No Travel Agents

[gerryuk]

According to another board, cruise lines are spending a staggering 15% of their overheads on travel agents and their commissions.

Hypothetically speaking, if the cruise lines decided to cut out the middle man and get rid of travel agents, would those who book through them still book, if the only way was to book online or via telephone? 

In the world of covid, it seems to me that shelling out 15% of your overheads to travel agents is "economics of the madhouse", particularly when it takes a split second to book online. 

[Flatbush Flyer]

12 minutes ago, gerryuk said:

According to another board, cruise lines are spending a staggering 15% of their overheads on travel agents and their commissions.

Hypothetically speaking, if the cruise lines decided to cut out the middle man and get rid of travel agents, would those who book through them still book, if the only way was to book online or via telephone? 

In the world of covid, it seems to me that shelling out 15% of your overheads to travel agents is "economics of the madhouse", particularly when it takes a split second to book online. 

If you think 15%+\- TA commission is staggering, do the math for a cruise line's added costs if they had to increase their own staff to handle the work previously done by TAs. Let's see: telephone/digital inquiries, local/regional advertising, bookings (including groups), etc.

 

Perhaps you're forgetting that things like the then necessarily increased staff would require more than just salary. There would be benefits, space, equipment....

 

Bottom line is that cruise lines' comprehensive services are far more complex than are specific travel providers like a hotel, airline, tours et al. Thus their customer services endeavors need to be robust and that costs plenty. In this situation, "outsourcing" to TAs is the efficacious way to go.

[babs135]

Obviously if it was the only way to book a cruise then so be it , but I would be sorry to see travel agents disappear.  It's nice to have a face to face conversation , especially if what you are booking is not totally straightforward.  Sometimes trying to explain a slight deviation to what the agent expects is difficult over the phone .

[gerryuk]

13 minutes ago, Flatbush Flyer said:

If you think 15%+\- TA commission is staggering, do the math for a cruise line's added costs if they had to increase their own staff to handle the work previously done by TAs. Let's see: telephone/digital inquiries, local/regional advertising, bookings (including groups), etc.

 

Perhaps you're forgetting that things like the then necessarily increased staff would require more than just salary. There would be benefits, space, equipment....

 

 

Why would they have to increase staff? Banks, insurance company's and the likes would all disagree. Everything that a travel agent will sell you, including all the trimmings can be done online by the cruise lines themselves, with minimum staff. In fact there is very little human interaction when purchasing goods online, if any. 

[Flatbush Flyer]

14 minutes ago, gerryuk said:

Why would they have to increase staff? Banks, insurance company's and the likes would all disagree. Everything that a travel agent will sell you, including all the trimmings can be done online by the cruise lines themselves, with minimum staff. In fact there is very little human interaction when purchasing goods online, if any. 

You are making misassumptions about the nature of a business that is more complicated than just taking your payment online or over the phone. FWIW, the volumes of inquiries that do not result in an actual booking are staggering and that's where the value of TAs (who do not get paid until there's an actual booking is made and used) is realized.

 

Don't you think that cruiselines have already weighed (again and again) the options of using certain internal vs outsourced services?

 

Edited August 4, 2020 by Flatbush Flyer

[Hlitner]

Once upon a time there was new cruise line, Renaissance, that decided to pave new territory by not booking through travel/cruise agents.  This line (which had 8 ships) only accepted direct bookings (either online or via phone), did not allow any children, and had a no-smoking policy.   The company did survive about 10 years and finally went bankrupt shortly after 9/11.  Some have argued that one reason that led to their financial failure was not embracing the travel/cruise agency community.  

 

It has long been argued that the cruise lines actually save money (on staff and marketing) by using travel/cruise agents.  Whether this is true is open to debate.  Until Southwest came along and decided not to pay commissions it was also argued that no airline could survive without travel agents.  Not only has Southwest survived, but it has truly done well by tossing aside all the old/normal airline policies and doing their own thing.  We have often wondered if a cruise line put their money into a really decent online booking system...if they could save lots of commission money.  Until COVID 19 most cruise lines followed a model that allowed come cruise/travel agencies to offer much more attractive deals then a customer could get by booking direct.  A Princess rep once told me "we do not try to compete against travel/cruise agencies because we need their support.

 

Will COVID change everything?  I suspect that many cruise agencies will not survive the next few months since they are not getting anything close to their normal income/cash flow.  If and when the cruise industry is able to resume normal operations we are likely to see a world with fewer agencies and agents!  Perhaps one or more lines will finally move to a direct booking only policy.   An even bigger question is will any of the big 4 cruise companies (RCI, CCL, Norwegian Holdings, and MSC) even survive COVID.   The recent (last 2 weeks) attempted cruise restarts in Europe should cause all the cruise lines a lot of concern.  Every restart failure just adds one more nail to the growing coffin containing the cruise industry.  

 

Hank

[donaldsc]

How much service do you get from a cruise company sales representative where you are not a person but customer # 123456789.  When I book with B***, I am Don and she has done business with me for years.  She knows my likes and dislikes.  I don't have to tell her what types of ships I prefer and what type of cabin I like.  Also, when the cruise company tries to screw me over and lets face it, cruise company sales representatives don't give a damn about me as a person but just as a profit center for the cruise line, she is on my side and not on the side of the cruise company.  One last thing, even if you grant that the commission costs for TAs is 15%, most TAs give some of that back either in on-board perks or direct cash rebates.

 

If you are taking a Caribbean cruise or a cruise on the Statten Island ferry, a cruise company agent might provide you with perfectly acceptable non-service.  If your cruise needs are a bit more complicated, they are totally useless.

 

DON

 

 

[LHT28]

2 hours ago, gerryuk said:

Why would they have to increase staff? Banks, insurance company's and the likes would all disagree. Everything that a travel agent will sell you, including all the trimmings can be done online by the cruise lines themselves, with minimum staff. In fact there is very little human interaction when purchasing goods online, if any. 

Well you can do it now  so just book online  do not worry about  using  a TA

 

Some of our banks here have 1 teller  on duty  & if you have a problem with the ATM or account  just get in line  or sit on the phone for hours

to each their own

[SelectSys]

2 hours ago, Hlitner said:

Once upon a time there was new cruise line, Renaissance, that decided to pave new territory by not booking through travel/cruise agents...The company did survive about 10 years and finally went bankrupt shortly after 9/11.  Some have argued that one reason that led to their financial failure was not embracing the travel/cruise agency community.  

 

Until Southwest came along and decided not to pay commissions it was also argued that no airline could survive without travel agents... A Princess rep once told me "we do not try to compete against travel/cruise agencies because we need their support.

 

Will COVID change everything?  I suspect that many cruise agencies will not survive the next few months since they are not getting anything close to their normal income/cash flow.  If and when the cruise industry is able to resume normal operations we are likely to see a world with fewer agencies and agents!  ...An even bigger question is will any of the big 4 cruise companies (RCI, CCL, Norwegian Holdings, and MSC) even survive COVID.   The recent (last 2 weeks) attempted cruise restarts in Europe should cause all the cruise lines a lot of concern.  Every restart failure just adds one more nail to the growing coffin containing the cruise industry.  

 

Hank

 

Nice post.  In terms of Renaissance, 9/11 was probably more of a factor in their demise.  No bailout or easy money for them.

 

I believe what Southwest started caused whatever remaining airline ticket commissions to be radically lowered for normal agents although the airline ticket resellers/consolidators still make money on commission.

 

The lines may disappear or change names but the assets aren't going away.  Just like the Renaissance ships got recycled, other ships being taken out of service may be picked up for pennies on the dollar.

 

Someone, somewhere is thinking about how to pick assets up on the cheap and start a new line post-COVID,  Same holds true in the airline space and other parts of the travel world. 

 

 

[gerryuk]

2 hours ago, donaldsc said:

How much service do you get from a cruise company sales representative where you are not a person but customer # 123456789.  When I book with B***, I am Don and she has done business with me for years.  She knows my likes and dislikes.  I don't have to tell her what types of ships I prefer and what type of cabin I like.  Also, when the cruise company tries to screw me over and lets face it, cruise company sales representatives don't give a damn about me as a person but just as a profit center for the cruise line, she is on my side and not on the side of the cruise company.  One last thing, even if you grant that the commission costs for TAs is 15%, most TAs give some of that back either in on-board perks or direct cash rebates.

 

If you are taking a Caribbean cruise or a cruise on the Statten Island ferry, a cruise company agent might provide you with perfectly acceptable non-service.  If your cruise needs are a bit more complicated, they are totally useless.

 

DON

 

 

Ok, i take your points but back to my original question. If you contacted your TA to book a cruise and your TA said that they and all other travel agents no longer deal with the cruise lines, would you still book the cruise online or by phone, or would you give up cruising? 

[sfaaa]

3 hours ago, gerryuk said:

Why would they have to increase staff? Banks, insurance company's and the likes would all disagree.

Of course they would disagree because instead of hiring more local staff, they outsource their call centers to India, Philippine, Central America etc. 

 

I use big box TA because they give extra perks.

Edited August 4, 2020 by sfaaa

[gerryuk]

15 minutes ago, sfaaa said:

I use big box TA because they give extra perks.

Just a thought, but if the cruise lines stopped shovelling 15% of their overheads to travel agents, so they can give you extra perks, the rest of us could possibly get cheaper cruise tickets, if we all booked online.

I await my scolding 😀.

[George C]

3 hours ago, Hlitner said:

Once upon a time there was new cruise line, Renaissance, that decided to pave new territory by not booking through travel/cruise agents.  This line (which had 8 ships) only accepted direct bookings (either online or via phone), did not allow any children, and had a no-smoking policy.   The company did survive about 10 years and finally went bankrupt shortly after 9/11.  Some have argued that one reason that led to their financial failure was not embracing the travel/cruise agency community.  

 

It has long been argued that the cruise lines actually save money (on staff and marketing) by using travel/cruise agents.  Whether this is true is open to debate.  Until Southwest came along and decided not to pay commissions it was also argued that no airline could survive without travel agents.  Not only has Southwest survived, but it has truly done well by tossing aside all the old/normal airline policies and doing their own thing.  We have often wondered if a cruise line put their money into a really decent online booking system...if they could save lots of commission money.  Until COVID 19 most cruise lines followed a model that allowed come cruise/travel agencies to offer much more attractive deals then a customer could get by booking direct.  A Princess rep once told me "we do not try to compete against travel/cruise agencies because we need their support.

 

Will COVID change everything?  I suspect that many cruise agencies will not survive the next few months since they are not getting anything close to their normal income/cash flow.  If and when the cruise industry is able to resume normal operations we are likely to see a world with fewer agencies and agents!  Perhaps one or more lines will finally move to a direct booking only policy.   An even bigger question is will any of the big 4 cruise companies (RCI, CCL, Norwegian Holdings, and MSC) even survive COVID.   The recent (last 2 weeks) attempted cruise restarts in Europe should cause all the cruise lines a lot of concern.  Every restart failure just adds one more nail to the growing coffin containing the cruise industry.  

 

Hank

Loved Renaissance did a cruise from Athens to Rome in 2001 would definitely have kept sailing then if they diy not go under. 

[Hlitner]

3 hours ago, donaldsc said:

How much service do you get from a cruise company sales representative where you are not a person but customer # 123456789.  When I book with B***, I am Don and she has done business with me for years.  She knows my likes and dislikes.  I don't have to tell her what types of ships I prefer and what type of cabin I like.  Also, when the cruise company tries to screw me over and lets face it, cruise company sales representatives don't give a damn about me as a person but just as a profit center for the cruise line, she is on my side and not on the side of the cruise company.  One last thing, even if you grant that the commission costs for TAs is 15%, most TAs give some of that back either in on-board perks or direct cash rebates.

 

If you are taking a Caribbean cruise or a cruise on the Statten Island ferry, a cruise company agent might provide you with perfectly acceptable non-service.  If your cruise needs are a bit more complicated, they are totally useless.

 

DON

 

 

I always feel like we are beating a dead horse when we post the many reasons folks should shop around for reputable cruise/travel agents that offer the best overall deals.  There are still a lot of fans of specific cruise lines that feel like they have bonded with a cruise employee (PCC for HAL fans) or will tell you about awful experiences with cruise/travel agents.  The real truth is that one should be able to save 7-10% (factoring price, OBCs, amenities) when using a decent discount cruise agency as opposed to booking direct with cruise lines.  We have personally saved several thousand dollars on a single booking (with both HAL and Princess) by simply shopping around.  Or course those booking short lower priced cruises are not going to get those kind of savings.

 

I also admit that finding a near perfect cruise agent has become very difficult.  At one time there were many excellent cruise travel agents (many had the MCC designation) but the profession has changed and many today are more order takers then cruise experts.  Our favorite cruise agent (for over 20 years) retired about 5 years ago (so she could do more cruising) and we have been "breaking in" a young agent in that same agency :).  I fear that she and many others will not survive the COVID-19 cruise pause.

 

Hank

[c-boy]

21 minutes ago, gerryuk said:

Just a thought, but if the cruise lines stopped shovelling 15% of their overheads to travel agents, so they can give you extra perks, the rest of us could possibly get cheaper cruise tickets, if we all booked online.

I await my scolding 😀.

🤣... so if your a tour guide and you have 45-50 in your group, T A's come in handy. 

[mom says]

23 minutes ago, gerryuk said:

Just a thought, but if the cruise lines stopped shovelling 15% of their overheads to travel agents, so they can give you extra perks, the rest of us could possibly get cheaper cruise tickets, if we all booked online.

I await my scolding 😀.

So you actually think the cruise lines would take any possible cash windfall ( Completely disregarding the need for additional reservations staff salaries and benefits, or improvevents to their online systems (and the requisite IT staff)), and divert that to lower cruise prices? Seriously? It would more likely go into the executives or shareholders pockets.

[LHT28]

55 minutes ago, gerryuk said:

Ok, i take your points but back to my original question. If you contacted your TA to book a cruise and your TA said that they and all other travel agents no longer deal with the cruise lines, would you still book the cruise online or by phone, or would you give up cruising? 

If the only way to cruise is booking direct  then  sure

it would be the only way  no options  so  YES  I would book direct

 

But  as it stands we have options so I will use a TA

YMMV

 

[Charles4515]

Ok, i take your points but back to my original question. If you contacted your TA to book a cruise and your TA said that they and all other travel agents no longer deal with the cruise lines, would you still book the cruise online or by phone, or would you give up cruising? 

Of course I would not give up cruising. I use a TA because I would rather they do the calling and to support small and independent businesses. I don’t use a big box TA’s or the cruise line direct. After 60 cruises I could easily do it myself direct but since I have a good TA I have no need to and don’t want to since I have a choice.

[Aquahound]

5 hours ago, gerryuk said:

According to another board, cruise lines are spending a staggering 15% of their overheads on travel agents and their commissions.

 

That number is a little misleading.  My mother runs a small travel agency.  She only makes 10% commission.  15% only comes after they meet a certain quota for sales with that line.  Then, the commission is not even based on the total sale price.  It's not even based on the base price pre taxes and port fees.  Only a certain amount of the base price is commissionable.  I just booked a $2200 cruise through her and her commission was only about $125.  

[Charles4515]

Just a thought, but if the cruise lines stopped shovelling 15% of their overheads to travel agents, so they can give you extra perks, the rest of us could possibly get cheaper cruise tickets, if we all booked online.
I await my scolding [emoji3].

You are dreaming if you think that is what would happen. The cruise lines would pocket any savings if there were any.


Sent from my iPhone using Tapatalk Pro

[Flatbush Flyer]

17 minutes ago, Aquahound said:

 

That number is a little misleading.  My mother runs a small travel agency.  She only makes 10% commission.  15% only comes after they meet a certain quota for sales with that line.  Then, the commission is not even based on the total sale price.  It's not even based on the base price pre taxes and port fees.  Only a certain amount of the base price is commissionable.  I just booked a $2200 cruise through her and her commission was only about $125.  

You make an Important point regarding the sliding scale some cruise lines use for commissions. It's one of the reasons that we took the time and energy to find "top sellers" for our preferred line. 

 

And even though a "top seller" commission of >15% is chipped away by cruise taxes/fees that are non-commissionable, a reasonable split of that commission with your respected/regular TA can represent a significant "chunk of change" - particularly if you're doing longer cruises with "5 figure" per person fares. 

 

Add to that occasional "quiet sales" allowances for those preferred TAs, additional incentive perks from a consortium to which the TA belongs and the responsiveness of a cruise line to concerns voiced by a TA who does $ millions/month in their booking and it's easy why so many CC folks would never DIY a cruise booking or use a cruise line's employee  (Personal Cruise/Vacation Planner) who can only give you the current cruise line perks available to anyone (including those folks using their own TA).

 

That said, there is the reality that many cruisers just don't want to do the real TA research to find the right one (in a sea of sometimes disappointing choices). So they kid themselves into believing that they "control their reservation" by booking direct with the cruise line (when the reality is they will sit on the phone "on hold" with a low level phone rep while a preferred top seller TA has the line's Regional Sales Director as a speed dial on their phone. 

 

Bottom line- do your homework and you will be rewarded!

 

[ontheweb]

2 hours ago, sfaaa said:

Of course they would disagree because instead of hiring more local staff, they outsource their call centers to India, Philippine, Central America etc. 

 

Our area newspaper once had an editorial that one should buy locally. And yet when you called their 800 number because your paper did not arrive, the call was answered in the Philippines. I sent off a letter to the editor calling them out for their hypocrisy. Of course they did not print it. Instead they e-mailed back that they were part of a larger corporation (I think the same one that owns the Washington Post), and it was not their decision to make.

[Love.II.Cruise]

7 hours ago, Hlitner said:

The real truth is that one should be able to save 7-10% (factoring price, OBCs, amenities) when using a decent discount cruise agency as opposed to booking direct with cruise lines.  We have personally saved several thousand dollars on a single booking (with both HAL and Princess) by simply shopping around. 

Hank

I agree with you!  We shop around and usually get that 7-10% back!  Those decent discount cruise agencies always beat the actual cruise line pricing.  

[pris993]

During the period following 9/11, the only cruise line to go bankrupt, I believe was Renaissance.  I read part of their problem was they did only direct bookings, so they did not have a TA network promoting them.   Different times now, but having a TA network to promote cruise lines may be just as important.

 

I personally don't use a TA now, haven't for years.  But given the experience of Renaissance, a TA network may be important to cruise lines today.  

[John Bull]

19 hours ago, gerryuk said:

According to another board, cruise lines are spending a staggering 15% of their overheads on travel agents and their commissions.

 

Approx. 15% is the norm in the UK, and has been for years.

 

You overlook the fact that TAs offer a wide range of cruise lines, so folk can compare offerings in a single physical or on-line visit, and if a cruise line isn't amongst those offerings many prospective cruisers - particularly new cruisers -  probably either wouldn't know about that cruise line or wouldn't hunt around the web.

 

In other industries - insurance, utilities, etc - the trend is in broadly the opposite direction. ......

 

Many providers actually require potential customers to buy through comparison websites in order to get their best prices - that was the case when I changed my gas & electric supplier.

 

My motor insurance is with a company (you'll know which one because of its name) that stresses that it isn't on any comparison sites. It was marginally cheaper (but nothing like 15% cheaper) than the comparison sites, so I reckon that most of the savings by not using agents are spent on their necessarily large TV advertising budget.

 

We always use agents' websites to get the best deals on flights - one-stop shopping, and lower prices than booking direct.

 

Back to cruising.....

with most cruise lines (Thomson / Marella is the big exception) we get better prices or perks by asking one agent to improve on another agent's offer, perhaps coming from the agent's commission.. The web is very useful, but the phone is invaluable in getting the best deal.

 

 I appreciate that 15% is a big chunk, Gerry, but it's worthwhile to the cruise lines. Their bean-counters aren't daft, if cutting out the middle-man were worthwhile they'd have done it years ago.

As others have said, cutting out agents means extra staff and other overheads and that eats into the 15%.

Add the increased advertising which would be required, and any savings would be negated.

 

A worthwhile suggestion Gerry, but no cigar 

 

JB