RCI and Celebrity have announced that they will not allow any more rebating at all by anyone anymore for RCI or Celebrity products, - beginning on Monday. This is a huge development, and I don't think enough consumers have really thought it through yet to understand what the ramifications are going to be. I personally don't see how this benefits anyone unless you get a thrill from injecting a little chaos into your life once in awhile. All this policy is going to do is make life more complicated for many people in this industry.
At first, many of the small agents applauded this and thought it would level the playing field. Then they realized the mandate goes beyond just advertising, it says everyone will sell at the same price and cannot offer any incentives of any dollar value. That means they are no longer allowed to offer free transfers, onboard credit, or other such gifts that they used to give their special clients.
The big agencies who regularly rebated but made it up on volume are going to find other ways to "discount" Royal Caribbean by bundling the cruise with "free airfare" or a hotel. They can afford to do this because RCI will be paying them the full commission.
RCI is going to have to pay those huge commissions so they are not making any more money than before. If anything, because they have ended rebating, they will be forced to lower prices to keep their cruises competitive in the marketplace. Why would they want to put themselves in that position?
The consumer is going to be hurt the most - always paying full retail for every RCI or Celebrity cruise - discounts are now a thing of the past.
I am sure RCI's first incentive to do this was the hope that it would lead to more direct booking, because now people who call the cruise line directly won't discover they can get the same cruise cheaper from a travel agent. However, since the discounters are going to find other ways to offer incentives, this "level playing field" RCI may have been hoping for is not going to materialize as quickly as they hoped.
And here is another possible reason why...
When Bob Dickinsen created a similar rule for Carnival Cruise Line cruises (except that their rule begins in January and is restricted only to advertising, discounting is still allowed on the telephone), he said he was doing it because "the agents have created a gray market with Carnival's product, and that isn't fair to his company." OK - true enough.
However, I foresee a possible black market of small agencies being rebaters for RCI. For the first time they have the upper hand because they can give a wink and handshake to their customers and they are small enough that RCI will rarely catch ANY of them in the act. So, in the future if your want a rebate on RCI, you go to your neighborhood agency and show him your driver's license says you live right around the corner. He'll understand you are NOT from the RCI gestapo, and he can offer you pricing power over any other agency.
RCI has said they will crack down vociferiously on such violations, but how can they possibly monitor what happens on the local level between neighbors? As long as the payment to RCI is for the full amount they will have no idea how much gets returned to the buyer in cash. This isn't illegal, it is just like a grocery store offering an "in-store" discount. The worst that can happen is the agent can't sell any more RCI or Celebrity cruises - so what has RCI gained by disenfranchising an agent who was giving them full price for the cruise anyway?
Anyway - these are things I see happening. Correct me if I am wrong.
I am the editor, but I also speculate, ask questions and play devil's advocate. I reserve the right to change my mind.
So what that means is its going to be more about quality. I guess agents will now have to actually learn about the product and do a great job selling it. They will have to go out of their way to make the sale. They will have to give someone a special reason, other than price, to book that cruise from them. Imagine....A knowlegeable, curteous, outgoing agent.........the possibilities are endless
I have been dealing directly with Celebrity and Princess for my last 4-5 cruises. I was tired of calling my agent to say "I see on the web-site that the flight I am booked on has been cancelled" or "I read in the paper that ships are no longer stopping at XX - can you look into this". We were going to her for years, booked 2-3 cruises per year, believe me we are very low maintenance - I call her and say we want to go on Cruise X on Date Y and we want to fly in the day before and I'll make my own hotel reservations. She lost interest.
OK, just a thought...The TA must sell the tariff price....The ticket will reflect the tariff price. What keeps the TA from cutting you a check for say 8% of the value of the cruise?
The is no paper trail for a cruise line to follow.
Or the TA can purchase an onboard credit. Or the TA can pay for a hotel night pre or post cruise. Or the TA can use somem of the commission to discount the air fare.
RCI has stated vociferously that they will crack down on any agent who does this. All cruise line payments must be paid in full and if an agency cuts a rebate check and they find out about it they will be "de-listed"
But I am wondering the same thing as you are. How are they really going to know? As long as the cruise line receives full payment, they can't know what the agent does.
I am not a travel agent - and I doubt that any are going to come in here and tell us how it will be done, bit I am sure a small travel agent could easily start a separate checking account or pay an instant rebate in cash. There are probably a dozen ways.
I am the editor, but I also speculate, ask questions and play devil's advocate. I reserve the right to change my mind.
Well perhaps they will give customers cabin credits for snitching on their travel agent. I would sell my agent down the river for a 200.00 cabin credit. Im sure they will probably use entrapment techniques like law enforcement "professionals" when they use fake hookers to catch people soliciting prostitutes.
I am surprised at the lack of concern about this "pricing policy." I book my own cruises, arrange my own flights & hotels & find my own excursions. That is how I afforded 2 -3 cruises a year. I was very loyal to Celebrity. I will not be in the future. I have NO INTEREST in getting flowers in my room or having someone provide "excellent" service to arrange my vacation - I do NOT need that. And, I will not pay hundreds more to cruise an identical itinerary on Celebrity. The cruiselines are trying to put the tootpaste back in the tube - consumers, I hope, are smarter than that.
I agree with lougee - I'm booked for next April on the Summit as my first Celebrity cruise and have no problem going with another line (not RCI who are doing the same thing). They're spiting the TAs and their customers ... and we can just do it back to them!
I cruise the Emerald Princess, Eastern Caribbean on April 16, 2012
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.
CCL's policy is currently limited to advertising. RCL & CXC is for advertising AND selling. So a customer call still get a direct dollar rebated/discounted CCL cruise - unless they change the policy to match RCL/CXC's.
Jackass - enjoy paying more for the same product. You deserve it. And Ron, I am interested is saving money - not getting gifts. Although I love Celebrity, I am sure I will find equally enjoyable vacations elsewhere after the cruises I have booked are over.
Once again what happens is that it gets complicated. Deals will still be there. Consumers loose IF they cannot navigate all the deals. However, if a deal like inexpensive airfare ad-on is important to you - do you really loose? maybe - maybe not? If you always purchase insurance and we throw it in for much less - do you loose? maybe - maybe not?
Time will tell - regarding a true deal - nothing is absolute at this time!
The real reason they are doing this is because they can. Bookings are so great that they are now in an overbook situation on many cruises. I've read where Carnival had this problem and recently, a friend of mine ran into this as he prepared to leave on a Princess cruise. He was offered another cruise of longer duration and an enormous amount of shipboard credits if he took it. Unfortunately his wife works in a school system and could only travel then.
So it seems that even though many new ships are entering the market, demand is strong enough that the cruise lines can eliminate discounts and raise prices. However, they should also remember what happened to Rennaisance when they tried to play games with travel agents.
If I were running another cruise line and figured that I could let agents give away their commission and fill my ships at the expense of RCI, I'd jump all over it. Don't expect all the others to jump onboard because this is a golden opportunity to take significant business away from RCCL-Celebrity. Carnival started something but the honchos at RCI took it a step further. Wonder if Carnival knew this and planned it this way. Notice they didn't include any other of their lines?
There was an article in today's paper on this and it can be read at:
http://www.contracostatimes.com/mld/cctimes/business/9413896.htm?ERIGHTS=-7305184725529859952contracostatimes::franknca@sbcg lobal.net&KRD_RM=7pnpqnwuuoqtwwstqpnnnnnnnn|Frank| Y
Travel Agents should not have to cut their commission to be competitive in selling cruises. The cruise lines pay that commission because booking a cruise for a client involves a lot of work. Finding the right fit for the client, checking docs, special requests, applying discount coupons, ground transportation, hotel arrangements, advice on shore excursions and the list goes on.....This website is a great example of how uninformed people are on cruising. Most people in here probably have used a cruise booking factory to book their cruise and then they have to come in here and get marginal advice that may or may not be correct. The practice of commission rebating is just another nail in the coffin of the brick and mortar travel agencies accross the country. These people are forced to cut their commission to almost nothing because Cruiseticketfactory.com has the cruise for 90.00 less. Try calling this place for help if run into problems before, during or after you journey. You will be pressing numbers on your phone keypad and holding and transfering until the cows come home.
You make a strong statement for the "Brick & Mortar" TA. However, in my personal experiences, I could not disagree with you more. I went the conventional TA route for my Horizon cruise a few years back. I used a very large nation wide chain & was told that there would certainly be discounts & upgrades offered by them (the TA) prior to my trip (we paid list Celebrity prices). I was not counting on any of their promised "Perks" but was thinking it would be nice. Not only did we never receive any of the promised perks prior to my trip, but she also ignored my phone calls. We are a family of 3 (8 year old at the time) & she made my air arrangements (through Celebrity). I was beyond shocked to find that when we finally received our documents (3 days prior to leaving) we all had different seats on the airplane. When I asked her to change this, she told me she was unable to do so & that we will have to ask people on the flifgt to switch seats. This was ludicrous! I got home & called Celebrity myself, they resolved the problem immediately.
My next cruise on the Millennium, I did a lot of homework using these boards & other sites. I knew how much I would like to pay & the exact room number I wanted. All the TA had to do was take my reservation. This time I went to a local TA who only booked cruises. His price was $250.00 higher than I had hoped to pay. I really wanted to use a local TA because I like to patronize local businesses. I had a $50.00 captain's club coupon so I figured that with using the coupon I knock off a few dollars & would let the local TA get the business. Boy was I shocked when he refused to honor the coupon. He told me that he does not honor coupons because it cuts into his profit (hard to believe huh?) & he works too hard for my business to cut into his comission. Pretty bold statement that he works hard for my business, especially because I came to him with all of my information, he just had to make a phone call to book it. Well, needless to say we walked out. When I got home I called the agency that I found on line and booked my cruise. They were not only cheaper than the local TA, but they honored my coupon. Furthermore the cruise later became discounted again & they adjusted my price. About 2 weeks prior to my final payment being due I received another coupon which they also honored much to my surprise. This same "Factory" as you call it also booked my Century cruise which I just returned from and honored all Captains Club coupons without question. They have always been very responsive to my inquiries and are very professional.
As far as information, that's exactly what these boards are for. Tell me what TA can tell me if cabin 7173 on the Millennium has an oversized balcony. When I posted this question on the boards last year, I got an immediate response.
Don't get me wrong, there's a place for your local TA, & good for you if you found a good one. I have found my TA & their Brick & Mortar" is as close as my computer.
Excellent post!!! We just booked with a "Factory" and they saved us $625 per person on the Celebrity Website. And their service has been amazing...they've switched cruises, switched cabins for us...I couldn't be happier. I phoned a Bricks and Morter TA yesterday for a Hotel quote...after being on hold for 20 minutes and being transferred all over, I e:mailed them....I'm still waiting for a response....No thanks!!
One thing I would like to emphasize is that a "Brick and Mortar" agent/agency can still have an online presence and still provide excellent service without having to be right in front of you to do it.
I have booked all of my cruises with these types of agents and book most of them with the same one. I did meet her once in Fort Lauderdale when she was there on business and I was there for a cruise. She does have franchise with a large online agency.
__________________ Cruisemates Community Leader/Moderator
"There is a great difference between being well traveled and just having been to many places." ~Me
For those of you who enjoy researching your own travel and only use a TA to "broker" the deal, there is an extremely easy way to get around this new policy by becoming your own travel agent. I did it about 2 years ago when I had fantasies of quitting my job and selling cruises for a living. I discovered that becoming a TA is extremely easy (it took me less than 24 hours and only $75), but finding customers is very difficult. I gave up after only a few weeks, but I still book vacations for my family and friends at huge discounts.
Here how it works:
You need to find a host agency that is willing to work with you. The host agency is a reputable travel agency that has established relationships with the various cruiselines as well as the proper travel industry credentials (CLIA, ATA, etc.). Basically, you will be working as an independent contractor for this agency in return for a share of the commission. Most host agencies will pay you between 60% and 80% of the total commission earned on any travel you book.
You can find host agencies by searching the terms "host agency travel" on google.com. Here's what to look for in a good host agency:
1) Low cost to sign up: There are alot of scam agencies out there that will try and charge you large amounts for things like courses, materials, insurance, etc. A good agency should cost very little. Mine only charged a total of $75 to add me to there liability insurance (since they assumed I would be selling to the general public).
2) Industry credentials - Make sure the agency you select has reputable industry credentials such as CLIA and ATA certifications.
3) Established with cruiselines - Pick an agency that has a good relationship with the cruiselines and a high enough volume to earn a high commission rate. The agency I use earns commissions of between 16% and 18% with all the major cruiselines.
4) High commission sharing - Agencies typically will pay you between 60% and 80% of the total commissions on any travel you book. Choose an agency willing to share the highest commission percentage so that you will keep more of the total commissions paid by the cruiseline. My agency pays me 80% of the total commission. So if I book a cruise with a commission of 18%, the agency keeps 20% and pays me 80% of that commission, so in effect I will net a commission of about 14.5% of the total cruise fare.
5) Willing to work with beginners - Some agencies will only accept experienced travel agents, whereas others will work with people with little or no experience (I had none).
6) Beware of affiliate programs - There are alot of online agencies offering affiliate programs where they will pay you a commission to refer people to there website. THIS IS NOT THE SAME THING! These affiliate programs generally pay a very low commission and only allow you to earn commissions from a limited selection of travel choices offered on their website. A true host agency will pay you between 60% and 80% of the total commission and will allow you to book ANY travel (hotels, airfare, cruises, land tours, etc.).
Once you select a host agency and they accept you as their independent contractor, you are ready to go. From the time I first started the research on becoming a travel agent to the time I earned my first commission was less than 24 hours! It really is that easy and has alot of benefits including:
1) You will earn commission not only on cruises, but all commissionable travel including hotels, car rentals, land tours, travel insurance (commissions on travel insurance range between 20% and 40% depending on the insurance company, so being your own travel agent can greatly save you on travel insurance costs).
2) You will receive advance notice of any sales or special sailings, as well as "travel agent" only promotional rates and special events.
3) Since you are the travel agent, you can speak directly to the cruiseline without being told to "have your travel agent call".
Like I said above, my dreams of selling travel for a living quickly died when I realized how difficult it was to attract customers, but I still save LOTS by booking my own travel and keeping 80% of the commissions for myself. And this is something that the cruiselines can't take away from me since they can't stop me from "self-discounting" my own fare!
This definitely isn't a good idea for the novice cruiser or anybody who likes to consult a travel professional prior to making vacation plans, but for those of you who don't mind doing the research and planning yourself, I would highly recommend it.
Well im afraid 9/11 and the airlines paying no commission and the internet has taken its toll on the Travel Agent profession. There are many Travel Agents out there now who actually have no or very little travel experience. The problem is the pay is so low that even with the discounts its still not affordable to most. RCCL lets TAs cruise for 40.00 per day plus tax. Thats 307.00 for 1 week plus gratuities and transportation expenses and shore excursions etc. Thats well over 1,000.00. In a profession that pays an average of 26,000.00 a year that is a lot of money. Having a travel agent that has never travelled is kind of like going to a surgeon that has read all the medical books and passed all the tests but has never actually performed surgery. A travel agent with great affiliations and credentials is fine but when im looking for a travel agent I ask them where they have been. Thats more important than if they are affiliated with Cruise Holidays or if they have CLIA certification or any of that.
Question for those who are understanding this better than I am. If all bookings will pay the same price, should everyone be booking onboard for their next cruise to at least get the shipboard credit? Up til now my wonderful local TA always beat the brochure early booking price but last two bookings (recently) it was same as the brochure. GUess this was the strart of it all....So now we are paying the brochure price & will not get the shipbaord credit. Guess we could re-book on board & then transnfer the booking to the TA--still getting the same price & the credit. We have 4 trips already booked ahead, so the dollars kind of add up! Eh--guess it's not worth it--we already have the cabins of our choice..but in the future we may have to consider it. A live TA is there for you when problems arise--not a distant 800 number or internet connection--
Excuse the novice-cruiser naivete, but does this mean that the customer must now always pay the brochure price, as was suggested above? If so, I'm looking for another cruise line! Boo hoo!! How will they stay competetive?