Interesting e-mail from my TA...

[ekerr19]

Just got a quote on my folks Anniversary cruise on Celebrity next April (thanks to all who posted on that thread - Mom is thrilled :) ) along with the quote came a bit of interesting information I'd not seen before.

This according to my TA -

"You may not have heard, but as of last Friday travel agencies are no longer allowed to discount any RCI product (Carnival is not far behind).

If a TA is caught discounting or rebating they will loose any commission and the capability to sell their (RCI) products. Also, RCI has stopped providing any shipboard credits as gifts. I do not know what our agency is going to do as added benefits for our clients - I know we will have gifts, but do not know what they are, as of yet. The world of cruising is changing..."

(edited by me - for brevity)

[jhannah]

Yes, this was the topic of much discussion last week or so. Here's the link:
http://boards.cruisecritic.com/showthread.php?t=67064&highlight=commission

[ekerr19]

Yes, this was the topic of much discussion last week or so. Here's the link:
http://boards.cruisecritic.com/showthread.php?t=67064&highlight=commission
Jim,

Thanks, I must have missed it - I should have known it wouldn't get past the CC bunch! :)

They sure keep me in "the know" - unfortunately, if I miss a few days of checking in - I'm behind the times. :D

[Krazy Kruizers]

Shipboard credit as gifts - hmmmm!

Hope that doesn't mean that in the near future, shipboard credits offered through promos will be stopped.

[jazzsea]

There are many discussions about this topic in our "trade" publications. Many of us in the cruise biz are trying to figure what the goal of the cruise lines really is.

We believe that the real motive is to reduce commissions paid to travel agents, just as the airlines did a few years ago.

It will take quite a while for the cruise lines to improve their websites to handle the volume of direct bookings that they would like to have. In the mean time the TA market is still healthy. IMO the number of stand alone agencies will continue to decline. Those of us that are "home based" and specialize in cruises will be fine for a few more years.

As the population in general becomes more computer literate, the cruise line direct bookings will increase. At that point the cruise line will be able to control the discount that you the passenger receive and also control the "perks" that they will give you. Brand loyalty will be a big factor just as it is with the airlines with their frequent flyer miles rewards.

The media has already been telling the marketplace that the travel agency business is dying. Very few new agents are entering the business. Who can blame them. The benefits are lousy and the TA "perks" are a thing of the past.

I do think that some agents will be able to get around the "rebating" rules.
Don't be surprised if your agent asks you to pay your final payment by personal check. Or, maybe he/she will say they will send you the rebated amount after they receive their commission from the cruise line.

One agent friend of mine writes a check to her cruise client the day that the client returns from a cruise. Another agent has a point system good for dollars off a future cruise deposit.

Be prepared to pay by check instead of credit card.

My really good TA buddy (an owner/manager like me) believes that the real effort behind the "level playing field" is to encourage more cash payments and less credit cards. Cruise lines pay a percent to a percent and a half for the cost of your credit card transaction.

Many ideas from all of us but we won't know for a few years what the real motive is or was. Although I could retire in five years I had hoped to work for at least nine more years. Could be I will retire sooner.

It seems that technology changes my work place every month or so. All of us have to be ready to make personal changes just to keep up.

[ocngypz]

It'll be a snowy day in he** before I'd write a personal check to cover my final cruise payment.. I don't care how large of an agency it is or how long they've been in business. FWIW the AAA agencies I've dealt with in the past do not accept personal checks.

Of course, the cruiselines would like pax to book directly. However, there are enormous capital expenditures required to handle the bookings, not to mention the manpower. What kind of volume would be necessary to show a ROI on these capital and payroll expenditures? What happens if bookings fall off????

Unlike flights.. which are merely transportation to and fro.... cruises are still an emotional purchase with many variables......and that requires a competent individual on the other end of the telephone/computer. These inside sales people at the cruiselines... are paid $8-9.00 an hour.. slightly more than counter people at a Dunkin Donuts. Whether it be a simple 7 night Caribbean cruise in an inside cabin... or a 15 night South American cruise in a Penthouse suite, I will continue to book with a real live agent..... with 10+ years experience.. and one who has traveled and cruised extensively around the globe... and one who has a vested interest in retaining my business through excellent customer service. It's called relationship selling.......and that does not happen with a mere inbound call center.

Cruises are not a necessitity.... they are a luxury.... and whether the cruiselines like it or not... the decision to purchase is price driven. With the no rebating, we'll see more space allotments in groups... more cruises appearing to be sold out when they aren't really (just inventory held by groups)....the cruiselines are going to have to revisit their group policies.. and inventory control will need to pay closer attention to these allotments.

Ships will still sail full...it will be the promotional pricing as set by the cruiselines, rather than agent's rebating their commissions which will fill the ships.


If you've ever lived in Europe... and booked cruise vacations......this is nothing new. There's no agent rebating...really doesn't matter who you booked with... the pricing is all the same.........if bookings aren't as anticipated, the cruiseline drops the price.

Saturn cars is a good analogy. Here's the car... here's the price. It's a business plan which has worked well for them.

What I do think is going to happen with ta's... is that the savvy ones who know their product inside and out and can establish a relationship with their clients will survive. Those who have entered the business for the so-called "perks" (few and far between btw) and have sold strictly on their discounting to move volume, will cease to exist.

[elmorejj]

Well it seems like they have us over a barrel as usual. I think many pax will wait longer to book, to see if the prices go down...jean :cool:

[sail7seas]

JazzSea.....I need to look at my recent issues of Travel Trade as I didn't notice much conversation about this. Of course, we never cruise RCI so I could well have skipped over it.


I would not deal with a TA who asked for me to pay with a personal check. Not going to happen!!! All the obvious reasons......as well as the fact we like our $300 Am Ex Platinum shipboard credit.

I think when you write such a statement as "Be prepared to pay by personal check" that you should indicate that is your personal opinion. That is the projection you make....or your agency, or your boss.......It is not a widely held opinion YET.

[lipoppop]

Carol, how do you think this will affect the large volumn agencies that take a block of cabins for a cruise and get a reduction from HAL which they pass in part onto their customers?

[ekerr19]

I must be missing something here... why would paying by personal check be beneficial to a TA?

[flatwallet]

The payment by personal check could be an invitation to disaster. You lose the bargaining power a credit card has in the event a need arises to dispute a charge.

[iluvcruzin]

Be prepared to pay by check instead of credit card.
NEVER is it a good idea to pay by check or cash. The risks are WAY to high for something wrong to occur. As it's been mention one would have a hard time disputing a claim if something goes wrong. Too often people are scammed out of their money from agencies going belly up or being sold out.

If you decide to go this route Carol, be prepared to lose a great deal of business. It's a "credit card/ electronic check" society now. Going backwards is asking for trouble IMHO.

As far as the analogy of the small pecentage a credit card charges... I disagree with that thinking. The cruiseline gets their money faster and the amount of charge is so small it isn't that big of an impact.

[gliles]

We believe that the real motive is to reduce commissions paid to travel agents, just as the airlines did a few years ago.

More like eliminate not to mention the GDS fee that all agencies will likely be paying in the future if all airlines follow NW.

[jhannah]

I must be missing something here... why would paying by personal check be beneficial to a TA?Credit card companies charge from 1% to 2.5% to the merchants for the "privilege" of accepting their credit card. Paying by check saves the TA this fee. That's how the card companies make money when many of us pay our credit card bills in full every month.

[jazzsea]

Going back to my earlier post.....

I do not recommend paying by personal check. I have clients that do it and I always warn them that it is not a good idea. I'm not going to run off with their money but a credit card always gives them more options.

Why does paying by check eliminate the problem with rebating? When a client pays by check, the agency can pay the cruise line by check and can pay the net amount due rather than the gross amount. There is no way for the cruise line to know how much (or little) the agency charged the client.

As I said, many of us in the business are discussing the ramifications of the new "level playing field".

In a perfect world, cruises would be priced fairly and discounts would apply to Mariners. And TAs would make a decent living.

I don't believe that the new rules will apply to the big agencies. AAA will still get top commissions as will Virtuoso agencies. Those of us that belong to Vacation.com will continue to be offered competitive rates.

What we think will happen is just conjecture. Many small agencies will not be able to compete unless they find a niche market or some specialty that brings business to them.

I don't want to imply that all of you will have to change the way you book your cruises. I'm only saying that times are changing and your TA may be looking for new ways to help you find better prices.

One thing that you might not have considered is that people who get great discounts talk about their pricing while aboard ship. Imagine being at the dinner table and hearing your tablemates say that their stateroom cost $300 less per person than yours. Would you go to the front desk and inquire as to why the pricing was different? Sure you would. Imagine the drain on the onboard staff.....

[jazzsea]

Agencies will still book groups and will be able to pass the group savings and contract rates on to their clients. Our agency does ONLY group bookings. We seldom, if ever, take individual clients. Groups are our specialty. I suspect that HAL will continue to offer us good pricing on twelve to fifteen groups a year. Sames goes for Windstar. Those group bookings keep us busy 12 months of the year.

We do not promote other cruise lines unless they come to us with a heck of a price. This has happened a few times. With Radisson and Oceania and Orient Lines. Mostly though, we stick with Holland America and Windstar. We are currently looking at a couple of programs with MSC Italian.

We are a little company with a handfull of employees that specializes in Dixieland Jazz Band cruises. I am the owner and the manager and I stay as far away from the rebating issue as I can.

I suspect that this subject will be discussed heavily at the Travel Trade Leisure Travel Conference & Winter Cruise-A-Thon held in Ft. Lauderdale December 2 - 5.

[sail7seas]

How many folks go to the flight attendants on an airplane and ask why they paid more for their ticket than the person seated beside them? Not any that I have ever heard of.

I cannot imagine a parade of folks going to the front office to ask that question. IF some want an answer, I think most would realize the prices are not set aboard the ship....they are set in Seattle and would address their question there.

JMHO......

[dakrewser]

How many folks go to the flight attendants on an airplane and ask why they paid more for their ticket than the person seated beside them? Not any that I have ever heard of.

I cannot imagine a parade of folks going to the front office to ask that question. IF some want an answer, I think most would realize the prices are not set aboard the ship....they are set in Seattle and would address their question there.
You've a much higher opinion of the hoi polloi's logic facilities than I do, S7S. Have you forgotten the story of the Carnival "riot" because the ship went to Bermuda? The folks who argue about the tipping policy with the purser's staff? The folks who berate the steward because the lobster tail is too small? Its so much easier to simply yell at a person who's in front of you right now than to actually have to figure how the right person to lodge a complaint with....

-dave

[sail7seas]

Sadly, I must stand corrected.

Me thinks you are probably correct!!! Unfortunate as that may be.

(I will however remove the reference to hoi polloi as to my agreement with you.)

[LizB1]

It seems to me I remember a time when HAL would ONLY accept an Agency check which meant that the client HAD to pay in cash...either by check or in cash to the TA. The Line did not accept credit cards at that time. Believe this was back in the 70's and 80's and perhaps very early 90's.

jazsea...you have been in the business long enough to remember I believe.

[sail7seas]

Back to the early days when credit cards were just becoming available to most of us. I don't recall Visa or Mastercard being something I used or thought of before the early seventies. Of course, that would probably depend upon one's age??? We were newly married and beginning our 'adult life'.

[dfwplunk]

JazzSea.....I need to look at my recent issues of Travel Trade as I didn't notice much conversation about this. Of course, we never cruise RCI so I could well have skipped over it.


I would not deal with a TA who asked for me to pay with a personal check. Not going to happen!!! All the obvious reasons......as well as the fact we like our $300 Am Ex Platinum shipboard credit.

I think when you write such a statement as "Be prepared to pay by personal check" that you should indicate that is your personal opinion. That is the projection you make....or your agency, or your boss.......It is not a widely held opinion YET.

amex offers a shipboard credit?? this is our first cruise (on RCCL) and we used our amex to pay for it. detals??

[sail7seas]

It only applies to the AmEx Platinum Card.....the one you pay something like $380 per year membership.

[Krazy Kruizers]

Paying by check - never happen here. Love all the extras we get with credit card payments on cruises.

Right after 9/11 many travel agencies in this area closed and some people didn't get their money back - those that paid by check - while those that paid by credit card were lucky.

[Esme]

It seems to me I remember a time when HAL would ONLY accept an Agency check which meant that the client HAD to pay in cash...either by check or in cash to the TA. The Line did not accept credit cards at that time. Believe this was back in the 70's and 80's and perhaps very early 90's.

jazsea...you have been in the business long enough to remember I believe.

Liz - I remember those days and we HAD to pay by personal cheque or cash to the Agency. Do you also remember when we had to pay the bill the last day in either cash or travellers cheques because HAL did not accept personal cheques or credit cards. I think we did this either the day of disembarkation or night before we got off the ship - talk about long line-ups. :p

[HeatherInFlorida]

Back to the early days when credit cards were just becoming available to most of us. I don't recall Visa or Mastercard being something I used or thought of before the early seventies. Of course, that would probably depend upon one's age??? We were newly married and beginning our 'adult life'.Right, Sail, there were no bank credit cards back then. I worked for what was then First National City Bank (now Citibank) in New York in the division that came out with the very first bank card called the "Everything Card". This later became MasterCard and Visa came much later. It all started sometime in the early 70's. My memories blurs:o . Prior to that there were only store credit cards.

There is no way the cruiselines will be going to a personal check/cash basis. Things are going the other way around. Personal checks are accepted by less and less businesses. So that is simply not going to happen. We are in a world of direct debit and credit and it's here to stay. How the TAs and cruiselines will handle all this is something I know nothing about and will not begin to surmise. But we won't be paying by personal check, that is certain.

[dfwplunk]

It only applies to the AmEx Platinum Card.....the one you pay something like $380 per year membership.

oh, we only have the gold card, but sounds like the ship credit would more than pay for the additional fee to have the platinum card.......if we decide to take another cruise.

thanks for the info!

[HeatherInFlorida]

A TA just gave me the opportunity to read some of the actual policy put forth by RCCL/Celebrity and I have to tell you it chills my bones.

Afraid those of us depending on discounts in order to cruise are on our way down a dark dismal alley. So a lot of you in a better financial position than we are just may be sailing on some pretty empty boats.

It's a sad sad day for moi:( .

[jazzsea]

Do not be too concerned. Only Royal Caribbean and Celebrity are asking agents to NEVER offer lower prices. Carnival and other Carnival Corporation cruise lines are only asking that we not advertise rates lower than those that are published or contracted by the cruise lines.

Also, I remember the days of only making final payments to cruise lines by check. More often than not we would transfer funds by wire from our bank. The bookkeeping was a nightmare. We were also hand writing airline tickets, rail tickets and bus tickets. And the airlines weren't regulated. Those were the days. 1977.

[HeatherInFlorida]

Do not be too concerned. Only Royal Caribbean and Celebrity are asking agents to NEVER offer lower prices. Carnival and other Carnival Corporation cruise lines are only asking that we not advertise rates lower than those that are published or contracted by the cruise lines.

Also, I remember the days of only making final payments to cruise lines by check. More often than not we would transfer funds by wire from our bank. The bookkeeping was a nightmare. We were also hand writing airline tickets, rail tickets and bus tickets. And the airlines weren't regulated. Those were the days. 1977.
Yes, I well remember!

As to my concern, I guess it's because I figure one line starts it and the others follow. Either that or they'll see what happens with RCI first. They may be biting off more than they can chew if they plan to do all their booking in house. As you say, not the same as booking a simple flight on an airline.

Time will tell as it always does.

[LizB1]

Sure do remember those days, Esme, when we paid everything in cash aboard the ships. Also, when credit cards were being used by many in the 80's HAL still only would take an Agency check or cash in payment. In those days you could also cancel and get your money back without insurance!!

[ekerr19]

oh, we only have the gold card, but sounds like the ship credit would more than pay for the additional fee to have the platinum card.......if we decide to take another cruise.

thanks for the info!
There are other perks as well. If you look at Amex's website it will detail them. I have a Corporate Platinum Amex, the annual fee is ridiculously high, but if use it for cruising more than once a year it pays for itself. Also, the there are certain other travel related benefits we take advantage of periodically.

[ekerr19]

Going back to my earlier post.....

I don't believe that the new rules will apply to the big agencies. AAA will still get top commissions as will Virtuoso agencies. Those of us that belong to Vacation.com will continue to be offered competitive rates.
Our TA is a Virtuoso agency - my TA seems to think they will feel the affects like everyone else - I hope not, but travel IS changing and IMO, full service agencies will be a thing of the past soon enough - unfortunately. We always use a full service TA for significant travel purchases.

[Esme]

Sure do remember those days, Esme, when we paid everything in cash aboard the ships. Also, when credit cards were being used by many in the 80's HAL still only would take an Agency check or cash in payment. In those days you could also cancel and get your money back without insurance!!

That's right - I forgot that we never took Insurance in those days. Wouldn't leave home without it anymore. Has come in handy a couple of times.

[Roadwork]

I have read some of the posts on this subject on other boards. Everything seems up in the air at the moment but one thing I did read was that RCI was not allowing TA's to give clients on board credit. RCI's policy appears to be much strickter than CCL's.

[sail7seas]

oh, we only have the gold card, but sounds like the ship credit would more than pay for the additional fee to have the platinum card.......if we decide to take another cruise.

thanks for the info!


Yes....if one takes advantage of just a few of the features of the AmEx Platinum Card it is well worth the annual fee.

We no longer write any travel insurance for cruises. The AmEx Platinum card covers for emergency medivac from anywhere in the world. Our concern is not that we might lost the price of the cruise. When we consider how much we have saved by not writing insurance on well over 35 cruises in an "S", suite, even if, heaven forbid, we need to cancel a cruise at this point, we would still be way ahead financially. We are willing to self insure the price of the cruise and 'take the hit' if necessary. Our air tickets are always fully refundable.

Insurance would cost at least $450 and upward depending upon the price of the cruise..........Thirty five (plus) cruises x $450 = $15,750. Insurance premiums we did not pay.

I would feel very differently if we faced the possibility of a medical evacuation with no coverage. Then, we would assuredly be taking insurance.

[HeatherInFlorida]

I have read some of the posts on this subject on other boards. Everything seems up in the air at the moment but one thing I did read was that RCI was not allowing TA's to give clients on board credit. RCI's policy appears to be much strickter than CCL's.I have been advised by my TA that is is aok for me to post this here as it may well clear up any questions we all may have. This is from the actual fax or email they got. I'm hoping the link to the website will work because it takes you to a lot of questions and answers that will be interesting to everyone. Even though this is not currently HAL related, it could be in the future so I think it bears our interest:

and Celebrity Cruises® Announce Policy Change
Royal Caribbean and Celebrity Cruises appreciates the praise and support from our travel agent partners on the recently announced new Rebate Policy. To ensure a full understanding and compliance with the new policy, the following procedures are to be adhered to when marketing, advertising and selling Royal Caribbean or Celebrity cruises or cruisetours.

No agencies can advertise, market or sell below our published or contracted pricing programs. Any rebating or incentive programs that can be converted to cash or currency, (e.g., a $50 credit card certificate), are not permitted. Any incentives that are used to promote either of our brands, such as a department store or Home Depot gift card, must be pre-approved by either a Royal Caribbean or Celebrity Sales Director. Agencies in violation of these policies will be subject to a reduction in the co-op support provided by the cruise lines and other effects such as a reduction in the base commission paid on all future cruises booked by that agency. The marketing, advertising and selling mediums shall include, but not be limited to, TV, radio, phone, newspaper, catalogs, direct mail, call centers, and all on-line vehicles such as search engines, websites, e-mail, pop-ups, and banners. Our existing marketing policies with respect to group bookings will remain, for the time being, unchanged.

Royal Caribbean and Celebrity Cruises new Rebate Policy was effective as of Monday, August 16th, 2004. The 5-day implementation period to ensure all agencies are within compliance ends at end of day Friday, August 20th, 2004.

Frequently Asked Questions (http://www.creative.rccl.com/sales/dual/General_Info/FAQ_external.pdf) regarding our Rebate Policy

[ekerr19]

Heather-

Thank you for posting this - this is what my TA was referring to when she informed me of our booking for my parents on Celebrity. :)

[HeatherInFlorida]

Yes, I thought it was. And were you able to link to the FAQ? Because there's some really good info at that site.