Royal Caribbean Cruises Ltd. has restructured the 2009 commission thresholds for some consortia, following its announcement in May that it was raising thresholds for the first time since 1999.
RCCL earlier this year toughened up commission tiers for 2009 for its Royal Caribbean International, Celebrity Cruises and Azamara Cruises brands, requiring in a few cases that agents nearly double their combined sales in order to maintain their 2008 commission levels. National accounts and consortia, which up until 2008 were given lower commission targets to achieve than smaller and unaffiliated agents, were hit the hardest.
Royal Caribbean International's senior vice president of sales and marketing, Vicki Freed, said that although the thresholds were changed, retailers always had the opportunity to negotiate.
"There was a lot of gray, and we would make exceptions/tweaks depending on circumstances," Freed said. "If an agency or group was growing year after year, we wanted to have flexibility in our policy to reward that sort of behavior.
"All along, when agents were emailing me or calling me after our initial announcement, we were customizing our 2009 commission deals, and sometimes giving agents more time to reach the new levels, to 'fit' the circumstances."
To reach RCCL's top commission threshold of 16% in 2009, agents were told in May that they would need to sell at least $1.5 million in combined sales of RCCL's three North American brands — an increase of 36% for nonconsortia agents and 76% for consortia members. Now, for some consortia agencies, the revised commission tables will mean having to sell $1.1 million to earn 16% commission, a 29% year-over-year increase.
At the low end of the commission structure, agencies in the regular tiers will need to sell $50,000 to advance from 10% base pay to 11%; for some consortia agencies, that threshold will be $35,000.
"To [RCCL's] credit, we collaborated with them and modified it to be more reasonable," Jack Mannix, CEO of Ensemble Travel. "It was too big a pill to swallow at one time."
A letter from Vacation.com CEO Steve Tracas to V-com members, meanwhile, said that “Vacation.com’s priority over the past several weeks has been to continue dialogue with RCCL and to work on establishing a program that reflects the value of the ongoing Vacation.com member support for these cruise lines.
Due to the revised targets, the letter said, "25% of our members once at risk of dropping a tier under the 2009 standard thresholds are now secure."