TAs allowed to discount?

[suzyed]

On 5/25/2020 at 10:54 PM, Karlzmom said:

I know we can't ask for specific TA recommendations but is it ok to ask HOW to find a TA that does discounts?  Sorry if it's not allowed to ask for help with the procedure, no offense intended.

I ask friends and fellow cruisers for recommendations for who they are happy with.

Edited May 28, 2020 by suzyed

[suzyed]

On 5/26/2020 at 6:34 PM, weedpindle said:

They are giving up part or most of their commission.

Why would they do that?  If they give up most or even part of the their commission how do they make any money?

[caribill]

40 minutes ago, suzyed said:

Why would they do that?  If they give up most or even part of the their commission how do they make any money?

 

Volume.

 

Low overhead.

[caribill]

55 minutes ago, suzyed said:

We had a significant discount from a TA on NCL for an Alaska cruise but that was in 2008 or 2009.  I even called Princess directly to see if they would match it and they said "no".

 

 

Princess does not price compete with the TAs that sell Princess cruises.

[RocketMan275]

7 hours ago, suzyed said:

Why would they do that?  If they give up most or even part of the their commission how do they make any money?

Depends upon the size of the commission.  The TA I know who discount have been in business for many years.  Obviously their business model works.

 

I don't know why one should be concerned about TA giving up part of their commission.  After all, I know of no one who is concerned about bargaining with a car salesman for a lower price.

[ontheweb]

9 hours ago, jagoffee said:

The TA that I use for Princess just offers me a lower fare than the Princess price.  It is not shown like yours.  I look for price adjustments by capturing the originally Princess price and then monitoring any Princess reduction.  When I see a reduction or increase in benefits, I have my TA quote me a revised discounted price.

 

Your example would be easier to manage.  I have never had a TA that reflected the discount as a separate line item on the invoice.  I can see why you would like it.

When we did an Alaska cruise, I looked at our TA's website and found 3 on different cruise lines all that fit our criteria for dates and ports. The one with the highest price listed was Princess. (I do not specifically remember what the other 2 lines were.) But, when I called our TA it was the Princess cruise that had the lowest price quoted, and the one we eventually took.

 

This is obviously an example of both a TA being able to discount Princess and also the TA not being able to advertise that discounted price. Always call when booking with a TA, especially when it comes to Princess.

[suzyed]

2 hours ago, RocketMan275 said:

Depends upon the size of the commission.  The TA I know who discount have been in business for many years.  Obviously their business model works.

 

I don't know why one should be concerned about TA giving up part of their commission.  After all, I know of no one who is concerned about bargaining with a car salesman for a lower price.

Not really concerned, not losing sleep over it!  LOL!  I am merely asking how they make money doing their job if they are giving up their commission? 
One we use usually gives us a lower price and $60 obc.

[Steelers36]

On 5/27/2020 at 9:41 AM, Ken the cruiser said:

For purposes of this discussion, would somebody please explain to me what type of discounted rate we are getting from our TA based on the amount of the commissionable Princess cruise fare? The below was copied from one of our TA's invoices:

 

Amount Details   Total               Grand Total
Cruise Rate         2,039.00 x 2     4,078.00     (Advertised Princess cruise fare)
Air Fare                527.92 x 2        1,055.84
Transfer              39.00 x 2                78.00
Insurance           163.12 x 2            326.24
Tax/Fees            260.13 x 2            520.26
(TA) Discount   (170.00) x 2         (340.00)    (TA Discount to manage our booking)
---------                 --------------------    ----------------------
Total                    2,859.17              5,718.34

 

** BTW our TA advertises a 10% discount on their website for most of their listed cruises, sometimes in the form of a cruise fare credit and sometimes in OBC depending on the cruise line. The reason the above TA Discount doesn't appear to be 10% of the Princess Cruise Rate is because the discount is based on the commissionable portion of the advertised rate rather than the entire amount.

It would help to know the length of the cruise example you have above.  (See my response below for why).  I also don't know the cabin type, so it is difficult to guess.  If the above is for a 10-night cruise, I would say you are getting about 9.5% off.  But tell me more about the booking and I can give you a better answer. 

 

Working backwards, if you are getting exactly 10% off then the commissionable fare should be $1,700 (10% = $170).  That leaves a difference of $339 ($2039 - $1700).  That value isn't a correct value for a non-commission portion of cruise fare.  It is closest to 13 nights.  Anyway, I suspect you are getting something close to 10%, but not exactly.

 

 

17 hours ago, RocketMan275 said:

The TA has no control over any of those except the cruise rate.  I would not include the air fare, transfer, insurance, or taxes/fees.  I would compare the cruise rate offered by your TA to the cruise rate offered by the cruise line.  I wouldn't get hung up on commissionable or non-commissionable since they don't apply to the cruise line.  Nor has the TA disclosed those.  Suppose the cruise line offered this cruise at $4500 cruise fare, then I would calculate the discount as 1- (4078/4500) = 1- 0.9062 = 9.037%.

Actually, it is incorrect to state the above.  The base fare that we see on Princess website, or in brochures, etc, consists of two parts - a commissionable portion and a non-commissionable portion.  The latter is a fixed amount per cruise day and the fixed amount is as much as $25 with Princess for cruise lengths that most people take.  Longer cruises have been $20/day.  The Pacific appears to have its own rate which I have seen in a couple of sample cruises at $29.  IDK if there is a new trend developing, or if this is an exception, but the 2022 WC voyages on Island are $24/day.  Have never seen that number before for a "regular" size ship and for such long voyages. 

 

The commissionable portion of the base fare is variable by type of cabin and location on the ship, so TA's can earn more if they can sell higher category cabins.  TA's who offer discounts, calculate the discount off this portion of the fare.  It will be a consistent percentage, but since the total fare varies, when you calculate the percentage savings off the total base fare, you get a range of percentage values. 

 

My TA has been steadily giving 15% off, pre-COVID, but some changes in the way Princess is doing things have affected the calculation and I have seen it swing around somewhat and also be different for cruises still being sold in 2020 versus 2021 and beyond. 

 

Edited May 28, 2020 by Steelers36

[Coral]

19 minutes ago, suzyed said:

Not really concerned, not losing sleep over it!  LOL!  I am merely asking how they make money doing their job if they are giving up their commission? 
One we use usually gives us a lower price and $60 obc.

Some travel agents only make a few percentage points as they often have to pay a parent agency a few points and they cut their commission steeply. If they do enough volume, they do make money. The OBC can often be group incentives.

[Hlitner]

13 minutes ago, suzyed said:

Not really concerned, not losing sleep over it!  LOL!  I am merely asking how they make money doing their job if they are giving up their commission? 
One we use usually gives us a lower price and $60 obc.

They do not give up their entire commission.  And  the commissioning structure is more complex then some folks realize with some cruise/travel agents and consortiums getting special overrides (similar to an extra commission) and promotions from the cruise line.  Cruise lines depend on cruise/travel agents to generate up to 80% of their bookings and it is a very competitive business.  The cruise lines must actually compete with each other to gain the favor of the high volume cruise/travel agencies.  For any cruise line it is vital to sell most of the available  berths, even if it means selling some of those berths for less money (or paying higher commissions).  An empty berth equals "opportunity loss revenue" which is a very big problem on the mass market lines that rely on "maximizing onboard revenue" as a key part of generating profits.  

 

I share the view of a few others in that we do not lose any sleep worrying about how the cruise/travel agents make their money.  It is not my problem!   We simply shop around for the best deals.  It is up to the cruise/travel agents and agencies to take care of their own business.  We are not their keeper!  It is no different then when we buy a car in that we look for the best deal and do not concern ourselves with the profit or loss of the dealer and/or salesperson.

 

I will admit to feeling bad for our favorite cruise agent given the current COVID-19 mess.  She had 4 major bookings (from us) of which the first two have already been cancelled and the third will likely get cancelled in the next few weeks.  The loss to her agency from those bookings is several thousand dollars.   We truly hope our favorite agents/agencies survive.  But it is truly a dog eat dog world and I am NOT wearing milkbone underwear.  In simple terms this means that folks need to take personal responsibility and look out for themselves.

 

Hank

[RocketMan275]

9 minutes ago, Steelers36 said:

Actually, it is incorrect to state the above.  The base fare that we see on Princess website, or in brochures, etc, consists of two parts - a commissionable portion and a non-commissionable portion.  

Yes, you can do that but not all cruise lines or TA disclose the breakouts between commissionable and non-commissionable.  Sure, you can include it but only if you know the breakout.  Since, I don't always know, I tend to ignore it.

[RocketMan275]

25 minutes ago, suzyed said:

Not really concerned, not losing sleep over it!  LOL!  I am merely asking how they make money doing their job if they are giving up their commission? 
One we use usually gives us a lower price and $60 obc.

I also know of one agent who says on her website that she charges a flat fee (IIRC, $100 per booking) regardless of cost.  I used her once but wasn't happy with her services so I went back to my other agent.

[Steelers36]

7 minutes ago, RocketMan275 said:

Yes, you can do that but not all cruise lines or TA disclose the breakouts between commissionable and non-commissionable.  Sure, you can include it but only if you know the breakout.  Since, I don't always know, I tend to ignore it.

Correct - agencies usually do not disclose this information.  But it is nonetheless a fact of the situation.  I can only speak about Princess as I don't have current experience with other lines and what their structure is, but I suspect something similar.   Cruise lines certainly disclose to agents so they know the scoop. 

 

PS - I use the info in my spreadsheet setup for cruise bookings.  I can enter in a cruise I am thinking of booking and know to the penny what my bottom line cost will be when I book it on my agency website.  (The net pricing is there also).

Edited May 28, 2020 by Steelers36

[Steelers36]

26 minutes ago, Steelers36 said:

My TA has been steadily giving 15% off, pre-COVID, but some changes in the way Princess is doing things have affected the calculation and I have seen it swing around somewhat and also be different for cruises still being sold in 2020 versus 2021 and beyond. 

Just to clarify, I had noticed some variations in pricing on my agency website for our fall 2020 cruise that is now cancelled out.  This was around when Pause 1 had happened.  I think the agency was reacting to whatever Princess was doing and perhaps the decline in business.  I probably should have left the above out, as other promotions and pricing came along later on and things were back to normal.  For anything after Dec 25, it was normal as in the past.

[RocketMan275]

11 minutes ago, Steelers36 said:

Correct - agencies usually do not disclose this information.  But it is nonetheless a fact of the situation.  I can only speak about Princess as I don't have current experience with other lines and what their structure is, but I suspect something similar.   Cruise lines certainly disclose to agents so they know the scoop. 

 

PS - I use the info in my spreadsheet setup for cruise bookings.  I can enter in a cruise I am thinking of booking and know to the penny what my bottom line cost will be when I book it on my agency website.  (The net pricing is there also).

I've accumulated enough data using my TA that I can closely predict her pricing as well.  I just use a different factor to predict the discount that doesn't require knowledge of the breakout between NCF and CF.  Your system is probably more accurate but mine is close enough for my purposes.

[Ken the cruiser]

3 hours ago, Steelers36 said:

It would help to know the length of the cruise example you have above.  (See my response below for why).  I also don't know the cabin type, so it is difficult to guess.  If the above is for a 10-night cruise, I would say you are getting about 9.5% off.  But tell me more about the booking and I can give you a better answer. 

 

Working backwards, if you are getting exactly 10% off then the commissionable fare should be $1,700 (10% = $170).  That leaves a difference of $339 ($2039 - $1700).  That value isn't a correct value for a non-commission portion of cruise fare.  It is closest to 13 nights.  Anyway, I suspect you are getting something close to 10%, but not exactly.

It was a 14 day northern Europe cruise in a mini-suite on the Island.

[Steelers36]

10 minutes ago, Ken the cruiser said:

It was a 14 day northern Europe cruise in a mini-suite on the Island.

So, virtually 10% when rounded off.  ($2039 - $350 = $1689 x 10% = $168.90 and you got $170).

Voila.

 

[DrivesLikeMario]

13 hours ago, suzyed said:

We had a significant discount from a TA on NCL for an Alaska cruise but that was in 2008 or 2009.  I even called Princess directly to see if they would match it and they said "no".

 

That makes sense that it was 2008 or 2009.  They've changed the rules since then.   With NCL, most TAs will offer OBC from their commission now to get around the "no discounting" rule.  😉

[Thrak]

I just book my own cruises. Then I send the Princess quote to my TA. He sends back an email saying he will discount the cruise by x number of dollars. When final payment rolls around Princess gets the full amount but my credit card gets charged the amount the TA quoted me. Works for us. It's not a huge agency and I don't get a 10% discount like many others say they get but I do get a significant discount that is enough to make me happy.

[suzyed]

15 hours ago, caribill said:

 

Princess does not price compete with the TAs that sell Princess cruises.

I actually meant NCL.  Actually, none of the cruise lines seem to compete with the TAs.
(I guess I have Princess on the brain since that's all we have been dealing with)

[RocketMan275]

3 hours ago, DrivesLikeMario said:

That makes sense that it was 2008 or 2009.  They've changed the rules since then.   With NCL, most TAs will offer OBC from their commission now to get around the "no discounting" rule.  😉

There is another way.  Some TA will offer a 'rebate'.   A 'rebate' is similar to a discount. In this case the TA will send a check for the amount of the discount after the cruise is complete.  Really not a big deal.  It does not make a difference if the TA offers a discount, a rebate, or refundable OBC as long as the amount is the same.

 

The 'rule' is against advertising a discounted rate.  As I've said previously, enforcing a 'no discount' rule would be in violation of anti-price fixing legislation.

[caribill]

15 hours ago, Hlitner said:

 

I will admit to feeling bad for our favorite cruise agent given the current COVID-19 mess.  She had 4 major bookings (from us) of which the first two have already been cancelled and the third will likely get cancelled in the next few weeks.  The loss to her agency from those bookings is several thousand dollars.  

 

If you had already made final payments, the TA will still; get the commissions.

 

If you had not made the final payments and picked the option for FCCs instead of a cash refund, when you use the FCCs in the future your TA will get commissions on those amounts.

[ontheweb]

5 hours ago, caribill said:

 

If you had already made final payments, the TA will still; get the commissions.

 

If you had not made the final payments and picked the option for FCCs instead of a cash refund, when you use the FCCs in the future your TA will get commissions on those amounts.

Just out of curiosity, what happens if a different TA or no TA is used for the future booking? Who gets the commission then?

[Steelers36]

2 hours ago, ontheweb said:

Just out of curiosity, what happens if a different TA or no TA is used for the future booking? Who gets the commission then?

The new TA of course.  Or no one.

[jagoffee]

On 5/28/2020 at 3:51 PM, RocketMan275 said:

 

The 'rule' is against advertising a discounted rate.  As I've said previously, enforcing a 'no discount' rule would be in violation of anti-price fixing legislation.

Obviously you feel confident in this position, because you have stated it multiple times.  
I suppose it depends on your definition of “no discount” and whether you consider refundable OBC from a TA as  being a “discount”.  My payment to the cruise line is always given to the cruise line.  With Princess the amount that I pay is discounted from the normal price.  (True discount).  With Celebrity the amount I pay is the Celebrity “no discount” price.  The TA then gives me a refundable OBC.  Sometimes with other cruise lines, I receive a rebate check  after the cruise.