Disney Cruise Line has capped the amount that travel agents
can earn when customers book a future cruise while onboard the ship. And, in
a competitive response to the move, Royal Caribbean said it is exploring how it can pay
agents more money for such bookings.
Disney’s new commission rate for onboard bookings is a flat
10%. Previously, Disney had paid up to 16% depending on an agent’s sales
volume and other criteria.
A spokeswoman for Disney addressed the change by saying, "We
continually evaluate our business practices and make changes from time to
time.”
During a session at Ensemble Travel Group’s conference in
Orlando on Tuesday, Vicki Freed, Royal Caribbean International’s senior vice
president of sales, said, “We believe that those future bookings made onboard
are the most valuable bookings we can get. … You should have the full
commission. And when a competitor makes a move like [Disney] did yesterday, it
concerns us because we don’t want to ever misbehave. And I don’t know of
another way to word that. We never want to misbehave with our travel agent
partners. Our success is dependent upon your success. We’re not stupid. We are
having the best year ever, our stock’s about to hit $100, and that’s thanks to
the support of the travel agent community.”
Freed said Royal Caribbean is looking at how the cruise line
can pay agents more money for onboard bookings. She said that Royal Caribbean
President Michael Bayley told her, “Vicki, find a way to pay travel agents
even more for those bookings that are made onboard. Let’s do some incentives.
Let’s give them back-end overrides.”
Typically, a client will make an onboard booking to reap an
incentive, such as a spending credit or reduced deposit. Cruise lines then
credit the booking to customer’s travel agent, or the last agent on record.
The system has worked well for both agents and suppliers,
who get confirmed repeat business out of it, said Bill Smith, vice president of
cruise sales for the Virtuoso agency network.
“We are disappointed and really don’t understand why Disney
would take this action at this time,” Smith said.
Smith said Disney’s move creates an incentive for agents to
discourage their clients from rebooking on Disney cruises, or for them to
cancel the future cruise booking and rebook it at a higher commission rate once
the client returns, a process that he said was not a good use of anyone’s time.