Disney’s Commission Changes Stir Concerns

by Ana Figueroa August 21, 2014

Increases in Disney Cruise Line’s non-commissionable fees have created something of a stir in the travel agency community. But a closer look indicates that Disney’s revised NCF policy is fairly consistent with industry standards.

Still, the timing of the move is raising some eyebrows, since it comes in tandem with other changes in Disney commission policies that also affect agents’ bottom lines.

Is it a case of unfortunate timing or is there a dark cloud over the Mouse House for agents?

To get some perspective, Travel Market Report spoke with two seasoned Disney specialists. Both run agencies that are “Ear Marked” by Disney, a designation that allows them to call themselves “Authorized Disney Vacation Planners.” The distinction, based on sales volume, is highly prized and conferred yearly by invitation.

Disney’s new NCFs
Disney Cruise Line this week shifted from a flat NCF of $20 per person, per night, to NCFs based on length of a voyage. Under the new policy, the NCF is $25 per person, per night, on sailings of six nights or fewer, and $30 per person nightly on seven- to 10-night cruises.

For sailings of 11 nights or more, the NCF remains unchanged at $20 per person, per night.

Disney Cruise Line told Travel Market Report that its new NCFs bring it closer to the industry standard.

Moreover, it said, unlike some other cruise lines, its stateroom pricing includes features such as dining, non-alcoholic beverages and entertainment, which means that agents selling Disney Cruise Line earn commissions based on higher average fares.

Travel agency owner Elizabeth Foss of My Travel Elf in Naples, Fla., agreed that Disney’s new NCFs are in keeping with the rest of the industry. “Disney is really very much in line with what everyone else charges as far as the NCFs go,” she said.

Still, the timing of the change puzzles her.

“July was a great month for agents who sell cruises; we finally saw a bunch of lines offer bigger commissions. It was nice to be recognized. Then Disney Cruise Line sort of burst the bubble with these NCF and other policies that result in less money for agents,” said Foss.

Adventures by Disney commissions
The “other policies” Foss referred to include changes at Adventures by Disney. The high-end tour company has announced that it will no longer pay commission on air or on pre- and post-tour stays at non-Disney hotels.

“If you’re a decent agent, you know how to get commissions for international flights. You can always book hotels directly. So, savvy agents will work around this. But it’s still another example of Disney hitting us from every side,” said Foss.

Disney specialist Kimberly Hill, owner of Mouse Tales Travel in Myrtle Beach, S. Carol., said the change in commissions on Disney’s luxury tour product will have little impact on her.

“We don’t sell Adventures by Disney unless someone asks for it. If clients are spending that kind of money, they’re spending it elsewhere. It’s a great product but it’s not a big deal for us.”

Disney Dining Plans
Another commission change from Disney affects agents who sell its Disney Dining Packages.

Until recently, Disney based commission payments for its dining packages on the total amount of the sale, including tax. Now, under a new rule, only the pre-tax amount is commissionable.

“We were a little surprised to be getting paid on tax in the first place. Some of us wonder what took them so long to make the change,” said Foss.

“The problem is they didn’t announce it. You have to look for it buried deep down in some fine print.”

For agents like Foss who sell a lot of Disney, the seemingly minor change can have a significant impact. Foss forecast that her agency will lose around $4,000 in commissions annually under the new rule.

“It may be the least of our problems with Disney right now,” said Foss. “It’s the timing that’s so interesting. You wonder if they tried to sneak it in. It’s like pulling off a Band Aid – get the pain over all at once.”

Benefits and costs
Both Hill and Foss are philosophical when it comes to their relationship with Disney.

“The Ear Marked contract is very strict and very controlling. Each agency has to weigh the benefits. I’m seeing a lot of owners going away from booking directly and using a wholesaler like Funjet or GoGo,” said Hill.

Hill has decided to “Disney-proof” her business by launching a new division devoted to everything but Disney.

“Part of the reason why I’m doing this is that Disney isn’t as agent friendly anymore,” said Hill, citing a slow erosion of commissions.

Foss sees a mixed picture when it comes to Disney’s relationship with agents.

“I have to say Disney is a little bipolar. When they show us love, nobody does it like they do. You just never know when the other side is going to show up,” said Foss.