Seven months after announcing it was to reduce agent commission to 10%, Royal Caribbean says the move has worked and helped to combat discounting.
Speaking to Travel Weekly at Thursday’s Clia UK Selling Cruise Convention, Royal’s UK general manager Jo Rzymowska said she was convinced it was the right thing to do.
When Royal made the move following rival Carnival UK’s more drastic cut to 5% 18 months earlier Rzymowska said she was taking personal responsibility for the decision admitting to ‘some nervousness’ ahead of meetings with agents.
With the trade now having had seven months to get used to the new terms, she told Travel Weekly: “Overall the work we put in working through the rationale the outcome we came to was we should make changes. It was the right thing to do.
“Without a doubt discounting has come down in the marketplace and we are in a situation where we get less frustration from customers and from travel partners and overall the retained earnings of many of our partners have either stayed to same or increased.
“If we felt we had done the wrong thing we would look at it again but I genuinely feel that’s not the case. Would we please everybody? No, it’s impossible but I think ultimately it was the right thing for our business and above all it was the right thing for the industry. I think the level we went to was right.”
Rzymowska admitted the market was tough, with prices hit particularly hard, but that the downturn was cyclical and that she was hopeful that there was a glimmer of light to suggest they would start to come back in 2014.
“People have spoken today about how we transition through this period. What we have got to continue doing even when times are tough as they are at the moment is continue to invest and market and believe that actually if we collectively as an industry do what we are doing we will work our way through this.
“This is cyclical. Eight years ago when I started in cruise we operated a lowcost airline model with prices rising closer to departure. We can get back to that situation.
“You have to put this into perspective; clearly there is pricing out there none of us want but many cruises are sold at a good price.”
The conference was the first under the new Clia branding following the creation of an international umbrella body.
Rzymowska became the first chairwoman and will serve for a transitional period until the end of the year when the organisation will decide how it wants to appoint its chairman in the future.
She said she would consider standing if she felt there was support for her to do so.