Bid website says it will help cruise lines enforce rebating policies

By Tom Stieghorst
CruiseCompete, which has run into resistance from some major cruise lines over the lines' rebating rules, said it has changed contract language to make it clear that agencies must comply with cruise line policies when they craft bids.

The added language says agencies agree they will conform to each cruise line's rules and that CruiseCompete account access will be suspended if it determines the agency is deliberately violating cruise line policies.

With the CruiseCompete model, customers request quotes on cruises through CruiseCompete.com, and the quotes are made available to agents to bid on the business. Prospects are notified of the bids and can contact the agencies when and if they want.

CruiseCompete says it works with about 300 agencies.

Bob Levinstein, CEO of CruiseCompete and its parent company, Compete Ventures, said he’s willing to work directly with any cruise line to help enforce its policies.

“In fact we are engaged in positive discussions with several lines to do just that,” he said.

Recently, the 10-year-old website, which solicits bids from agencies on cruises sought by consumers, has had a falling out with Norwegian Cruise Line over rebating.

Last month, Norwegian sent a memo to some travel outlets that said the line would not sign new contracts with agencies that used CruiseCompete to bid for Norwegian cruises. The line also asked CruiseCompete to stop using its proprietary materials.

In the memo, Norwegian detailed why it was pulling out of CruiseCompete. One reason it cited was the difficulty of monitoring improper rebating by agent users.

Norwegian said some of its contracted agents were bidding down their commissions or using net rates intended only for approved strategic sales initiatives.

CamilleOlivereThe memo, signed by Norwegian Vice President of Sales Camille Olivere, said Norwegian would not contract with new accounts and would enforce its current contracts to cancel accounts that have bid for Norwegian sailings on the site.

Levinstein said CruiseCompete offered Norwegian the ability to directly monitor quotes but was rebuffed.

Carnival Cruise Lines said in an emailed statement that Carnival “does not engage directly with CruiseCompete, nor does it encourage travel agents to do so as a marketing opportunity.”

It said Carnival collaborates on and reviews market plans with agents and can withhold marketing co-op dollars for activities that don’t comply with its advertised price policy.

“The nature of CruiseCompete encourages rebating, which Carnival doesn’t view as a viable strategy,” Carnival said.

Royal Caribbean International declined to comment.

Some agents who object to CruiseCompete’s bidding model argued that it puts the spotlight solely on price, neglecting to account for additional value that agents provide customers in a cruise sale.

Several agents applauded Olivere’s stand.

“Thank you for upholding the integrity of hardworking, professional cruise consultants everywhere,” Lu Maggiora, of San Francisco-based Travel by Lu, wrote in a post on Olivere’s Facebook page.

Dwain Wall_Dwain Wall, general manager of CruiseOne/Cruises Inc., said he was not an expert on CruiseCompete, but he said business models that focus mainly on price make it harder for many agents.

“It’s not in our best interests for customers to wait for the deal, for somebody to come out with a rebate or a deep discount,” Wall said. “We all make less, and the cruise lines make less and it’s really not good.”

Levinstein said it was a mistake to think of CruiseCompete that way. “We are all about providing the consumer with choices and fair competition in the marketplace, as mandated by ethics and the law,” he said.

“In fact, over 55% of the bookings that are generated by the leads from the site are not thelowest price offered,” Levinstein said.

Follow Tom Stieghorst on Twitter @tstravelweekly.
 
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