Johanna Jainchill
Johanna Jainchill

Insight logoCruiseOne and Cruises Inc. last week launched a land travel division, the second such decision by major cruise-only retailers in the last year.

Cruise Holidays did the same thing last October, citing both the need to be a more complete travel agency and the comparatively low return on selling cruises.

"It's not that we're giving up on cruising," Roger Block, president of the Travel Franchise Group, parent company of Cruise Holidays, said at the time. "The reality is, when you look at the economics of selling a cruise today compared to what it was seven or 10 years ago, the amount of dollars the agent puts in their pocket, even though the commission rate has remained identical, is literally half on the same-price cruise to the consumer."

CruiseOne and Cruises Inc., both part of World Travel Holdings, licensed more than 1,000 of its franchise owners and independent agents to sell land travel, and partnered with ten preferred suppliers, including Gogo Worldwide Vacations, Sandals Resorts, Trafalgar and Travel Impressions.

"We're seeing this happen more often with cruise-only agencies," Sallie Rawlings, senior director of corporate communications for American Express Vacations and Travel Impressions, said in an email.

"From what I understand, cruises have become less profitable to travel agents due to reduced pricing and an increase of non-commissionable items," Rawlings said. "Commissions have remained higher on land-based vacations, including additional commission opportunities for add-on components such as onsite tours, which are not part of the base package vacation."

The dilemma between agents and cruise lines over commissions heated up this year as cruises prices plummeted.

The cruise lines have argued that commissions would be better if the agents could sell cruises at higher prices, while agents have implored the cruise lines to eliminate the NCFs.

One agent offered another angle.

"The ultimate idiocy of all this is that were it not for cruise sellers who prostitute the business and rebate 5% to 11% of their commission on a booking, we would not have this problem," said the former cruise-only seller, who has expanded into land-based as well.

"Agency owners didn't learn from the example set by the airlines when agencies were rebating air commissions, or else they were too stupid to realize what was going on," the retailer added. "When cruise sellers rebate heavily, they scream at the cruise lines 'You're paying us too much money' so loudly that protestations of high NCFs, etc., cannot be heard."

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