Celebrity raising agents' commission?

[Suzy Smith]

An interesting article from Travel Weekly:

 

http://www.travelweekly.co.uk/Articles/2015/06/04/54433/celebrity-agents-report-commission-raised-to-20.html

 

I guess we will be paying for this one way or another!;)

Edited June 4, 2015 by Suzy Smith

[crazee4cruzin]

Travel agent commissions are built in and a TA may offer perks such as on board credits when you book with them. The travel agent is not allowed to charge more then the published rate on celebrity cruise lines website.

[neverbeenhere]

Travel agents (state laws inclusive) are allowed to charge various fees, so the "cost" of the cruise can be more than the company website.

[marie61]

Don't know about the Us but in Canada, the travel agents have a better rate than the Celebrity website..

 

they offer perks, discounted rates and better service than Celebrity online...for no commission (that we pay).

 

Why would you book directly?

[HouseRulz]

Don't know about the Us but in Canada, the travel agents have a better rate than the Celebrity website..

 

they offer perks, discounted rates and better service than Celebrity online...for no commission (that we pay).

 

Why would you book directly?

 

This is a good point. If I read the article linked by OP, it means that:

 

1) If I book a 2000$ cruise through a TA, the TA gets $400 and Celebrity makes $1600

 

2) If I book a 2000$ cruise with Celebrity, Celebrity gets $2000.

 

So while some may see this as a 20% commission for the TA, I see it as me paying a 25% upcharge on the cruise, even when I book direct. I would think if the cruise industry is hurting so much, they would be better off to cut out the middle man, pass the savings on to their customers, and encourage more bookings. If people still care to use a brick and mortar travel agent, let them subsidize the cost of that.

[teecee60]

This is a good point. If I read the article linked by OP, it means that:

 

1) If I book a 2000$ cruise through a TA, the TA gets $400 and Celebrity makes $1600

 

2) If I book a 2000$ cruise with Celebrity, Celebrity gets $2000.

 

So while some may see this as a 20% commission for the TA, I see it as me paying a 25% upcharge on the cruise, even when I book direct. I would think if the cruise industry is hurting so much, they would be better off to cut out the middle man, pass the savings on to their customers, and encourage more bookings. If people still care to use a brick and mortar travel agent, let them subsidize the cost of that.

 

VERY well stated! The cruise lines could dramatically increase their profits with this! ;)

[The_Big_M]

The issue is that most people book through TAs, and so bringing it inhouse is likely to cause extra cost to Celebrity due to adding the necessary headcount, training and so on.

 

Just as with many things, Celebrity is also happy to deal through agents and doesn't currently see a cost saving by taking on all sales itself.

[ECCruise]

As far as I know, there was only one cruise company that tried to cut out the Agents in their booking process. That was Renaissance Cruise Lines, and we know what happened to them.

[C 2 C]

Don't know about the Us but in Canada, the travel agents have a better rate than the Celebrity website..

 

they offer perks, discounted rates and better service than Celebrity online...for no commission (that we pay).

 

Why would you book directly?

 

You must have found a gem because the ones I have tried don't come close to the perks given by large US travel agencies.

In matter of fact the majority of Canadian agencies give nothing.

They certainly don't advertise that their rates are better.

 

No agency is allowed to quote a lower price than Celebrity's but they can give kick backs

 

An illustration, name excluded, would be helpful.

[jshli]

According to my travel agent, Celebrity deducts the taxes and port charges before calculating their commission.

[ChucktownSteve]

I don't understand why Celebrity would want give the end consumer a lower price in lieu of giving it to a TA. The TA produces a service to both by handling a lot of the details and spending time with the client. If Celebrity had to spend more time with the consumer, they'd have to pay an employee instead of the TA. There would be no savings to them.

 

The best way to get the best deal is to book on board...getting the special perks for doing so... then transfer the booking to a TA when you get home to get their perks.

Edited June 5, 2015 by ChucktownSteve

[GUT2407]

According to my travel agent, Celebrity deducts the taxes and port charges before calculating their commission.

 

 

I believe that is so.

[Ex-Airbalancer]

Quote:

Originally Posted by marie61 View Post

Don't know about the Us but in Canada, the travel agents have a better rate than the Celebrity website..

 

they offer perks, discounted rates and better service than Celebrity online...for no commission (that we pay).

 

Why would you book directly?

Aron

You must have found a gem because the ones I have tried don't come close to the perks given by large US travel agencies.

In matter of fact the majority of Canadian agencies give nothing.

They certainly don't advertise that their rates are better.

 

No agency is allowed to quote a lower price than Celebrity's but they can give kick backs

 

An illustration, name excluded, would be helpful.

 

I have found the same thing about Canadian TAs, you may get dinners

One of the main things about booking in Canadian dollars was Celebrity exchange rate it was really good, I can use my CC to get health insurance and points

Edited June 5, 2015 by Airbalancer

[FKGirl]

I don't understand why Celebrity would want give the end consumer a lower price in lieu of giving it to a TA. The TA produces a service to both by handling a lot of the details and spending time with the client. If Celebrity had to spend more time with the consumer, they'd have to pay an employee instead of the TA. There would be no savings to them.

 

The best way to get the best deal is to book on board...getting the special perks for doing so... then transfer the booking to a TA when you get home to get their perks.

 

Yes! My clients book with me so they (a) get exceptional service and (b) speak to the same person every time they call, and © because I offer them ideas, expertise and lower or the same prices than they would get elsewhere. You certainly can't get the first 2 from a call center.

 

Oh, and the whole commission structure is a bit more complicated than one might imagine.

[Ex-Airbalancer]

Yes! My clients book with me so they (a) get exceptional service and (b) speak to the same person every time they call, and © because I offer them ideas, expertise and lower or the same prices than they would get elsewhere. You certainly can't get the first 2 from a call center.

 

Oh, and the whole commission structure is a bit more complicated than one might imagine.

 

I have a direct number and email to a sales person at Celebrity, she was very good and do not get put on hold when a TA has to phone Celebrity to ask a question :D

[goodycruising]

Sometimes people don't understand what it costs to run a business with all the staff, insurances, power, etc. Some of us can do a lot of our own research, and some people need a fair bit of time spent to help them.

 

I am sure that the bean counters are onto it and do what works as a business model.

[C-Dragons]

As far as I know, there was only one cruise company that tried to cut out the Agents in their booking process. That was Renaissance Cruise Lines, and we know what happened to them.

Yes, it was pretty sad.

A few years ago Carnival tried to do the same thing to UK agents. Their scheme didn't last long. ;)

[cle-guy]

According to my travel agent, Celebrity deducts the taxes and port charges before calculating their commission.

 

Basically your cruise booking looks like:

 

Cruise Fare

+ Taxes/Fees

------

= TOTAL PAID

 

Travel agents get commissioned on

TOTAL PAID

- LESS taxes/fees

- LESS an additional portion of the cruise fare which no one really knows how its calculated they call NCF - I've gathered from my TA this tends to be about $200 or so

-------

= Net commissionable amount

 

So basically Commission is paid only on the cabin portion of the fare, and not even paid on that entire amount.

 

While I haven't been able to get my TA to confirm what the commission rate is she gets paid, I've gathered its around 12%-15%, and apparently the rates can vary by agency based on volume, as the OP's article indicated.

 

My key takeaway from the article is fares are dropping....:D

[Champagne Cruiser]

What lower prices? I am still tracking my Oct and Nov cruises and the prices keep going up.

[cle-guy]

What lower prices? I am still tracking my Oct and Nov cruises and the prices keep going up.

 

Looking at the popular historical cruise-fare website, overall Disney has the highest cost, followed by Celebrity, the site of course doesn't track all lines, just X, Disney, RCL, HAL, Carnival, Princess and NCL.

 

Celebrity had a marked increase in fares in in October, a slight fall, then up again January, but in the last 2 months, they (as it seems too, most other lines) have been falling, very slowly, though not yet to pre-Jan pricing.

 

Of courser this is an all-in look at fares, and some itineraries won't require price adjustments, while others will. I;m certain the most drops will be seen in the Caribbean sailings due to capacity there.

 

My upcoming cruise in November for example, had a $200 price drop 2 weeks ago, but I'd have also lost the all-in 123 promo to change.

Edited June 5, 2015 by cle-guy

[RocketMan275]

Several things.

 

First, since the website prices in pounds, it's probably a UK site. Not clear how these commissions apply to US.

 

Second, it says the commission is being raised to 20% to encourage sales and offset lowered total commissions resulting from reduced rates. Also states the 20% represents a doubling of the standard rate. So, the standard commission must be 10%.

[cle-guy]

Several things.

 

First, since the website prices in pounds, it's probably a UK site. Not clear how these commissions apply to US.

 

Second, it says the commission is being raised to 20% to encourage sales and offset lowered total commissions resulting from reduced rates. Also states the 20% represents a doubling of the standard rate. So, the standard commission must be 10%.

 

All good points, but the article also states:

The line is understood to have raised commission to 20% for key partners,

 

So if in the past Key partners are getting 10% then other smaller agencies must be down in the 5% area, which isn't likely.

 

A Celebrity spokesman said: “Our commercial terms are confidential."

 

I know based on my perks from my TA that her normal commission has to be more than 10%, or if not, she's giving me the majority of her earned commission in my OBC, which I doubt she would be doing. If she's at 5% as a smaller agency, then she's losing money with her perks.

 

I'm guessing the article is really a lot of rhetoric and talking points, with its data provided by only some of the larger agencies, and is not really quoting very specific details, but generalizing.

[HouseRulz]

In my prior post I wasn't questioning the service that TAs provide, I was just questioning who pays for the service.

 

My most recent trip is booked through a travel agent, because the perks offered were better than what I would have gotten through the cruise line. However, that was the only reason I used a TA.

 

What I was suggesting is that as it stands, the full amount of the TA's fee for booking a cruise is paid for by the cruise line (and is therefore subsidized by passengers). Then the TA chooses, in most cases, to pass a portion of that money on to the customer in savings.

 

This also means that for the passenger choosing to book direct, the full amount is still paid, the cruise line pockets all the money, and the passenger gets no additional perks.

 

I feel that if the cruise lines were to discount the price of the cruise when you book direct, such that a TAs commission would end up shared by the cruise line and the passenger, that would be better for them.

 

So for instance, lets say a cruise has a published fare of 2000$. As it stands now booking direct you pay $2000, all of which goes to the cruise line, and you get no extra perks. Using a TA you pay $2000, $1600 goes to the cruise line, $400 goes to the TA, and then the TA gives you $100 back in perks.

 

If instead, booking direct you paid $1800, all of which went to the cruise line, thus saving $200. For the person who wanted to use a TA, they would pay $2000 (a $200 fee for using a TA), $1700 goes to the cruise line (so they are losing $100 over a direct booking), $300 goes to the TA (same net profit as before).

 

In this case the TA is making the same amount of money in the end, the cruise line is coming out about even, and the folks who want to use a TA are paying the cost of the TA, while pax willing to book direct are paying less.

[cle-guy]

I think cruises are an odd-man-out when it comes to the booking process and use of a TA over a direct booking.

 

Lines rely on agents to pull together their own mini-groups on sailings, which the agents do at their own cost (advertising, promotion etc.) and this helps fill ships. Many participants on these groups have probably never sailed before (recent CLIA conference noted that only 62% of cruisers are repeaters - meaning 38% are brand new), or would never have considered a particular sailing if not recommended by a friend who asked them to go who was part of the TA group.

 

So lines paying commission rather than keeping it all in-house, allows the lines a broader reach of cruisers who may not have otherwise been reached by marketing from X directly. And we already hear how awful it is to get service on the phone with X in many cases - long holds etc. we know they are simply not capable of handling the volume in house.

 

There is a reason 70% of cruise bookings overall are handled by TA's and not the lines directly (data again courtesy of the CLIA conference)

 

So while in the past, I would never think of using a TA for airline or hotel bookings (actually I have never in my life had to use a TA before cruising), I am sold on TA for cruise bookings.

 

TA's likely are way more familiar with the ships than the call center staff, since TA's often take cruises and have experienced the ships, yet call center staff may be stuck in Oklahoma or India someplace, and never even seen a cruise ship.

[RocketMan275]

All good points, but the article also states:

 

So if in the past Key partners are getting 10% then other smaller agencies must be down in the 5% area, which isn't likely.

 

I know based on my perks from my TA that her normal commission has to be more than 10%, or if not, she's giving me the majority of her earned commission in my OBC, which I doubt she would be doing. If she's at 5% as a smaller agency, then she's losing money with her perks.

 

I'm guessing the article is really a lot of rhetoric and talking points, with its data provided by only some of the larger agencies, and is not really quoting very specific details, but generalizing.

 

Yes, I noticed the reference to the Key Partners but thought that might just be a term of convenience. The big thing is that this article is from a UK website. Hard to know how this translates to US TAs.

 

But, that said, I agree with you. I know several TAs that discount 10% and up off the directly booked fair. I know there are group discounts and amenity points that can be retained or distributed by the TA. I'm thinking there is more than just their commissions. Just like a car dealership can make a profit selling at "Invoice". Would love to get a TA drunk enough to explain all that.