Carnival Corporation’s chief executive has admitted it possibly took things too far when it cut commission levels to 5%.
In his first media conference call, chief executive Arnold Donald said “the pendulum swung too far” when commissions were reduced to stop discounting in the market.
He said David Dingle, managing director and chief executive of Carnival UK, was in close dialogue with travel partners in the UK. Donald said it was conversation with agents that led to the initial move to drop commission, and it was also that dialogue which led to the company increasing to 7.5% last year.
“David Dingle as part of the leadership team is in constant dialogue with us and his peers and evaluating what works and what does not work,” he said. “Even more importantly he is in constant dialogue with travel professionals listening to them and that was where we started which led to the first change (in commission).
“We tried to simplify things and the pendulum probably swung too far and we over-corrected. By listening again we have made some further changes and it seems to have resonated with agents and it seems to be working.”
Agents have been critical in rebuilding the brand perception of Carnival Corporation in 2013, he said, adding that communication with agents was “yielding good results”.
“We are committed to agent relations and giving them the tools to be successful. They key is to listen and understand so they can grow their business.”
Donald said that in 2014 the company’s brands would work together more to leverage scale. He said there would be “more cooperation, collaboration and communication”.
He said the collaboration should be seamless and something guests would not necessarily notice, but didn’t rule out that the brands might work together on certain initiatives and cross-brand loyalty schemes.
He said the ten brands had and would continue to operate independently, but said it would be a missed opportunity to not become more coordinated in their efforts.
Another challenge for the corporation would be to increase pricing across the brands. Donald reiterated the great value of a cruise but said it was important to build more demand in the industry in order to drive prices. He said demand would help slow added capacity in the market place and would in hand benefit agent’s businesses.