TOURISM AND CULTURE MANAGEMENT 2021

Market opportunities for cruise lines in the outbound distribution channels: assessing the predictors of new bookings

GIOVANNI SATTA - LUCA PERSICO - GIORGIA MORCHIO - CATERINA TROPEA

Objectives. Traditionally, the indirect channels such as travel agencies and tour operators have traditionally represented the prominent option for the distribution strategies of the leading cruise lines. The adoption of this perspective, indeed, was in line with the need for keeping the pace of the two-digit growth rates in the industry worldwide as well as for ensuring a capillary presence in far distant markets (Bitner and Booms, 1982; Dwyer and Forsyth, 1996; Dev, 2006). The role assumed by these valuable intermediaries has been historically consistent with a transactional approach predominantly applied to the market by cruise companies (Som et al., 2012). Nonetheless, given recent market trends and in line with a growing shift toward relational marketing and customer engagement approaches within the industry, both practitioners and academics are questioning the traditional marketing mix of leading cruise companies, especially with regards to “place” programmes. Relatedly, the management of direct distribution channels is getting priority in the agenda of cruise managers and marketers.

As relational approaches to customer are nowadays increasingly at the base of cruise companies’ marketing plans (Huang and Hsu, 2010; Hi et al., 2014), direct distribution channels are expected to become a valuable marketing tool for the success of companies operating in the cruise industry. It is especially the case for those market-oriented cruise companies embracing the concept of “customer engagement” (Vivek et al., 2012). Customer’ proximity, in fact, favours the quality and the frequency of feedbacks and insights received from the market and cruise lines are expected to benefit from the development of their direct distribution channels if they aim at increasing the degree of trust and commitment, as well as satisfaction and emotion affecting the relations with consumers, especially when well-experienced and loyal (Pansari and Kumar, 2017).

Among direct distribution channels, the outbound channel, in particular, is expected to increase rapidly its relevance in cruise lines’ marketing plans, programmes and budgets. By fostering their outbound channel, cruise lines obtain additional market insights from both repeaters and first timers, improve their relationships with loyal and committed customers, develop tailor-made sales programmes and support promotional and communicational campaigns, for protecting or expanding targeted segments.

Nonetheless, these distribution channels have received only limited attention from extant cruise marketing literature and several literature gaps still persist. In particular, as the outbound teams actually embedded in leading cruise companies are still “undersized” compared with the business opportunities in their customer portfolios, the cruise industry would greatly benefit from the development of new theories and analytical models capable to support those managers involved in the sustainable growth of this distribution channel. As managing direct relations with customers is time consuming, the outbound channel operators available should be used for feeding relationships with the customers that show a higher likelihood to positively impact on corporate performance due to their behavioural intentions (e.g., new bookings or word-of-mouth).

#booking predictor #cruise market #leads #logistic regression model #outbound channel