Carnival Corp. last week took the unusual
move of dictating a commission policy across all its cruise brands
by eliminating commissions on the air portion of its cruise
bookings.
In a letter sent to
travel agents on Sept. 12, the company said that the policy would
go into effect for new bookings on Oct. 15 for all its cruise
lines.
Carnival Corp.
brands currently pay 5% commission on the air portion of air/sea
bookings. Jack Anderson, vice president of marketing for Carnival
Corp. and executive director of the World's Leading Cruise Lines,
an umbrella marketing organization for several Carnival lines, said
it was not competitive to add commission to the airfare when
airlines don't pay it.
"The bottom line is
that we are offering air fares that are simply not competitive,"
Anderson said in an interview.
Royal Caribbean at
press time declined to comment on the issue. NCL Corp. did not
respond to a request for comment.
Across Carnival
Corp. brands, Anderson said that travel agents book air with the
cruise company less than 12% of the time. Six to seven years ago,
he said, it was 35%.
"Every single year
our air utilization has been decreasing," he said. "The only way we
can figure out how to offer a competitive air pricing program is to
not mark it up for agents' commission."
Anderson, who
drafted the letter to travel agents, explained that as air fares
have increased Carnival has had to mark them up even further to
cover the commission.
"Eighty-eight
percent of the time travel agents are booking noncommisionable air
... which they should do; they are going out and shopping for the
best air fare for their customer. And all too frequently," he
added, "it ain't us."
Anderson said that
the effect of the decision would be immaterial to Carnival Corp.'s
earnings and that it was about increasing the company's air/sea
utilization. "It's important that we offer a competitive home city
air program both for the consumer and particularly for cruise only
agencies," he said.
Agents expressed
outrage six years ago when Carnival Cruise Lines was the first to
cut its air commission from 10% to 5%. (At the time, President Bob
Dickinson said the move was made to boost air/sea bookings and make
the line's air prices more competitive with the airlines'
prices.)
Last week, agents
contacted by Travel Weekly said that while they were displeased
with the new policy, most admitted they were not buying air/sea
packages.
"Cruise lines are
very expensive in their air," said Bud Smead of Cruise Holidays in
Arvada, Colo.
"They are always
higher than what a customer can get on their own," said Laure
Hristov, owner of Just Cruises and Tours in Delray Beach, Fla. "I
feel the customer is best served by booking it themselves and
getting a taxi from the airport or paying for transfers from the
cruise line. They save a lot of money."
Of the decision
itself, Hristov said, "It doesn't really surprise me, nor does it
affect me."
Smead said his
agency buys air for its customers through other outlets and charges
the customer a fee for doing so, but he still disagreed with the
commission elimination.
"It's generally bad
policy when suppliers -- cruise lines, anybody -- expect us to
provide service and not get paid for it," he said.
To
contact reporter Johanna Jainchill, send e-mail to [email protected].