Oh No! Not the Discount Question Again..

[Tikibird]

I am wondering now if it is better to book the 2 day repo cruise Brisbane-Sydney either on Princess.com or a USA based online TA now or wait to see if the price drops in Jan 2012. The cruise appears to be wide open booking wise and a similar itinerary in May is being offered at $145pp past passenger but the one I want in March is $195pp no past passenger discount offered. For me to give up the convenience of booking direct with Princess I would either want a decent amount of OBC or some perk like frequent flier miles.

 

My concern is that lack of competition from TAs might put the price up.

[Pam in CA]

You're always taking a chance waiting for a price drop because often, it doesn't happen. As a matter of fact, sometimes, the price goes up. Hindsight is perfect so whether you book now or wait, you'll either make the right choice or regret it. :(

[Beopthtuh]

I am a TA in the UK and this has been in place for a few months. If we discount Princess, P&O or Cunard we will be breaking our commercial agreement with these cruise lines and they can stop us from selling them.

 

They actually reduced our commision from 15% to 5 %, so theres no way we can afford to discount even if we wanted to. As any discount we give comes directly from our commission.

 

Customers in the UK will get the same price from Princess Direct and High Street TA's. The only exception to this is if a TA has Princess Group allocation, then you may get some OBC.

 

:D

the usa is about to feel the affect of princess price increases like us £400 on the same cruise itinery 8 months apart ,

will the power of the masses change their mind if folks stop booking ,NOPE !!!!

because some us ta,s will bend like the visa card to get sales

[caribill]

I am wondering now if it is better to book the 2 day repo cruise Brisbane-Sydney either on Princess.com or a USA based online TA now or wait to see if the price drops in Jan 2012. The cruise appears to be wide open booking wise and a similar itinerary in May is being offered at $145pp past passenger but the one I want in March is $195pp no past passenger discount offered. For me to give up the convenience of booking direct with Princess I would either want a decent amount of OBC or some perk like frequent flier miles.

 

 

If the price is $195, that does include some taxes and port fees. Let's assume the commissionable amount is $170. If the commission is 15% (and some report it is lower), the commission to the TA would be $25.50.

 

So how much of this $25.50 commission do you want the TA to give to you that you would consider a "decent amount of OBC"?

 

How much of the $25.50 do you want the TA to keep to cover overhead and salaries and, if any is still left, profit?

[Tikibird]

For this purpose, I was more interested in frequent flier miles than OBC which on a 2 nighter would have been minimal. I have been investigating and based on the poor customer service from the online TA I had in mind which was offering that I decided to book on Princess.com. If they aren't interested enough to return emails BEFORE the booking, I don't have much confidence if I require anything after booking and they insist on doing everything over the phone, not by email so I wouldn't have a written record.

 

There was a 2 night repo a few days ago and that one also remained at $195pp. The one in May that is $145 is during our late Autumn so that may account for the past passenger discount.

[chamima]

I'm throwing this out there for advice and opinions.

We currently have a couple of expensive cruises booked (with Princess) for 2013.

I was going to wait until closer to sailing (summer or fall of 2012) to see about price drops, etc. and to transfer to a TA.

If I transfer now, will I get the price drops if they happen next year?

If I wait until next year will my TA (one of two I use, both of whom normally discount) no longer be able to offer a discount?

[cherylandtk]

If I wait until next year will my TA (one of two I use, both of whom normally discount) no longer be able to offer a discount?

That was my original question, and while the thread has wandered around a bit, I am hoping a TA in the US will be able to respond with an answer. I have had two different answers from two TA's I use; one said nothing has changed and the other sent the quoted email.

[Borrego]

Before getting off the Sapphire earlier this month, I asked the Captains Circle hostess about this, and after some prodding, she told me Princess took a harder than expected hit over their new smoking policy issued earlier this year and had to do something to make up the revenue.

[zacc]

Some key points which may have been posted and I simply missed them. Princess to date is one of the few cruise lines that allows TA's to offer "discount" pricing. So this switch simply meets competition. Also some of you seem to be of the opinion that Princess discounts their fares to TA's that offer discounts. That is not the case at all. These "discounts" come out of the commissions to the TA. Also, if the commission rate is 10% then the TA gets 10% of the commission fare(the entire fare is not commissioned). If you book that exact same cruise directly through Princess then Princess "keeps" that 10% commission as their own. It is the size and large booking numbers that allows these TA's to work on a lower %.

[MandE-UK]

Some key points which may have been posted and I simply missed them. Princess to date is one of the few cruise lines that allows TA's to offer "discount" pricing. So this switch simply meets competition. Also some of you seem to be of the opinion that Princess discounts their fares to TA's that offer discounts. That is not the case at all. These "discounts" come out of the commissions to the TA. Also, if the commission rate is 10% then the TA gets 10% of the commission fare(the entire fare is not commissioned). If you book that exact same cruise directly through Princess then Princess "keeps" that 10% commission as their own. It is the size and large booking numbers that allows these TA's to work on a lower %.

That is all fine and dandy. But what will happen over there once the discount to the TAs is cut to 5% as it has been over here. (see Englishbird's post above. ) What has really compunded matters over here is that at the same time they stopped TAs discounting (with a threat of no more business from us if we catch you discounting!!) they also jacked up the prices by about a third.

[zacc]

That is all fine and dandy. But what will happen over there once the discount to the TAs is cut to 5% as it has been over here. (see Englishbird's post above. ) What has really compunded matters over here is that at the same time they stopped TAs discounting (with a threat of no more business from us if we catch you discounting!!) they also jacked up the prices by about a third.

 

I really can't comment on business practice in the UK however I can comment on the US. The US has seen an increase in fares. However this increase in not unique to Princess but has been done by all lines. The price difference between lines is still in existence and remains in the same balance as it has been. Princess is quite smart from a business standpoint. You will be hard pressed to find a cruise line that sails at the capacity level that Princess does. If they lower the % paid to TA's it would only be to stay in line with competition. If the majority of the other major lines don't "give away" their bonus money(commission paid to TA) explain from a business point of view why Princess should. The high level of return passengers that Princess gets is because of the product they offer not because someone received a $50 OBC or a coupon book. I select my cruise based on the ship, the itinerary, the quality of the product offered and their dedication to making my cruise special. The last item that influences me would be a token OBC offered by a TA. I know some will argue that they always save big money from some of the large online TA's. I have no doubt this is true but will these same people change cruise lines if it happens. I really don't think so. And if they do many will return after sampling other lines and seeing the difference in the overall packages.

[Astro Flyer]

I really can't comment on business practice in the UK however I can comment on the US. The US has seen an increase in fares. However this increase in not unique to Princess but has been done by all lines. The price difference between lines is still in existence and remains in the same balance as it has been. Princess is quite smart from a business standpoint. You will be hard pressed to find a cruise line that sails at the capacity level that Princess does. If they lower the % paid to TA's it would only be to stay in line with competition. If the majority of the other major lines don't "give away" their bonus money(commission paid to TA) explain from a business point of view why Princess should. The high level of return passengers that Princess gets is because of the product they offer not because someone received a $50 OBC or a coupon book. I select my cruise based on the ship, the itinerary, the quality of the product offered and their dedication to making my cruise special. The last item that influences me would be a token OBC offered by a TA. I know some will argue that they always save big money from some of the large online TA's. I have no doubt this is true but will these same people change cruise lines if it happens. I really don't think so. And if they do many will return after sampling other lines and seeing the difference in the overall packages.

'zacc'...a fair analysis of the upcoming change & I agree with you.

[dianef]

I checked with my travel agent and she did confirm about not discounting after the first of the year.I have a cruise in mind that I will book before the end of the year. She does not know,at this point,what they will be doing about incentives after the first of the year.We are used to getting about 12 or 13% off.That can add up to alot.

[caribill]

Before getting off the Sapphire earlier this month, I asked the Captains Circle hostess about this, and after some prodding, she told me Princess took a harder than expected hit over their new smoking policy issued earlier this year and had to do something to make up the revenue.

 

That makes no sense.

 

Princess revenue is the same whether the travel agent discounts or not.

 

Any discount comes from the TA's commission.

[chamima]

Before getting off the Sapphire earlier this month, I asked the Captains Circle hostess about this, and after some prodding, she told me Princess took a harder than expected hit over their new smoking policy issued earlier this year and had to do something to make up the revenue.

 

That makes no sense.

 

Princess revenue is the same whether the travel agent discounts or not.

 

Any discount comes from the TA's commission.

 

 

I agree. Sounds like either the CC hostess or the poster is a disgruntled smoker.

Large corporations don't make changes without lots of research and since the new smoking policy isn't even in effect yet it would have been impossible to do that research .

More likely that they realized the no discount policy didn't affect Celebrity (as the no smoking policy didn't either) and went with that.

[Borrego]

I agree. Sounds like either the CC hostess or the poster is a disgruntled smoker.

Large corporations don't make changes without lots of research and since the new smoking policy isn't even in effect yet it would have been impossible to do that research .

More likely that they realized the no discount policy didn't affect Celebrity (as the no smoking policy didn't either) and went with that.

I don't know if the hostess was a smoker, but I do know most people don't wait until the last minute to book a cruise so if, after Princess announced the new smoking policy effective Jan 15, 2012, they received a higher number than usual of cancellations for the 2012-13 season they wouldn't need extensive research to figure out why. And if they stopped discounting by TA's, more people would book direct with Princess and they wouldn't have to pay any commission at all leading to more revenue, especially if they additionally reduce the TA's commission. And your claim that Celebrity didn't go thru a rough patch when they first changed their policy is false. It took them about 2 years to get back to where they had been and they did it thanks to the reduced fares.

[Pam in CA]

I don't know if the hostess was a smoker, but I do know most people don't wait until the last minute to book a cruise so if, after Princess announced the new smoking policy effective Jan 15, 2012, they received a higher number than usual of cancellations for the 2012-13 season they wouldn't need extensive research to figure out why. And if they stopped discounting by TA's, more people would book direct with Princess and they wouldn't have to pay any commission at all leading to more revenue, especially if they additionally reduce the TA's commission. And your claim that Celebrity didn't go thru a rough patch when they first changed their policy is false. It took them about 2 years to get back to where they had been and they did it thanks to the reduced fares.

I agree with the others that while that might have been one factor, it wasn't the reason. It takes months to consider and plan a major change such as this. The smoking change was announced just 2-3 months ago and word of the discounting change not too long after. If it was really due to cancellations, that would make it a knee-jerk reaction, not something carefully thought out and planned.

 

As for Celebrity, even in past 2-3 years, attitudes towards smoking have changed and it's less tolerated. Again, this is a huge change and, I'm sure, carefully thought out. I'm guessing but I bet price increases for the 2012 and 2013 cruises were made in order to make up (in part) for future cancellations. I also see people switching to Princess due to the policy change. There are some who would have cruised Celebrity but have now booked Princess.

[Borrego]

I agree with the others that while that might have been one factor, it wasn't the reason. It takes months to consider and plan a major change such as this. The smoking change was announced just 2-3 months ago and word of the discounting change not too long after. If it was really due to cancellations, that would make it a knee-jerk reaction, not something carefully thought out and planned.

 

As for Celebrity, even in past 2-3 years, attitudes towards smoking have changed and it's less tolerated. Again, this is a huge change and, I'm sure, carefully thought out. I'm guessing but I bet price increases for the 2012 and 2013 cruises were made in order to make up (in part) for future cancellations. I also see people switching to Princess due to the policy change. There are some who would have cruised Celebrity but have now booked Princess.

You're probably right, but as Netflix found out earlier this year, there are consequences - some small, some large - to policy changes that directly impact customers. The planning by Princess to change their smoking policy was not done in a vaccum. They would have calculated the potential reaction and had in place contingency plans covering a variety of scenarios, so in that regard this follow-up change would not have been a knee-jerk reaction.

[cherylandtk]

The comment from the CC host has two parts; the loss of revenue from the smoking policy announcement and the non-discounting by agents (supposedly) to make up that revenue. The smoking policy loss of revenue portion of the comment is irrelevant to the topic of this thread and can be ignored or discussed in a separate thread.

 

The non-discounting portion of the comment, while relevant, makes no sense as caribill noted, because the revenue to Princess is unchanged when a TA discounts by giving a portion of their commission back as a lower cost to their customer.

 

Which gets us back to the real question, will 2012 bookings by discount TA's still be able to be sold at a lower price than what Princess offers to sell direct to the same customer? Today that answer is yes, but come January 1, I still don't know and apparently will have to wait to find out.

[jagoffee]

That makes no sense.

 

Princess revenue is the same whether the travel agent discounts or not.

 

Any discount comes from the TA's commission.

 

IMO that new policy which looks to be the same as the current Celebrity policy does not directly benefit Princess unless it leads to more people booking directly with Princess instead of using a TA. (more of the profit stays with Princess) I believe the real reason is an attempt to satisfied certain TAs particularly those that do not like to discount much and they are at a competitive disadvantage. If the end result is similiar to the Celebrity practice the discount TAs will offer OBC instead of a discount. The bottom line is almost the same except that the OBC is typically spent on board and benefits the cruise line, but the OBC can be refunded to the customer is it is not spent.

[newfirsttimer]

Being in Canada, our TA's are not allowed to discount cruise fares and we get the same rate as offered by Princess or any other direct deal. We can on the otherhand, book at the moment with an online US based TA and get some discounts. Some of the bigger TA's might have some 'groups of rooms' available on certain cruises and can offer a discount on those. It will be interesting to see just how these new rules play out in the US marketplace.

[Pam in CA]

IMO that new policy which looks to be the same as the current Celebrity policy does not directly benefit Princess unless it leads to more people booking directly with Princess instead of using a TA. (more of the profit stays with Princess) I believe the real reason is an attempt to satisfied certain TAs particularly those that do not like to discount much and they are at a competitive disadvantage. If the end result is similiar to the Celebrity practice the discount TAs will offer OBC instead of a discount. The bottom line is almost the same except that the OBC is typically spent on board and benefits the cruise line, but the OBC can be refunded to the customer is it is not spent.

I'd be very surprised if I got an OBC that's 12-15% of the cruise fare; 20% isn't unheard of. Perhaps the combination of group fares and OBC will be similar. I guess it remains to be seen.

[cherylandtk]

Pam, I was just thinking the same thing. The OBC I have seen offered on other lines don't come close to the discounts I have received on Princess bookings.

[cruisetherapist]

I asked my parents who own a large national travel agency if Princess was prohibiting any discounting effective January 1, 2012. My parents spoke with their Princess rep today who told them that there has been NO CHANGE in the selling policy, only that agents are prohibited from advertising discounted prices or advertising agent provided amenities. Apparently a number of travel agencies who received their new Princess contracts misinterpreted the section dealing with advertising cruises. According to my parents, travel agents are only prohibited from "advertising" reduced prices or offering discounts or amenities in any print or electronic media. Of course Princess could change this policy at any time.

[MandE-UK]

I'd be very surprised if I got an OBC that's 12-15% of the cruise fare; 20% isn't unheard of. Perhaps the combination of group fares and OBC will be similar. I guess it remains to be seen.

Hi Pam,

Over here we cannot now even get OBC. Princess UK will not trade with a TA that goes down this route. The only exception would appear to be when a major player amongst the TAs takes a block booking and packages the cruise with airflights, hotels and land tours. In which case they probably would have more room to offer a small incentive. They would also need to sell all their allocation. (See Englishbirds Post #20 above.) I look forward to meeting you on the Star in March too.