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Old July 16th, 2010, 12:29 PM
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Default Carnival Rules Out Agent discounting and rebating as of Aug. 1

As of August 1, Carnival will refuse to allow travel agents selling their cruises to discount or rebate portions of their commissions. Travel agents will have to offer pricing identical to the prices Carnival charges.

While it basically illiminates the need to do any price shopping, do you feel it's unfair that Carnival is controlling all the prices?

Are you more likely to book directly with Carnival, rather than a travel agent, since the pricing will be the same?

Any other thoughts on this development?
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Old July 16th, 2010, 12:32 PM
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I'll probably still use a TA, since if I understand it correctly, they can still offer OBC and/or gifts such as a wine package. Please correct me if I have the wrong idea.

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Old July 16th, 2010, 12:37 PM
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I will continue to book through a TA also. But regarding the OBC, I thought those were offered from the cruise line, not the TA?? Maybe someone can clarify?
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Old July 16th, 2010, 02:48 PM
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We have not used a TA for over 7 years for booking a cruise, so it don't matter. We look around to see prices and what week and month the best balcony prices are (boy what a difference a week can make in a price) then we go to our PVP and book it. Were not wine drinkers so that never came in the game.
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Old July 16th, 2010, 03:16 PM
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I got an email today,from a cruise agency offerring free cruise travel insurance, when booking Carnival or NCL. I will still continue to use a travel agency. I want that advovate, when we need it.
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Old July 16th, 2010, 05:56 PM
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As a TA, I think it is a good thing. Everyone else (other cruiselines) has flat pricing and Travel Agencies have to compete in a flat rate market for RCI and NCL business, why not Carnival? Now all agencies have to compete on their service or OBC and/or gifts, not rebates of commissions. Great I say!!!
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Old July 16th, 2010, 07:49 PM
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As I understand it, this won't impact group cruises.

Also, what impact does this have on cruise consolidators?
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Old July 16th, 2010, 08:21 PM
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From what I've read, this just brings Carnival in line with the rest of the major cruise lines. Like Trip, we'll continue to use our TA because she can be an advocate for us in case of any problems, and she keep's up with what's going on !
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Old July 16th, 2010, 08:52 PM
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I would still us a good cruise travel agent, especially since by booking direct doesn't save a penny. Why not have the customer service that a travel agent offers for the same $.
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Old July 16th, 2010, 10:53 PM
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I'll continue using the T.A. I've dealt with as long as she's in business. Now that Carnival has basically put the breaks on the T.A.'s for a little minor discounting in order to do more business, I'll be much less inclined to ever deal directly with Carnival or any of the other lines.
If they want an across the board pricing system , then why do they vary the rates themselves all the time? Charge one price for the particular cabin cat.--if you want it --take it--if not--don't. Don't constantly change the prices from month to month, offering all kinds of " specials" -- and always with an asterisk indicating the fine print that most people don't read, and then hooking you for a higher price than advertised, then hobble the T.A. from knocking off a few dollars from their commission in order to do more business. It'll be good for Carnival, no doubt.
Nope, I don't like it--think it hurts the T.A. and Carnival expects to get more business for their PVP's by eventually running the cruise agent's out of business. Just my opinion which doesn't mean a thing to anyone except to me.
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Old July 17th, 2010, 11:24 AM
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I am amazed that so many agents are in favor of the "level playing field"... because on the level playing field the cruise lines are also your competition.

In the long run it's never great to play a game where the competition sets the rules as they go.

Many of us see the value of using travel agents, but there is no doubt the numbers of people booking directly with the cruise lines has been growing exponentially.

With the Internet, there's plenty of folks who'll book it from home, with the cruise line, without even walking in to their local ma & pa agency, once they find out their is no financial gain.... they'll simply take the path of least resistence.

It may not be too long before booking direct is the default for the majority.
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Old July 17th, 2010, 12:04 PM
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NOPE NOT ON YOUR LIFE. we have been using a carnival PVP, for a few years after we got well --- by a TA, who did not care and talked us in to other cruise insurance for the trip which we ended not going and got due to a not covered item and LOSS $2500. and she said OH WELL. i think carnival controlling the trips and the money is more than fair as is their insurance they have modified in the last few years. NO TA FOR US AS THEY ARE OUT FOR JUST THEMSELVES
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Old July 17th, 2010, 12:25 PM
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I am amazed that so many agents are in favor of the "level playing field"... because on the level playing field the cruise lines are also your competition.

In the long run it's never great to play a game where the competition sets the rules as they go.

Many of us see the value of using travel agents, but there is no doubt the numbers of people booking directly with the cruise lines has been growing exponentially.

With the Internet, there's plenty of folks who'll book it from home, with the cruise line, without even walking in to their local ma & pa agency, once they find out their is no financial gain.... they'll simply take the path of least resistence.

It may not be too long before booking direct is the default for the majority.

So it was perfectly OK when the "competition" (ie the BIG agencies) had the advantage??????

The TAs I have talked with are thrilled, BECAUSE they work for smaller agencies who could not offer the size of discounts "the big guys" could.

Carnival has helped them get on that level playing field.

In the long run, the only agencies this will effect will be the big agencies that already had the advantage .....

so now they don't.

And as stated, this has already been the case with many other cruise lines.....

People who are new to cruising will still need their hands held. Once they develop a relationship with a TA....(if the TA does their job)...they will stay with them.

The way you worded your post....the only thing a TA was good for was a discount. That sounds a lot like insult to TAs to me.
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Old July 17th, 2010, 02:05 PM
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I also personally think this is a very good thing - for the customer and the travel agent.

Here are two things a lot of people have not put into this equation:

First of all - the cruise lines want to (and should) control the information on the web about their ships, because it is the most accurate and timely. If someone wants to look up an alcohol or refund policy - they should go to the source. Many agencies had made it a goal to keep customers in their sites by offering as much information as possible, when in fact they are better off letting cutomers get info from the cruise lines rather than their own sites (in case a policy changes and they did not keep it up to date - let the cruise line be responsible).

Now agents have no fear of sending customers to the cruise line web site because they know they will have the exact same price. In fact, with some lines (Carnival, RCL) the agent is now pretty much required to teach a new customer how to use the line's web site, because they have to go there to get their e-docs.

Second - this puts an end to neophyte, unqualified travel agents competing with the real agents who deserve our business by price alone.
It has NEVER been a good idea to book a cruise based solely on lowest price.

Take for example, an outfit that used to sell cruises for a $25 service fee (no commission) BUT they didnt have a phone and only used email.

Well... most cruise lines will refer you to your travel agent if you have a serious problem with your booking (need a name change, etc) so you could be stuck if you used a bargain basement travel agent. Or even if you just used an incompetent agent you found through some vague web site where agents compete on price alone.

Now that they have flat pricing, though, that is changing, Cruise Line web sites now make it possible for you to manage your own reservation. So you have both - the ability to handle simple things yourself, and a travel agent when things arise that you CAN'T fix yourself on the cruise line web site.

We used to have a service here where agents could compete on price, but we took it down years ago because I felt we were doing a disservice to the cruise industry in general. I don't think price alone is ever a reason to select any travel agent.
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Old July 17th, 2010, 03:02 PM
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First of all - the cruise lines want to (and should) control the information on the web about their ships, because it is the most accurate and timely. If someone wants to look up an alcohol or refund policy - they should go to the source. Many agencies had made it a goal to keep customers in their sites by offering as much information as possible, when in fact they are better off letting cutomers get info from the cruise lines rather than their own sites (in case a policy changes and they did not keep it up to date - let the cruise line be responsible).
I do have to chuckle at that. If you ask the same question of 3 people at Carnival, you are likely to get 5 answers and it seems the website would provide yet a different answer.

How is this going to impact a company like LJ who often bundles transportation and maybe a pre and post cruise stay? Who is to say which commissions they are rebating? I suspect there are many ways around the new rule.
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Old July 17th, 2010, 03:23 PM
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I like and generally agree with Paul's comments. I think it is a good thing for Carnival and the TA's. I have found in cruising as well as in life that the lowest price is usually NOT the best value.
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Old July 17th, 2010, 04:05 PM
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Who is LJ?

The cruise line policies generally say the agent cannot rebate anything that is of cash value to the cruise line. (including transfers, free drinks, spa treatments, shipboard credit, etc.)

However - that means they cannot use it in the sales process to make the price lower. If an agent wants to send you a bottle of bubbly after you book the cruise that is up to her.

The same with "free insurance" - as long as the policy is not from RCL there is nothing the line can do to stop the agent from offering it as part of the deal.

The cruise lines say they make random phone calls to agents to see if they are rebating - so if they really are, technically they can catch them.
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Old August 2nd, 2010, 02:49 PM
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The cruise lines say they make random phone calls to agents to see if they are rebating - so if they really are, technically they can catch them.
I wonder what Carnival would do to a TA caught providing "of cash value" kickbacks to clients? I bet very little to nothing. If I'm right there's no sense in bothering to make the random calls. I would bet it's more lip gyration and plausible deniability for TAs.
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Old August 2nd, 2010, 02:58 PM
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I wonder what Carnival would do to a TA caught providing "of cash value" kickbacks to clients? I bet very little to nothing. If I'm right there's no sense in bothering to make the random calls. I would bet it's more lip gyration and plausible deniability for TAs.
No, they would suspend that agencies ability to sell Carnival Cruises. In order for an Agency to receive the commission from a sale, we have to give the Cruiseline something called our "IATA" number so they know whom to send the commission to and who will be managing the booking. They would suspend that IATA number in their system and that Agency wouldn't make any money at all selling Carnival Cruises.
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Old August 2nd, 2010, 07:20 PM
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I just talked to a TA and they said they can't even offer OBC anymore. I assume it applies to all of them. Guess I will just book thru Carnival if its all going to be the same cost.
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Old August 2nd, 2010, 07:41 PM
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I just talked to a TA and they said they can't even offer OBC anymore. I assume it applies to all of them. Guess I will just book thru Carnival if its all going to be the same cost.
There's a thought that I think is going to be a growing trend when people learn they can get the price everywhere. And I'm surprised travel agents don't anticipate that becoming a problem.

While I agree with those who posted above, that the lowest price isn't always the best deal. Service certainly counts too! But I never had a problem finding a Travel Agent who supplied terrific service, and a bit of a discount.

I also think this policy may lead people to book anywhere... so they could just walk into a travel agent, who can sell cruises, but may not know anything about them, and in fact may never have been on one. The "so-called full service agents", rather than those with some cruise sales training and experience.
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Old August 2nd, 2010, 09:12 PM
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I think it is important to look at the whole history of travel agent / cruise line relationships.

Cruise agents do more than just book cruises, they SELL cruises to people who don't know what a cruise is. The cruise lines do not have time to educate every new cruiser on all the intricacies of a cruise; dining times, tips, shore excursions, deposits, itineraries, etc.

So, traditionally, travel agents sold "travel" and the cruise lines went to where the customers were - to the travel agents. This also saves the cruise lines a lot of time in distributing catalogs and order-taking. It was always a two-way street.

Flat-pricing was introduced so the "master-rebators" like Travelocity couldn't control prices. In some cases they were even affecting direct pricing because they were discounting more than the cruise lines. So, the cruise lines did this not only to make it fair for all travel agencies, but also to take back control over their own pricing.

Now, RCL has had flat pricing in place for three years now (at least) and it hasn't stopped agents from selling RCL cruises. In fact, they reported that a larger variety of agents were selling their cruises than before; more mom & pops, etc.

But that isn't always a good thing. In some fixed costs it costs as much for RCL to support Mom & Pop as it does to support Travelocity. But they stuck with flat pricing.

I am guessing that Carnival was getting complaints from the smaller agencies that it was getting to competitive for the small agencies, that they were getting rebated out of business by the big sellers. When profits are razor-thin you have to be able to guard against price erosion.

Just keep in mind that the agent still offers you a level of service and an advocacy position if you have a disagreement with the cruise line that you will never get if you book direct. Plus, an agent can send you champagne, but no direct seller at the cruise line will ever do that.
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Old August 2nd, 2010, 10:58 PM
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I think Paul is spot-on with his last post.

I think the CCL/Travel agent relationship will actually be better. I heard at one time the % of bookings by Travel agents vs. booking with Carnival direct---seems the vast majority of booking are through TA's. If anyone knows I'd like to know that.
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Old August 3rd, 2010, 12:15 AM
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Quote:
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Who is LJ?
Legendary Journeys - they never sell just cruises (I think) - they always sell value added cruises - transportation, pre and/or post cruise hotels, etc.

Just like cruise lines no longer break out port charges - if people want to sell cruise packages, Carnival, or any other cruise line, has no way of knowing how much of the cruise price is rebated to the customer. Or am I missing something?
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Old August 3rd, 2010, 12:41 AM
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I am guessing that Carnival was getting complaints from the smaller agencies that it was getting to competitive for the small agencies, that they were getting rebated out of business by the big sellers. When profits are razor-thin you have to be able to guard against price erosion.

Just keep in mind that the agent still offers you a level of service and an advocacy position if you have a disagreement with the cruise line that you will never get if you book direct. Plus, an agent can send you champagne, but no direct seller at the cruise line will ever do that.

I don't know how many TAs there are, but probably more than there are Carnival sales people.There are certainly some in both camps that don't belong.

A good one in either camp can serve you better than a poor one in the other.

IF you have good TA, yes, they can easily be worth more than a Carnival person, however, it is also easy to do worse.

If Carnival goes bankrupt (the US would fold first), everyone is screwed. If a TA goes under, only their customers may be screwed - not out of a cruise (unless the TA is a flat out crook), but perhaps out of some of the extras.
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Old August 3rd, 2010, 04:10 PM
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Quote:
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I think Paul is spot-on with his last post.

I think the CCL/Travel agent relationship will actually be better. I heard at one time the % of bookings by Travel agents vs. booking with Carnival direct---seems the vast majority of booking are through TA's. If anyone knows I'd like to know that.
The cruise lines generally say 80 -85% of their sales are made through travel agents. Not too long ago that figure was 100%, so their piece of pie, though expanding in numbers, has grown smaller.

I'm a big advocate of using TAs. Way more beneficial than booking direct. But I do think in the long run this policy drives more people to book direct. If that "pie" shrinks even another $10-20% then that's a pretty significant dent.

While the pricing policy might seem of help to the "mom & pop" agencies, the large producers are still being given an edge through cruise lines sharing advertising expenses, higher commissions, etc.
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Old August 3rd, 2010, 04:31 PM
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The master-rebators like Travelocity had to stop this practice. If they didn't they would have went blind.

Sorry, I couldn't resist.
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Old August 3rd, 2010, 04:57 PM
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Yes, it is true that anywhere from 100% to 80% of all cruises are sold through travel agents depending on the cruise line. A few have even refused to take direct bookings.

As a travel agent it is hardly even worth it to book a cheap Carnival cruise anymore, so I can see the day when Carnival sells all of their cruises direct, and the agents may not even care that much.

There is so much more money to be made in a bundled product like Legendary journeys. And Zydeco, as long as the agent charges the right amount for the cruise when they pay the cruise line there is no way for the cruise line to tell if they are rebating. That is why they had to say they do stealth spot-checking of agents to make sure they are not rebating.

Any cruise line that sells air, tours, drinks and gratuities as one package and pays a commission on all of it is much more agent friendly than the typical cruise line that does not pay commission on any extras (port fees, etc).

The cruise lines have said in the past that they actually lose money selling directly because they have to pay salaries to a staff regardless of how much they sell. However, there is a point where direct sales become profitable and at that point it makes sense to focus on them even more.

Once direct sales reach the "tipping point" they will probably take over faster than anyone imagined. Look at the airlines.
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Old August 6th, 2010, 01:56 AM
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Well, a friend of a friend of a step-cousin just purchased a cruise through a TA and the invoice price was more than the actually price paid, so... there must be a way.

I do know of TAs who even before this stopped selling Carnival cruises but will book them if the client specifically asks for Carnival. This is especially true for groups where there seems be be an entirely different bureaucracy within Carnival that needs to be dealt with, and a new level of information hiding from the TA.
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Old August 6th, 2010, 07:00 AM
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Originally Posted by zydecocruiser View Post
I do know of TAs who even before this stopped selling Carnival cruises but will book them if the client specifically asks for Carnival. This is especially true for groups where there seems be be an entirely different bureaucracy within Carnival that needs to be dealt with, and a new level of information hiding from the TA.
So true.....So true
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