Norwegian Cruise Line has followed in the footsteps of Royal Caribbean by reducing its commission to 10%, saying it was not a large enough company to have made the move first.
The company will also remove its 5% online discount, with both moves to come into force on January 1, 2013.
Royal Caribbean revealed last week that it would cut commission to 10%, 17 months after P&O Cruises’ parent Carnival UK slashed rates to 5%.
When asked whether Norwegian had been waiting for another cruise line to cut commission first, Francis Riley, vice-president and general manager of Norwegian, said:
“It’s a difficult question. We are not the biggest in the market. It would have been very difficult for us to be the first.”
Riley said Norwegian had tested new commission models in July and August. The move followed consultation with agents, Riley explained, adding that the feedback had been generally “very positive”.
“Most of our partners understand the dilemma that’s going on in the industry,” he said.
Norwegian is hoping the new rate will encourage more agents to sell its cruises, saying that currently many feel unable to compete with heavy discounters.
“I think we have now created a level playing field from a Norwegian perspective,” said Riley.
The cruise line said that current noncommissionable elements will remain when the 10% rate is brought in, although Norwegian will reward agents with “incremental earning opportunities” through performance-based incentives.
“By amending our commission rates, we believe this will help end the discounting culture that is currently widespread in the UK cruise market,” added Riley.