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Carnival cuts travel-agent commissions
A report from the USA says that in a move deplored by travel agents, Carnival Corp. has announced that they have decided to stop paying commissions on the air portion of packages that include both a cruise and airfare to the port.
Only 12 percent of cruises sold last year included airfare, said Carnival, the world’s biggest cruise company (which includes Seattle-based Holland America), but the 5-percent commission on that part of the ticket represents hundreds of millions of dollars in revenue for travel agencies.
Carnival attributed the cuts to the need to make air/sea packages more competitive with other ways that travelers buy air transportation to their cruise departure port, however, travel agents said the disparity between the Carnival air price and the independent price is wider than 5 percent.
“The problem is their air fares are so out of touch with what people can buy air fares for,” said David Brams, president of World Wide Cruises/American Express in Tamarac, Fla.
Carnival’s decision, likely to be matched by other large cruise firms, is the latest in a string of setbacks for travel agents dating to 1996 when 10 percent was the standard commission on domestic flights. Airlines whittled that to 8 percent and then 5 percent before eliminating it entirely in 2002.
Cruise lines, meanwhile, cut the air commission on fly/cruise packages to 5 percent in 2001, but did not eliminate it until now.
Carnival still pays up to 16 percent commission on the cruise itself, Brams said, as well as 10 percent on travel insurance sales and pre- and post-cruise hotel stays, with travel agents accounting for more than 90 percent of cruises sold.
Widespread familiarity with the Internet has given cruise customers easier access to airfares and more competitive prices.
The commission cuts apply to all Carnival Corp. brands, which include not only Carnival Cruise Lines, but Holland America Line, Princess Cruises, Costa Cruises and Cunard Line, among others.
Carnival began telling agents of its decision on Wednesday, with the cuts taking effect Oct 15.
Report by The Mole
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