Triton would have stopped cruise cuts, says Freudmann

Triton would have stopped cruise cuts, says Freudmann

By Lee Hayhurst

Triton would have stopped cruise cuts, says FreudmannThe recent cuts to cruise commission would never had happened if the old consortium superpower Triton had still been around, according to its former chairman.

Steve Freudmann, also a former Abta president and now ITT chairman and chief executive, said the now defunct Triton would have acted as a powerful force in opposing the cuts.

The super-consortium was formed by Advantage, Worldchoice and Global in the wake of Tui’s decision to cut commission to 7%, announced at the Abta Travel Convention in Marrakesh in 2009.

Tui eventually had to reverse its decision, but the group fell apart acrimoniously due to what was described as a clash of personalities within the Triton board.

Speaking to Travel Weekly on Wednesday during filming ahead of this year’s annual Barclays Corporate Travel Forum, Freudmann said:

“Had Triton still been in existence the reduction in cruise commission would not have taken place and we would not have seen some of the problems we have seen in recent years.

“Unfortunately it [Triton] fell apart due to personality clashes around the board table.”

Reflecting on the Triton era this week after he announced his retirement from Advantage, John McEwan said there were ideological differences of opinion.

“Triton did not work for different reasons. There were differences of opinion in how to lead things.

“George Begg (the Global owner) was clearly interested in optimising performance of the company for himself.”

Freudmann accepted Begg did have personal commercial motivations for making Triton a success but that these were shared by the entire membership.

“George was trying to maximise the value of his company but to do that he had to maximise the benefit for all of the members that formed part of the overall company.

“Yes, it would benefit George, he owned the thing, but ultimately we all had the same interests at heart but we could never see eye to eye.”

In the aftermath of the Triton fall out Global’s Australian owner Stella Travel Services was linked with buyouts for Worldchoice and Advantage, which unlike Global were both owned by their agent members.

However, The Travel Trust Association swooped for Worldchoice and the deal was finalised in October 2008 as Advantage officially left Triton. McEwan was chairman of Triton at the time.

McEwan said: “We [Advantage] have had approaches along the way but when I evaluated those offers with the board we came to the conclusion that there was insufficient value available to make it attractive for each member.

“It was felt we were in a position of strength. We were already the largest consortium by some distance. Members were really happy with what they were getting at the time and a one-off cheque for their shares was quite transient.”

Both McEwan and Freeudmann agreed that since the Triton days the consortia have become far less cut throat in terms of competing against each other and have developed in different ways.

“When I came in you had three groups all vying with each other for members. There was not the gap then that there is today.

“We have become different, we have a much more diverse mix of members. Global has a different model and Worldchoice has been subsumed in to the TTA. It retains its brand but the closure of the Peterborough office is a real break with the past.

“Advantage has a powerful corporate travel membership and in lesisure we have got a much different mix. We have all the big players in the UK like Barrhead and Dawson and Sanderson and we have lots of individual location members as well.

“Other consortia have large members but by and large the majority are smaller retail members.”

Freudmann said the consortia no longer see each other as major competitors. “They see the independence of the consumer as being their biggest challenge rather than the guy across the road [other consortium] because the guy across the road is having the same problems and challenges.”

Norwegian says sales uplift vindicates 10% commission move

Norwegian says sales uplift vindicates 10% commission move

By Phil Davies

Norwegian says sales uplift vindicates 10% commission moveNorwegian Cruise Line attributed its switch to 10% commission a year ago to a big lift in UK business – and stressed there are no plans to alter its course on remuneration.

Executive vice president sales Andy Stuart revealed that business from the UK was 25% ahead of this time last year.

This vindicated the move to cut commission as it helped eradicate retail cruise discounting and provide price clarity to consumers.

And Stuart stressed that his door was always open to negotiate with Advantage Travel Centres after the consortium took the rare decision to take the line off its preferred supplier list due to the reduction in commission.

“We were clearly disappointed because we felt we were doing something positive to discourage rebating in the industry,” he said.

Speaking as Norwegian showcased new 4,000-passenger ship Norwegian Breakaway in Southampton to 2,000 UK agents, he claimed Advantage had “misunderstood” the company’s intentions and there continued to be ongoing positive dialogue.

“We believe 10% is a fair commission which will result in a higher retention and better margins for agents while ensuring that consumers are less confused about pricing,” Stuart added.

More than 100 Advantage agents were on board for the overnight showcase of the ship and the opportunity to earn additional commission by ensuring they saw different parts of the vessel.

Stuart conceded that the line would continue to run tactical promotions such as the current short-term bonus commission offer to coincide with the introduction of Norwegian Breakaway.

But he insisted that there would be no shift in the ongoing 10% level as part of Norwegian’s Partners First philosophy.

He declined to be drawn on a rise in the company’s share price but industry observers believe investors see positive returns from ongoing improvements in profitability and the introduction of both Breakaway and sister ship Norwegian Getaway from Miami from January 2014.

Stuart revealed that there would be tweaks to the second new ship to reflect its Florida home port.

Norwegian expects UK passengers to be attracted to the Miami-based ship due to the popularity of Florida as a holiday destination and good levels of airline capacity.

The line is aiming for “more than double digit” percentage growth from the UK in 2014.

Royal Caribbean CEO defends agent compensation to investors

Royal Caribbean CEO defends agent compensation to investors

By Tom Stieghorst
Royal Caribbean International CEO Adam Goldstein said he sees stability in the compensation paid to travel agents.

Asked by a Wall Street analyst to elaborate on commission strategy during Royal Caribbean Cruises Ltd.’s conference call on first-quarter earnings, Goldstein said Royal Caribbean takes pride in its travel agent relations.

_Adam Goldstein“Clearly, that relationship is predicated on us giving them competitive compensation to produce business for us,” he said. “If they don’t feel we’re giving them a fair shake on compensation, they may love us and our products, but they’re going someplace else.”

Goldstein said he doesn’t blame travel agents for asking for more compensation, nor does he blame investors for pushing for lower commission costs.

“It is our responsibility to navigate the right balance to reflect the great value they bring to the success of our business model and neither underpay nor overpay,” Goldstein said.

He said the foundations of travel agent compensation in recent years “have been much more stable than unstable.”

“It’s pretty clear what the building-block elements of travel agent compensation are, and it’s pretty clear travel agents are willing to produce good business for us with the existing components of their compensation,” Goldstein said.