Tough Talking On...


Maria Harding asked some of the industry's top players for their views on the likely consequences of recent changes to payment methods to travel agents


COMMISSION


C


arnival UK’s move to slash commission to five per cent across its Complete Cruise


Solution (CCS) brands P&O, Cunard and Princess Cruises has prompted some travel agents and homeworkers to threaten they will cross-sell to other lines in protest. But will the move prove a fatal blow


to agents’ business or is it a long- overdue move to stop desperate discounting? Will sales of CCS brands suffer? And if the market leader proves powerful enough to adopt a tougher stance, how soon before other cruise lines follow suit?


14 Autumn 2011 • www.sellinglonghaul.com


DAVID DINGLE chief executive officer, Carnival UK "I’d say it’s so far so


good; our objectives are being fulfilled in terms of sales and the commission cut has led to agents selling on value rather than low price. Most agents appreciate that it opens the door to smaller specialists and means that customers who had deserted their local travel agent in favour of large discounting call centres can now be won back by good service and knowledgeable advice. Clearly it’s early days yet and we’ll


only be able to judge when we have a full sales cycle, but this move has been in the air for some time. About five years ago, at the ABTA Convention, agents were saying 'why not reduce commission so we’re not cutting each others throats?' "It’s actually not as dramatic a move


as it appeared as we’ve been offering five per cent commission on late bookings (of up to eight weeks before departure) for about a decade now, and lates accounted for some 25 per cent of our sales. "As the market leader we felt it was up to us to make a move. It will


remove the disfunctionality created by competing on price. Will other lines follow our lead? I haven’t heard anybody say that they won’t."


JO RZYMOWSKA associate vp and general manager (UK and Ireland), Royal Caribbean


International and Celebrity Cruises "We currently offer from 10 to 15 per cent commission, depending on performance, and haven’t made any decision about reducing it at the moment; we are watching the marketplace. But we are looking for


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