Thursday, December 11, 2008

Mexi-Go!

Over the last few months, I've heard from a number of my cruise clients, raising the same point when they get back from vacation. Invariably they had a great time, but they felt like they were being "nickeled-and-dimed" more than ever before. REALITY CHECK: With the Caribbean chock-full of ships holding 3,000+ passengers, in the midst of the worst economy since the 1930's, cruise lines are having to offer low entry-level pricing to attract business. They are still having to serve up lobster, steak and everything else cruise passengers expect, so there is a lot of pressure to generate onboard revenue (that's a nice code name for nickel-and-diming, but after all it IS a business). Today, we're seeing cruise prices as low as they've been in 20 years. When I got in the cruise business about 33 years ago, it was common for a 7-night cruise to be $1200-1500 per person. Most cruise lines were privately-owned companies. I remember when I got into the selling side in 1989, the port charges and taxes on a cruise were around $39. Today, it's not surprising to see taxes totalling $300 or more!

You're probably asking "Is that kind of increase even possible?" Not really, if the truth be told, but it's a secret way cruise lines adjust pricing, so that even we as travel agents are feeling the pinch of getting nickeled-and-dimed. As I mentioned the lines used to be privately owned, but now they're almost all publicly-owned, traded on major stock markets. I don't think it's a coincidence that as shareholders ask for more return on their investment, the cruise lines have become extremely creative with how they price cruises. Everything's legal, just "different." Let me explain how this works, and dispel some rumors and myths at the same time.

Some people don't use travel agents. Say WHAT!? They believe that somehow they pay more to go through a travel agent when booking a cruise, than to just call the cruise line themselves. That is TOTALLY UNTRUE! You don't pay us any extra fees on cruise bookings, and actually we often have group space or other volume discounts, that will save you money over booking direct, not cost you more. So how do we get paid? The way it works is cruise lines pays us a small commission behind-the-scenes, on the cruise fare. It's not economically feasible for them to have 10's of thousands of reservation agents on their payroll, especially in a down economy. So they welcome the assistance of travel agents, and as a reward for helping complete payment transactions and fill their ships, they pay us a little "thank you," once people have sailed. Notice I mentioned cruise fare. Back in the day, you might have seen a cruise fare of $1100, and port charges of $39. They realized they were paying travel agents commission on $1100, but since they pay nothing on taxes, it created a sweeping industry turnaround. Over the next few years, cruise fares have been shrinking to ridiculously-low levels, while taxes and fees have increased exponentially. We recently read reports of a 3-night NCL cruise where the agent commission was $3. That's not a misprint. Three bucks. The supposed taxes were over $200, but the part they consider commissionable was almost non-existent. You can't even create an invoice, mail it to someone and break even for $3. So trust me when I tell you, agencies are feeling your pain! You can see why passengers are getting sticker-shock, when confronted with their onboard charges, shore excursion prices, service fees, etc. during the trip.

Having said all that, cruising is still an excellent value in many parts of the world. I tell people cruising is like a box of chocolates, which means you can sample different ports or islands, to see what they're like. Maybe after you find a destination or two that you fall in love with, you can plan a vacation back there on a later trip. If you just like cruising, I understand. Me too! But it's also important in the current economy, to have a good idea what your vacation is going to cost, before you ever leave home. It's called budgeting. For that reason, even though I'm an old Sea-Dog, I send more clients to island or country destinations these days, to a relatively-new type of resort called an All-Inclusive. What the heck is an all-inclusive, anyway? Gee, it kind of sounds like a place where everything is included....

WE HAVE A WINNER, Ladies and Gentlemen!

One of the reasons cruises became so popular 25-30 years ago, besides a little TV show called Love Boat, is that many upscale resorts started doing the unthinkable to their best customers. See if this sounds familiar: they started nickel-and-diming them with exorbitant resort fees, sky-high food and drink prices, and so on. Hmmmmm. Could this be an example of life imitating art imitating life imitating, oh you know what I mean. Many resorts have now decided they can put together a complete package, including fabulous accommodations, unlimited meals, drinks, gratuities, activities (within reason), and really win back those people who abandoned them due to their greed years ago. The best way to say you're sorry is to make it back up to the person. Isn't that the way life is supposed to work?

Not all destinations offer all-inclusive packages. Case in point, the USA! We have almost none, because resorts don't get liquor duty-free, our food costs can be higher, and by the time they'd package something comparable to a Caribbean destination, the price would be through the roof. There are islands in the Caribbean that offer all-inclusive options, but not all of them. But it's not all about the islands. There is a country bordered on the East by the Caribbean Sea, on on the West by the Pacific Ocean, that has more all-inclusive options than just about anywhere you can imagine: MEXICO!

Mexico has become the king of all-inclusive destinations on both coasts. From the red-rock beauty of Cabo San Lucas, to the sleepy mountain scenery of Puerto Vallarta, to the white-sand beaches of Cancun and the Mayan Riviera, there are beach destinations all over Mexico that offer fantastic value. The upscale resorts all have water purification plants, excellent food, and before you leave your house you will know almost exactly what you'll be spending. Alcoholic beverages are included, as are soft drinks, and even the gratuities are pre-paid in your trip cost. Some Mexican cities offer choices ranging from economy to world-class resorts, and many activities are included such as non-motorized water sports, tennis, basketball, putt-putt, and much more. Certain hotels offer free golf. Others have free tours built in, such as seeing one of the 7-wonders of the world, the great pyramid at Chichen Itza. Or horseback riding. Or a sunset cruise. On and on, the variety and VALUE are unmatched by just about anywhere else in the Western Hemisphere. I didn't even mention places like Acapulco, Ixtapa, Cozumel and others. Whether you're a diver, golfer, beach bum, or just want pampering and relaxation, Mexico has it all.

Now - depending on you, the traveler, there can still be other expenses involved. If you go to a spa facility and plan to have treatments, just like any other spa those are "a la carte." For golfers, the greens fees may be included, but they may have a charge for a cart or club rental. How can you find out these things? Call us! This is what we do. Sure you can research the internet, but we can do better. We can give you active feedback from hundreds or thousands of clients that we've personally sold to the top Mexican resorts. We'll ask you questions, to find out what exactly you're looking for out of the trip, and will make recommendations based on the budget you give us. IMPORTANT NOTE: When calling us for an all-inclusive, give the agent your full, real budget. If your budget is $4000, don't tell us $2500 (keeping the extra $1500 in reserve at the back of your mind). It's an all-inclusive! You don't need to keep a huge reserve like you might on a cruise, and the difference between an artificially-low budget and what you really can spend could throw our recommendations way off. Instead of offering you a world-class experience, we may be offering you something still very good, but not in the same league. That's because we're basing our recommendations on the type of hotel and budget you give us. I can't stress to you enough how important it is to be up-front with your booking agent on how much you truly have in the budget for your trip! The difference to your vacation satisfaction can be enormous. Let's get you down to Mexico. Call us today!

Here's a big OOPS! When George W. Bush was elected 8 years ago, a web developing company copyrighted the domain name http://www.georgewbushlibrary.com/. They maintained it year after year for a $10 re-registration fee, and were planning to do so forever, as the official website of W's library. Well, somebody was asleep at the switch, and they accidentally let it expire. When they went back in to re-register, a Raleigh North Carolina based Karate school had bought it. Illuminiti Karate purchased the name for $10, and when web developer Yuma Solutions asked for it back, they said SURE. No problem. It's absolutely for sale. Our price? $35,000. Mark Mills, owner of Yuma Solutions, did not immediately return calls seeking comment Thursday. The Tallahassee, Florida-based company has a history with the Bush family, hosting Web sites for Bush's 2000 campaign and for Florida Gov. Jeb Bush's 1998 and 2002 campaigns. Unfortunately for Yuma, they were left in the awkward position of having to buy the domain name back, and paying the $35,000. Whatcha going to do? Argue with a red-belt karate Grand Master?

For you Christmas fans who prefer a "live" Nativity scene, as opposed to plastic animals and plastic baby Jesus, the price of poker is going up this year. One example is in Wisconsin, where the cost of renting live camels has gone through the manger roof! People who had rented camels in the past are replacing them with much cheaper options, such as donkeys and sheep. It may cost $2,100 to rent three camels on ChristmasEve , where you can get a half dozen of the other little farm critters for a mere $250, according to the Milwaukee Journal-Sentinel. Kathy Meyer, whose family owns Jo-Don Farms in Franksville, Wisconsin told the newspaper, “We're expecting this year to be worse than normal. Some groups have replaced camels, and it has hurt us because we've kept and fed them all year, and now there is no demand.” Is it just me? With as much beautiful, fertile farmland as there is in Wisconsin, did raising camels for a 1-night yearly rental, strike anyone as a good idea? OK, maybe Micheal Jackson, but anyone else? Anyone? Bueller? Bueller?

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