A cruise specialist has warned rival retailers that want to move into the niche and river cruise sector that a discount war would wreck the market.
Niche and river cruising has been hailed as a lucrative growth sector for agents selling mainstream cruise holidays.
But Blue Water Holidays managing director Barry Peters said commissions will be eroded if the discount tactics used in mainstream cruising are introduced in the niche cruise sector.
He said: “One of the motivations to move into niche cruising is that it’s a relatively untapped market, but if some of the big discounters start doing the same in the niche cruise sector, they will wreck it for everyone.”
He added: “We don’t want the river cruise market to become the BOGOF [buy one get one free] cruise market.”
He called the mainstream sector an “utter farce” because of the huge discounting. “The mainstream market has almost wrecked itself – no one is making any money,” he added.
Mainstream cruise retailers discount much of their commission, often leaving them with just 3%, he said.
Currently in river cruising there are few discounts – which allow agents to earn their full commission – and many of the early booking or money-off deals are supplier-led rather than retail-led.
Peters said maintaining commission levels was even more important in the niche cruise sector in order to train staff on the product, while consumers did not expect high-level discounts on these holidays.
He said: “Within the niche sector you get some very different products and you need to have the margins to train up staff. Customers expect agents to have good product knowledge.”