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Travel Agents and Cruise Lines

Written by: Kuki

To begin to describe the relationship between the cruise lines and travel agents, the first thing for a consumer to know is there is “normally” NO charge to the consumer to use the services of a travel agent when booking a cruise.

They are paid by the cruise lines from the revenues for your cruise fare, and that fare does NOT go up because you are booking a travel agent.

One may run into the rare travel agent who charges a service fee, or the rare agency which will charge a booking fee, and will only offer a credit on a future booking upon cancellation, rather than a full refund. However, both those situations are indeed quite rare (and avoidable- run).

Several years ago, the cruise lines instituted “flat pricing policies” (meaning travel agents could no longer discount prices for cruises by reducing their commissions-essentially giving customers kickbacks from the agency profits). The cruise lines insisted this move was initiated at the bequest of the larger travel agent community.

At the time, and several times since, I wrote a number of articles, warning, while it was a move detrimental to consumers, it was also a “careful what you ask for” scenario for travel agents.

On one level of thinking it made sense for many of the smaller travel agencies to request this move, as they were having some difficulties competing for customers with the “large discounters”. However, my arguement against the move was that it would lead to more and more people booking directly with the cruise lines… which I believe has proven to be the case.

From the first perspective of the smaller travel agents who lobbied for the changes, it might seem that the system has worked. The large discounters have virtually disappeared, or are finding different methods to compete, rather than on lower prices alone.

However, I believe it has also had quite a negative impact on the business travel agents do for a number of reasons.

1. Though wrong, many people looking to book cruises have the perspective that it will cost them more to book through a travel agent.

2. Along the way, the cruise lines have developed very sizeable, significant, and sophisticated marketing and sales departments, to encourage people to book directly with the cruise lines.

From a business perspective it makes sense that that the cruise lines like it when customers book directly with them, rather than travel agents. Though they, of course, have to pay their own sales force, those costs are less than the commissions they pay to travel agents which come directly from the fares consumers pay.

And, of course, the cruise lines sales teams sell only the cruise lines for which they work, as oppposed to travel agents, who service customers as best they can to place them on a variety of cruise lines which, together, they determine is best suited for them.

Now, in the latest move American Express Travel ( which a variety of travel agency consortiums and companies are affiliated with) have ended their “Preferred Supplier” relationship with Carnival Cruise Line.

Their stated reason for the decison : “With some of Carnival Cruise Lines’ recent policy decisions, many of the components that comprise a preferred supplier relationship with American Express are no longer present, including a drop in agent commissions”.

It seems many travel agents associated with American Express Travel are unhappy with policy changes and indeed even changes in marketing “suggesting” customers simply call Carnival Cruise Line, rather than directing them to call their travel agents.

To date, this is the only cruise line taking the steps described. But I think one has to believe, like many strategic decisions made in the cruise industry, if the industry perceives Carnival’s moves as successful, many other cruise lines will follow suit.

As consumers we might think, “it makes no difference to me, as long as the price to me doesn’t change”.

However, I believe there are ramifications possible, that affect much more than price, because there are many other factors that also affect your cruise experience; particulary unitiated, first time and less experienced cruisers.

I have no problem with experienced cruisers, who know their own preferences very well, booking directly with their cruise line of choice. I understand many of those people feel they then have direct control over their booking, and like what that represents.

However, for the less initated, choosing and booking a cruise is a fairly comlicated process; what with choosing ship, itinerary, cabin types, cabin locations, dining choices, etc. , etc., etc.

My largest caveat against booking directly with a cruise line is a warning in the event something in the process goes wrong.

If you’ve booked directly with a cruise line sales representative, when a problem arises, they are working FOR the cruise line. That does not translate well to looking after the customer’s interests to seek resolution.

If you’ve booked through a good, trained, cruise specialist you have someone to represent your interests, and take your position to the cruise line.

With all of that said, not all travel agents are created equal. For the consumer it is imperative to research, look for recommendations, and interview perspective travel agents BEFORE you book.

There are many professional, knowledgable, and incredibly helpful cruise travel agents available, and there are also some who’s only concerns are selling you a cruise.

It is your job to ask questions, and find one of the many good ones, and if successful you’ll reap many benefits for your work… and rather than cost you extra, it’s most likely to save you from unsatisfying, or costly stumbles and mistakes.

- A View From The Kuki Side of Cruising -

Related posts:

  1. Are Restrictive Pricing Policies The Path To The End of Cruise Travel Agents? Last week Holland America joined the ranks of some cruise...
  2. Are Cruise Travel Agents Justified in Charging Service Fees? Traditionally Travel Agent’s earnings have been based on commissions paid...
  3. Are More Internet Savvy Cruisers Booking Direct; While Others Book With Travel Agents? Over a decade ago, when I first began writing for...
  4. When is a Travel Agent A Travel Agent? There seems to be wide spread confusion over what/who is...
  5. You Should Interview A Travel Agent As If You Were Hiring An Employee Let’s make it clear from the beginning; I believe EVERYONE...

Comments

Comment from Paul Motter
Time February 27, 2013 at 10:36 am

Interesting post, Kuki. I hope to foster some discussion here so I will make some statements and ask some questions:

1) The flat-pricing rule was made because smaller agencies were complaining that large volume sellers had more leeway to sell at discount prices, because they made it up on volume. The large sellers did not want the rule.

2) The rule only stopped agents from ADVERTISING lower prices, in many cases, not from selling at a lower price so it did not change much.

3) The fact that a travel agent sells many cruise lines is an advantage, but if something goes wrong why should the travel agent be on the side of the consumer? In the long run, it is the cruise lines who pay his salary, right?

Well, the answer is this; if the agent doesn’t have a customer to start with then he will never be paid a commission – and that is why he fights for the consumer.

4) Flat-pricing has not stopped rebating. In fact it still happens, but under the table. There are still agents who send the customer a check when their commission comes in. It is flat against the rules, but I hear about it. Furthermore – there are also agents who pay for things like gratuities, transfers, special dining, etc. by booking those things for you on your account. The cruise line can’t stop that behavior.

Bottom line – the customer is still better off using a travel agent – the right travel agent. But it is really hard for them to fight off the cruise line sales force when Carnival’s “Personal Vacation Planners” call a travel agents customer to ask about booking his next cruise. However, it should be up the agent to beat Carnival at their own game.

Comment from Mike Mastellar
Time February 27, 2013 at 10:38 am

Kuki:
I really do believe that the days of the “standard” agent are coming to an end. Renaissance was about fifteen years too early in their self sales but the cruise lines are shifting in that direction. It directly hits their bottom line when they can do it in-house, with order takers, and not pay commission. It is definitely cheaper, even with call centers, personnel, G&A, and equipment.

I see the “concierge” type of travel services becoming more popular. You pay for the service but you get what you want and do not have to do any leg or online work to get it. They will also do what travel agents are supposed to do and watch for price decreases, book airlines, hotels, tours and actually take care of you if there is a problem before, during or after your trip. Today many agents merely give you the phone number, email or business address to contact someone else if you have a problem.

The other problem that will lead to the end of the current type of cruise travel agent is that there are too many “bad” ones. Many are people who just want discounted travel and know little about their product. I hear too many stories about people who have been burned by an online travel agency or other bad agent/agency and then book their next cruise directly with the cruise line. The cruise travel industry has contributed to their own demise.

I remember in the ’90′s when airlines dropped commission to almost nothing. Carlson – Wagonlit Travel said that it will destroy the airlines and they’ll reinstate the old commission plan in less than year. I guess their crystal ball was broken. Airline commissions never returned.

The veteran cruisers are easy for agents and cruise lines but the first time cruiser is where they have to work for in order to retain them. Luckily the cruise product is a good one and a good percentage will book another one. The bad part is that if they had a problem with their first booking, many will book their second cruise with the cruise line.

No matter what: In five to ten years, the travel agent of today will be as different as the travel agent of twenty years ago.

Take care,
Mike

Comment from Mike Mastellar
Time February 27, 2013 at 11:22 am

Paul said: “2) The rule only stopped agents from ADVERTISING lower prices, in many cases, not from selling at a lower price so it did not change much.”

This is old information. Carnival implemented their policy in the summer of 2010. They removed the “advertised” price option in August of 2012. They also implemented the policy that an agent could give no incentive or “add-on” that had a monetary value that was worth more than $25.

This policy is why American Express Travel removed Carnival from their “Preferred Travel Partner” list and basically will only sell you a Carnival cruise if you specifically ask for it.

Take care,
Mike

Comment from Kenneth Eden
Time February 28, 2013 at 10:37 am

Comparisons and argumentative selling points aside, I have always booked my cruises with a travel agent, period. I know the ropes, the ins and outs and what commissions are and what the cruise line will offer to me and my agent. A good agent will support his client(s), offer any and everything available, and believe, me,. I have asked for copies of the invoices from a cruise line as booked with a travel agent, to assure that what I am getting is what I persoanally arranged with the cruise line and booked with my agent. It is not hard to do, and it is a no brainer.

However, what of the passenger booked on the wrong ship for their tastes and lifestlye?
I se it time and again, the one booked plain old wrong – for whatever reason it may be.

I know what I like and demand from a cruise ship and cruise line, I avoid many like the plague, and support what I know will delight me. Am I rare in this>perhaps, I have been taking cruises for decades.

The real and only way to get what you really want from a cruise is to READ THE BROCHURE carefully, every word, compare brochures, e brochured or printed ones. Read every review on line and from magazines and periodicals and newspapers. Then and only then if you have done your homework well, then, if what you get does not live up to the cruise onboard experience, then, you may have grounds to complain.

Complaining because you did not get a towel animal on your bed is not grounds to can the whole ship, debase the crew and rant against the food.

And, booking on line without a knowing the credentials of the booker is just plain stupid.

Comment from Kenneth Eden
Time March 5, 2013 at 8:43 am

Well, no more comments seem to be of interest in the above.

It seems very easy to get all riled up over Carnival and people do. Maybe for good reasons, or poor ones.

Whatever, Carnival and its major competition are all here to stay.

What many people miss is this point: if Carnival did not buy or take major ownership in the cruise lines they include in their family of cruise lines, these lines would be gone. Out of business, lost forever, their ships probably trashed by quick buck artists, then scrapped. Don’t believe this?

Well, back in the early 1970′s the world lost, along with other lines, FRENCH LINE, GREEK LINE, UNITED STATES LINE, AMERICAN EXPORT LINE, SWEDISH AMERICAN LINE, ITALIAN LINE(as it was, it tried feebly to make a come back in late ’70′s), POLISH OCEAN LINES, PRUDENTIAL GRACE/DELTA/UNITED FRUIT LINE and then, once again, 1980′s, loss of PAQUET FRENCH CRUISES, DOLPHIN CRUISES. PREMIERE CRUISES, HOME LINES and others.

Incidently, the majority of the cruise lines today are owned by conglomorates, have stock holders to cow-tow to show profit, or have financial houses that tie the cruise lines purse strings.

Post 911 SUN LINES/EPIROTIKI, under the ROYAL OLYMPIA banner, and COMMODORE CRUISE LINE, poof, gone forever.

So, along comes Carnival and buys CUNARD, COSTA, HOLLAND AMERICA PRINCESS/P&O, and SEABORN.

Carnival built up on its reputation for offering a product suited to its market share, and thus comes AIDA CRUISES, and others. Also, brand new state of the art ships, and major rennovations of the older ones in the fleets they bought.

Can anyone fathom that CUNARD is the only true Ocean Liner product out their, with the liner Queen Mary 2, and two new consort cruise ship, Queens Victoria and Elizabeth? How major is that commitment to preserving the history of the passenger ships of the past and the realizarion for the future?

So, pick on Carnival, they have used stunts to bypass travel agents in the past, sell directly in Wal Mart (this failed), and yes, they do offer bonus $$ to travel agents if they book on the spot a carnival Cruise – so what.

What Carnival does, the cruise industry follows or avoids, it is that simple. The big “C” always returns to the TA!!

By the by, Micky Arison is a member in the top billionaires in Forbes newest issue, %4Billion.

Pingback from Cruisemates Blog » Carnival – Floundering Or Rebounding – Kuki
Time May 28, 2013 at 11:56 pm

[...] Another development is one I wrote about a short while ago, http://www.cruisemates.com/blog/201302263767/relationships-travel-agents-cruise-lines/. [...]

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