Penalizing TA's

CARNIVAL AND ROYAL CARIBBEAN revealed plans to penalize agents who advertise rebated rates and promotions not approved by the cruise lines.

• Carnivalsaid it will cut compensation to retailers that advertise rates and promotions not approved by the line, effective Jan. 1. The pay cuts will be determined on a case-by-case basis. Repeat offenders will be placed on a "do-not-book" list, Carnival said. Carnival said the plan would ensure consistency in its advertised pricing, including on the Internet.

• Royal Caribbean and Celebrity, meanwhile, said the lines will cut co-op support and commissions to agents who advertise non-published or non-contracted rates, starting Aug. 16. Lisa Bauer, Royal Caribbean's senior vice president of sales, said "We really feel that rebating is damaging our distribution system."

Will Hal join in on this? Any comments?

Well seeing how Carnival owns HAL it would seem to me the answer to your question is yes. However, this is a good thing and will kill off false advertizing by online TAs to suck in people to do business with them just to find the charges added back in someplace else in the booking. I say "Bravo" to the cruise lines for putting their foot down on false ads!

Carnival has been trying to "level the playing field" for several years now. Being a travel agent, I can tell you that what they suggest to do will never work.

Many agents that discount cruises (rebate) do not advertise their prices. We are not allowed to advertise prices on this (CC) board. We are allowed to advertise pricing on the Yahoo board and yet many of us chose not to do so. We may post that we have great pricing for a particular sailing but seldom do we offer pricing. We provide an email address and then email the pricing, which is perfectly legal within the framework of our cruise line contracts.

I find it interesting that Carnival will review the 'rebaters' on a case by case basis.

The dot.com wholesalers are here to stay. No cruise line can afford to turn them away. However agent friendly a cruise line may be, their first and foremost goal is to fill their ships.

Every business must evolve to prosper within a changing market place. Right now the cruise business is considered a "buyers market". I suspect that the situation will remain the same for a while. Also many of us do not sell all of the cruise lines. Our office only works with five cruise lines and the ones that you mention are not among them.

I read on one of these boards that since Carnival owns Princess,Holland,Seabourn,Cunard,Costa and Windstar, that CCl will be implementing policy across all the lines. Its about time all this misleading and low balling are curtailed. I had some friends recently return fron a Carnival cruise,they had two couples as dinner table mates,who booked online with no TA imput,the two couples claimed they knew nothing about Formal nights,sail and sign requirements and several other issues. I'll bet this is one reason CCL and RCI are changing there policies,people who book online from some sites receive no support or ability to ask questions. So CCL and RCI are now providing support to clients,when the online sites are being paid to answer questions and provide support.

The on line agency that I use has always answered questions and provided support. Our last booking they also obtained a $300 on board credit in addition to a significant discount from the AAA price.

General Max

This seems to mimic a recent news report that airlines will not recognize rates from travel sites that offer lower fares than the airline posts. I don't recall the exact details, but it was a very similar release.

However, I'd imagine airlines which change fares daily, and even hourly at night, would have a difficult time tracking/comparing the online offers. It'd be much easier for cruise lines to do.

I think that the cruise lines have been giving extra discounts to big producers making it easier for them to give back to their customers. I think that the cruise lines don't like having them show the lowball numbers because it opens up negotiating from the customers driving prices down. This could mean that they are no longer rewarding big producers who advertise lower prices.

This is really no different than Starwood Hotels saying that they would no longer use Priceline, Expedia, et al to fill their hotel rooms. They are now controlling just how low the price of one of their hotel rooms will be.

I have always understood that a low price means less service. Sometimes it is worth it, sometimes it is not. We still do a lot of business with our brick and mortar travel agent of 25 years, but have strayed to a discount service to save $300. And we do book a lot of air trips directly with the airline via the Internet, since our travel agent does not make money on these transactions. Ditto on hotels. We save a bundle that way.

I don't see why it matters that much. The cruise lines have an approved price. They don't let TAs send them less than that to pay for the passenger's fare. But why does it matter to the lines if the TA is willing to rebate a bit of their commission to me to get my business? We're not talking huge sums of money in these commissions (on an individual cruise basis.) If I can stay in business selling widgets for a dime less than the MSRP, why should the manufacturer care?

I totally agree with you jhannah. I've read the Cruise News artical on this several times and it doesn't make any sense.. The cruise line is still going to get $xxx.xx in their pocket no matter who sells the ticket at what price...Go figure!... Bombero

I don't see why it matters that much. The cruise lines have an approved price. They don't let TAs send them less than that to pay for the passenger's fare. But why does it matter to the lines if the TA is willing to rebate a bit of their commission to me to get my business? We're not talking huge sums of money in these commissions (on an individual cruise basis.) If I can stay in business selling widgets for a dime less than the MSRP, why should the manufacturer care?

You touched on a good point when you mentioned that certain agencies make a higher commission and can therefore rebate more to the client. I know that Holland America has amended the commissions of some of the dot.com agencies because their pricing was published.

Normally, if I see a rate published on a cruise that is lower than what I can get for a client, I can call Holland America and ask them to match the rate. I smell a rat however when the other agent can sell the cabin for less than my net/net fare.

It that case, one of two things has happened. Either the other agency makes a higher commission than I do or the agency is being given lower cruise rates. I 'm not concerned about the agency making a higher commission. I am concerned if the agency has lower (or wholesale) rates that I cannot receive for my clients.

Commissions are usually based on agency production. I would expect to make a low commission on Carnival because I don't sell them. My Holland America Commission would be higher because a majority of my business is with that line.

When you are looking for special pricing, always deal with an agency that does a lot of business with the cruise line you want.

The end result is that clients are going to look for the best value for their money. That's what they are supposed to do. We in the agent community are supposed to help them have the best cruise at the best value.

I wonder if this has anything to do with people getting promos after booking their cruise by finding out about deals on boards like these??? For example, we booked our cruise on-line and got a very low rate (7 day, Ooster, SS 995 pp). Then I heard about certain promos like the $50 shipboard credits and I contacted the on-line agency and they got me the credit. I wonder if cruise lines are trying to close the gap on situations like this where they get hit twice - first by offering a cheap on-line rate and then applying a promo that is usually used for more expensive bookings. I know it's a little conspiracy sounding but it makes sense. A cruise line can offer bargain basement rates or retail rates with promos, but not both. They don't seem to have good control over how the promos are awarded and I think they need to get control of that. Just a thought.

 

Many agents that discount cruises (rebate) do not advertise their prices. We are not allowed to advertise prices on this (CC) board. We are allowed to advertise pricing on the Yahoo board and yet many of us chose not to do so.

 

I know I am "off subject", but I lost my link to Yahoo Board....will you share the addy please? I used to read it and now cannot find it. Thank you.

Well seeing how Carnival owns HAL it would seem to me the answer to your question is yes. However, this is a good thing and will kill off false advertizing by online TAs to suck in people to do business with them just to find the charges added back in someplace else in the booking. I say "Bravo" to the cruise lines for putting their foot down on false ads!

This is not about "false ads."..The cruise lines are trying to stop any advertising of prices that are lower than their suggested prices...I say "Boo" to any cruise line that is attempting to stop advertising of information that is helpful to the consumer.

Is this what is called price fixing?

Sure sounds like it.

I am sorry, but I don't need TA to tell me about formal nights and such.

I CAN READ cruise documents. I usually use TA when I do something for the first time ( All Inclusive, cruise etc) but after that I am pretty familiar with what I am doing and don't need any advise!

I'd rather save lots of $ by booking with on-line agencies...Additional charges? I usually read the rules before I book anything. ;) I always was able to find much better deals than cruise lines have.

If I really worry about getting fleeced I choose on-line agency that provides in call options.

I don't feel cruise lines will afford this move as most of the people like to search and find better deals. And how are cruise lines different from other resorts? All types of vacations sold on-line.:confused:

I took a look at the Celebrity board. They have about 4 different threads going on this subject. There are some interesting views.

Thanks Roadwork, for the info on the X board. It seems like some of these TA's have sent emails to clients informing them of the changes, and some are coming up with plans to work around it. Most seem to think that the TA can still have lower prices but cannot advertise it. :mad:

Navy Chief,

I don't believe it has anything to do with false advertising. The majority do not do this.

:)

It really sounds like price fixing to me as well.

Will be curious to see what happens over the next few months.

:)

I found this on the X board. :mad:

Additional Information from Best Price Cruises

I understand the written policy is unclear and the threads and revealing much confusion. The Agent community is also confused as a whole and we all require additional information from RCL/CXC

As Executive Director of Best Price Cruises, I have personally spoken to many SENIOR executives at the cruise line as well as attended a previously scheduled agent meeting in Ft. Lauderdale yesterday. The policy is that NO REBATING of any kind wil be allowed beginning Monday August 16th, including by email & telephone.

The following two written statements are just the beginning of future policy memorandums:

1. What about cash back offers or upgrades, or if any agency wants to use

their commission for a value add and not lower their rate?

Only promotions that are driven by RCL are permitted to be advertised.

Agencies using commission to fund other offers will be in violation of our

policy. (other than GAP) Note: GAP relates to selling of group space.

2. What about rebating in the calls centers and over the phone?

We will monitor agencies and will not permit agencies to promote, "Call us

for lower Celebrity or Royal Caribbean rates, or specific sailing's, or

specific categories." We will do mystery calls and police this practice

Note: this was clarified further to say that NO rebating will be allowed. (Carnival's new policy DOES allow "secret" rebating between agent & consumer - RCL/CXC does NOT)

A Thrid Policy clarification was the focus of yesterdays discussion of this topic:

It says: "Added-value must not represent a hard dollar value"

A the Q & A that followed, led by senior RCI executives including Richard Fain, CEO, (there were over 100 agents present) the following was considered "hard dollars"

1. Shipboard credit offers by Agents

2. Cash Rebates

3. Dollars off or Agency dollars that are invoicing or payment credits

Other items are in process of being determined & clarified. I believe we will all have additional information in the coming week.

To conclude, Best Price Cruises is not misleading you. We have over 200,000 email list members and felt it our responsibility to inform our customers of the appropiate information in a timely nature.

We do not normally review or participate in these boards, we have however decided to respond in an effort to assist everyone with a further clarification of a confusing issue that we believe requires additional written policy from RCL/CXC.

Regards,

Ron Russo

Executive Director