Carnival UK bosses say ‘distinct ‘ Princess Cruises will not move on commission. Lee Hayhurst reports
Princess Cruises’ moves to forge its own ‘distinct’ trade offering does not herald a change of policy on agent commission, the company has said.
Complete Cruise Solution, the trade sales division of Princess Cruises and sister Carnival UK brands P&O Cruises and Cunard, last week announced it was to create a separate sales team for Princess.
This underlined a growing differentiation in pricing and promotions strategies as well as trade relations between the Princess brand and Carnival Corporation’s two British heritage cruise lines.
But speaking to Travel Weekly at last week’s UK Cruise Awards, Princess UK managing director Paul Ludlow said there were no plans to review commission levels after last year’s cut to 5%.
Ludlow said a lot of agents were selling very successfully with the current level of earnings.
“There are not any plans for Princess to change that approach,” he said. “There are a number of areas, such as the Complete Cruise Solution website and commercial collaboration, where we will continue to work closely with P&O Cruises/Cunard.”
Giles Hawke, Carnival UK sales and customer services director, said in some aspects Princess now had a “very clear and distinct” approach from the other two CCS brands.
But he said all three would continue to work together under the CCS umbrella, providing the trade with a “one stop shop” for all its needs via its travel agent extranet.
Despite Carnival UK’s new offices in Southampton now also housing the UK teams for other Carnival brands including Holland America Line and Seabourn, Hawke said he did not envisage an expansion of CCS, which previously encompassed four brands before Ocean Village was closed.
“We will keep one portal for travel agents and be very focused across all three brands so agents will not need to go anywhere else,” he said.
“I do not see us expanding CCS. I do see opportunities to work more closely [with HAL and Seabourn] – we are all part of one corporation.
“We clearly can and probably should in the future work more closely in a more joined-up way across the Carnival Corporation brands, particularly as we now have five brands headquartered in Southampton.”
Hawke said he did not think the brands were competing for business from travel agents despite the differential in commission levels, with HAL and Seabourn still on old-style agreements offering up to 15%.
“Our competition is not our other Carnival brands; it’s everyone outside of the family – other cruise lines, holiday companies and places where our customers spend money,” Hawke said.
Hawke told agents at the awards that in 2012 CCS brands would account for 638,000 passengers and that £50 million in commission would be paid to travel agents, with whom it has invested £13 million in joint promotional activities.
And he believes Carnival’s decision to cut commission has been vindicated after rivals Royal Caribbean Cruise Line and Norwegian Cruise Line followed suit, although not by as much, reducing base rates to 10%.
“What that says is that we made a market‑leading decision,” he said.
“And we got the sort of reaction overall we expected, which was that the vast majority of our important agent partners stayed with us and, over a period of time, others [operators] have chosen to follow a similar route.”