Cruise industry’s review of commission splits travel agents

THE trade is divided over news the cruise industry could be the next sector to slash agent commission.

Cruiselines Carnival, Royal Caribbean and Island Cruises are reviewing agent payments following Thomson’s decision to slash base commission from 10% to 7%.

Some agents believe chopping cruise commissions from their current 10%-15% base levels would be no bad thing.

Chandlers Travel manager Richard Knight said cutting commissions would rein in retailers that insist on heavily discounting cruise prices.

“I discount as much as anyone else does. I would like to see commission cut if it takes some of this heavy discounting out of the industry,” he said.

A second agent said commission cuts didn’t necessarily mean less money for agents.

“We’ve increased revenue and retained margins. We also discount by 10% by taking control of our overheads. It can be done,” he said.

Cruise Club International director Graham Dullop said there will always be some agents that offer big discounts regardless of commission levels.

“I remember when commissions were up to 35% and some agents rebated by 32%. The more retailers get in commission, the more they give away.”

But Dullop warned the UK’s biggest cruise operator Carnival that it not a good time to upset their major channel of distribution.

“What happens if operators end up with too much capacity and you need agents to help move this stock?” he said.

Triton, which represents Global Travel Group, Advantage and Worldchoice agents, said it will also resist cruise commission cuts. Global founder George Begg told cruiselines: “Don’t think it’s a bandwagon you can climb on easily.”

Carnival UK managing director David Dingle admitted the cruiseline has been considering a review of agent commission for some time. “With only 2.5% of the market, the cruise industry couldn’t be seen to be the first one to move on this,” he added.

Passenger Shipping Association director Bill Gibbons predicted the number of Brits taking cruises by 2008 will hit two million passengers, representing 10% of the UK package-holiday market.