HAL Devalues Its Own Website

[Epicureangirl]

Ok, I'm going to take a stab at this 800lb. Gorilla.

 

Cost Benefit Analysis techniques are required to determine what cost ($ outlay) is required pay for the benefit of an improved web-site.

 

To do this, you need to be able to estimate the incremental cash flows over the estimated life of the benefit (the new website).

 

You would then discount those cash flows (using Present Value formulas) to figure out if it is worth it (or not).

If the PV of the discounted cash flow is greater than the initial $ outlay (investment) , then the project would move forward.

 

Here is where is gets tricky as some assumptions need to be made. You would need to know the cost of the outlay (estimate from a vendor to improve the website) and have a confident estimated life of the new website, which is difficult given the nature of technological obsolescence. My guess here is that is a short period. You would also need to calculate the incremental cash flows that would be generated by product line. How many MORE cabins would be sold, how much more revenue would be generated from other services (i.e. excursions, food services).etc,etc,etc The data is available to calculate these estimates to cruiselines fairly readily, but it incredibly difficult for us here on the forum to guess and we constantly read the complaint here that HAL is losing money or going belly-up yet most users lack the empirical evidence to back it up.

 

To illustrate, lets assume that HAL is operating at 105% occupancy. (I read that on this forum somewhere but I cannot verify if that is true but HAL can). How much more occupancy could they possibly generate? See my point. They can do the same thing using historical data for excursion booking and right on down the product line.

 

I smile when I read that HAL is losing business because of their website, and for sure some people may choose another cruiseline or book an off ship excursion, but if they are eventually selling the cabin or the excursion, then they may not really be losing money.

 

I'd like to see a better website too, so don't get me wrong, it may just be worth it for now for HAL to keep putting band-aids on the problem.

 

p.s. Thanks to my professors in the Business Administration Department at San Diego State University. I've used this methodology in business practice to fund several projects and it holds water.

 

I will not contradict a thing you said there, finance is not my area of expertise. However, there are other ways to fund that type of project (it depends on the company). Some organizations have an IT budget set each year, that this type of project would come out of. If there is competition for those funds within the company, each area of the business that needs IT capital can request funding (or compete for it if there is more money needed then available that year). Obviously HAL has more to worry about then its front-end website, they will have a whole lot of IT systems in place to order food, schedule staff, pay staff and vendors, etc. that need maintenance budgets, upgrades and in some cases all new systems.

 

In my company (not as large as HAL's for certain), we write a business-case that is either driven by the types of calculations you presented as an example, or it can also be risk-driven too (we have a ranking and weighting system so we can prioritize who gets the funds). We also have a 10 year planning cycle so we know what we are planning and budgeting for into the future. Risk is a big factor with customer-facing websites, as they need to also keep up with everyone's browser version or be left in the dust! Hopefully HAL already has a large website project earmarked for funds in their planning cycle. One can hope!

[bennybear]

Just a couple of points. All ships are not sailing full. Our last one was very undersold. 1500 passengers instead of 2200.

If as I have been reading HAL is wanting to attract younger cruisers then this is not going to fly. My Gen X and millennial kids shop almost exclusively online. They would have ZERO patience for this.

I cannot for love nor money find flights. And I agree if sister company princess has a good flight search even prior to booking, why should this be so difficult?

So if HAL want to attract new cruisers and keep some of us others around they absolutely must invest in this or go the way of the dinosaurs!

It is not cost effective for me to call in and take hours to find flight information and get different answers from everyone I speak to. Come on HAL!

[JRG]

Just a couple of points. All ships are not sailing full. Our last one was very undersold. 1500 passengers instead of 2200.

If as I have been reading HAL is wanting to attract younger cruisers then this is not going to fly. My Gen X and millennial kids shop almost exclusively online. They would have ZERO patience for this.

I cannot for love nor money find flights. And I agree if sister company princess has a good flight search even prior to booking, why should this be so difficult?

So if HAL want to attract new cruisers and keep some of us others around they absolutely must invest in this or go the way of the dinosaurs!

It is not cost effective for me to call in and take hours to find flight information and get different answers from everyone I speak to. Come on HAL!

 

Your GenX and Millennial kids wouldn't bother booking thru HAL, they'd be savvy enough to find on the internet the good cruise shopping websites that savvy users use. When we use our preferred site, we still call the corresponding online TA to book it (24 hours a day) and finding flight options at the best price is a piece of cake. You may be making it more difficult for yourself than you think. And those flights are invoiced (contracted with HAL) with your cruise so the cruiseline has to fly you to the next port if you miss a connection.

Edited January 9, 2018 by JRG

[*Miss G*]

They have been rolling the flight module out incrementally. I didn't have it a few months ago when it seemed everyone else did. I have it now.

[Epicureangirl]

We did check flight prices on HAL, but had to call for instructions on how to find it in their site. [emoji39]Turns our the same flights I wanted, came out as an extra $300 through HAL.

 

 

Sent from my iPhone using Forums

[*Miss G*]

We did check flight prices on HAL, but had to call for instructions on how to find it in their site. [emoji39]Turns our the same flights I wanted, came out as an extra $300 through HAL.

 

 

Sent from my iPhone using Forums

 

We have the same experience. I have never been able to find a HAL flight cheaper than what I can find on my own. Maybe one day!

[idiebabe]

I had no problem booking our flights on HAL's Website (and I didn't book direct with HAL but booked with the Bix Box Agency). It's under "My Reservations", your Booking and then "Purchase". Right there on the left hand side "Book Flights". This is a huge improvement for us then to spend the time on the phone going back and forth with available flights and pricing, etc.

 

I could never get the flights

for a TA direct through the Airline

at the price that I can get TA flights for with HAL's Flight Ease. The only TA I ever booked direct with the Airline was when I used FF Miles.

[freestyling]

My history with booking flights thru HAL is I always save $$ on business class international flights. In my last 4 cruises I have yet to find an open jawed or multi city business class or higher flight for less money. Perhaps we have been lucky..if so I hope it continues. We are also close to a major International airport.

[mauimacho]

I just bought 2 one way business class to Venice on flightease and saved thousands over any other entity I could have gone through. It took a few minutes online - got the exact flights I wanted.

[bennybear]

Idiebabe, thanks. Good news got it to work, bad news 17000 for restricted economy! Really?

 

No where near the 1299 advertised by HAL!

 

Jrg. I usually book my own flights, we like to fly business or premium and use points where I can. Unfortunately the poor website leaves me unable to compare what HAL really offers. I often know more than a lot of TAs. I prefer being in control of my own bookings until I want to turn over to a TA.

 

I think HAL or a TA can do simple routings but if you want something complex you need to do some checking. Most of my trips are anything but routine. I like multi cities with stopovers and often open jaws.

 

Is it too much to ask for a working website?

[idiebabe]

Idiebabe, thanks. Good news got it to work, bad news 17000 for restricted economy! Really?

 

No where near the 1299 advertised by HAL!

 

 

Bennybear, glad you got it to work! Did you check the price with Flexi Fare vs Restricted? I believe Restricted is actually buying the ticket at time of booking vs Flexi Fare which you can cancel up to Final Payment. The downside to Flexi Fare is that it won't be ticketed until 45 days before but we've never had a problem in the past and I was able to book my seats as well.

 

I always have to connect with not too many choices of Airlines so opt for Delta via ATL vs AA via CLT. I booked our TA for the Fall on HAL's website using Flexi Fare and booked Main Cabin (Economy). The price for the same flights on Delta are $12,127 pp that I booked on HAL for $717 pp a few weeks ago. They had the "Premium" (Economy Comfort) pricing as well as First Class pricing, too.

 

I just logged into HAL to access My Reservation but they are having "scheduled Maintenance" (lol) but if I recall there was also a "Filter" where you can do an advanced search and filter to a particular Airline, etc.

[Hlitner]

Yeah, we noticed that the "wonderful" HAL web site has been partially down ("for schedule maintenance) since yesterday. Kind of gives one a lot of confidence :). To quote the HAL site:

Due to scheduled maintenance, certain features of My Account are temporarily unavailable including reservations, history, personal details or preferences.

One can only hope that they are actually making site improvements...although its difficult to be optimisti

 

Hank

[JRG]

Idiebabe, thanks. Good news got it to work, bad news 17000 for restricted economy! Really?

 

No where near the 1299 advertised by HAL!

 

Jrg. I usually book my own flights, we like to fly business or premium and use points where I can. Unfortunately the poor website leaves me unable to compare what HAL really offers. I often know more than a lot of TAs. I prefer being in control of my own bookings until I want to turn over to a TA.

 

I think HAL or a TA can do simple routings but if you want something complex you need to do some checking. Most of my trips are anything but routine. I like multi cities with stopovers and often open jaws.

 

Is it too much to ask for a working website?

 

No problem, I was reading that you "couldn't find flights for the love or money" so I thought maybe you weren't using all available tools. Sounds like you are. Maybe this HAL 'work in progress' will improve with respect to booking flights.

 

It will be interesting to see if they fix the spelling mistakes that this website reported, that might lead us to believe they may be reading these posts.

[bennybear]

Thanks Idiebabe, they only showed the restricted economy, I couldn’t get the search to even look at premium or business. Let alone different routings, argh!

 

JRG, thanks, I meant just the Hal site I can’t manipulate And I keep hearing of these great one ways so was hoping to use that. I do hope they are reading this and will get it working. They have also posted fares on their site that seem impossible to access and the site has two conflicting dates to book by.

[iancal]

Bottom line....HAL's website is a joke.

 

It has been for a long time. Stuck in neutral (or worse)....similar it seems to many of their other corporate strategies/directions.

[DeeniEncinitas]

Ok, I'm going to take a stab at this 800lb. Gorilla.

 

Cost Benefit Analysis techniques are required to determine what cost ($ outlay) is required pay for the benefit of an improved web-site.

 

To do this, you need to be able to estimate the incremental cash flows over the estimated life of the benefit (the new website).

 

You would then discount those cash flows (using Present Value formulas) to figure out if it is worth it (or not).

If the PV of the discounted cash flow is greater than the initial $ outlay (investment) , then the project would move forward.

 

Here is where is gets tricky as some assumptions need to be made. You would need to know the cost of the outlay (estimate from a vendor to improve the website) and have a confident estimated life of the new website, which is difficult given the nature of technological obsolescence. My guess here is that is a short period. You would also need to calculate the incremental cash flows that would be generated by product line. How many MORE cabins would be sold, how much more revenue would be generated from other services (i.e. excursions, food services).etc,etc,etc The data is available to calculate these estimates to cruiselines fairly readily, but it incredibly difficult for us here on the forum to guess and we constantly read the complaint here that HAL is losing money or going belly-up yet most users lack the empirical evidence to back it up.

 

To illustrate, lets assume that HAL is operating at 105% occupancy. (I read that on this forum somewhere but I cannot verify if that is true but HAL can). How much more occupancy could they possibly generate? See my point. They can do the same thing using historical data for excursion booking and right on down the product line.

 

I smile when I read that HAL is losing business because of their website, and for sure some people may choose another cruiseline or book an off ship excursion, but if they are eventually selling the cabin or the excursion, then they may not really be losing money.

 

I'd like to see a better website too, so don't get me wrong, it may just be worth it for now for HAL to keep putting band-aids on the problem.

 

p.s. Thanks to my professors in the Business Administration Department at San Diego State University. I've used this methodology in business practice to fund several projects and it holds water.

WOW, well said!!!

I knew you must be tied to a business degree! I appreciate the detailed analysis.

Thank you

Denise:)

[iancal]

If customers book with a TA instead of on HAL's website HAL is indeed loosing forgone revenue. The revenue that it lost is revenue/commission paid to the TA IF the prospect books. Plus the potential customers who five up, perhaps peruse another cruise line web site and then book.

 

HAL's current customers may be OK with a poor performing /poorly designed web site and they may be loyal enough to stick with HAL. But look at the stats for on line purchases and look down the road five or ten years. We are leaving next week for a two month trip. Everything booked by ourselves, on the web, and where ever possible directly with the supplier.

 

Having been in the IT business for years-sales, consulting, outsourcing, I have seen marketing organizations refresh and redesign their web sites with extremely positive business impacts. A good web site is no longer a 'like to have' or some sort of customer convenience. It is a necessity to compete effectively and reduce the transaction cost. Just think of HAL's cost for a commission or for a PCC salary. Compare that to the cost of someone booking on the web or having a query answered on the web vs. calling a HAL CSR. It is why the airlines and the hotel chains place so much internal emphasis on their web sites.

[3rdGenCunarder]

If customers book with a TA instead of on HAL's website HAL is indeed loosing forgone revenue. The revenue that it lost is revenue/commission paid to the TA IF the prospect books. Plus the potential customers who five up, perhaps peruse another cruise line web site and then book.

 

HAL's current customers may be OK with a poor performing /poorly designed web site and they may be loyal enough to stick with HAL. But look at the stats for on line purchases and look down the road five or ten years. We are leaving next week for a two month trip. Everything booked by ourselves, on the web, and where ever possible directly with the supplier.

 

Having been in the IT business for years-sales, consulting, outsourcing, I have seen marketing organizations refresh and redesign their web sites with extremely positive business impacts. A good web site is no longer a 'like to have' or some sort of customer convenience. It is a necessity to compete effectively and reduce the transaction cost. Just think of HAL's cost for a commission or for a PCC salary. Compare that to the cost of someone booking on the web or having a query answered on the web vs. calling a HAL CSR. It is why the airlines and the hotel chains place so much internal emphasis on their web sites.

 

Like you, I book travel online, and generally with the company itself. The one exception is a cruise, which I do book through a TA. But I do my research before I contact her, so I know what I want and just want to find her price.

 

I'm no IT expert, but what you say makes a lot of sense to me. A website is an entry point for a lot of potential customers. Suppose I had no idea about cruising but thought I'd like to try it. I might google "cruise" to see what's out there. I just tried it. First on the list were specific lines, like ncl, royal carib, princess, carnival. Then cruise critic and a few big cruise online TAs. (HAL didn't show up until page 2)

 

So maybe I'd start checking out specific sites. I clicked on a few and it's funny how similar the home pages are. Biggest thing on the home page is a nice picture and a headline touting the current promo. But if I tried to search through the sites (and I didn't take the time to do that), how easy it is to get info? Google has already shown me that there are a lot of cruise lines, so if a bad website turns me off, I'll go back to my search results and try another site. People have short attention spans these days, and if the website doesn't provide instant (or at least quick) results, they'll bounce to somewhere else.

[iancal]

You certainly do not have to go far to see what other firms, including cruise lines, are doing with their web site design, navigation, and attractiveness. Just key in to sites like Princess, Marriott, Accor, Renaissance, and the big airlines.

 

They all use their web site to attract prospects, keep them on the website, and when they book there is a huge push to sell them additional services, including upgrades and insurance. And of course to reduce the amount of calls to their respective 1 800 numbers. This is why well designed FAQ sections can produce real cost savings and increases in customer sat and corporate image immediately on implementation. These are huge revenue and profit generators and cost reducers since the customer has already made a buy decision and may be unlikely to price shop or price compare those add ons.

 

When it comes to web based business, on line bookings, HAL, IMHO has, and is really missing the boat as it were. This is as much about the present as it is about the future. And Celebrity is not very far ahead of them....they have many of the same web issues.

 

If you knew nothing about HAL, what kind of image do you think HAL's web site would portray to a prospect and do you think it would encourage this prospect to continue considering HAL or place HAL as a top contender on their shopping list?

Edited January 11, 2018 by iancal

[JRG]

If customers book with a TA instead of on HAL's website HAL is indeed loosing forgone revenue. The revenue that it lost is revenue/commission paid to the TA IF the prospect books. Plus the potential customers who five up, perhaps peruse another cruise line web site and then book.

 

HAL's current customers may be OK with a poor performing /poorly designed web site and they may be loyal enough to stick with HAL. But look at the stats for on line purchases and look down the road five or ten years. We are leaving next week for a two month trip. Everything booked by ourselves, on the web, and where ever possible directly with the supplier.

 

Having been in the IT business for years-sales, consulting, outsourcing, I have seen marketing organizations refresh and redesign their web sites with extremely positive business impacts. A good web site is no longer a 'like to have' or some sort of customer convenience. It is a necessity to compete effectively and reduce the transaction cost. Just think of HAL's cost for a commission or for a PCC salary. Compare that to the cost of someone booking on the web or having a query answered on the web vs. calling a HAL CSR. It is why the airlines and the hotel chains place so much internal emphasis on their web sites.

 

The forgone/lost revenue (commissions) is an expense, so it is tax deductible and has to be considered net of tax, so it is not as much as you think. Plus, historically speaking this has always existed on a given cruiselines' respective income statement. 25 years ago, or even before the internet, HAL relied on the outside sales of travel agents and probably had very few walk-in sales. So this component has always existed and still remains.

Sure they make more when a customer uses their booking engine, and there are cost savings, but they still rely on a high-volume of outside sales to meet occupancy targets.

 

The question remains, how much business (think occupancy) are they losing because of a weak website. My point is that, people who want to cruise on a given HAL ship, still find a way to get it booked, so are they really losing the sale (or the customer). You and I really don't know, we have to look at the META Data and I suggest to you HAL has this data in the form of historical and forecasted data. In other words, they can estimate how much they are losing, it can be QUANTIFIED. I too come from an IT background AND an ERP and ERP software development background. Consider the following:

 

If SAP or IBM or Amazon Web Services gives HAL a bid for a new booking engine and website, and lets say it will cost them $20Million plus $4 million a year maintenance, but it will only last 5 years because the platforms and technology is changing and in 5 years we may be doing everything from our smartphones or thru ALEXA; then HAL has to figure out how much more money they will make to cover this cost in this 5 year period. They can only make more money by raising prices, cutting expenses or increasing occupancy, but they can only increase occupancy by adding ships (1 in 2018, 0 in 2019) and they certainly can't add any more weeks to the calendar, so their upside (ceiling) is very very limited, and very very QUANTIFIABLE, so they CAN make the cost benefit analysis of whether or not to INVEST in a new booking enging/website over a this 5 year period. (We would need to be a fly on the wall inside the CFO's office to know this.) It may actually be more economically feasible to just keep fixing the band-aids on the existing system.

 

When talking about the issue of needing a website to be competitive, (like every other on-line retailer) the argument breaks down because other on-line retailers down have the growth ceiling that cruislines have. Companies like Amazon (and most retailers) can grow at 20% annual rates because they can expand easier than HAL can. HAL can only raise prices (not good) and build new ships (very expensive).

 

We still book HAL when we like the itinerary value, but we don't like the website for purchasing either. But we still book the cabin. Have they lost our business, no. Are they going to go belly-up, not yet as I see it.

 

 

We can only watch and see what they do to their website in the short run to see the answer here.

 

"Alexa---please call HAL and book me on the World Cruise 2025 and text me when you're done"

[bennybear]

I think they need to get their act together if they want to attract the new cruisers they seem to be seeking.

 

And to keep some of the others of us that may look elsewhere.

 

Our US thanksgiving cruise was severely undersold so something’s not working. And some of the cabins were practically given away. Our last one same time of year with princess was packed. Our Alaska one was also very inexpensive. I know it’s only a couple of examples but really makes me wonder.

[CvilleJane]

We're going on the Nieuw Amsterdam in March to the Caribbean and I've been using Carnival's web site to do my shore excursion research. Carnival has a ton a reviews and pictures so I can MUCH better determine if this is an excursion that my family will enjoy and if it will be worth the money. Then I switch back over to HAL to book, if needed. I find the EXC Tours info to be less informative, less user friendly and less visually appealing.