Norwegian Cruise Line’s move to cut commission from 15% to 10% has met with cautious approval from agents – but some warn they will stop selling its product if discounting continues.
Seamus Conlon, managing director of Cruise.co.uk, said that although he initially welcomed the move if it succeeds in preventing discounting, he would consider pulling Norwegian’s product if the new commission rate fails to create more price parity in the market.
“If the level of retail discounting also reduces, then we have no problem with it,” said Conlon.
“Obviously if it doesn’t, then we would look to sell those cruise lines where we can maximise our profit.
“I think everyone will simply wait until January and see what happens. Obviously it’s illegal for cruise lines to tell people not to discount or stop them from discounting so it depends on what physically happens.”
He added: “I’m sure lots of agents, if they are not making enough money, will simply stop promoting cruise and will start promoting other products instead.
“It’s in the cruise lines’ interest that these people make money, otherwise they will stop promoting cruise and will promote other products.”
Regarding today’s announcement that two of the largest travel agent consortia, Advantage and Travel Network Group, have joined forces to lobby against reductions in commissions, Conlon commented that Abta used to be at the forefront of lobbying for agents.
“When British Airways cut its commission, it was Abta that led the charge,” he said. “But Abta does seem to be keeping remarkably quiet on the subject of cruise line commission compared to previous years with the airlines.”
Richard Twynam, managing director at Virgin Holidays Cruises, welcomed Norwegian’s decision to cut commission, adding that it had not come as a surprise for Virgin due to their close partnership with the cruise line.
“If it’s successful in creating a level playing field and removes discounting, then it’s a great move and we would support it,” said Twynam.