Cruises and Port Shopping - Article

[frequent cruiser]

by Alexis Rinard, Econews

 

Over the past 20 years the passenger cruise industry has become one of the fastest growing sectors of the travel industry. It has created destinations, fulfilled lifelong dreams and given the world a new perspective of how to travel. Cruise line employees are well aware of what the ships' lack and what the passengers demand and such have found a variety of different opportunities to gain their portion of the "onboard" dollar. From art auctions to internet cafes, those are only a few ideas that have made millionaires out of former cruise line employees.

 

A concession onboard a ship is not managed by the cruise line but does pay a percentage of its revenue to the cruise line (it can be considered "rent" for the space the concession occupies). Passengers pay for the service or object onboard and immediate recourse is available should the service or object purchased not "meet their expectations". This is the focus of this article.

 

When we travel, we choose a destination for lots of reasons, beaches, historical significance, culture, and/or shopping. Since most of us are unfamiliar with the destination, we need someone to guide us and answer our questions. During the early years, the Cruise Director did field those questions, and based on his own dining or shopping experiences, would recommend the best place to eat, buy liquor, jewelry, or souvenirs. The Cruise Director was compensated by merchants for the referral either monetarily and / or with merchandise or a free meal. The only condition to be compensated would be to dine at the restaurant or model their wares so that passengers would feel confident in their recommendations and spend money. After every cruise the Cruise Director would stop by the merchant, pick up his / her "reward" for a job well done and find out what to "push" next voyage.

 

PPI Group, founded and owned by Bill Panoff, a former Cruise Director, developed the idea to place a person aboard every ship (Port Shopping Ambassadors on Holland America or Super Shoppers on Carnival). This person would provide the passengers with not only shopping information but would give a historical and cultural overview of each port of call, and answer all questions for guests who wanted to be independent of the ship's tour program. However, in most cases, the Port Shopping Ambassadors have either never been on a ship prior to that contract or have never been to the destination and therefore can’t answer simple general questions about the location (though contractually obligated to do so) but are quite well versed in all facets of the local jewelry industry. In fact, the great majority of the Port Shopping Ambassadors are recruited from the Home Shopping Network labor pool.

 

Contractually they are paid a weekly salary which ranges from $400 to $500 per week and if they achieve sales targets (which with rare exception are unattainable) are given around 1% of the target at the end of their 5 to 6 month contract. They are not allowed to accept any monetary compensation from the individual merchants (to keep them impartial). However, most are financially rewarded by the merchants for not reporting large sales orders to the cruise lines (via a Buyer's Guarantee Form), allowing the merchants to then pay only the-per ship per call fee (avoiding paying the cruise line a percentage on large orders). This is fool proof as long as there is no problem with a purchase (if a purchaser asked to return an item or to get an item replaced and it was not in the Buyer’s Guarantee Form it would indicate that the purchase was never recorded).

 

The cruise lines allow PPI to operate because it is a source of revenue for them. What PPI offers to the cruise line is a representative who will direct the passengers' dollars to specific stores. These stores are listed on a printed map delivered to each and every cabin. Depending on the port of call there can be as few as one store or as many as fifty. Since most passengers are first time users they rely solely on the credibility of the personnel they come into contact with onboard. The only “quality” a merchant needs to have to be “recommended” by PPI as a reputable store is to be able to sign an agreement that describes paying PPI a per ship, per visit fee, that ranges from $50 to $300, and in most cases also a percentage of their sales depending on the targets achieved. The agreement outlines the penalties that will be incurred if accurate sales are not reported within 48 hours of the ship departing. Buried deep within the agreement are clauses giving PPI free reign over what merchandise will be promoted. This is an important clause because PPI and Diamonds International ultimately control which merchants and what merchandise will be promoted.

 

With that said how is the cruise line to benefit? The person assigned to the ship is responsible for picking up the agreed to fees and these fees are what the ship's revenue is based on. The revenue stream is so high that it warrants the printing of thousands of maps of “recommended” stores per cruise. The only complaint the cruise line receives is the program focuses too heavily on shopping, and there is not enough or any port information. Future cruise passengers should do their own research (using guide books and the internet) to get objective and credible information.

[elmorejj]

Very interesting article. I for one never go to the port talks as I do all of my own research, and I have found the port ambassadors know very little outside of what they have printed before them. I also never use the "reccomended" stores, their prices are much higher than other local stores and their products are no better. I have been travelling the Carib. on cruises and land vacations for over 25 years and have never had a problem....jean :cool: JMHO