I'm concerned about several cruise agent e-mails I've received recently indicating that Carnival, Royal Caribbean and Celebrity are mandating that their agents stop their discounting to their customers. This is very disturbing and would seem to end up having a very negative impact on the cruise lines by increasing the prices of what customers are paying. I receive many e-mails from various agencies weekly and I am alarmed at this recent news. I spoke to one agent and was told that after this Friday, August 13, they must stop discounting or they will be retaliated against by the cruise line. If I had only seen it from one agency, I wouldn't be so alarmed but I've seen it several places now. I don't know the specifics of how the agency will be impacted by the cruise line if they do offer discounts to customers but this results in the cruise line's "bread and butter" (the cruiser) incurring much higher prices. We already experience so many additional fees and now this! Comments anyone?
Thanks for your input on this important topic to all avid cruisers!!!!
I think what they are saying is that they are 'leveling the playing field' and that the cruiseline themselves are not giving discounts to some agencies and not others. A TA will have to explain this further but that is what I hear is the plan. Agencts will still be able to rebate portions of their commission etc. If not, what would the purpose be of having an agent? Everyone would get the same price from anyone and that doesn't make sense. Any big time TA's that can explain this better?
Kuki is correct about the "advertising" being the culprit. It does mean, however, that any rates refered to on websites or search engine results be the standard cruise line pricing. This will level the playing field between the "brick and mortar" agencies, the online agencies and the cruise lines themselves.
In my opinion, this is just the first step towards eliminating cruises from the travel agents portfolio similar to what has happened with airline, hotel and rental car bookings. Direct booking cruises in a year or two will be as common as direct line booking airline flights, hotel rooms and rental cars. The next step will be eliminating commissions for cruises.
Travel agents will be reduced to servicing a shrinking population that doesn't know or trust the computer online booking process.
I'm not sure about the other cruise lines, but I did see an article on Travel Trade's website regarding Carnival Cruise Line. Here's a link to the article, if anyone is interested in reading it in full:
To put the source in perspective, Travel Trade is a trade publication that caters to the cruise industry...specifically to cruise retailers.
I assume that the cruise lines want to maintain more control over the price at which their product is sold. In addition, the statistics show that buying a cruise is more complicated than buying an airline ticket....although the cruise lines may some day try to cut ties with travel agents, they aren't ready to do that yet.
Kuki is right -- the article that I read did not say that the agencies could not sell at lower prices....it just said that they could not advertise them, although I believe that is the cruise lines' intent. It would be very hard for them to moniter whether or not an agency was rebating part of their commission back to a customer....but it's much easier to monitor their advertising.
The agencies will have to take this seriously -- Carnival claims that it will place "repeat offendors" on a "do not book" status.
Actually it is RCI who is doing this which also means Celebrity. No this does not just include advertising and it does indeed mean no more discounting period. There is a post in the RCI boards concerning this situatio9n and it has been confirmed by Anne Campbell with the cruiseline itself so there is no mistaking it's point. Check out the RCI message board on this.
Sorry, Jim, but I think you're wrong and it does just apply to advertising. I read the article from stem to stern and it does say "advertise".
Here is a short quote from the wsj article: "Robert Dickinson, president and chief executive of Carnival, the cruise industry's largest operator, acknowledges that his company can't entirely stop travel agents from rolling out the discounts. "What happens between two consenting adults outside of public media, as long as it's not advertised, we're fine with that," he says in an interview. "
It's both Carnival and RCCL. I think its great as it will continue to take the mystery away from the transaction and reduce it to simply purchasing a commodity online without having to deal with a middleman (travel agent).
"Agencts will still be able to rebate portions of their commission etc. If not, what would the purpose be of having an agent?"
Huh? That's so off-target that I can't even begin to outline the ways. Maybe to start off with, I don't think you need an agent to rebate commissions. I could program a computer that. So if that's what an agent is for, then RCI can find another way to accomplish it, without an agent taking a cut.
As I've said before, the cruise lines are arrogant, because the travel business is up in general. After 9/11, they would never have added policies that dicated more expenses for the client, such as paying for soft drinks and ice cream, and mandatory tipping rules. After 9/11, they scrambled for our cruise business. They didn't care whether we tipped or not.
The next disaster, the cruise lines will rescind all of the b.s. if they think it will lure passengers.
Cruise lines are businesses. Their managers have a fiduciary responsibility to take all actions that could result in positive impacts for the owners. Pricing is always a matter of supply and demand. Demand is up... it would be naive to think prices wouldn't go up in some way.
i just recd a reply from my on line ta and as posted earlier it only has to do with advertising --they cannot offer a cheaper price in print but they can sell it for whatever price they want ----my ta says he will continue to offer discounts up to 15%
I may have missed it in the several entries here and in other forums on this topic, but does this essentialy mean the end of the facility herein where I can solicit bids from agents on a specific cruise? I did that for our last cruise, and it really worked well. Can anybody answer or at least hazard a guess? I just can't remember the name of the facility, but it's where you submit the info (ship, date cabin) for a specific cruise, and you get e-mails from various agents with prices.
Whatever the answer is today, it may be different next week. This situation is still fluid. In most industries, these kinds of changes take weeks to work out, and in the end, if all the suppliers buy-in, then it all gets rolled-back to the way it was.
Peter, our own Anne Campbell confirmed it herself, it is "NO DISCOUNTING OR REBATING PERIOD". On Carnival it applied to advertising only. RCI and Celebrity as part of them will not allow agents to rebate any of their commission and offer you a lower price on the cruise than that which is advertised, and you cannot do it on the phone or in person either. What larger agents will probably do is toss in something like free air or hotel to get around this but it is a fact that no rebating of commissions will be allowed.
Jim - a little confused with your post. You agree that Carnival isn't going to try to manage discounts and rebates except for advertising. But you're saying that RCCL and Celebrity are and thats the part that Anne Campbell confirmed? You know as well as I that if Carnival allows it, so will they all as they are the market share leader.
Peter and others. It has been confirmed that RCI, which includes Celebrity, will NOT allow ANY agent to rebate ANY portion of their commission, period. If they are caught they will lose the right to sell RCI cruises. The only way they can sell less than the cruiselines advertised price is if they have groups and they have to prove they have these groups. In addition RCI can give rebates through onboard sales or in the Crown & Anchor mag.
Carnival's policy relates ONLY to advertising and you can still get discount and rebates through your agent at this time if you ask or they offer on the phone ot in person etc. They just cannot place advertisements with a price lower than that which CCL advertises. I am sure that CCL is watching the reaction towards RCI very closely.
The way I see the larger agents getting around this is that they will offer maybe free air or lodging if you buy through them. They will not rebate any of their commission but instead will pay for some other service for you not directly associated with the cruiseline. If I read it right they cannot even offer you onboard credit or gifts!
CruiseMates has been the most accurate – and as fare as I know – ONLY cruise community or magazine to officially report on this! Thanks to All! Ever wonder why the other communities haven’t said a word – even with over 100 posted and thousands of views?
It will be interpreted, adhered to, pushed to the limits, and abused by some agencies. My policy will be to take the high ground for now and watch others push the policy as well as wait for additional clarification.
Regarding On-line agencies going out of business - most of us are the largest and most profitable in the industry - that is why others continue to enter the marketplace. Most of my competition - or as I call it - my friends, associates & peer group, are incredibly solvent (of course, again considered hearsay). I do not intend to boast - just an attempt to calm some individuals regarding most major cruise dot coms going out of business. Any agency - including local ones, can go out of business. Please ask if you Agency is bonded for protection.
Yes, packaging will be the #1 new ballgame in town - whether it is air, hotel, rental cars, etc. Then #2 will be value added items (which also includes packaging) will be the next item - yes we are waiting to hear if iPods, DVD's, Digital Cameras, etc are allowed. Shipboard credit is NOT allowed - except possibly in a group purchase environment. Now that gets complicated since many agencies purchase group space and sell it on an individual basis - we await clarification on this.
Additionally, not all agencies are created equal and some agencies have key account rates or KAF. These are at lower rate, and only a couple hundred of the largest agencies have them - and only on some sailings. Finally, many agencies are members of consortiums or member groups that are somewhat similar to buying groups. Consortiums are recognized as national accounts by the cruise lines (like the largest of the largest of agencies). These national accounts gain some advantage by negotiating cruise line promotions that are sanctioned - including upgrades, shipboard credit, gift cards etc. This will still be acceptable although they are constantly being adjusted and negotiated and may become limited.
So, the pricing and competitive nature of cruise sales is what changes. Which in IMHO, makes purchasing a cruise - at a true value, or lowest price - more complicated for the consumer. This already happens - currently one of the two biggest dot coms is offering $200 cash back and UP TO $200 shipboard credit on some cruises. A customer of ours - who already booked with us, asked to price protect their booking. We were able to prove that the customers booking with us was still $28 less - not much - but incredibly complicated! (BTW, just making a point - not advertising!) This is how complicated it will become.
Patience and time will tell and everyone will have an opinion. Again, remember RCL & CXC provide great cruises - the choice will be yours the consumer.
Ron - I'm interested in your opinion. What will stop the cruise industry from going the way of airline bookings? It would seem that the direction of all travel types and components are headed to the single data base of inventory and then access via the Orbitz, Expedia's, Travelocities of the world. Airfare is surely there, hotels and rental cars are close behind; why should cruises not follow?
This would, of course, mean your company's demise - but try to be unbiased. Thanks.
Our business plan today is the same as 8 years ago (when we started) - the business plan has always expected this. Obviously, many people/posters - mostly on another community board - have already dug our grave. It amazes me that people would not actually believe this is part of our business plan!
Bigger (in sales) has always been better. Remember the largest online retailers sell airfare more than anything else. If you don't realize it, most believe that airlines no longer pay commission - however there are annual incentive bonuses (back-end) of 2% or even 3% available in addition to booking fees. Travelocity, Expedia, Orbitz and others make millions on booking fees and these back-end bonuses.
We almost have a single database of inventory now - all our computers link to the cruiseline - it is the cruiselines inventory you see. Airlines don't have a single database either. I do not believe this will change.
I also remember starting a company with $5000 from scratch in my back bedroom. The same one that is one of the largest cruise-only agencies in the world. When I started, I had no price advantage, and limited financial resources. Back then, we sold mostly groups - when the retail price went up, the group price didn't - and we sold hundreds of cabins.
Today, we have thousand of customers, marketing clout, financial resources, the same business plan, and the ability to adapt. We will survive - thanks for the question!