MSC's commissionable items now include prepaid activities

By Tom Stieghorst
MSC Cruises is broadening its policy of paying commission on certain items not included in the cruise fare to include all prepaid activities, a stance that breaks with the industry's compensation standard.

Since it launched in the U.S. in 2004, MSC has paid commission on some items, such as shore excursions and airfare.

Now, in addition to the current 5% commission available on air, shore excursions, hotel packages and transfers and a 10% rate on insurance sales, agents will be able to earn 5% on spa treatments, beverage packages, alternative dining fees and stateroom celebration packages.

Only activities booked prior to the cruise by an agent are commissionable.

MSC Cruises USA President Rick Sasso said that by broadening the policy, MSC hopes to raise awareness of it among agents and deepen loyalty in the trade.

Sasso said now that the policy is comprehensive, it will be easy to grasp. "It's a simple thought: 'I'm going to earn commission on this no matter what it is.'"

Although MSC's presence in North America is limited to one ship, the policy addresses a frequent complaint of travel agents that they don't get paid for many revenue-producing activities on ships.

The expansion of the MSC policy, effective June 2, comes at a time when some agents are struggling with low earnings on discounted fares.

"We wanted to address the comments by our travel partners that they're finding it difficult to earn a decent living from some of the cruise commissions," Sasso said.

"It's just a great way for them to try to increase their earning potential and also provide a great service to their clients."

An MSC classic beverage package priced at $44 a day per person would cost $308 on a week-long cruise and yield a commission of $15.40. Sasso said drink packages have become popular with guests.

"The travel agent should be pushing them, and therefore they should be compensated for it. It all just made very clear sense to us," Sasso said.

Debbie Fiorino, senior vice president of CruiseOne and Cruises Inc., said anytime a cruise line recognizes the agent's value by compensating them for what they sell, "it goes a long way to the agent's commitment to that line."

Few expect MSC's model to catch on with other cruise lines. But it will help MSC stand out, said Vanessa Lee, president of Cruise Strategies in Toronto.

As a new entrant in the year-round North American market, MSC has to be creative in establishing itself as a serious player and in cultivating agent support for its growth.

"MSC needs to prove they can play in the big sandbox," Lee said.

The deeper issue, she said, is the growing number of agents who are emphasizing all-inclusives and other landside vacation options because they're not earning enough on cruise commissions. "Cruise lines need to address this," Lee said.

MSC announced several other earnings opportunities for agents, in addition to the broader commission plan.

Through July 31, it will pay a 25% commission on balcony cabins booked on the MSC Divina from Aug. 2 to Dec. 20. Sasso said it was a short-term promotion that gives more reward to agents who step up to sell higher priced categories.

He said MSC has never paid a 25% rate before.

The line also is eliminating the requirement that agents block group space in order to earn tour conductor credits. Now, agents can earn a TC by aggregating 20 full-fare FIT guests on the same sailing date. The bookings have to be made at least 75 days prior to departure.

An agent could make the incentive work by concentrating their efforts on a few sailings, Lee said. "It won't happen that often, but really savvy agents will focus on a few cruises."

Sasso said that in return for higher earning opportunities, MSC expects agents to talk up the line with clients.

"When you treat your partners correctly there is a halo effect on support," he said. "The other side of that is, you need to support us more. You need to be sure that when you have a chance to select MSC Cruises for your clients, make sure that we get a shot."
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