Norwegian: Inclusive Plan Can Double Agent Commissions

Norwegian Cruise Line announced an “all-inclusive” add-on package, available in August, that it said can double travel agents’ commissions on 2015 bookings.

The move was prompted by research showing broad consumer interest in inclusive pricing, along with previous successes with similar offerings, Norwegian said.

Priced at $899 per adult for a seven-day cruise, the add-on package represents $2,400 in savings per person, according to Norwegian. The line said the program is the first of its kind offered by a major cruise line.

The package is available on new bookings made between Aug. 4 and Aug. 29 for 2015 sailings of varying lengths. It encompasses 10% fare savings, dining and beverage plans, shore excursion credits and an Internet plan, among other amenities. (See sidebar for details and exceptions.)

‘Huge opportunity’ for agents
In a travel agent webinar touting the program, the line emphasized the potential earnings for travel sellers.

“In a time when margins have been under pressure, we think this is a huge opportunity to earn some tremendous commission by giving customers what they want,” Andy Stuart, executive vice president of global sales, told some 3,000 travel agents who sat in on Wednesday’s webinar.

Travel Market Report asked Stuart about the impetus behind the promotion and why the deal is good for agents.

Andy, what was the inspiration behind the program?
Stuart: Six or eight months ago we were looking at our Transatlantic voyage and it wasn’t doing very well. We were looking at how to promote it differently, so we packaged it with air and with a couple nights’ hotel. Then we added in some onboard offerings and it really started to sell.

There’s interest in more inclusive packages. Every time we’ve added it, we’ve seen a pop in booking.

We really like these more inclusive packages. It simplifies things for us and the customer. In the triangle of the cruise line, the agent and the customer, this is something that can get all points excited.

Why is this good for agents?
Stuart: It’s good for travel agents because they’re going to get a more excited customer and drive a higher margin. It’s not often you find something good for everyone in the transaction.

The big win for travel agents is that it’s commissionable, with the exception of the prepaid service charges and gratuity on bundle. Essentially agent commission is double, and we think this is a great incremental earning possibility.

What kind of cruiser is this deal meant to attract?
Stuart: It’s one more choice. We don’t think this is right for 100% of customers; there are some who like the Chinese menu or who are looking to cruise on a budget.

We did research with past cruisers and first-timers to get a sense of whether it’s appealing, and the level of people who were generally interested was higher than we expected, at more than 40%.

Our expectation was that repeat cruisers would immediately get it, but the reality was that it was almost the same between the two groups [past guests and first-timers].

It got us excited to see there is a broad market – maybe people who go to all-inclusive resorts want that experience on a cruise. This may check the box for them.

The appeal is that there wasn’t one segment which stuck out. Some of these things feel a bit limited because it’s just the families or couples who like it. In this case it really seemed like a very broad audience.

If this performs, do you foresee more inclusive deals going forward?
Stuart: It’s early to say. We’re not ready to say this is a path we would head down. We want to watch it and see.

How have agents reacted?
Stuart: Close to 3,000 agents were on our webinar, and the reception was overwhelmingly positive. About 2,000 questions were asked. It really looks like our travel partners are excited. And my Facebook has gone crazy with agent support.