Complete Cruise Solution has insisted bonus payments agreed with large volume retailers have been structured so they can’t use them to discount cruises to compete with each other.
Following the announcement of its move to a 5% base rate commission from this year’s launch of 2012 programmes for P&O Cruises, Cunard and Princess Cruises, there have been suggestions the operator will continue to offer big reward for volume players.
However, speaking at the launch of Carnival UK’s annual Cruise Report last night managing director David Dingle said the bonus payments were designed to reward long-term sustainable growth and investment in the cruise market from the agents themselves.
Gone are they days of writing cheques to agents for meeting short-term tactical targets that were just used to take business off other agents and “did nothing to grow the cruise market”, he said.
“All volume incentive payments are received by agents retrospectively and they tend to come as reward for investment because I think what we would all like to see as an ideal is that travel agents make more money out of cruising from more and more volume.”
Dingle admitted the move to an across the board 5% commission rate had “changed the playing field” but he said he had not seen any difference in how agents are planning to work with CCS ahead of this weekend’s big launch of UK market leader P&O Cruises’ 2012 programme.
“Let’s be honest, we have done something very different and as we go through the first days trading we are going to learn a few things. We have got the core of the strategy right, it will be interesting to see whether it drives any behaviour that we had not anticipated. If it does we may have to do a little bit of refining.
“We have not so far picked up that anybody is planning to to behave in ways we had not anticipated, but it’s early days.”
Dingle said there had been “a little bit of posturing” from the trade about the commission change. “It’s hard, particularly for people in consortia to make statements which satisfy what can be diverse opinion among members,” he added.
“There may be a little bit of switch selling but you have just got to have the courage of your convictions. You can’t make an omlette without breaking a few eggs.”
Dingle said he would like to see agents who had been put off selling CCS being able to sell its product, an upturn in yields and greater price transparency for consumers as the main gains to come out of the new trade remuneration structure during next month’s launch.