New Carnival policy re: rebating and gifts

[kicia]

There is a new policy by Carnival effective August 1, 2012 that permits no rebating in any form over $25 per person. This includes no OBC allowed, even gift cards, etc. No airline miles, gifts, etc. This will make it easier to check prices for Carnival cruises and makes it more fair for TA's. This refers to advertised and and non-advertised prices using the web or calling in.

[vacation_junkie]

There is a new policy by Carnival effective August 1, 2012 that permits no rebating in any form over $25 per person. This includes no OBC allowed, even gift cards, etc. No airline miles, gifts, etc. This will make it easier to check prices for Carnival cruises and makes it more fair for TA's. This refers to advertised and and non-advertised prices using the web or calling in.

 

you are confused.... in 2010 they implemented something for Travel agents...it has nothing to do with cruisers and our rebates/OBC

 

Carnival Extends, Expands Anti-Rebate Policy and Adds 'Teeth'

 

by Dori Saltzman

 

 

July 02, 2010

 

 

 

 

Carnival Cruise Lines will implement an anti-rebating policy with “teeth” effective Aug. 1, Joni Rein, vice president of worldwide sales, told Travel Market Report.

The policy extends the line’s five-year-old anti-rebating policy across all marketing channels and expands it to include value-adds. Reins said the policy will be good for the agency channel, allowing travel sellers to sell Carnival on their expertise and service, not price.

Selling on price is a no-win situation, Rein said. “The customer you gain by price today is the one you lose tomorrow to price.”

She noted, “One of the top three issues I hear consistently across the country is the non-level pricing. Rebating has been very problematic for a lot of the mid-sized players and the home-based, and even some of the large producers.”

The policy’s objective, the line said, is to ensure a level playing field among travel agencies and to eliminate the unauthorized manipulation of pricing.

“Inconsistent pricing in the marketplace confuses the consumer, encourages shopping, undermines an agent’s ability to sell on service and to close sales, and erodes the value of the Carnival brand,” the line said in an announcing the policy.

The new policy will tackle rebating from two angles.

First, as of Aug. 1 only Carnival approved rates can be used in any form of communication. Since 2005, Carnival has enforced uniform pricing in mass media and now will extend that policy to phone sales, direct mail flyers and face-to-face meetings.

Second, the line is modifying its policy on how value-add items can be marketed in conjunction with a cruise. This includes non-cash equivalent items such as wine, chocolate, beach towels, etc., and cash-equivalencies like onboard credits.

Value-Adds Rule

Carnival’s new value-add rule states that Carnival will continue to permit value-adds as long as they are part of a formal sales and marketing plan to promote the Carnival product. However, pre-approval will not be required for non-cash equivalent items where the actual (or perceived) value does not exceed 5% of the complete cruise fare or $25 – whichever is greater.

Non-cash equivalents that exceed that and all cash-equivalent value-adds require submission of a travel partner sales and marketing plan, as well as pre-approval by Carnival. Furthermore, the value of the giveaway item must always be less than 10% of the complete cruise fare.

Travel sellers should work with their business development managers to create such plans and get approval.

Enforcement

“We really are putting teeth into the policy because I think it’s such an important part of the health of the distribution, of the industry,” Rein said.

To enforce the policy Carnival has put together a team within its sales administration division with a primary focus on monitoring and auditing of pricing throughout the distribution system. Methods will include Web site browsing, shopping around and checking payments applied to bookings, among others.

“They will use a lot of different proactive approaches to determine not just that the pricing is correct, but how our brand is represented as well,” Rein told TMR.

When a violation is found, the agency will be notified that it is in violation, and to remedy the situation. A follow-up will then be done. If the agency is still in violation of the policy any number of penalties may be applied.

“Violation of the policy will result in a range of actions such as the elimination of co-op marketing support, reduction or elimination of base commission and placement on a no-booking status,” the line said.

Travel agents can also report violations by e-mailing ad_compliance@carnival.com.

We believe this policy is going to have a really positive impact on the distribution system,” Rein told Travel Market Report, adding the line reached out to key travel partners before hand for feedback. “All were very positive,” she said.

Most agents TMR spoke with agreed as well, though cautiously.

Agents Express Cautious Optimism

“I love it,” CruisingAgents.com’s Mark Jacobs told TMR. “It will help all of us to make more money. It makes it even for all of us. There will be less shopping by clients… therefore not wasting agents’ time.”

Toby Nash, of Utah-based Cruise & Travel Masters, is also pleased to see cruise lines trying to level the playing field.

“I do believe that a level pricing shelf for all agencies keeps our industry more respectful and not so cut throat. If I were a vendor, I would want all customers paying the same price. It has undermined the industry as a whole,” he told TMR.

“I definitely think that cruise lines’ sticking to approved rates is great,” agreed Lisa Silvestri, CTC, of Florida-based Silvestri Travel.

“Maybe it will keep the ‘shoppers’ from jumping around from one Internet site to another. Most of the time, one sees the online travel sellers being the ones with the DEEP discounting.”

“I think it is a good idea because there are many agencies, mainly – but not exclusively – online that sell at cost – just to get the volume and hopefully more commission and backend,” said Stephanie Turner, president and CEO of Brentwood Travel when informed by TMR of the policy (but not the cruise line).

“I think the problem that smaller, highly service-oriented agencies face is that customers call them, get all the advice and info and then buy elsewhere if it is just a few dollars less,” she added.

Carnival says the new policy will eliminate this shopping pattern, as well as agencies selling at cost.

[BigDfromTN]

There is a new policy by Carnival effective August 1, 2012 that permits no rebating in any form over $25 per person. This includes no OBC allowed, even gift cards, etc. No airline miles, gifts, etc. This will make it easier to check prices for Carnival cruises and makes it more fair for TA's. This refers to advertised and and non-advertised prices using the web or calling in.

 

Sounds like a recycle of old news....

I think they did this rule about 2 years ago??

[kicia]

No I am not confused and this has nothing to do with OBC from price drops, etc. It applies to travel agents giving OBC or other gifts as an incentive to book with them. This is an enhancement to the 2010 policy. Read the following for more info:

 

Today marks an important step in Carnival's commitment to ensuring that all travel partners have the equal ability to sell the Carnival product at the same great rate. Nearly two years ago, we introduced a popular revision to our Advertised Price Policy, which ensured a level playing field for all agents. Following our 2010 policy change, we continued to hear from many partners that they saw the ongoing value-adds in the marketplace as excessive and another form of rebating and Carnival was encouraged to revisit our policy once again. We are proud to announce that effective August 1, 2012, we will take this commitment one step further by revising our value-add policy.

 

With this revised policy, value-add booking incentives may only be non-cash equivalent items and have a value equal to or less than USD 25 per passenger. The policy applies not only to advertising, but to all forms of communication, including in-person, phone or any other means. Our former policy allowed non cash-equivalent value-adds that were less than five percent of the Complete Cruise Fare or USD 25 (whichever was greater). In addition, it allowed for cash-equivalent value-adds that were less than 10% of the Complete Cruise Fare (with approved marketing plans).

 

Moving forward, there is no pre-approval process for value-adds. However, we do reserve the right to review promotional offers to ensure they align with brand guidelines and may request that partners remove or change offers should they not meet these criteria.

 

What are some example of value-add items you may use for incentives? The main requirement is that they be non-cash equivalent items. Examples include tote bags, hats, beach towels, memory books, sunglasses and Carnival gifts delivered onboard (Bon Voyage items). For all Carnival-branded items, appropriate branding guidelines must be followed as outlined in the Travel Agent Policy and on the Carnival Brand Center on GoCCL.com.

 

Examples of cash-equivalent value-add items that are no longer accepted as part of the revised policy include but are not limited to cash, gas cards, onboard credits, pre-paid gratuities, Bon Voyage bar credit and photo coupons (i.e. cash equivalent), airline miles, third party cash back offers, reduced or waived deposits, free or discounted insurance, free or discounted shore excursions, free or discounted hotel nights, reduced airlines, gift cards or anything that equates to a cost associated with the cruise.

 

In speaking with the thousands of agents we come into contact with each year, we hear significant praise for our firm stance on "no rebating." Many of you have asked us to take an even stronger stance on this issue, which we did in 2010 and we're doing today. Our objective is to create a structure that provides you with the assurance that the rates you quote won't be undercut by competitors. In revising this value-add policy, we're able to better ensure that value-adds are being used to enhance agents' sales and marketing plans, which is what they are intended to do.

 

I think this will prove to be interesting.

[Ivanova]

kicia is correct. this came out today and takes affect 8-1-2012.

[Eastcstrob]

Vacation Junkie

 

Doesn't look like the OP is "confused"

 

In the OP they mentioned Aug 1 2012 - They later clarified.

 

OP Thank you for posting what is to come August 1st 2012..... For ALL carnival people be it agents or a cruiser, all parties are involved and affected come 8/1/12

[kicia]

Thanks Ivanova and Eastcstrob - I assumed most people haven't heard of this since it just came out today and thought I would give a heads up.

[LHP]

This is interesting since I was still reading from cruisers on here that their TAs were giving them $100 OBC etc.....

 

I am wondering how in the world is Carnival going to police this. I wonder how Carnival will now where the OBC comes from since a lot of cruisers buy it for themselves to help reduce the bill they owe at the end of the cruise.

[cruisercrazy69]

Does it apply to HAL or the other carnival family? what about RC,NCL & X?

[kicia]

The policy takes effect on August 1, 2012 so I assume if you book anything before then you can still get whatever the TA is offering.

 

The memo only specifies Carnival so I don't know how it affects their other brands.

[Ivanova]

This is interesting since I was still reading from cruisers on here that their TAs were giving them $100 OBC etc.....

 

I am wondering how in the world is Carnival going to police this. I wonder how Carnival will now where the OBC comes from since a lot of cruisers buy it for themselves to help reduce the bill they owe at the end of the cruise.

 

The easiest part for them to police is advertising. Anything on Facebook, websites, etc. can be easily monitored. As for their policy against making such offers face to face, via email, or over the phone, I can only think of one way (not easy) and that's if they have mystery shoppers call agencies they suspect of breaking the rules.

[ItsAllAboutTheSass]

Am I going to book Carnival for a baseball cap and maybe a tote. No. Will I book RCCL for pre-paid gratuities, OBC and dinner in a specialty restaurant, yes.

[firefly333]

There is a new policy by Carnival effective August 1, 2012 that permits no rebating in any form over $25 per person. This includes no OBC allowed, even gift cards, etc. No airline miles, gifts, etc. This will make it easier to check prices for Carnival cruises and makes it more fair for TA's. This refers to advertised and and non-advertised prices using the web or calling in.

 

I thought the policy already was no more than $25 OBC??

 

The main difference is no other gifts right??

 

.... and if Carnival starts to enforce their own rules.

[firefly333]

This is interesting since I was still reading from cruisers on here that their TAs were giving them $100 OBC etc.....

 

I am wondering how in the world is Carnival going to police this. I wonder how Carnival will now where the OBC comes from since a lot of cruisers buy it for themselves to help reduce the bill they owe at the end of the cruise.

 

You and I are thinking the same thing.

 

TAs are already not following the rules set up just last year ..

 

They dont have to advertise they give OBC, most people know to call them or email them.

[Ivanova]

Am I going to book Carnival for a baseball cap and maybe a tote. No. Will I book RCCL for pre-paid gratuities, OBC and dinner in a specialty restaurant, yes.

 

Don't be surprised if the other cruise lines (not just Carnival family of brands) follow suit with something similar in the coming months.

[Another ship trip]

Carnival is basically sqashing the free enterprise system whereby those who will offer OBC to customers to get business will no longer be able to do this. But where there is a will, there is a way.....

 

Who would use a TA if there isn't something in it for them? Why not book with your PVP if you have to pay full price or get some dumb carnival logo hat or key fob. I have enough of that stuff already. Using a TA is a pain so there has to be something in it for me to do so.

 

Clearly this benefits Carnival. It benefits the agencies that do not rebate.

It does not benefit the customer. Without my current OBC, I would have booked another cruise on another line. The way it currently is, Carnival has had my business the last couple of cruises.

 

I will continue to shop around. Saving a few hundred dollars affords me the ability to take excursions, drinks, casino, new outfits, etc, etc.

 

Carnival is trying to completely stomp out this savings for customers under the guise of "fairness to the big agencies." Horse----. I am loyal to NO ONE but my pocketbook.

[Ivanova]

Carnival is basically sqashing the free enterprise system whereby those who will offer OBC to customers to get business will no longer be able to do this.

 

No different than Apple not allowing discounted pricing on iPads, etc. Buy it from them, Best Buy, etc. and it's all the same price. Their attitude is: don't want to pay our price, then go buy a cheaper, inferior product (in their mind at least).

 

Carnival can enforce their pricing if they so desire. If you don't like it, do as you suggest and book with another cruise line. Until they follow suit....

[HondaShadow]

I always thought price-fixing was illegal.

 

For example, Ford cannot tell their dealers what to sell their cars for, nor can a group of dealers get together in a market and agree to sell for a certain price.

 

Why is price-fixing ok for Carnival?

[Ivanova]

I always thought price-fixing was illegal.

 

For example, Ford cannot tell their dealers what to sell their cars for, nor can a group of dealers get together in a market and agree to sell for a certain price.

 

Why is price-fixing ok for Carnival?

 

This is not price fixing.

 

Price fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point. This benefits all businesses or individuals that are on the same side of the market and involved in the conspiracy, as prices are either set high, stabilized, discounted, or fixed.

 

So if Carnival, Norwegian and Royal Caribbean got together and agreed they'd all charge $1,199 per person minimum on all 7 night sailings out of Florida ... that would be price fixing.

 

Carnival (or Apple) saying you can't discount our pricing, is not price fixing.

[Another ship trip]

No different than Apple not allowing discounted pricing on iPads, etc. Buy it from them, Best Buy, etc. and it's all the same price. Their attitude is: don't want to pay our price, then go buy a cheaper, inferior product (in their mind at least).

 

Carnival can enforce their pricing if they so desire. If you don't like it, do as you suggest and book with another cruise line. Until they follow suit....

 

 

I always have and will continue to go where the prices are what I am willing to pay for the product received. But it is a principle here that I am disagreeing with. Strong-arming the struggling cruise travel agents is strangling small businesses, but they are promoting it under a guise of "fairness." Let's be real....Fairness really means more $$$$ in Carnival's pocket, so call a spade a spade.

 

IF Carnival is successful, we will see. But most cruiselines are similar and I have been on 6 lines (one now defunct) and will continue to travel.

 

I think I will still be able to sniff out the deals and there are always those who are offering.

[Richiebaseball]

No different than Apple not allowing discounted pricing on iPads, etc. Buy it from them, Best Buy, etc. and it's all the same price. Their attitude is: don't want to pay our price, then go buy a cheaper, inferior product (in their mind at least).

 

Carnival can enforce their pricing if they so desire. If you don't like it, do as you suggest and book with another cruise line. Until they follow suit....

 

Yes but Apple doesn't then tell Best Buy what they can do with the profit after they sell an Ipad. Do you think Carnival should be in control of what an agency does with their profits? Does that include your agency?

[Another ship trip]

And Carnival ain't no Apple!

[Ivanova]

I don't see how this particular policy translates into more money in Carnival's pocket. They get paid the full net pricing on a cruise, even if a travel agent rebated 100% of their commission. Even if a TA doesn't rebate, that commission is paid out, Carnival only gets the net amount. Drive's more business to Carnival PVP's? Except they have to pay their salaries (and bonus commissions), and the overhead associated with employees (benefits, office space, etc.).

 

Don't get me wrong, I'm not buying that this is in the interest of travel agents. I think it has a lot more to do with Carnival trying to protect brand integrity and prevent their product from turning into a commodity like airlines have become.

[Eastcstrob]

WalMart put a lot of "mom n pop" shops out of business with their buying power and discounting. Not that anyone else should care about the businesses affected right?

 

People turn to agencies for MANY reasons, some of them are perks; be it perks for being a loyal customer, or the ever faithful till they find this cruise for $3.50 cheaper over looking any personal relationship built.

 

The Major Discounters and Wholesalers are mere order takers posing as a cruise agent. We all know they operate mainly online and use various ways to keep their costs down. They pay their "representatives" various way many by the hour.

 

A true Travel Agent on the other hand has to take recurring training, have a vested interest in what they do and excel at such.

 

The "mom n pop" travel agent needs to make sales and provide for their business. They usually do that by not only providing a seamless transaction for your cruise purchase, but advising pre/post cruise, submitting online checkin, assisting with air travel, speaking to you in depth about the ship, cruise line or any other travel questions.

 

The less time you require from them then the more courtesy they may extend you.

 

On the flip side, the big box guys have Order Takers standing by that most likely have never stepped foot on a ship, Have no clue what IATAN/CLIA means, or know of a great priced pre cruise hotel you may park your car at for free.

 

Its always your choice, Which is whats good about it all. There's means now a days you can book a complete trip online and never look back.

 

Carnival feels this policy is needed, So be it. If you work the system for your best deal, go for it. If your travel agent will break the rules for you, Show appreciation, Don't expect them to jump at your demands if they choose to follow this policy

 

I think Loyalty would help best in this situation.

[Gail & Marty sailing away]

Sounds like a recycle of old news....

I think they did this rule about 2 years ago??

I agree...