Beginning next week, agents who sell Carnival cruises will face what some consider another obstacle to profitability.
Carnival will revise its fare codes on Dec. 3. The new pricing program includes four new fare categories, as well as changes in terms for two existing fare categories, making apples-to-apples fare comparisons difficult. (See chart in sidebar.)
More restricted fares
Among significant changes is a new category called Easy Saver fare (PES), offering savings on bookings made within three to five months of sailing, depending on cruise length. Terms include a nonrefundable deposit that can be transferred with a $50 “change fee.”
A new Super Saver fare (PSV), for bookings made more than three to five months out, is “heavily discounted,” according to Carnival. Restrictions include a nonrefundable deposit, plus Carnival selects the stateroom location.
The existing price-protected Early Saver fare (PPB), also for bookings made more than three to five months out, now comes with a $50 change fee attached.
A new nonrefundable Instant Saver fare (PUF) is comparable to Carnival’s current Pack and Go fare, for bookings made within the final payment period.
Up in arms
The move has agents frustrated with Carnival and concerned about what the changes portend for Carnival Corp.’s other brands.
“People are up in arms over this,” said one longtime travel seller whose agency ranked at one time as Carnival’s agency of the year. “We’ve already decided that the only way we are going to book them now is if our clients call specifically requesting it.”
For agents, the changes draw a stark contrast between other cruise lines with more agent-friendly policies.
“We have too many other suppliers who support us,” said the agent. “Carnival is saying loudly to the agent community that they don’t want to work with us.”
Carnival maintains that the additional fare codes will help agents by encouraging their clients to book further out.
“To simplify the selling process, only a few fare codes will be visible to travel agents at any one time, as the fares vary based upon how close-in the travel agent books their client’s sailing,” a Carnival spokesperson told Travel Market Report.
“The new fares and related structure are designed to provide consumers more choices, and therefore provide travel agents an opportunity to qualify their customers and select the fare that is right for each customer, based upon what is most important to them,” Carnival said.
Carnival has launched a webinar to explain the changes and new incentives. A lengthy FAQ document is also available online.
Agents had a less pragmatic view of the fare changes, citing the new fare structure as just another episode in years of indifference from Carnival.
“They’re masters of the shell game,” said Cindy Clifford, co-owner of Gotta Go Cruises in Riverhead, N.Y. “Carnival is way less concerned with being transparent than with getting bookings.”
She said reduced rates for early bookings will cut into agent commissions, while the added categories will make more work for agents and “baffle the public.”
Not all agents were offended by Carnival’s move though.
“Initially Carnival’s rate code changes may seem complex to some,” said Ralph Santisteban, owner of Ralph Santisteban & Associates, a CruiseOne Franchise in Miami. “However, these new price programs are designed to increase agent revenue by providing multiple price points that cater to clients’ needs.”
Santisteban, whose agency sells a lot of Carnival product, said he thinks the move will help agents sell more cruises to consumers looking for the most value.
“Carnival's codes are designed as a win-win for all involved,” Santisteban told Travel Market Report. “The consumer has the opportunity for greater savings [closer to departure date]. What will change with time are the restrictions.
“The agent gets an opportunity to sell more cruises because consumers simply love a bargain.”
Anything that drives business is good, Santisteban said. Then it’s up to the travel agent to sell customers on a higher fare category. “The issue is making the phone ring, and that’s what Carnival is doing.”
Santisteban takes issue with the notion that the new fares are confusing. “I think agents aren’t really reading what it’s about. They’re intimidated from the get-go. If you read it, it’s not really that complicated.”
Moving away from Carnival
Some agents see Carnival’s changes hastening its consumer-direct strategy.
“It’s a shame, because we were a fairly large producer for them as of a few years ago,” said Barry Richcreek, owner of Richcreek Vacation Center in Harrisburg, Penn., and former chairman of ARTA.
“They’ve changed their business model so much that we don’t even look at them anymore.”
Clifford asserted that Carnival is “not interested in supporting the travel agent community. They’re really looking to cut out anybody they can.”
It remains to be seen if similar changes are slated for Carnival Corp.’s other brands, including Holland America Line and Princess.