A year after Carnival Cruise Lines embarked on an intensive campaign to bring travel agents back into the fold, agents say the company is doing a better job supporting the trade.
Low commissions remain a chronic complaint, however, especially as Carnival stays focused on attracting deal-hungry first-time cruisers and restoring its brand image with consumers.
During a media call this week, Carnival Corp. CEO Arnold Donald downplayed agents’ concerns over commission levels.
Build repeat business instead
“Really strong travel agents aren’t paying attention to commissions, because they’re building the [first-time cruiser] into a customer for a lifetime,” Donald said, in response to a question from Travel Market Report.
“We want [agents] to earn, but the reality is we all have to focus on how we turn these guests into a lifetime customer.”
Donald also said the cruise company needs strong support from travel agents as it recovers from the fallout of last year's Carnival Triumph incident and other ship malfunctions.
“Clearly the travel professional remains a critical partner in the whole effort,” Donald said.
The last 18 months have been rough for Carnival Cruise Lines, as the line has scrambled to restore both its public image and trade relations.
Agents said the company’s outreach on the trade front – including last year’s Carnival Conversations with agents across the country – have been steps in the right direction.
The company also brought back physical brochures, tweaked its fare structure again and reportedly upgraded its level of phone service for agents.
Appreciates the changes
“Overall I think Carnival is doing a better job. The changes have been positive and appreciated. But there is work left to be done to embrace the agent community as well as other suppliers have,” said Gary Smith, a CruiseOne franchise owner in Eugene, Ore.
Others said Carnival’s efforts amount to nothing substantial for agents who sell Carnival cruises.
“From my agency’s standpoint, nothing much has changed; my earnings are miniscule,” said Lisa Silvestri, CTC, ECC, of Sarasota, Fla.-based Silvestri Travel, a NEST agency. “There are more regular email updates now, and lots of gimmicks to earn points.”
Carnival is continuing its investments in trade outreach this year, including the appointment earlier this spring of 30-year sales veteran Vicki Tomasino as divisional vice president in charge of trade and community outreach programs.
It also has continued its Carnival Conversations program.
But agents say Carnival’s commission levels are hurting them.
“Even when my agency was not at the lowest commission tier level we didn't make much, but with the change in the levels, I might as well pay them,” said Silvestri, referring to the revamped commission structure that Carnival implemented in 2013.
Agent stories of low commissions can border on the absurd.
“I recently had a booking with Carnival that paid me $18.50 commission,” travel agent Cade Huffman wrote in an online comment on Travel Market Report. “I even told my client and they didn't believe me, so I showed them the paperwork.”
Huffman went on to write that his client was proud of how cheap the cruise was and how low the agent’s commission.
“Normally we don't sell the ‘Wal-Mart’ cruise line, but in a moment of weakness we took that sale,” writes Huffman. “NEVER again.”
$40 doesn’t cut it either
Tampa-based Cruise Planners agent Stephen De Potter complained that increases in NCFs in recent years have shrunk his profits.
De Potter said he recently received about a $40 commission on a $500 Carnival cruise for two. “Nobody can stay in business with $25 a booking,” he said.
While Carnival’s phone service improved following the Carnival Conversations, De Potter said he thinks it is clear the company doesn’t care about the agency community.
Earnings for shareholders
“Their main objective is to make money for shareholders,” said De Potter. “It is a good product, but they have manipulated us and created a way to pay us less.”
The growth strategy outlined by Carnival Corp.’s top exec this week seems unlikely to change the reality of low commissions.
“The ships we sail are pretty full, so you’re not going to grow by putting more people on ships,” said Donald. “The only way you are going to grow is [with increased] onboard spending, ticket yields and adding capacity over time.”
A better product
Despite their gripes about commissions, agents had positive reports about Carnival’s efforts to improve the quality of the passenger experience.
“We still have many first-time cruisers choosing Carnival,” said Smith, the CruiseOne agent. “We have never stopped recommending them when they are the right fit for the client and we are proud to support this strong brand.”
Silvestri said the brand’s solid product is also attracting more repeat cruisers.
“Past cruisers are more likely to stay with Carnival, from my personal experience, because they have stepped up their service, dining and total onboard experience,” said Silvestri.
De Potter also was upbeat about improvements to Carnival’s product.
“Carnival looks a little more elegant these days after implementing the Fun Ship 2.0 upgrades,” he said. “I have a lot of clients who cruise for the experience and won’t even get off the ship in port.”