Agents fume as more lines match Carnival's cut


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 commission rates.

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 pay cut.

"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 said.

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 business."


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