said.

In the case of Commodore Travel’s charters, they’re all built around a single individual, an author and history professor who has more than 4,000 of his own followers.

Tips for Getting into Charters
Both Carlson and Mace had a variety of advice for other advisors considering trying out chartering.

Start With Groups
Carlson and Mace agreed, the easiest way to get into the charter business is to start with group space. This gives advisors the experience of finding group leaders, building groups of travelers, figuring out inclusions, developing organizational skills, and more – without the risk of having to pay for unfilled cabins.

“First and foremost, make sure you have the ability to handle a large group,” Carlson said. “Have you done groups before? If not, do not jump into a charter right away. Build from large groups to charters. So maybe your first step is to fill 50 cabins with a group and build from there.”

“You have to have that base,” Mace added. “To know what that base likes, what they want to do, how they want to do it.”

Don’t Be Intimidated
The risk inherent in chartering can be intimidating to many travel advisors, but Mace told TMR advisors shouldn’t be intimidated.

“Anything that we do, booking a cruise and getting insurance for the client and following it through to the end, everything could be intimidating,” she said. “The whole thing can be intimidating, whether you’re just a newbie starting out selling one Carnival cruise or you’re hosting a charter. It’s just building up the clientele, having the Pied Piper and the confidence to go for it.”

Matthew Sholar, CEO and co-founder of brand-new charter-only river cruise line Transcend, told TMR, chartering is simply a step forward for many advisors who are already doing groups.

“Many advisors, or groups of advisors in an agency, are already placing groups with cruise lines, hotels and resorts that equal or exceed the numbers of guests that fill a Transcend ship,” he said.

With Transcend, an advisor could fill a ship with as few as 30 suites.

“There are literally thousands of advisors who are already placing group business at these numbers, and now that group can become a private program, with all the benefits that follow.”

Transcend ship aren’t the only option for charters of 60 or so people, though most charters require 100 to 140 people.

“You could potentially do a Lindblad, something that’s under 150 people,” said Mace. “River is more doable because of the numbers. To fill up 120 or 150, it’s not all that impossible.”

Organization Is Key
Even chartering something as small as a 20-cabin yacht takes lots of organization. Keeping track of inventory, payments, onboard activities, and other similar details is complicated.

“You have to keep inventory, the roster, everything has to be done [by you]… I do the pricing. I figure out where everybody’s going to be. I do the itinerary. It’s huge,” Mace said.

“The most important component is to have an organizational structure and process that can handle the volume of business that potentially will come from your charter activity,” Carlson added.

Be Careful with Pricing
Carlson said advisors need to be careful when setting prices for their charters.

“Make sure you include your expenses. Is there a group leader that is looking for a free cabin? You need to build this into your budget. There terms and conditions of a charter are much different that a regular group contract. There are not TCs, for example, build-in. You need to do it.”

Carlson added it’s important that what you’re offering clients on the charter is more than they could get with any other advisor or by booking the same itinerary on their own. That’s what allows you to charge more.

That can be one-off itineraries, like Mace did when her last charter stayed in Linz for two days, or exclusive on-board programming with chef-led cooking demonstrations. It can be Q&As with popular authors, athletes or other public personalities or daily workouts with popular national trainers or yoga retreat leaders. Whatever it is, it is should be something clients can’t get anywhere else.

Have Next Year’s Charter Ready
Carlson said one trick he uses to fill up the next year’s charter is to have the dates, itinerary and a rough program already worked out at the time of the current year’s charter. That way people can sign up, and put down a deposit right away.

Respect Other People’s Advisors
Depending on the type of charter that you’re doing, clients might have other travel advisors for more general travel. It’s important to respect that, Mace said.

“Your Pied Piper’s followers may or may not have their own travel agent. Respect goes a long way … so I do not go and solicit anybody. If they want me, they’ll find me,” she said.

Enjoy the Process
Mace admitted that putting together is a lot of work, but said, loving the process makes it all worthwhile.

“I absolutely love it. It’s so much work, but it’s a labor of love. When it’s over, it’s like childbirth. All the labor pains and everything just fade and I can’t wait to go and do it again.”


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