Ahead of opening the books for its first ship, the Scarlet Lady, Virgin Voyages revealed a commission structure and other travel advisor-focused policies that, like everything else at a brand spearheaded by iconoclast Richard Branson, will be different than industry norms. Vice president of sales and business development Stacy Shaw jumped to Virgin Cruises (now Virgin Voyages) in 2017 after 11 years with Royal Caribbean Cruises Ltd. She spoke with cruise editor Tom Stieghorst about Virgin's commission strategy.
Q: Typically, agents get rewarded for additional sales by seeing their commission rates move up. Virgin will pay a flat 10% commission. Why?
A: You probably have noticed that nothing is really typical with us. We listened to what travel advisors said they wanted. There were certain things they said they wanted, and that's what we have built our program and our sales strategy on.
The things they said mattered to them were a simple commission structure, which includes no NCFs [noncommissionable fares].
The second most important thing to them was earning on everything. They already are doing this work. They're selling things in addition to just the base cruise fare because they want to provide great service to their client, and in many-to-most cases they're not being paid for those things.
And then reimagined, flexible policies. That was what we looked at when we decided to put this together.
Q: Why are you paying commission on taxes and fees? Most cruise lines say they have nothing to do with the cruise sale.
A: One of our guiding principles is: keep it simple. We want advisors to be able to look at the bottom line and know what they've earned without having to remove or deduct. Again, this is one of those things where we don't look to the rest of the industry for guidance on what we want to do.
Q: You will pay annual overrides, starting at 2% for voyage sales of $1 million or more. Does that apply at the agent level or the agency level?
A: Red Hot Bonus is paid to an agency or an affiliated organization. I don't think that's different than anybody else. We're not paying individual people, we're paying a company who we partner with based on the performance of all of their employees or independent consultants.
Q: Will the Red Hot Bonus be calculated on cruise fares or on all products sold?
A: To reach the threshold, everything counts. Voyage fare, all of the prevoyage sales like shore excursions and onboard credits. All of that counts toward the threshold. But the Red Hot Bonus is paid as a percentage of voyage fare.
Q: Can you provide an example?
A: If we make an assumption that 15% of an advisor's total sales come from nonticket fare: If they hit $1 million in total sales, all of those things considered, if we apply 15% that means $850,000 in voyage fare. So when it is time to calculate the Red Hot Bonus ... since they hit $1 million, we would say 2% multiplied by $850,000, and we would do an additional payout of $17,000.
Q: Will there be a lower commission rate paid on items such as airfares, hotels, excursions, spa and treatments?
A: It's 10% across the board on everything, with nothing deducted or set aside or excluded. When we open up in mid-February we won't have air and hotel products, but we will have them very soon after.
Q: Under what circumstances can an agent earn commission on onboard credits?
A: We are introducing something that I think is an industry first with our commissionable Sailor Loot product offering. This idea came to us from a travel partner, Anthony Hamawy of Cruise.com. Advisors can sell a commissionable onboard credit to their customer, which enables the customer to pay it over time, and then when they get onboard they don't have to worry about it, it's already been funded.