Carnival Changes Policy

[mickeyd]

I received this as part of an email from CruCon. Does this mean the end of cheap last minute cruise deals?

NEWSFLASH: New Carnival Policy goes in effect August 1st, 2012

Carnival has just announced that effective 8/1/12, they will not allow travel agents to give ANY cash equivalent value-adds (i.e shipboard credit, pre-paid gratuities, gas cards, airline miles, reduced airfare; free or discounted travel insurance, hotel nights, or shore excursions) and will be limiting any booking incentives to a $ 25 pp non-cash equivalent item (like a tote bag, hat, beach towel, memory book, sunglasses and Carnival gifts delivered onboard (Bon Voyage items)). This new policy applies not only to advertising, but all forms of communication, including in-person, phone or any other means. If any travel agent is caught violating the policy, (whether big, small or even a home based agent belonging to a host agency) their commission can be eliminated and they can be put on a "no book" status.

 

[Danmar]

Not sure why they would do this? Why do you think it would put a stop to ladt minute deals? They may be reducing commissions paid to agents? But why would Canival care if agents give away on board credits? Not sure I understand how agents are paid?

 

[MasterBlaster]

I received this as part of an email from CruCon. Does this mean the end of cheap last minute cruise deals?

It could. The cruiselines certainly want it that way.

But we've been through this before and somehow the deals disapear for awhile and then all of a sudden discounts start showing up again.

If I were to make a bet I would think that there will indeed be great deals in the future.

 

[Bestwifeever]

I think they want people to book directly with Carnival rather than through a travel agent, so they don't want the agents using part of their commissions to effectively lower the cost of the cruise, like with shipboard credits, to their clients.

 

[Danmar]

I think they want people to book directly with Carnival rather than through a travel agent, so they don't want the agents using part of their commissions to effectively lower the cost of the cruise, like with shipboard credits, to their clients.

Simple solution would be to cut commissions? Like the airlines did?

 

[ziggy29]

Cruise lines have been one of the last holdouts in eliminating travel agent commissions, and this looks like the beginning of the end for that practice.

 

[mn54]

they will still need a way to fill ships that are not full. last minute deals will not go away.

 

[ziggy29]

they will still need a way to fill ships that are not full. last minute deals will not go away.

I agree, though I think they will increasingly be *only* available on their own web site where they don't pay any agent commissions at all. A passenger booking last-minute at half the usual fare is better than an empty stateroom, but it doesn't leave much room for an agent's cut.

 

[Danmar]

Agree that the travel agency business looks like it's on the way out at least for cookie cutter trips like cruises. They must add value if they are to survive and if you can do it yourself on the internet don't see what they bring to the table.

 

[kumquat]

While I tend not to use agencies for my travel, I think they have one thing going for them. Back in my working days, we had communications links all over the continent. Several carriers were involved. We could save a buck here and there by handling all this ourselves but we usually picked a carrier to handle it all. Our rational was "one throat to choke".

We sometimes book a trip with a travel agent (if costs are similar) for that reason.

 

[Danmar]

@kumquat. Agree that they can be useful for more complicated trips to unusual places but cruises are pretty simple. I would rather just deal directly with the cruise line and cut the middle man out especially if it would be cheaper.

 

[ziggy29]

I would rather just deal directly with the cruise line and cut the middle man out especially if it would be cheaper.

Except that it's usually not. It goes straight to margin in most cases. And it leaves fewer people employed to be their customers.

Business today wouldn't recognize Henry Ford's idea -- that a good way to build your own business is to make sure a lot of workers could afford them.

 

[MasterBlaster]

Lets just think here for a minute what Carnival is doing...

They are dis-incentiving agents and passengers from using their cruiseline. I suspect that if they have to drop prices or sail with unfilled ships that their policy just may change.

As I stated before, I have seen this very same policy (attempted to be) enforced in years past. Yet it continued after a short while.

So my personal opinion is tha we'll see about this policy...

 

[Danmar]

I don't think keeping an extra layer in the process that isn't needed is sustainable in the long run. Need to add value or you will be cut out. The catalogues both printed and on line are simple to use. Only a matter of time before cruise lines cut agents out. I acknowledge that it may take a while as cruise customers are a fairly mature group and quite a few may not have internet access.

 

[clifp]

I don't think keeping an extra layer in the process that isn't needed is sustainable in the long run. Need to add value or you will be cut out. The catalogues both printed and on line are simple to use. Only a matter of time before cruise lines cut agents out. I acknowledge that it may take a while as cruise customers are a fairly mature group and quite a few may not have internet access.

The internet is pretty ruthless as eliminating middle man who don't add value. That is true for retailers as it is for travel agents, and 411 operators.

My friend paid $500 to a travel agent recently to book his honeymoon to France and Italy. While I think he was happy his bride was furious with everything from the fact that misspelled her name, to the seats flying over. They are both obese and really should use business class or at least economy plus seating.

I guess for somebody travel agents can save you time, but I generally want to have more control over my travel arrangements and find going through travel agents saves me little time and cost me additional money.

I can't imagine what I'd gain using a travel agent that would be better than reading website reviews and using the cruise lines websites.

 

[MasterBlaster]

The internet is pretty ruthless as eliminating middle man who don't add value. That is true for retailers as it is for travel agents, and 411 operators.

My friend paid $500 to a travel agent recently to book his honeymoon to France and Italy. While I think he was happy his bride was furious with everything from the fact that misspelled her name, to the seats flying over. They are both obese and really should use business class or at least economy plus seating.

I guess for somebody travel agents can save you time, but I generally want to have more control over my travel arrangements and find going through travel agents saves me little time and cost me additional money.

I can't imagine what I'd gain using a travel agent that would be better than reading website reviews and using the cruise lines websites.

A travel agent cab be helpful to someone who has never been on a cruise. The agent will know about cabin types, dining, shore escursions (and so on) and can answer any other questions/concerns that may arise. They can also discuss things that may not have occured to the newbie cruiser. This may be particularly true for cruises leaving out of foreign ports where English is not widely spoken.

But after you've been an a cruise or ten, travel agents add little value. For those people an online website works just fine. That's especially true when the online websites save you money.

 

[clifp]

A travel agent cab be helpful to someone who has never been on a cruise. The agent will know about cabin types, dining, shore escursions (and so on) and can answer any other questions/concerns that may arise. They can also discuss things that may not have occured to the newbie cruiser. This may be particularly true for cruises leaving out of foreign ports where English is not widely spoken.

But after you've been an a cruise or ten, travel agents add little value. For those people an online website works just fine. That's especially true when the online websites save you money.

You raise good points but, I learned more by reading the online forums devoted to Alaska cruises before taking my first cruise, than I did talking to my mom, a former travel agent and veteran of 20+ cruises. Now admittedly I am forum junkie and many others aren't a big fan of this type of medium still..

 

[SJ1_]

You raise good points but, I learned more by reading the online forums devoted to Alaska cruises before taking my first cruise, than I did talking to my mom, a former travel agent and veteran of 20+ cruises. Now admittedly I am forum junkie and many others aren't a big fan of this type of medium still..

We learned everything about cruises from online forums. We use an agent because she is real smart and we get On Board Credits with the agent

 

[sailfish]

The "vacations to go" agent told me also that Celebrity and RCCL also does not let any agency cut prices to keep the small travel agents viable. I would think the cruise lines would have to have a huge staff to handle all requests with all their different ships and dates , if travel agents did not initiate the bookings. The advertising that all these travel sites do is constant and saves the cruise lines a lot of resources IMO.

 

[Danmar]

The concept of on board credits is interesting. The fact that big travel agents can offer these(and they can be over $1,000 on expensive cruises) tells me that commissions paid by the cruise lines is too high. Will be interesting how this works out over the next few years. There is a very large part of the cruising market that is main stream, mass market, and commoditized. This segment at least seems ripe for disintermediation.

 

[ziggy29]

The concept of on board credits is interesting. The fact that big travel agents can offer these(and they can be over $1,000 on expensive cruises) tells me that commissions paid by the cruise lines is too high.

It has historically been in the range of about 8-15%, usually around 10% depending on a number of factors. But don't delude yourself into thinking eliminating agent commissions will result in a significant drop in fares. The truth is that most cruise lines have, for years, kept base fares low (this is the commissionable part) while increasing "junk" fees which are not. The junk fees can almost equal the base fare itself, so in terms of the total price you pay, the commission percentage is almost cut in half.

 

[Danmar]

I don't think I am deluding myself. Just that commissions seem high for what the agents do. In any event, I don't buy travel based on price although I know that most people do. Making $500-1,000 commission on a cookie cutter cruise seems unsustainable.

 

[ziggy29]

I don't think I am deluding myself. Just that commissions seem high for what the agents do. In any event, I don't buy travel based on price although I know that most people do. Making $500-1,000 commission on a cookie cutter cruise seems unsustainable.

Fair enough. But as my wife used to sell cruises I think I have a pretty good handle on how the industry works. (She doesn't any more, so I have no vested interest in maintaining the status quo.)

Even when she was selling travel we were recognizing that "travel agent" won't entirely go the way of buggy whip maker, but it will be an increasingly niche product that can support far fewer agents. There is a market for booking, coordinating and selling travel products, but it's increasingly not for the masses but for those willing to pay extra for the service and don't want to deal with all the details themselves with a complicated itinerary.

 

[Danmar]

Ziggy: I think we have reached common ground on this issue. Cheers.