From January, Royal Caribbean will cut its base rate commission to 10% and will be more selective about how it works with its trade partners. Here, Jo Rzymowska, Royal Caribbean UK general manager, explains why it’s all about give and take.
"Over the next few months we will be having conversations with our trade partners about our new commercial agreements.
Discounting is still an issue and will continue to be, but the good news is that overall the agency world is now thinking more about their retained levels of earnings. I think there is now a real desire for things to change.
We have a good relationship with our trade partners and we want to incentivise agents who sell us properly and who understand what we want to achieve.
We still have the means to help agents sell our brands. At the moment, lots of consumers don’t understand us and what we want to do is invest more in getting consumers to understand what our brands are all about.
We are prepared to pay a premium to those agents who sell our products properly, and lots of them are doing this already.
We don’t manage our accounts in a one-size-fits-all way and we recognise the different needs of a high street agent, a cruise specialist, a call centre, or a home worker.
I can’t disclose all of what we are doing competitively, but it’s fair to say that is if agents are blatantly going to go against us and insist on discounting, we will have conversations with them.
We will look at how we work with them in terms of account management, joint marketing, shop visits and training. We will decide who we invest our marketing funds with and who we invite on sea visits. We will also need a commitment from agents that they will go home from these visits and teach their own staff how to sell our brands on product differentiation, not on price.
We’ve had meetings with the trade throughout October and I have personally attended many of these and I am confident that we have their support. We will, of course, continue to have further discussions over the next few months."
