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Lisa Hronek Archive for September, 2010
Unclear waters ahead for Cruise West
A new story is rocking the cruising world…
Business at Cruise West has essentially come to an abrupt stop, and questions are swirling around as to the reason. Execs at the company are tight-lipped about the whole situation.
If you visit the company’s website (www.cruisewest.com), a press release posted September 8, 2010 states that the company announced a company restructuring and the termination of “The Spirit of Oceanus’ Voyage of the Great Explorers.”
The Voyage of the Great Explorers world cruise was supposed to be a Singapore-to-Singapore 355-night world cruise that started on March 6, 2010 and expected to end on February 3, 2011. The 114-passenger Spirit of Oceanus was expected to visit 242 ports in 59 countries over the 355-night itinerary and was broken down into 6 “chapters,” or legs of the itinerary. Each chapter was broken down further (so that travelers could sign up for part or the entire trip).
Imagine how you might feel if—as a passenger of the world cruise— you were asked to disembark in St. John’s, Newfoundland (the last stop in the third of six chapters). It is easy to say that the company’s recent cancellation of its world cruise has come as a shock to travelers; imagine the frustration associated with not being provided much information as to why this business decision has been made.
The company has remained tight lipped about everything, just suggesting that guests place a claim with a third-party travel insurance provider, their credit card company or to the company if a cash/check payment was made and no travel insurance was purchased. However, the company stopped short of stating that it would refund customers who have paid for the cruise.
In addition to the cancellation, the company is not taking new bookings and recently laid off 65 employees. Theories have been floated that the company was bought out, but why stop a cruise mid-sail?
This doesn’t seem like a planned, expected business decision. For example, Comperemedia has seen both direct mail and email campaigns from Cruise West as recently as July 2010, so what could be the reason for this sudden fire drill? What is your take on the situation?
American Airlines finds another charge: first rows of coach
Remember when travelers were up in arms after a major airline made the business decision to start charging a fee for checking the first bag? This change was started by American Airlines, and nearly all major carriers followed quickly suite.
People were outraged that airlines decided to start charging for luggage, as it was a way to automatically increase travel fees with few alternatives available. Since then, airlines have continued to charge for services that were once bundled as part of the travel experience—food, blankets, exit row seating, even early boarding.
It appears that American Airlines may be changing the face of travel again. The company recently announced its plan to start charging extra for certain coach seats.
Travelers interested in sitting in the first few rows of coach will have an opportunity to pay between $19 and $39 per flight to ensure a seat in the front of the plane. Called Express Seats, American Airlines hopes to increase revenue while providing travelers with the option to ensure the best seats on the plane.
This feature is now available at airport self check-in machines and allows passengers to board the plane in the first group of general boarding. It also ensures travelers that they will not be stuck in the last row waiting for everyone to disembark the plane.
This announcement comes as the company continues to struggle with profitability. While most major US carriers posted second quarter profits, American Airlines did not. Is this a way for the company to try and continue unbundling services and amenities associated with travel, so it can provide a la carte travel options and increase revenue?
I have seen airlines like US Airways offer passengers the opportunity to pay a bit more for a window seat or aisle seat during check-in, but this appears to be the first time an airline has offered the option to pay for good row position. Do you think other airlines will follow suit? Would you pay up to $40 more to sit near the front of the plane?
Variable annuity sales (and direct mail) rebound
Let’s be happy for this recently reported good news: variable annuity sales are rebounding!
At the same time, I think it’s important to remember the difficulty variable annuities have had and what that means. Sales have decreased by 30 percent since the peak level in 2007. That means it is going to take a 43 percent increase in sales just to get that back.
Obviously, it’s great news that LIMRA reported an 80% increase for the first half of this year over the first half of 2009. However, the reality is that if that is the growth rate we can expect, it will take four more years for variable annuities to regain their previous peak level.
LIMRA’s report also shows that Prudential replaced MetLife at the top of variable annuity sales with a remarkable 86% increase in sales for the first half of this year, compared to the same period last year. MetLife held steady with a 3% increase in its variable annuity sales.
Prudential’s sales increase seems to reflect its increase in direct marketing campaigns. Mintel Comperemedia’s data show that the number of campaigns sent to producers for the first half of 2010 is double what Prudential sent out for the same period of 2009, and they are reaching twice as many producers. Likewise, MetLife sent out the same number of producer campaigns for its variable annuity product.
For details of Prudential’s or MetLife’s campaigns, please leave me a comment below or email info@comperemedia.com.
The variable annuity industry’s growth this quarter ended a long string of declines. Part of this growth was achieved by increased producer direct marketing campaigns. Let’s hope variable annuity marketing campaigns increase even further to prompt even faster growth over the next few years.
App kings: iPhone and Android
If the number of apps is any indication of the success of a particular smartphone, then Apple’s iPhone has taken the cake by far.
A recent article titled “The app gap” on CNN Money reviewed the number of apps available to smartphone users as a way to explain why the iPhone and Google Android phones have faired better in the marketplace than BlackBerry or Palm products.
It is estimated that there are approximately 250,000 apps available to iPhone users, followed by approximately 100,000 apps for Android phones. This is compared to only 8,000 available to BlackBerry users and 3,500 available to Palm WebOS users.
The benefit to having apps available to customers is that it gives individuals the opportunity to customize or personalize their phones. They are able to take a functioning phone and add features that increase individual usage and satisfaction.
The CNN Money article argued that the lack of apps was a major reason why the Palm Pre was not as successful as the release of other smartphones, particularly the iPhone, and stated that it could have contributed to why the company was sold to Hewlett-Packard for such a low market price. The author also wonders how the BlackBerry Torch (available this week) will fair, considering the significant difference in the number of apps available through BlackBerry versus competing products.
Do you think that the ability to “customize your phone” is a draw to the iPhone or Google Android over other smartphones?
What factors played a part in your choice of phone? How many apps do you have?