Tag Archives: Travel agents

Royal Caribbean CEO defends agent compensation to investors

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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.

Cruise lines ‘are paying agents extra under the table’

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Cruise lines ‘are paying agents extra under the table’

By Lucy Huxley

Cruise lines 'are paying agents extra under the table'Cruise lines that have cut commission are giving money back to travel agents “under the table” as they accept that reducing payments to 5% was a mistake, according to the UK boss of MSC.

Giulio Libutti, UK managing director, told Travel Weekly: “Under the table, these lines are now starting to give money back.

“They aren’t going back to fixed rates of 15% or up to 18%, but they are offering double commission for certain months, or bonus commissions.

“Through variable means they are making it back up.”

He added: “The fact that Princess moved back from 5% to 10% shows it was a mistake. You have to have mutual respect for agents and, by cutting commission, they were basically saying the value of an agent wasn’t important any more.”

 

Libutti’s comments come a month after he accused lines of “underestimating the value of agents” by cutting commission.
MSC revised its terms to offer performance-based commission rates of up to 13%, a move Libutti claimed had increased revenue by 35% year on year in 2013, and had also developed new agent partnerships.

“We are now working with some small cruise specialists that a year ago were doing no business with us at all,” he said.

Libutti said competition was particularly challenging as growth in the cruise market had stalled due to the economic crisis and high-profile incidents involving Costa, Carnival and Thomson Cruises.

“Cruise will continue to grow but it is suffering so we all need to find travel agent partners who understand and share our targets.”

MSC expects to attract about 100,000 passengers from the UK in 2014, up from an anticipated 70,000-75,000 in 2013.

Norwegian Cruise Line pulls out of CruiseCompete

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Norwegian Cruise Line pulls out of CruiseCompete

By Tom Stieghorst

This article has been clarified.
Norwegian Cruise Line has asked CruiseCompete to stop using its proprietary materials and wants its contracted agents to refrain from submitting bids on Norwegian voyages to the Des Moines, Iowa-based company.

In a memo sent to some travel outlets the week of March 18, Norwegian Vice President of Sales Camille Olivere said Norwegian would not sign new contracts with agencies that use CruiseCompete.

Further, under some circumstances Norwegian said it could cancel existing contracts with agents found to be submitting bids on Norwegian cruises to CruiseCompete.

“I very much appreciate your willingness to support our decision as it relates to CrusieCompete,” the memo said.

Olivere could not be reached to elaborate. A Norwegian spokeswoman said she was traveling and unavailable.

Account holders at CruiseCompete can request bids on cruises on a particular itinerary or ship, specifying dates and cabin preferences. The company tells consumers that more than 300 agencies are available to bid on the cruises. Consumers are notified of the bids and can contact the agencies when and if they want.

Olivere’s memo cited several frustrations with the way agents interact with CruiseCompete. In particular, she said, contracted accounts have access to higher commissions than smaller retail accounts, can use group discounts and get marketing funds from Norwegian.

She said a contract partner’s ability to sell its own “packaged product” during periodic timeframes is disrupted by having Norwegian cruises on a “facilitated site” like CruiseCompete. She also said rebating can’t be monitored in such an environment.

In addition, some Norwegian travel partners have bid down commissions or have offered net rates intended for packaging purposes.

“Not only is this activity a breach of the sales and marketing agreement that travel partners like you have signed with Norwegian, it is also negatively impacting the great progress we have made with the Norwegian brand and business,” Olivere’s memo said.

Olivere said Norwegian officials would “avail ourselves of all contractual remedies” up to and including the cancellation of accounts found to have bid on the site.

In a statement, CruiseCompete CEO Bob Levinstein said, “We have reached out to Norwegian Cruise Line to address their concerns. The door is still open, as far as we are concerned, to find a solution.”

Levinstein said 55% of cruises booked through CruiseCompete are not with the lowest bidder.

“We are all about providing the consumer with choices and fair competition in the marketplace, as mandated by ethics and the law.”
 

Clarification: Norwegian Cruise Line has asked CruiseCompete to stop using its proprietary materials and wants its contracted agents to refrain from bidding Norwegian cruises on the site. A previous version of this report said that Norwegian was asking retailers to stop working with CruiseCompete, but it didn’t specify that the action was limited to bidding Norwegian’s product, and to agencies with a Norwegian contract.

Correction: The article misspelled the name of CruiseCompete CEO Bob Levinstein.