Viking Unveils All-Commissionable Fares

Viking River Cruises chairman, Torstein Hagen, drew a line in the sand at the American Marketing Group’s You’ve Got Talent global conference. After Vikings’ announcement that it is the first cruise company to pay agents on ‘everything they sell,’ he dared other river and ocean cruise lines to follow Viking’s announcement that it is taking the “non” out of Non-Commissionable Fares.

To thunderous applause from agents at the conference, he proclaimed, Viking River Cruises is now paying travel agents commission on the total invoice of a Viking river cruise, affirming his company’s support for the agency channel.

“I hope everyone follows suit,” said Hagen, noting the new all-commissionable fare policy will mean about $70-$80 more in pay for agents, on top of the typical $1,000-plus they earn booking a Viking river itinerary.

Viking River Cruises is the first cruise company to pay commission on every aspect of a client’s booking, including the government taxes, port fees, air upgrades, beverage packages and gift orders. The line already paid commission on shore excursions and travel protection plans.

“This unprecedented commission policy was developed with input from leaders in the travel agency community, and it is very simple,” said Hagen. “If an agent sells a Viking River Cruises itinerary, they earn a commission on all of it. Our partners will be paid for everything they sell.”

While Viking entered the market with a campaign that focused on direct selling, Hagan said that was because the river cruise company had to educate consumers about this new product, which he said is highly compelling for agents to sell for two reasons: The first is that they make commissions on the entire all-inclusive fares and the second is that consumers need to consult with an expert to be sure they are spending their money on the high-ticket product that is right for their needs.

Agent Reactions

Agents told Travel Market Report that the principle of the policy is of central importance and have indicated they will try to support the line because of it.

“I think it is great that Viking is giving commission including the taxes and port fees, considering that most of the fees are pure profit,” said Angie Gideon, office manager for Gideon Travel Agency in Ontario, Canada. “We try to give the customer what they ask for but it sure won’t hurt to recommend Viking as well.”

Amber Blecker of a Colorado-based CruiseOne was equally as enthusiastic. “Viking’s new policy is wonderful for travel agents. Viking is an important partner for CruiseOne especially, and has long honored the relationship with our company and the agent community in general. This is another step forward and I applaud them for making this change. This will absolutely help my bottom line!”

She continued: “While river cruisers are often more experienced and sophisticated, the various itineraries and lines lead most to call on experienced travel agents for guidance. The river cruise industry has had explosive growth in the last five years, and the choices can be daunting. Viking recognizes the importance and value of travel agent partners in this process and with this move is rewarding us for all we do.”

Like Gideon, Blecker said she will certainly mention Viking to river cruise clients. “Commissions aside, the bottom line for my clients always must be what is right for them. I believe my commission should not affect my recommendations to my clients. However, each time a line makes it easier to work with, it earns a place in ensuring I do keep them in consideration for my clients, when appropriate.”

Incremental Income

Unlike other river cruise lines, Viking’s brochure cruise pricing is, and has always been, inclusive of port charges. But until now the port charges were excluded from the commission. Air prices are also inclusive of governmental fees and charges, and airport transfers as well. According to the river cruise company, the new commission program is an extension of the all-inclusive formula and provides additional earning potential to travel professionals.

“Since our inception, Viking has prided itself on its relationship with the travel agent community, and with this program we reaffirm this commitment,” Hagen pointed out. “Currently, our average commissions are more than $1,000 per booking; by commissioning everything, earnings will increase by an average of $100, and agents will have an even greater incentive to selling Viking.”

However, one travel seller Travel Market Report spoke with said that based on his calculations the additional income would be only approximately $14 to $16 for the port charges. No river cruise companies, he said, list additional taxes and fees on their invoices.

A Line in the Sand

While at least one travel agency group executive told TMR that Viking has drawn a line in the sand, two Viking competitors seem unfazed by the announcement.

“Our policy has always been to provide commissions on every aspect of the Avalon vacation experience except government-imposed taxes and fees,” said Jennifer Halboth, director of marketing for the Globus family of brands. “And, our average agent commission is $1,200.”

And Guy Young, president of Uniworld Boutique River Cruise Collection, said: “As a company, Uniworld markets exclusively through travel agents. We pay amongst the highest commission levels in the industry. And our support and commitment to the travel agencies is very high, and I would say if you’re going to compare us relative to Viking, 95% of our business comes through travel agents so, as a percentage of our overall business, we pay a lot higher commission than Viking does.”

However Blecker told TMR she would not be surprised if other lines followed suit. “Regent Seven Seas moved in this direction approximately one year ago, making all aspects of their bookings commissionable, which emphasized their cruises as all-inclusive both for the passenger and their agent. I’d not be surprised to see other luxury and river cruise lines follow in the steps of Viking and Regent in the future, and would like to see it extended to deluxe lines since they are moving more toward an all-inclusive experience as well. I don’t expect to see this trend extend to the mainstream ocean cruise lines in the Contemporary or Premium categories, but I’m sure discussions on this topic will continue between agents and the lines to find a balance between commissionable and non-commissionable fares.”

Carnival and Royal Caribbean have so far declined to comment.

Viking’s new commission program will apply to all new 2010 and 2011 bookings, and Viking will continue to pay commission 29 days prior to departure.

Information on Viking’s 2010 and 2011 itineraries, dates, pricing and more is available on the cruise line’s travel agent portal at www.vikingrivercruises.com/agents. Or call (877) 66-VIKING.