MSC Cruises has warned agents it will end commercial agreements with those who refuse to stop discounting after it scrapped its 5% online discount.
On Monday the privately-owned Italian operator stopped short of following rivals by cutting commission to a base rate of 10% opting instead for a variable rate.
It confirmed that from this month agents will be able to earn 10%-14%, down from the previous 13%-16%.
The new commission levels have been set “according to season and product”, with the upper rate of available on cruises that are most difficult to sell, such as those departing in winter months.
MSC said the new rates “will remain competitive within the market”, adding that it will offer more marketing support, together with a “lucrative” overrides scheme.
The cruise line has also told agents that as part of the new commercial agreements, they must stop discounting “as this is confusing customers and causing frustration among the trade”.
Stephen Moffett, director of sales at MSC Cruises, told Travel Weekly that if a travel agent continued to discount, the company would ask it to put the prices back up.
“If they continued to discount, we would take that sailing off them,” said Moffett. “If they carried on, they would have to withdraw their commercial agreement with us.
“We can’t be relaxed and let one off and not the others. We have to be consistent and be very strict.”
Moffett said that negotiations went well with the various travel agent consortia, adding: “The consortia have been very good, actually. They were quite easy to deal with.”
He said that agents backed MSC’s move to eradicate discounting, and that this will help them increase their margins and achieve more profit.
“Also, the consumer will hopefully not be shopping around, trying to get £10 off,” said Moffett. “They will shop with their preferred agent. That’s the way to retain customers.”