Royal Caribbean commission cut wins agent support

Royal Caribbean commission cut wins agent support

Travel agents have supported Royal Caribbean’s move to reduce commission as long as the line puts in other measures to clamp down on those agents who continue to discount.

Tui Travel distribution and online director Nick Longman said: “The move towards eliminating discounting is a positive thing for the cruise industry as it will provide transparency.

“For us, it’s not about the headline price, it’s about the amount we can retain.

“All we will seek in our negotiations with Royal Caribbean is a way to retain our commission rather than giving it away to consumers and so we will be looking for assurances from Royal Caribbean that they can police any discounting, otherwise this model won’t work.”

He added: “Those who just sell on price will have an issue with this. But we are not big discounters. When they bring this in, it should then come down to service which is where we have put a lot of our investment. We will be able to sell cruise on our expertise.”

Longman volunteered that he thought Royal Caribbean has approached its move to change its commercial terms in the right way.

“They have not just told us they are doing it. They have really engaged with the trade.”

Advantage Travel Centres leisure director Julia Lo Bue-Said added: “Discounting is an issue and the fact that Royal Caribbean is coming out with a scheme that will still give agents an opportunity to earn a decent commission level and that they are looking to put strict measures in place to control discounting, then I am comfortable.

“I’m not advocating commission cuts but the success of this will be in the policing and we understand Royal Caribbean will do that by signing off all co-op advertising, a lot of whistle-blowing by other agents, mystery shopping and mystery phone calls.”

She added: “What’s really encouraging is they really do want to work with the trade. They want to make this work for us.

“Yes, they are changing their remuneration policy to take discounting out of the market, but they are doing it in conjunction with us and doing everything they can to maintain our support.

“I know for a fact that when you try to reduce commission to a level that gives nobody an opportunity to make a commission, then it really does impact on sales.”

Richard Downs, Iglu Cruises founder and chief executive, said: “If it eradicates discounts it’s a great move.

“It’s a sensible level and will create a level playing field if properly brought in. They have done this in a collaborative way with a lot of thought and consideration and the trade should embrace it.

“I genuinely believe what they say about why they’ve done this and that they are full square behind the trade. There is no question in my mind that they have not got a hidden agenda.

“That’s reinforced by the way they gone about this. Royal has had the benefit of watching how a main competitor has done this and learning from some of the good bits and some of the pitfalls.”


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