Cruise and Schmooze

[Jason]

Companies have traditionally favored hotels and resorts when they wanted to reward top-performing sales representatives, giving them vacations in sunny places like Arizona, Florida and Hawaii, with golf, tennis and water sports among the allures.

But for the last decade, the cruise industry has been campaigning hard for some of that business and has been winning corporate converts.

Industry officials contend that cruises are less expensive than comparable resorts because the cabins, conference rooms, meals and entertainment are all included in the price. In addition, some of the smaller ships afford companies privacy and networking opportunities that they may not get on land.

"Companies want to share sales figures and product plans with the team they've brought on board," said Joyce Landry, head of Landry & Kling, a cruise consultant. "If they're on a charter — with the ship to themselves — they can control who knows what."

Cruise ships have one other advantage, at least from the companies' point of view — their top salespeople have no choice but to participate in the shipboard business sessions. Or, as Bill Connors, executive director of the National Business Travel Association, which represents some 2,400 corporate travel managers, put it, "You have a captive audience that can't easily walk away."

While companies are generally trying to hold the line on travel spending, the getaways are meant specifically to reward and motivate the people who are selling products that have a major impact on a company's bottom line. Most of the gatherings, in fact, include informal get-togethers in which the chief executive discusses strategy and future sales goals.

Hotel representatives counter that many of the advantages cited by the cruise industry are not advantages at all.

"The only difference between a resort and a cruise ship is that a ship moves and can change its itinerary," said Robert E. Dirks, a senior vice president at Hilton Hotels Corporation. "We put together all-inclusive packages just the way the cruise industry does."

Cruises now account for some 20 percent of what is known as "incentive travel," according to Brenda Anderson, president of the Society of Incentive and Travel Executives.

Patrick Mitchell, head of corporate business for Royal Caribbean International, said the number of companies booking cruises had grown significantly in the last two years.

"We saw incentives climb some 50 percent in 2005," Mr. Mitchell said. "And 2006 looks like another banner year."

The rise in such bookings has come at a good time for the industry, which, according to Micky Arison, chairman and chief executive of the Carnival Corporation, experienced "some softness" in bookings earlier this year. He attributed that largely to the lingering impact of last year's hurricane season. But some travel agents, like Evan Eggers of SureCruise.com, are reporting strong bookings because of price cuts.

Chartering a ship for an incentive cruise can cost corporate clients well over $2 million, according to Richard Weinstein, head of incentive programs for Carnival Cruise Lines. A boutique ship like the Legend, Pride or Spirit from Seabourn Cruise Line costs $85,000 to $110,000 a day for a four-day charter to Nassau, or about $750,000 for a seven-day sail around the Caribbean.

Incentive cruises are only a small segment of the $150 billion meetings and incentive industry in the United States, which includes everything from gift-reward companies to hotels and resorts to the services of incentive consultants.

Insurance companies head the pack of cruise enthusiasts. Not far behind are auto, financial services, pharmaceutical, cosmetics and beverage companies.

"We've done Ford, Avon, Bristol-Myers, Bank of America, Sun Life and Aflac," Mr. Mitchell, of Royal Caribbean, said, adding, "It's nice to have marquee names, but smaller companies in Peoria and beyond are our bread-and-butter business."

But there is a carrot-and-stick strategy built into incentive cruises. The trip at sea can take the form of an Alaskan cruise for Harley-Davidson dealers or a tour of the Baltic Sea for Pacific Life sales representatives. But when a cruise segues into a business meeting, it can actually benefit the incentive winners: it minimizes the gift tax they are obligated to pay to the Internal Revenue Service for the trip.

"We're running off a Travel Management 101 course for some of our members during a two-day cruise this month aboard Freedom of the Seas," said Mr. Connors of the National Business Travel Association, referring to Royal Caribbean's 160,000-ton ship, the world's largest luxury cruise ship. As with large groups on the bigger ships, the travel managers will share the array of shipboard diversions with the other passengers but drink and dine mostly in separate areas.

Companies that use incentive travel say the trips are not merely frills. For example, Pampered Chef, a marketer that sells kitchen tools through home parties, has recruited its 60,000 "independent contractors" partly by telling them they can earn incentive trips.

In the last two months, Pampered Chef has sponsored three incentive cruises for some 3,300 sales representatives aboard Royal Caribbean ships, with a precruise stay at the Four Seasons in Palm Beach, Fla., for the best sales producers.

Officials at Aflac, the health insurer, which has 63,000 sales associates, said the company had seen upswings in sales after cruises, but acknowledged there is no sure way to measure the return on the investment.

"Word of mouth is better than R.O.I. in judging results," said David A. Nelson, Aflac's incentive expert. He said that the company planned to send the 200 members of its President's Club, which honors top sales performers, on a cruise from Monaco next year .

Some of the small cruise lines that provide luxury suites for up to 200 passengers — Seabourn, Silversea Cruises, SeaDream Yacht Club and Windstar Cruises — offer an entire ship. They say the intimacy makes it easy to network in cozy surroundings and sometimes chat with the head of the company, who was only a distant figure back at the office.

Source: Paul Burnham Finney, The New York Times

[Joanandjoe]

That's great for the cruise lines and the sales people, not so great for the rest of us. One of the reasons we'll be sailing on Zemith to Bermuda on Saturday, instead of on our favorite ship, the Regent Seven Seas Navigator, is that the Navigator has been chartered. Bad for us, good for Sherry (Travel Bug), who will be on the charter.

Even when sales groups don't charter a whole ship, they take over. A group of extroverted people (as most sales people are) who are part of a large group can make it difficult for everyone else, even on a big ship. They take over lounges or pools, sometimes even an entire dinner sitting.