Commission cut hasn’t hurt us, says Carnival

Carnival UK has not suffered any drop in bookings from agents since announcing its controversial decision to cut commission to five per cent for 2012, chief executive David Dingle has claimed.

Princess has already launched its programme for next year, while P&O Cruises and Cunard will follow next month.

Dingle said it had received strong early support from agents and customers keen to book early.

“We’ve seen no impact at all, none,” said Dingle, speaking at the launch of Carnival’s Cruise Report 2011.

“There has been no change in the level of support.”

TTA Worldchoice has said it will direct members to strengthen relationships with other cruise lines, while some specialist agents have said they will have to reconsider their sales policies.

Dingle said he could not guarantee that Carnival brands would not discount prices under the new commission structure.

“The important thing is that we are taking back full control of our prices,” he said.

“We are the people who know best how to flex prices according to demand.

“Too much of our discounting has gone on agents competing with other agents and that does nothing to help sell our holidays. Long term this will benefit us and agents.”

He added that he would like to push prices up but could not say by how much.

“When you see what people are getting for their money, there is scope for people to pay more.”

Dingle said there was a 6% increase in the UK cruise market, which was acceptable growth.

“Any talk of over-capacity or saturation of the market is fairly absurd,” he said.

“In 2010, P&O Cruises introduced its latest new ship, Azura, and the additional capacity was absorbed with no adverse impact on pricing.”

Carnival is planning to gradually cut down on port visits, allowing ships to spend longer at sea at a slower speed, so that they burn less fuel.

This will help to keep prices down.

“The fact is that if we do not change the way we operate, our already rising fuel costs will be much higher from 2015 [due to air emissions regulations], so it is important that we start to grasp this nettle now,” said Dingle.

Cunard Line president and managing director Peter Shanks said the decision to lengthen Queen Mary 2’s transatlantic voyages from six to seven days had been welcomed by passengers and achieved a significant saving on fuel costs.

In each of the past two years, Carnival has achieved a 5% consumption saving across its entire fleet.

By Jeremy Skidmore