Carnival Revises Commission Tiers & Terms

Carnival revamped its commission policy for the first time in 10 years, modifying its payment tiers and simplifying its volume-based structure.

“[T]he majority of travel agents will not see a change to their current commission level,” Carnival said in a news release Wednesday.

The revisions, which apply to new bookings starting Jan. 1, 2013, were made “to align our compensation tiers with the rest of the market,” Carnival said on its agent website, Goccl.com.

Net cabin sales
Under the revised policy, Carnival will continue to pay agents based on volume, rather than revenue, but commissions will be based on net cabin sales, rather than its current seven-day equivalent structure.

Carnival said the change was in response to feedback that the seven-day formula, which gave agents more credit for booking longer cruises than shorter cruises, “was cumbersome and confusing.”

“Nobody really understood Carnival’s old formula,” agreed Ralph Santiseban, owner of  a Miami-based CruiseOne franchise. “It wasn’t user-friendly.

“Carnival is just getting more in tune with what the other lines are doing in how they classify commission tiers for agents,” he added.

New commission tiers
Carnival’s new commission tiers will be based on net cabins sailed in 2012. The tiers are as follows: 50 cabins, 11%; 100 cabins, 12%; 200 cabins, 13%; 300 cabins, 14%; 400 cabins, 15%, and 1,000 cabins, 16%.

The changes do not apply to agency sales in 2012 for 2013 or 2014 sailings.

Unlike other cruise lines, Carnival had not modified its commissions since 2003, it said. The changes in commission tiers “reflect Carnival’s 50% capacity growth during the past 10 years.”

No change for top producers
Santisteban agreed with Carnival’s assessment that most agents will not see a change in commission levels.

“I don’t foresee that it will affect top producers adversely,” he told Travel Market Report. “Most agencies that have high production should not see any change in their Carnival commission tier.

“It might affect the smaller agencies – they don’t produce as much to begin with. For larger producers, it will be business as usual,” he said.

As for his own agency, “we are members of CruiseOne and our numbers are looked at in unison,” he noted.

Lisa Kennedy, owner of a Cruise Planners franchise in Folsom, Calif., said Cruise Planners sent members the announcement, “telling us that it won’t affect any of the individual agents. So I’m not concerned about it.”

Values agent support
In announcing the changes, sales executive Lynn Torrent voiced Carnival’s appreciation for agents. “We rely on and appreciate the support of travel agents and remain fully committed to helping them grow their businesses,” said Torrent, executive vice president of sales and guest services.  

“Most North American cruise brands have decreased capacity in the U.S. as they’ve substantially increased international sourcing and deployment, while Carnival remains focused on the U.S. market.  

“As such, Carnival pays more commission to U.S. travel agents than any other cruise brand and the vast majority of our guests are sourced from the U.S. which continues to create huge earnings opportunities for domestic travel agents,” she said in the news release.