Paul Melinis told TTG how constantly slashing prices to fill capacity risked damaging profits in the long term as customers would begin to have unrealistic pricing expectations.
Melinis explained: “It becomes a vicious cycle, where the agent gets squeezed, the value gets diluted and, suddenly, a luxury holiday looks like a bargain basement deal. That’s not good for anybody.”
Looking ahead, Melinis believes river cruise lines can "easily" fill their expanding fleets up to 2027 with baby boomers. “Baby boomers have time, and they want to look forward to something," he added.
Melinis stressed customers are generally "seeing the value” in river cruise. “If you compared a river cruise with an average, seven-night beach break, you’re getting a lot more,” he added. “We need to protect the industry’s long-term health, which matters more than just filling a cabin for tomorrow."
This, he argued, makes quick-win tactics, such as flash discounts, counterproductive long term.
“Over 50% of our guests every year are new to the brand, or new to river,” Melinis continued. “There are 14 million baby boomers sitting there in the UK that want to enjoy a holiday like this, and river cruise companies realistically only take a tiny piece of that.”
While Melinis admitted no business is immune to discounting, he urged companies to be cautious, and consider switching to value-added offers instead.
“There’s only a need to discount when you’re getting very close to departure date, and you have inventory available,” he said.
Free upgrades for early bookings, low deposits, free or reduced drinks packages or identifying new destinations are some of the methods Melinis suggested to add value to attract customers.
Fleet innovations are also key to maintaining repeat clients, as new vessels with varied layouts, features and amenities are more likely to capture interest – and broaden capacity across peak dates, he explained.
“The lifetime value of a guest, when they believe in your brand, is immense,” said Melinis, who also noted that a discount-led model might dilute a company’s customer base.
“What you don’t want is people just ‘trying it out’ because they felt it was cheap,” he continued.
A discount-led pricing model could affect a company's entire ecosystem, including travel agents. However, he added: “A value-led model rolls onto the agents, because they won’t have to look for discounted products to sell, and repeat clients mean greater returns. When river cruise has a good year, travel agents have a good year."
He encouraged agents to “keep on doing what they’re doing”, while advising river lines to continue offering agent training, education and frequent fam trips for valuable hands-on experience.
