Cruise Commissions Keep Falling

So far results of this week’s poll show that NCFs top the list of specific complaints with more than one in five agents citing these non-commissionable parts of the cruise fares as their top concern. Low prices were cited by 6%, direct marketing to consumers and cuts in phone support were each named top issue by 5%; the move to e-docs was cited by 2%, and 62% said all of the above. Sadly, several agents told Travel market Report, low cruise prices and high NCFs are resulting in increasingly lower commissions.   

Agents also strongly reacted to a Travel Market Report article on an ASTA Cruise Webinar (see article) in which Vicki Freed, senior vice president of sales for Royal Caribbean International and Justin French, managing director, Canada, for Carnival Cruise Lines commented briefly on NCFs .

Through comments on the TMR Web site and letters to TMR, agents expressed exasperation with the NCF situation.

“I have been so frustrated lately with the cruise lines. They seem to be getting more and more ‘non commissionable’ and the commission is turning out to be nothing,” said Maury Reshman, owner of Around the World Travel in Charleston.

What’s In an NCF?

“Yesterday I booked a cruise for $2,496.90 and my commission was $149.00; that is 6% commission. There seems to be more and more taxes. What are those taxes that no one seems to know? … where are all of those [non commissionables] going?”

Reshman wasn’t the only one asking that question. A number of travel sellers questioned exactly what was included in the non-commissionable portion.

“I’m surprised the CLIA members haven’t been taken to task with the Department of Justice,” said “Alex” in a comment posted on the site. “How is it that airlines are required to list every tax charged on a ticket. … When you press a cruise line, you [can] expect deafening silence, [to be] hung up on – or just plain ignorance.”

Where’s the Profit?

Travel sellers also contrasted the profitability of selling NCF-laden cruises with land-based all-inclusive resorts and river cruises, pointing out that their clients benefit as well.

Leslie Koehler of Brighton Travel/Travel Leaders, Brighton, MI had a case in point, a family of 22 who normally go on a cruise, but decided to switch to an all inclusive this year. “The cost of the trip went from $38,000 to $45,000, and my commission went from $2,300.00 to $5,300.00.”

Koehler noted that her customers reaped a significant advantage while her commission more than doubled. “They now have everything paid for with the all inclusive so $7,000.00 is not that big a difference when you take that into consideration.”

“You can bet that we are going to be pushing the all-inclusives,” Koehler noted. “It really is a cost saver in the long run for everyone concerned. It was a win-win for both.”

NCF fares are just part of the problem, Helen Vacca owner of Vacation Bound in Nashua, NH told TMR.

“There’s also the low commission for all the work we do in the Mass cruise market…advising, printing documents, doing their Immigration paper work, and shore excursion information. Hours of time are spent on making sure the client has been well advised on all aspects and we get minimal commission.”

Selling What Makes Sense

Vacca suggested that agents leave the mass market cruises to Costco, BJs and Sams, “seeing as this is where the Mass Market is selling from.” Vacca said she recently had a client ask her to match a price from Costco that was $125 less than she had quoted. “I was not even making that,” she said.

“It is about time to stand up for what we all complain about every day. See if when their distribution system is gone, how they all fare…if ‘it is what it is’ to coin a phrase from the Vickie Freed interview…,” said Vacca.

“Show your clients after getting on board, how much more it will cost them for this Value at Sea,” she suggested. “Drinks, pictures, excursions, optional dining venues, bar tabs… See if an all inclusive will fit their needs better. We at least get paid for what we sell. 14% of a $6,000.00 all inclusive as opposed to 11% of a cruise chopped down from $6,000 to $3,200 without airfares, NCF, port taxes and Government Taxes…Makes more sense to me,” Vacca said.

In fact, in a TMR survey on NCFs earlier this year, 53% of respondents said they were coping with NCFs by trying to book better margin options and 26% said they were avoiding contemporary/mass market lines whenever possible.  

“If the cruise lines think we cannot move market share, they are sadly mistaken,” said Jane Blowes, of CWT Blowes Travel & Cruise Centres in Stratford, Ontario.

“The first cruise line that does something about the NCF’s and other things bugging agents will be the first cruise line to get my business. I can shift my clients. Cruise lines may think they have customer loyalty, but a good sales person can move them to another very easily.”

A number of agents also applauded Viking River Cruises’ no-NCF stance.

Documents, pre-paid excursions, wine with dinner, airfare, transfers are all included in the cruise price, Vacca noted. Plus: “the average commission on this River cruise is $1,600.00.

In a comment posted on the TMR Web site, “Betty” agreed: “…I prefer to sell escorted tours or River cruises. Those operators are still professional and present travel documents worthy of the company and price.”

“Not that this will fit all our clients’ needs,” pointed out Vacca, “but let’s learn a lesson from the Cruise lines: We have to do what we have to do to make a living and stay profitable.”