Agency commission is to be reviewed by Fred Olsen Cruise Lines under new sales and marketing director Nathan Philpot.
Speaking five weeks into the new role, Philpot ruled out the kind of blanket cut in commission to 5% imposed by P&O Cruises, Cunard and Princess Cruises’ umbrella sales arm Complete Cruise Solution.
Confirming that he is to investigate the ex-UK line’s cost of sale, Philpot ruled out changes for 2012 but indicated that non-supportive agents could be in the firing line.
Although he described as “absolute logic” the attempt by CCS to abolish cruise discounting by cutting commission, Philpot claimed the rival had gone too far.
“You have to get a commission structure that produces fair earnings for everyone,” he said. “If we could remove discounting from the cruise market we would all win.
“We are going to look at commission, not for 2012, but beyond that we want to back the people who support us. I don’t think we can keep the model as it is now. If people can switch-sell to Fred Olsen then there’s more chance of keeping things as they are.”
Any change in agent payments would come in the form of a “restructuring rather than a reduction,” Philpot added, revealing that distribution costs would be reviewed over the next six weeks.
“We do not want to do anything in an autocratic fashion. Anything we need to do will be done in collaboration,” he added.
Agents represent 90% of Fred Olsen’s annual sales of almost 100,000 passengers and Philpot is anxious to further attract the vast majority of 60-plus age package holidaymakers who have yet to take a cruise.
He denied plotting a direct sell strategy but said: “From a risk basis we would not like to have our future determined by a small number of agents. We have a collaborative partnership with the trade and long may that continue.”
Philpot joined the company five weeks ago from Page & Moy as successor to Nigel Lingard who leaves at the end of the month after 25 years service. Fred Olsen is to run a new TV advert as part of a cross-media promotional push for the post-Christmas ‘wave’ peak season booking period.
Philpot is looking to expand Fred Olsen’s strength in regional departure points by considering cruises from ports such as Belfast, Harwich and Liverpool while placing more marketing emphasis on the destinations visited rather than the ships.
“I would like to position us as the ‘local global brand’ being able to take people to many places from ports close to home,” he said.