Special Report: Commission tops agenda as new Carnival UK chief meets agents

Special Report: Commission tops agenda as new Carnival UK chief meets agents

Agents’ pay, discounting and service fees were among topics discussed at a Carnival UK round-table hosted by Travel Weekly for leading retailers and operators. Melanie Hall reports

Attending the debate (see picture, from left) were Giles Hawke (Carnival UK), Chris Roe (Virgin Holidays), Gerard Tempest (Carnival UK), Lucy Huxley (Travel Weekly), Stephen Bath (Bath Travel), Seamus Conlon (Cruise.co.uk), Garry Brown (Opodo Cruise), Miles Morgan (Miles Morgan Travel), Jenny Ellis (Thomas Cook), Simone Clark (Iglu).

A leading agency boss revealed he was forced to change his entire business structure in reaction to Carnival UK’s move to 5% commission.

Stephen Bath, joint managing director of Bath Travel, said his agents’ salaries were now linked to the commission earned on what they sell.

“They can work out for themselves what they want to do [what products they sell],” he said.

“This is not a casual change, it’s a massive structural change. My loyalty [to Carnival UK] was punished with almost Armageddon.

Cruise debate“Many parts of the industry have had to take action when faced with [cruise commission] cuts that lost my company a million pounds last year.”

Bath said his 60-branch agency chain was now selling cruise lines which yielded a better return.

“The last thing we wanted to do was switch-sell,” he said, explaining that lack of funds now means he can no longer afford to give his customers extras like flowers or taxis, or even send out promotional material.

“For 30 years, we produced our own advert-isements; now, it’s like bang, lights off, we have got no more money.”

However, Bath added that this January had resulted in “our first decent figures for four years”, and that he was hopeful that

Gerard Tempest, Carnival UK’s new chief commercial officer, would make changes that would help agents.

Miles Morgan, founder of Miles Morgan Travel, which operates 12 stores, said the cut in commission had forced him towards other cruise lines, as well as a move to long-haul and tailor-made.

“They [the cruise lines] are missing out on bringing new people to cruise because people like me go, ‘why bother?’

“I still want to have a relationship with CCS but unfortunately they miss out massively on getting more people into the market.”

However, Giles Hawke, sales and customer services director at Carnival UK, said the company’s TV advertising and other promotions helped boost the new‑to-cruise market.

“Our role is to drive the market with our brands so we are not missing out on new-to-cruise business,” he said.

Volume or price? Carnival hits the ‘sweet spot’

Carnival UK said it was not averse to sailing ships that weren’t full, and pledged never to discount so heavily as to “drive a hole through the brand”.

Cruise debateBath Travel’s Stephen Bath asked the cruise operator’s Giles Hawke and Gerard Tempest whether Carnival would ever adopt the approach of some high-end hotels, which had the “maturity” to not lower their room prices to bargain‑basement rates and risk having the wrong kind of client staying with them, which may devalue their brand.

Tempest (pictured right) replied: “Discounting down to the death is something we would never do as that would drive a hole through 
the brand.

“Discounting the room down and hoping a customer will buy something else on board seems a bit bonkers.”

He said Carnival’s aim was to “find the sweet spot between volume and price”.

Agents call for Vantage Fare benefits to be publicised

Agents called on Carnival UK to make its Vantage Fares more appealing in order to hammer home the message to customers that booking early offers a better deal.

Carnival UK’s trade arm, Complete Cruise Solution, introduced early-bird Vantage Fares last July to enable agents to guarantee that like-for-like prices will not later be undercut.

Jenny Ellis, head of cruise and commercial at Thomas Cook, said that her sales staff risked appearing to have their credibility undermined when they “push the Vantage message” if cruise lines later launch better deals closer to the departure date.

Ellis asked Carnival to give agents more information on future fares to avoid that scenario. She said: “It would be really good to have some idea of what’s going to happen in the market.”

Seamus Conlon, managing director of Cruise.co.uk, agreed, and said: “You need more benefits in the Vantage Fares.”

Giles Hawke acknowledged Carnival UK needed to do more to make Vantage Fares more enticing and to define the brands more clearly.

To fee or not to fee? That is the question for retailers

The controversial topic of service fees for cruise bookings divided agents at the round‑table.

Simone Clark, managing director of Iglu Cruise, sparked the conversation after saying that her company charges a £10 fee.

Cruise debate“It’s not a high amount,” said Clark (pictured right), who added that Iglu sometimes waives the fee depending on the customer.

Garry Brown, commercial cruise manager at Opodo Cruise, set out his company’s fee strategy, saying: “If a customer wants to speak to someone in the call centre, we charge a service charge; if they book online, it’s free.”

However, not every agent was convinced about charging fees.

“It works brilliantly in restaurants,” said Stephen Bath, joint managing director of Bath Travel, referring to the 12% service charge sometimes added to bills.

“But it doesn’t work very well in travel agents on the high street though. In a restaurant, if you scream and shout, they will go and take it off, and you would leave under a cloud.”

Online, however, he said it was easier for customers to refuse to pay the charge.

Miles Morgan, founder and managing director of Miles Morgan Travel, said his agency had never levied a service fee.

“The whole package includes the service,” he said. “We try to retain customer loyalty.”


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