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Cruise agent: Why we give away commission
Cruise specialist Chandlers Travel has confessed it indulges in the discounting practice that Carnival UK is seeking to stop by cutting agents commission.
But the Romford-based agency insisted it has no choice but to slash prices.
“Why do we do it? Because everyone else does,” divisional retail director Richard Knight told TravelMole. “People are not daft. If they can save £200 or £300 by booking with an agency that is offering discounts they’ll do it. We have no choice but to do the same.”
He revealed that of 15% commission, 10% is immediately given away in discounts, leaving Chandlers with a 5% margin.
“Carnival will cut commission when they bring out their 2007 brochures in June next year, not to the level that Thomson has done, but they will do it,” predicted Knight. “But we will still retain our 5% by simply not giving as much away. There will be a level playing field.”
Retailer 1st4Cruising managing director Kevin Ivie said it should be up to agents, not cruise lines, to decide how much they give away.
But Knight said: “It’s their product. The cruise lines want people to aspire to their product and attract a certain type of client.”
He said the danger of cutting prices is that is could attract customers not suited to a Carnival UK ship and who don’t spend much money on board.
“And on-board spending is a very important part of the business,” said Knight.
Report by Steve Jones
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