Princess Comission Rates

[Shogun]

Hi All

The news today was saying that last year Carnival Corp cut commission to UK travel agents from 15% to 5% may be a UK TA could confirm this, well one of the best known TAs around in the UK cruise industry went under yesterday , the good news is the cruise companies are standing by all the bookings any money still to be paid will be paid direct to the cruise companies.

5% commission gives little room to give customers a good deal or perks might be why almost all TAs quote the same price. And service so poor.

What rate would US TAs expect

yours Shogun

[cruisefreaks]

WOW - that is huge. I hope we can get a confirmation from someone in the UK.......

Donna

[ONT-CA]

The process of elimination. We started our booking adventures with a travel agent and paid what they asked. Then they decided to add a charge on top of the fare for their work in the booking, not large but a charge non-the less. Through CC we stumbled upon Internet services that not only discount the fares but even at times offer us perks for the booking. And as the fare is quoted in US dollars, the exchange rate in our favour makes this an ever better deal.

 

We have to sympathize with the UK passengers for not having these choices. It now appears that your situation could only get worse.

[hansi]

Hi All

 

The news today was saying that last year Carnival Corp cut commission to UK travel agents from 15% to 5% may be a UK TA could confirm this, well one of the best known TAs around in the UK cruise industry went under yesterday , the good news is the cruise companies are standing by all the bookings any money still to be paid will be paid direct to the cruise companies.

 

5% commission gives little room to give customers a good deal or perks might be why almost all TAs quote the same price. And service so poor.

 

What rate would US TAs expect

 

yours Shogun

 

 

Hi Shogun, yes, the commission rate has been reduced to 5% one of the reasons (but not the main reason) why a large UK agent (for whom I once worked) failed yesterday with huge debts.

[MCC retired]

Most US Agencies that book a good amount of Princess , receive 15% comm. on the cruise portion of the fare (not the port charges, not the taxs , not the transfers ,not the fuel chg, not the airfare :()

Most do receive 10% on Princess Insurance and 5% on Princess hotel pkgs.

 

That is the TA's pay .

Then many give some of their pay back to you via a additional discount or OBC. What a job ? You gotta give away part of your pay to make some sales . Ugh! :mad:

[Shogun]

Hi MCC Retired

 

Thanks for info, 5% is very low,

 

the service we get just now is no service,

 

so expect Princess want us to deal direct.

 

yours Shogun

[Coral]

Hi MCC Retired

 

Thanks for info, 5% is very low,

 

the service we get just now is no service,

 

so expect Princess want us to deal direct.

 

yours Shogun

 

MCC Retired gave you a good estimate (15%).

 

As she goes on to say, it is not as cut and dry as that. Most agents I know work for a larger company and has to pay that company a portion of their commission. If they work at a brick and mortar location (such as a downtown office, etc...) - I am guessing they have to pay a lot more of their commission to them. This is why a lot of agents I know work from their home. Ironically - a lot of these agents do more sales then a lot of retail travel agents with a real building where people walk into their agency.

 

Then on top of that, a lot of agents discount their commission and give it back to their client in either discounts or obc.

[Loonbeam]

10% seems to be closer to the mark for non volume, but that doesn't take into account in addition to the items above there are also fun things like Debit Memos, where the cruise lines can retract commission for not following policy (airlines are even worse with this and they don't PAY commission!)

 

My guess is that within 3-5 years most of the mass market lines will stop paying commissions at all to direct bookings to their sites, at which point consolidators and group fares will be the only discount options. And the rules on those are tightening.

 

Lets face it, the cruise lines are no fools. They see that despite the whining, the so called a-la-carte pricing works for the mass market and so do direct channels. So that's the way they will head. Look at RCIs latest dining changes..

 

And before anyone goes off on a rant about how you only want cruises to be all inclusive, I remind you the mass market lines don't really care if you sail them again, in fact as long as they can fill the ships at reasonable rates they would almost rather have all first time or low volume cruisers. In short, they make more money on them (they don't need preferred benefits, they often book shore excursions via the ship and do more since they haven't been to that port repeatedly, they don't know about things like shareholder or military OBC or all the myriad money saving tricks pointed out on here and they think a-la-carte venues on a cruise ship are normal).

[Shogun]

HI All

 

Loonbeam I fear that you are in part correct, Princess is in the business of making money, not giving us cheap cruises,

 

first time cruisrs are cash cows,

 

yours Shogun

[MCC retired]

Just to clear things up a bit , the Agency earns the 15% .

Individual agents , most working a independant contractors nowadays , receive a split of that . Usually 50/50 (or more depending on production).

TA's employees working for a brick & mortar agency , or a call center , may be salaried or receive a combination of salary/comm. I don't really know :confused:

 

Despite what it may seem here on CC with all the postings about booking direct, 85% of all cruise bookings are still made by TA's :).(it use to be 95% before the internet:().

[ONT-CA]

...And before anyone goes off on a rant about how you only want cruises to be all inclusive, I remind you the mass market lines don't really care if you sail them again, in fact as long as they can fill the ships at reasonable rates they would almost rather have all first time or low volume cruisers. In short, they make more money on them (they don't need preferred benefits, they often book shore excursions via the ship and do more since they haven't been to that port repeatedly, they don't know about things like shareholder or military OBC or all the myriad money saving tricks pointed out on here and they think a-la-carte venues on a cruise ship are normal).

 

Today's frequent traveller will be tomorrow's traveller because we can afford it. Can we say that about the first time cruisers who have been lured by these low low fares? The economy has HI and low points and I don't think we are revealing any state secrets here but the world economy has been in decline for several years now with several years more to go before we hit bottom. First thing to go in expenditures is luxury travel, especially if one is dealing with ever-reduced pensions. That leaves two things; cruise lines with many and massive sized ships and a limited clientele with whom they can count on to fill them. If it were I, much more attention would be paid to those who will likely continue to cruise regardless of the economy and thereby create a modest profit rather than milking the current newbie market for all it's worth.

[Loonbeam]

Agreed, but if I had to postulate I'd say the cruise lines were looking at targets of 50% by 2015-2020 at best.

 

Just to clear things up a bit , the Agency earns the 15% .

Individual agents , most working a independant contractors nowadays , receive a split of that . Usually 50/50 (or more depending on production).

TA's employees working for a brick & mortar agency , or a call center , may be salaried or receive a combination of salary/comm. I don't really know :confused:

 

Despite what it may seem here on CC with all the postings about booking direct, 85% of all cruise bookings are still made by TA's :).(it use to be 95% before the internet:().

[sunsetbeachgal]

Interesting thread...don't know about the rest of you, but we are being INUNDATED with cruise brochures-Princess, HAL, Seabourn (who we have never sailed on), etc. Something seems to arrive every day-I have received mailers from Princess two days now in a row. All of these direct mail pieces must be costing them a fortune...

[Loonbeam]

Doesn't matter because of the relative size of the pool. If you consider a new potential first time cruiser to be someone who hits the age of 30-35, something like 70,000 people enter that pool per day.

 

Repeat cruisers have some value, because they are a dependable revenue stream, and thus there are frequent traveler programs and special offers. But there are limits to the level of accommodation available because they are not a higher profit stream for reasons noted above (and nights cruised is not as much a factor as some think. Sure, you may cruise 30 nights a year, but if they make $30 per night on you and $100 on a first time cruiser, they can make the same profit on 9 nights for them and still have 20 nights to sell to you). Also, they know frequent travelers will be inclined to go -somewhere- even with lesser benefits its not an all or nothing deal. To capture frequent cruisers, you don't have to be the best, just better than a few of the others. They can also count on things like brand association and procedural inertia to help them along.

 

Today's frequent traveller will be tomorrow's traveller because we can afford it. Can we say that about the first time cruisers who have been lured by these low low fares? The economy has HI and low points and I don't think we are revealing any state secrets here but the world economy has been in decline for several years now with several years more to go before we hit bottom. First thing to go in expenditures is luxury travel, especially if one is dealing with ever-reduced pensions. That leaves two things; cruise lines with many and massive sized ships and a limited clientele with whom they can count on to fill them. If it were I, much more attention would be paid to those who will likely continue to cruise regardless of the economy and thereby create a modest profit rather than milking the current newbie market for all it's worth.

[Loonbeam]

Interestingly, with a few cruises booked on a couple of lines, most paper offers have stopped. Email, yes, but less than one a week now.

 

Interesting thread...don't know about the rest of you, but we are being INUNDATED with cruise brochures-Princess, HAL, Seabourn (who we have never sailed on), etc. Something seems to arrive every day-I have received mailers from Princess two days now in a row. All of these direct mail pieces must be costing them a fortune...

[Shogun]

Hi All

 

Princess makes more % in Europe per cabin than it does in the Caribbean

 

Princess sends biggest fleet ever to Europe

 

US folks not going to Europe

 

Some cruises 50% of book price

 

Many cabins not sold

 

So TAs will be getting even less money

 

Cruise market sure no easy to plan head if you are the boss

 

yours Shogun

[englishbird]

Hi.

 

I am a TA for a large UK high street agent. The commission was cut at the time of launch of the 2012-2013 brochures. It has been cut from 15% to 5%.

 

This applies to all bookings with Princess, Cunard and P&O. The reason behind this is that the CCS group want the customer to have the same price where ever they book in the UK. The price that I would give you on the hight street is the same price that Princess will give you if you call them direct.

 

Any agency caught giving a discount runs the risk of losing their agencys licence to sell these cruise lines. It is being taken very seriously by the CCS group. Breaking the rules on this one means that we are breaking our commercial agreement with the cruise lines.

 

:p

[DrivesLikeMario]

Thanks for the clarification, englishbird. Here in the US, RCI, Celebrity, Disney, NCL and a few others do not allow agents to discount the prices at all. The price you get quoted from any agent will be the same price you get if you call them directly. They did this WITHOUT dropping the agency commission. I don't understand why Princess, P&O & Cunard couldn't do the same thing?

 

Also, out of that total commission, agents here have to pay fees to their host agency, discounts to their clients and all other normal operating costs. It leaves very little behind for a profit.

[SRQfireman]

Most US Agencies that book a good amount of Princess , receive 15% comm. on the cruise portion of the fare (not the port charges, not the taxs , not the transfers ,not the fuel chg, not the airfare :()

Most do receive 10% on Princess Insurance and 5% on Princess hotel pkgs.

 

That is the TA's pay .

Then many give some of their pay back to you via a additional discount or OBC. What a job ? You gotta give away part of your pay to make some sales . Ugh! :mad:

 

Isn't anything sacred anymore? Now that people know what agents make, they'll now be wanting them to rebate heavily. If clients don't know what they make, they can rebate some money back and not have to worry about the clients knowing what they make/don't make!! :rolleyes:

[Go-Bucks!]

we are being INUNDATED with cruise brochures-Princess, HAL, Seabourn (who we have never sailed on), etc. Something seems to arrive every day-I have received mailers from Princess two days now in a row.

 

 

I also get tons of brochures in the mail (email too), especially from lines I've never gone on or requested anything from. I keep wondering if my mailman thinks I'm some wealthy, frequent cruiser (?), when actually I just take one vacation per year. :p

[caribill]

Agreed, but if I had to postulate I'd say the cruise lines were looking at targets of 50% by 2015-2020 at best.

 

If the cruise line had to book 50% themselves, they would have to increase their staff to handle the workload. That is why they love to have travel agents.

 

If I do book direct with a cruise line, I do it on the phone, not via the Internet. Too many things you can't do via Internet, for example applying an FCC,