Cruise Buyers Get the Shaft
Written by: Kuki
Suddenly most of the cruise lines put policies in place that prevented travel agents from advertising prices different than those a consumer could find by booking directly with the cruise line. And indeed, Royal Caribbean and Celebrity cruise lines prohibited travel agents from selling cruises on their ships for anything less than the cruise line itself is charging. The other cruise lines, while forbidding travel agents from advertising reduced rates did allow them to discount the cabin prices to those who contacted the agencies directly -via telephone call, e-mail, or walking into the agency.
The cruise consumer got the shaft!! Let’s roll back the clock just a bit to before these policies were put in place.
Before these policies arose any of us could simply surf the Internet to check for pricing on cruises we were interested in. Those travel agents who were willing to discount a portion of their commissions to aid them in attracting customers, or to keep their customers loyal, were allowed to do so. Not that anyone would, but if they chose to they could sell the cruises at a loss.
To understand that premise, one must realize that the cruise lines pay the travel agents commissions on their sales. That commission comes out of the fare, not as an add on to the cost to the consumer. Many people seem to believe that it costs them extra to use a travel agent, and that is simply a false premise. If that were the case, buying the cruise from the cruise line should be less expensive because the cruise line is not paying a travel agent. Fact is that doesn’t happen.
So, understanding that,… back to the way it “used to be”.
Prior to the placement of what the cruise lines refer to as Flat pricing policies we could very easily price shop, looking for the very best deals we could find on cruises. With the growth in the Internet this led to many large agencies coming to the fore, that became known as discounters. These agencies were willing to work on very small margins (keeping their commissions to a minimum) to build businesses that thrived and grew based on large volumes; simply put make less on each sale, but sell lots and lots of cruises.
There is no question that this put pressure on the more traditional travel agencies who felt because their costs of operation were higher they had to keep their commissions higher to keep their businesses afloat, and to make a profit.
They felt they were not on a “level playing field” with the discounters. Though in my view they certainly were. They were perfectly able to compete with the discounters if they CHOSE to. However, instead they chose to petition the cruise lines to regulate the prices for them, and dictate that their commissions remain in tact.
It’s my opinion that they asked the cruise lines to eliminate competition in their industry by regulating prices. And that regulation has led to customers getting the shaft, by being forced to pay higher prices.
Yes, pricing competition still exists within the cruise industry, between cruise lines trying to appeal to the consumers. However, that same condition existed, and would continue to exist if the flat pricing policies did not exist. What has happened is that consumers are paying upwards of 10% more for their cruises because the flat pricing policies are in place.
Another result of these pricing policies has been the cruise lines getting very heavily into the business of selling cruises themselves directly to the customer. This could be a good thing if the cruise lines were to discount direct bookings by the amount they would normally pay a travel agent. However, that isn’t the case. It doesn’t happen.
Ironically, the very travel agents who petitioned the cruise lines for these regulatory pricing policies, now find the competition for business has expanded. Besides competing against other travel agencies, they are now also competing for business with the cruise lines… which in some ways makes me chuckle. But that chuckle isn’t nearly as satisfying as lower prices for cruises!
There are still some options left for the consumer in some of the cruise lines flat pricing policies. Some, like all the Carnival Corporation companies for example, though forbidding travel agents from advertising lower prices, do still allow them to discount their prices (by reducing their commissions) if the customer contacts them directly.
This means if you contact travel agents directly you should be able to find those who will still discount. The system does require a bit more work on your part, other than surfing web sites, but the savings can be worth the effort, so don’t give up. Don’t simply accept the situation and be another consumer getting the shaft. Be a smart customer bucking systems that are unfair to you, and save yourselves BIG $$$$.
– A View from the Kuki Side of Cruising –
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