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Cruise lines likely to join commission cutting
ABTA Convention special report: Cruise companies look certain to review commission levels in the wake of Thomson’s base level reduction to 7% from January.
This emerged during a question and answer session at a business seminar during the ABTA Travel Convention in Marrakech.
Cruise lines are known to regularly pay well above 10% commission to their most productive agents on a value of sale that is far higher than the average package holiday.
Complete Cruise Solution head of sales Giles Hawke and and Fred Olsen Cruise Lines managing director Nigel Lingard both indicated they would be reviewing their positions.
Hawke, whose responsibility includes P&O Cruises, Cunard, Princess Cruises and Ocean Village, said: “We definitely have had concerns about the level of rebate agents give to customers.”
He suggested there was potential for agents to earn more money if lines reduced commission levels because there would be less agency discounting.
Lingard added: “We see too much of the price being used in a market share war between certain retailers. We have got to get away from the model that has been skewed in the wrong direction.”
And he called for more agents to get involved in selling cruises.
“We are still trading with too small an agent base,” said Lingard, whose company is introducing a fourth ship next year. “It would be a crying shame if that extra business is only going to the same group of retailers.”
Royal Caribbean/Celebrity Cruises’ head of field sales Michael English called on agents to take advantage of the “aspirational value” cruises offer to their customers.
“Agents are not particulalry going out a proactively selling cruises to their customers,” he said.
Appearing on the panel, Harry Weeks Travel managing director Jean Rodel said her company used “strict guidelines” about what cruises it discounted.
She explained how a lead-in of £699 on a Cunard cruise to New York resulted in 30 people booking but only two cruises were sold at the very low rate.
“It was used as a carrot,” she said. “It is all about being innovative with your marketing.”
Report by Phil Davies
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