Many column inches in the trade press of late have been dedicated to the contentious issue of slashing agents’ commission on cruise sales. The world of cruising has undeniably become a cut-throat market, with web savvy travellers shopping around to get the best deal possible - haggling over every last penny and value add offer – and the growing influence of online review/community sites changing the way we research (and purchase) our trips.In order to survive, agents are discounting and giving away commission hand over fist whilst other industry figures call for a level playing field in the face of a fierce price war. Cruise giants Carnival – who sell 90% of its cruises through agents – led the way, boldly announcing their intention to reduce agent commission to 5% to discourage further discounting. Meanwhile TTA Worldchoice has called for members to switch-sell from Complete Cruise Solutions brands for following the same route.
Cruise is one of the tourism industry’s success stories, representing significant year on year growth. Latest figures from the Passenger Shipping Association show cruise passengers were up 6% in 2010, accounting for 11.7% of the total overseas package holiday market. However, the cruise marketplace is already highly confusing for the cruise holiday purchaser, with an enormous range of product and pricing options available. Commensurate with the commission war is the risk that agents will switch-sell to gain more attractive profits. This can only be to the detriment of the consumer, being pushed to rival brands simply so that agents can make more money. Surely this will lead to a growth in the number of complaints from travellers who feel they were sold the wrong product? If this becomes the norm, everyone misses out.
This ‘discounting culture’ needs to be confronted, commission levels set and collectively, as an industry, we must focus on the consumer and their cruise requirements to make sure they have the best possible cruise holiday experience. In the face of this huge growth market surely cruise lines need to be looking at a healthier distribution mix, rather than putting all their eggs in one basket with agents? It would be foolhardy to ignore other sales channels, such as direct online bookings and not to attempt to reduce distribution costs. The expediential growth of the internet for researching and booking (cruise) holidays, the emergence of price comparison sites and the increased influence of online community sites reflects a huge shift in consumer purchasing habits.