Home agents booking more tours and all-inclusives

By Laura Del Rosso

Gran Bahia PrincipeHost travel agencies say home-based agents are increasing sales of land-based packages, all-inclusive resorts and tours because of attractive compensation and much-publicized troubles on cruise ships.

At Nexion, a host agency owned by Travel Leaders Group, agents are "still selling plenty of cruises, but because of the pricing issues and some of the negative consumer media around cruises, some agents who are generalists and were working very hard to bring in first-time cruisers have decided compensation isn’t as high as what they can get from selling [land vacations]," said Jackie Friedman, president.

The growth of land-based vacations is also due to an evolution of home-based agents, many of whom entered the industry by specializing in cruises and then broadened their sales to land-based products as they gained expertise and a client base, she said.

At Nexion, land and cruise sales were “neck and neck” until 2013, when land-based vacations edged out cruise sales for the first time, 21% vs. 20%, Friedman said.

One study shows the trend. According to the National Association of Career Travel Agents (Nacta), the ASTA-owned trade group that represents home-based agents, a 2013 survey of its members showed a slight drop in the percentage of agents who said cruise was their main specialty (from 50% to 49%).

However, the change from 2009 is more dramatic. That year, 57% of agents said cruise was their specialty, compared with 49% last year.

Host agencies say they expect the land sales rise to continue.

At Oasis Travel, a Florida-based host agency, land sales for the first two months of 2013 were up 250% over the first two months of 2012. This year, Oasis is up 127% in the first two months of 2014 over 2013.

Oasis vice president Kelly Bergin said that the continual increase in noncommisionable fees (NCFs) "versus the decrease in commissionable cruise fare has had a serious effect on the bottom line for all agents. This continued dilution in commission has forced agents to push land vacations where they are able to make significantly more money."

Andi McClure-Mysza, president of MT Travel, the host agency division of California-based Montrose Travel, said the trend was more pronounced in 2013.

"Over time, agent compensation has been squeezed in the cruise arena," she said in an email interview. "NCFs and reduction or elimination of commissions on shore excursions, pre/post, air and transfers have all taken their toll. So, this past year, when faced with the negative publicity surrounding various cruise incidents, clients came in asking about different options.

AnnvanLeeuwen"Agents took the opportunity to shift cruisers to land. This tended to impact newer cruisers and the contemporary cruise market more than the upscale lines and their seasoned passengers. These folks were ripe to shift to land and more profitable bookings to agents."

Nacta President Ann van Leeuwen said land-based vacations have become more of a focus for home-based agents because those suppliers include more in the "upfront ticket price, making the sale more attractive for agents," she said.

However, cruise line executives have another view.

“Production by all six of our biggest host agency retailers is up this year, and several of them are up double digits in both passenger sourcing and revenue,” Brian O’Connor, Princess Cruises’ vice president of sales, said in an email interview. “The sales results of these independent travel professionals is showing the exact opposite. Most of them tell us their business is up in the cruise category.”

Joni Rein, Carnival’s vice president of worldwide sales, said in an email, “We have heard that higher commissions from land-based resorts are tempting to some home-based agents. However, without question, cruising is a far better value, and this brings continual business to travel agents, making the lifetime annuity of a cruise a far better investment for them in the long term.”

Vicki Freed, Royal Caribbean International’s senior vice president of sales, trade support and services, said she is aware of the agent dissatisfaction with NCFs, but agents are making a mistake if they shift sales based on small difference in compensation.

"There may be some truth that some all-inclusives pay more, but agents who are in it for the long haul will see they will make more money selling cruises," she said. "Even if on a per-transaction basis you make slightly less, in the long term you’ll come out ahead because cruises deliver the highest level of satisfaction."

She added: "I recognize that agents don’t like the NCFs, but it’s just noise right now, and at the end of the day it has not changed their behavior. They still sell cruises because they recognize that nothing comes close to comparing to a cruise vacation.

"When you look at successful agents if you turn and burn [clients] and only go after the quick sales, it doesn’t work. You want repeat and referral business and to help clients make the right decisions. Then you will have clients for life."

Photo of the Grand Bahia Principe Riviera Maya Resort courtesy of Shutterstock.com 

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