MIAMI -- Shock turned to anger as agents saw Holland America Line
and Windstar Cruises fall in line with Carnival Cruise Lines'
reduction of air commissions from 10% to 5%.
While the industry waited to see if other cruise lines would
match the cut, some agencies took action of their own.
Luxury Vacation Mall of Mission Viego, Calif., ordered its 227
cruise specialists to divert sales to Royal Caribbean, Norwegian
Cruise Line, Princess, Star Clipper and other lines that have held
The company also
canceled its co-op advertising agreements, saying they were based
on the former commission rates.
Bill Stephen, chief executive officer, said Luxury Vacation Mall
received phone calls from at least 40 other agencies that are
making the same decisions.
Many retailers expressed the opinion that agents have more power
in dealing with the cruise lines than with the airlines.
One agency manager said, on condition of anonymity, "This is a
different situation than the airlines, especially considering how
many ships Carnival is building and how much help it is going to
need from agencies."
One owner of a cruise-only agency, who also requested anonymity,
said, "If Royal Caribbean came out and said, 'We aren't going to
back this,' I think they could get a real advantage out of it."
Colin Veitch, president and chief executive officer at Norwegian
Cruise Line, said the Miami-based company will not match Carnival's
"We've built travel agents into our cost structure," said
Veitch. "We consider travel agents a viable distribution system and
one that works. There are no changes planned."
Carnival president Bob Dickinson said the cut, effective Sept.
10, "was in the works before the airlines made their announcement.
We were going to do it anyway," he said. "This is the time we
finalize our pricing for next year."
Dickinson added the move was necessary because Carnival was
losing air/sea bookings and needed to bring its commissions in line
with the airlines.
ASTA president Richard Copland took issue with both the style
and the substance of the move, noting that there was no notice to
agents, only a press release with implementation set for a future
date (Sept. 10). "This could be interpreted as signaling," he
Brett Solon, manager of Pavlus Travel in Albuquerque, N.M., said
it "will make a big difference in income, as it always does. I
don't see it being passed on to the consumer."
As another agent put it: "It isn't about air commission cuts.
It's about the fundamental issue of being able to stay in