Cruise agent: Why we give away commission

Cruise specialist Chandlers Travel has confessed it indulges in the discounting practice that Carnival UK is seeking to stop by cutting agents commission.

But the Romford-based agency insisted it has no choice but to slash prices.

"Why do we do it? Because everyone else does," divisional retail director Richard Knight told TravelMole. "People are not daft. If they can save &#pound;200 or &#pound;300 by booking with an agency that is offering discounts they’ll do it. We have no choice but to do the same."

He revealed that of 15% commission, 10% is immediately given away in discounts, leaving Chandlers with a 5% margin.

"Carnival will cut commission when they bring out their 2007 brochures in June next year, not to the level that Thomson has done, but they will do it," predicted Knight. "But we will still retain our 5% by simply not giving as much away. There will be a level playing field."

Retailer 1^st4Cruising managing director Kevin Ivie said it should be up to agents, not cruise lines, to decide how much they give away.

But Knight said: "It’s their product. The cruise lines want people to aspire to their product and attract a certain type of client."

He said the danger of cutting prices is that is could attract customers not suited to a Carnival UK ship and who don’t spend much money on board.

"And on-board spending is a very important part of the business," said Knight.

Report by Steve Jones

Thursday, December 8, 2005

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Professionalism ????

The one thing about Mr Knight, is that he does know the market, and the industry. He runs, according to the TTG, The Best Agency in the South Of England. Knowing how he works, and also knowing some of his contacts in the industry, I would assume that the details he came up with are not far from the minds of some of the leaders in cruising. The call for a lower commission structure should actually help more agencies enter the market at a professional level, as it should cull the absurd discounts that are floating around. If Agencies concentrated on their service levels, along with monitoring their overall cost structure, then there would be no reason for everyone to make a healthy living from the fastest growing sector in the travel industry. If the previous author decides to have another shot at non-professionals in the travel industry, then she should first of all do her homework, and study who are calling for calm in these oceans of possible trouble - Graham Dullop, a superb member of the retail cruise industry who, with his father, runs one of the most respected quality Agencies in the UK; Mark Van Straten, MD of Voyana, who specialise in repackaging expertly most of what they sell, and are top Agents for both RCCL and Crystal Cruises, and are recognised as main players by the rest of the industry; and of course Richard Knight, who runs Britains First Cruise Club, and again is recognised as not the biggest player in the market, but certainly a person who has turned around an agency that had drifted into a backwater and could have stifled itself, but is now actively trying new and innovative ways to break the new cruising market, without bankrupting the agency on the way. I wish them all well, and look forward to seeing how long the American Commissions Standardisation takes to arrive herw in the UK.

By Stuart Highland, Tuesday, December 13, 2005
I am not running a charity agency

This comment is directed to all of the NON-PROFESSIONAL travel agents and companies that are indeed encouraging the cruise companies to consider cutting commissions. Why shouldn't they when you are doing it for them? I for one do NO rebate. There are times that I give a shipboard credit to the client in place of a rebate.

By marcia weinberg, Friday, December 9, 2005