Cruise lines that have cut commission are giving money back to travel agents “under the table” as they accept that reducing payments to 5% was a mistake, according to the UK boss of MSC.
Giulio Libutti, UK managing director, told Travel Weekly: “Under the table, these lines are now starting to give money back.
“They aren’t going back to fixed rates of 15% or up to 18%, but they are offering double commission for certain months, or bonus commissions.
“Through variable means they are making it back up.”
He added: “The fact that Princess moved back from 5% to 10% shows it was a mistake. You have to have mutual respect for agents and, by cutting commission, they were basically saying the value of an agent wasn’t important any more.”
Libutti’s comments come a month after he accused lines of “underestimating the value of agents” by cutting commission.
MSC revised its terms to offer performance-based commission rates of up to 13%, a move Libutti claimed had increased revenue by 35% year on year in 2013, and had also developed new agent partnerships.
“We are now working with some small cruise specialists that a year ago were doing no business with us at all,” he said.
Libutti said competition was particularly challenging as growth in the cruise market had stalled due to the economic crisis and high-profile incidents involving Costa, Carnival and Thomson Cruises.
“Cruise will continue to grow but it is suffering so we all need to find travel agent partners who understand and share our targets.”
MSC expects to attract about 100,000 passengers from the UK in 2014, up from an anticipated 70,000-75,000 in 2013.
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