Over the past two weeks two cruise lines announced expanded and clarified rebating policies designed to make it harder for travel agencies to sell cruises at prices below approved rates. The new policies also address the issue of value-adds by attempting to regulate how agencies can use value-adds when selling.

Most agents Travel Market Report spoke with indicated they support what Norwegian Cruise Line and Carnival Cruise Line are doing to level the playing field. In fact, a recent Travel Market Report online poll revealed that 85% thought rebating negatively impacts their business and that they lose business to rebaters.

However, 11% said rebating had a positive effect in keeping price shoppers away and 4% said it was irrelevant. 

For these agencies, who do not rebate or offer value-adds on matters of principle and don’t care if they lose “shopping” customers, the new regulations mean very little.

“Most smaller agencies don’t rebate,” Else Daniels, ECC, owner/manager of Vacations at Sea, said. “So it’s not much of an issue.”

“When we started our own company, we agreed that discounting out of our own pockets minimized the value of our time, our attention and our expertise,” added Cindy Clifford, of Gotta Go Cruises, who admitted that back when she got into the business, cruise only agencies were equated with big discounts and rebating commissions was standard practice.

“It was tremendously competitive and a lousy way to have to do business, but we did what we had to, to earn business.”

Now, Clifford sells on the value she provides. “The value we add to any booking is the first hand knowledge and experience that we use to guide our clients to the most rewarding cruise vacation. Period. If we lose the sale because some other agency is giving it all away, we figure we’ve lost a shopper and that’s not a tremendous loss.”

Not all small agencies are willing to lose customers so easily.

“I want business from wherever I can get it,” Staci Blunt, owner of Vacation Visions, told TMR. “I am glad that the cruise lines have implemented the new rebating policies to better level the playing field.”

But like so many other travel sellers, Blunt has her doubts as to how successful the new rebate policies will be.

“I believe that large companies (like Costco and Wal-Mart) will still find or create loopholes to offer special incentives and also block more group space at discounted rates that smaller agencies like myself might not be able to. I know that the larger companies also have more staff members to write the marketing plans and follow the rules to be able to give an incentive, while I have to focus more on the overall strategies of running a complete small business with limited manpower.”