Travel Market Report’s coverage of the recent ASTA cruise webinar featuring Vicki Freed, senior vice president of sales for Royal Caribbean International, generated a flurry of comments. Freed posted an invitation to TMR readers with her phone number and e-mail address inviting travel agents to learn more about how to increase their volume. We took her up on her offer.
TMR: First, can you explain exactly what goes into the non-commissionable part of the fare?
Freed: It is possible to explain, and as an industry, we have spelled it out. However, at the end of the day, you have to move on. When I said “It is what it is,” that was not a flippant remark. I meant that agents have to move on. And I meant that with all due respect.
TMR: But isn’t compensation important?
Freed: Agents spent so much time on Delta Airlines and commission cuts focusing on what they could not change. ASTA was very guilty of this. Some travel agents are making more money on airline tickets with no commission because they are charging ticketing fees and they negotiate overrides even on no commission. If a travel agent is motivated, they can more than make up for the commission on NCFs.
NCFs are the part of the ticket, mostly port-related items, that are not commissionable. You can debate it one hundred different ways, but at the end of the day, it is not going to change. This is a volume business and can help you make money. So don’t get stuck on NCFs. It’s just a distraction.
TMR: Are you saying that cruise line commissions will go the way of the airline commissions?
Freed: No, it is not analogous with the airlines… it’s the behavior, I’m comparing. Agents lost track of figuring out a solution around this. NCFs are not going to change. Does spelling out what goes into an NCF and arguing about the details put one more dollar in your pocket?
TMR: It probably would make agents feel better to know what is off the table and why in terms of what is commissionable.
Freed: My job is to help you sell more and make more money, and as a result, feel great about being in this business.
TMR: How can you make up for the effective pay cut brought about by NCFs? Doesn’t it still take time to make each booking?
Freed: First, let me say I did not create NCFs. This is not a new issue and it is an industry issue. I am just trying to help travel agents find ways to deal with it and find other streams of income to offset the pain point with NCFs.
That said, we have a bonus commission program. It’s an opt-in at www.CruisingPower.com. Once you opt in, you get $25 or $50 per stateroom. And if you want to do more volume, we can help and that will improve the commission level.
If you look at agencies like American’s Vacation Center, for example, they are high volume. Their agents probably spend the same time as the average agent. The difference is they know the product inside and out. The sales part of the call is faster because they have the knowledge to close faster. And because of knowledge and volume, in some respects they are probably helping the client more.
Every time I read a chat line with complaints, I pull productivity stats on the agents I can identify. The ones who complain generally give us zero revenue to $10,000 worth of business. The large producers are not the ones complaining. For example, Vacations to Go… maybe they don’t love it, but they’ve moved on. They’ve concentrated on the things they are in control of and that is selling more cruise vacations.
TMR: What does it take to increase the margins on each sale?
Freed: You have to be a significant player. When you make it a serious business, NCFs won’t matter. You’ll make it up on the backend, and with co-op and marketing support. That will more than make up for the NCFs.
TMR: What volume does an agency need to be at to qualify for the better margins?
Freed: It isn’t one size fits all; everyone’s model is different. While $1.1 million is the target for our brands (Royal Caribbean International, Celebrity and Azamara) to receive 16%, that can be out of reach for many agents.
If an agency is selling $20,000 today, it is absolutely possible to sell $200,000 of my brand in the next year, and I will hold your hand and do one on one monthly consultations. But you’ll have to work and do things differently.
That’s a directed, dedicated focus and I will work with any travel agent who is highly motivated to make a difference. At the end of the day, I’m truly the friend of the travel agent. We are all committed at Royal Caribbean to rolling up our sleeves and helping the travel agent increase their business. We are the cruise line that believes in the future of the agent.
You have to be more proactive in getting the word about what you do and your branded customer service. That’s important. You have to articulate why a consumer should buy from you. What is your branded customer service? If you are just a booking engine, the consumers can call the cruise line direct, or book it on line. What is my value?
I would go where the trend is. I would become the family vacation specialist. I would know everything about family vacations…every children’s program, teen program, what the facilities are, what type of staterooms can accommodate families, which cruise lines accommodate babies, which have children’s activities, what are those activities…I’d know that stuff inside and out.
Here’s another example. If families aren’t your thing, you might want to become the honeymoon and romance specialist, because families aren’t your thing. Or you might want to be the Australia and New Zealand expert. You need to find what your passion is and how do you want to help consumers make the right buying decision. At the end of the day, there is so much consumer confusion out there, that a good travel professional will help guide the consumer to making the right purchase decision.
TMR: You are known as being very supportive of travel agents. Can you share some of the ways you reach out and work with them?
Freed: Every two months, Cruise Planners invites me to speak to their new hire training classes. I do a kick off and welcome people to the industry. I spend an evening every two months telling them what a great career they’ve chosen.
As I’ve said, I work one-on-one with motivated agencies. I’ve proven to the industry that I care about them, whether it is someone new, or someone who has been in the business 20 years and is struggling or someone who just wants to move to the next level. I don’t see that many executives focused on the trade. Many are focusing their attention on other types of channels.
I don’t hide in the ivory tower. I care about agents. Sincerely. Honestly. And I want agents to succeed. We rely on agents. Not all suppliers need agents equally. I started as a sales rep. Without the support of travel agents, I couldn’t have grown my career. Working with agents is what I love. That’s my passion.
The more agents talk about shifting their business to all inclusive land vacations, the more they signal to cruise line that the lines had better figure out another way to build their business. Is that really what you want? I’m a firm believer that travel agents need to sell a variety of types of vacations. People take different vacations. They cheat on the cruise industry. They don’t always cruise. I don’t think it’s bad that travel agents sell a lot of different types of vacation packages but they shouldn’t threaten that they aren’t going to embrace the cruise industry and that they will sell away from the cruise industry. They should support it in a good way so the cruise lines continue to rely on travel agents.
TMR: Is there anything else you’d like to add?
Freed: I left my contact info in a comment on the Travel Market Report site. I am shocked and surprised that I did not hear from anyone. To me, that means people really just want to complain. I would love someone to contact me about how to grow their volume. I would have a BDM in their office, and I personally will help guide them and direct. Please take me up on my offer. You can reach me at (305) 539-6031 or email me at AskVicki@rccl.com.
Coming soon: Case histories of agents who have been successful in building their cruise business. (Please contact email@example.com if you’d like to share your cruise business story with us.)