All travel agents who work with Carnival UK are being asked to open their books to demonstrate their financial stability or take immediate steps to reduce the operator’s exposure should an agency fail.
Carnival has started to introduce new payment procedures for the three Complete Cruise Solution lines – P&O Cruises, Princess Cruises and Cunard – with payments made direct to the lines rather than through agents.
It intends to move all agents to the new system within 18 months. Some agents have already adopted the new terms, while those yet to do so are being asked to prove their financial stability or put up a bond during the interim period.
Carnival has spoken of its wish to do this for months but the failure of Gill’s Cruise Centre in July has given a new impetus.
Mark Pilkington, head of sales for CCS, said it was necessary to reduce risk. Carnival UK sales director Giles Hawke previously told Travel Weekly the current system of agents retaining pipeline monies effectively equated to them being given “unsecured interest-free bank loans”.
While direct payments are normal in the US, some agents attending a CCS conference last week said the move could have a serious impact on UK agents.
Louise Eakins, general manager of The Travel House, said: “We earn small amounts of interest on customer monies, so it will have a relatively minor effect for us, but some of the larger cruise retailers who rely on cashflow will lose a big revenue stream.”
Peter Grayson, managing director of Travel Angels, added: “Any agency dependent on cashflow is going to squeal, and they will also be very nervous that this is the thin end of the wedge with more operators to follow.”
Julia Lo Bue-Said, leisure director at Advantage Travel Centres, said: “When I look at this coldly I would resist it because it’s not in our members’ interests, but I understand the rationale from a Carnival UK point of view.”