Agents warn Carnival UK: Don’t risk losing sales

Sunday, 08 Dec, 2005 0

Agents have warned Carnival UK it risks throwing away a chance to work with an expanded network of retailers if they carry out threats to cut commission.

Cruise specialists predicted many mainstream agents would switch to selling cruise in the wake of commission cuts by the mass market tour operators.

But if cruise lines follow suit, the opportunity will be lost.

Agents also said Carnival UK risks losing market share to those competitors who retain a higher level of commission.

The warnings emerged after Carnival UK managing director David Dingle revealed to a TravelMole debate that it was considering scaling back commission in order to reign in high levels of discounting.

Cruise Club International director Graham Dullop said: “If cruise lines were to take a more adventurous leap in the market place they could tap into a whole new avenue of distribution by working with those agents who traditionally have sold mass market package holidays.

“With tour operators cutting commission, there will be agents looking to sell cruise which would be a wonderful new market for the cruise lines. But that opportunity will be lost if they do cut commission.”

He added: “Around 90% of sales come through agents – they don’t really have other means of distribution. It would be a risk.”

Asked if he would switch sell from Carnival to another higher-paying cruise line, Dullop said: “If you have two £1000 cruises and from one company you earn £100 and the other £150, who would you book?”

But he admitted it was imperative to send the customer on the right cruise, irrespective of the commission levels.

“If you don’t, you’ve lost that customer for life. Also, many people request P&O. It has a very strong brand and some customers just won’t go with anyone else.”

Hove-based Creative Cruises also said cruise operators could tap into the growing appeal of cruising – if they retain current levels.

“Agents are waking up to cruising and with mass market operators cutting commission, cruise lines have a great opportunity to grow their business,” said director Jason Peters. “But what incentive will there be if they follow Thomson and cut commission.”

Agents also questioned the rationale behind Carnival’s stance – that it wants to reduce discounting.

Peters said it just won’t work.

“Call centres for example will still give away their commission because many staff get a flat salary and don’t even see the commission,” he said. “If Carnival wants to reduce discounting, it would be better to impose a cap on the amount of commission an agent can give away.

“They should also bear in mind that ships are getting bigger and capacity is growing. Tinkering with commission would be a dodgy road to go down. They need to fill these ships.”

Dullop added it should be up to individual agents, not Carnival, what they give away in discounts.

“And it’s all very well dictating terms when the market is buoyant, such as now,” he said. “When times get tough, what happens then?”

Report by Steve Jones