Royal Caribbean says it is paying between 5% and 8% more commission to agent partners this year than in 2019, but such “generous” commercial terms won’t last indefinitely.
Speaking on board the trade showcase of Wonder of the Seas in Barcelona, vice-president EMEA Ben Bouldin said the line had “boosted commission” in terms of both base commission and targeted earnings.
Royal’s commercial model is a mix of base commission, guaranteed payments, frontline staff incentive schemes and co-op marketing funding, he explained.
“Our support has got bigger [and] has been very strong,” he said.
“We are spending an extra 5% to 8% on average on commission over 2019 to capture the same guest, albeit on probably a lower ticket price.
“But we’re mindful that we have to make sure our product is attractive to sell both as a great vacation and so that it’s profitable and worthwhile for our trade partners to want to sell.”
He added: “We won’t be successful if we don’t keep the right dynamic between agents and our brand. We recognise we’re in a very different place, we’ve got to rebuild.”
But he said: “I don’t want to be at that level [of commission] for ever. The industry as a whole is being very generous right now to make sure we help business recover quickly.”
Asked if cruise lines would pull back from current commercial terms once the market has recovered further, Bouldin said: “I think they will because the industry will want to get back to its same level of profitability.
“When we’ve got more demand than we have space, it’s within our gift to start being more selective on the levels of commercial we pay out.
“Ultimately, we’re managing a model to fill our ships.”
Speaking to agent partners during the showcase, outgoing senior vice‑president of international sales Sean Treacy said: “We are very much a growth business and we want you to grow with us.”