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Vacation.com Disappointed With Royal Caribbean Increasing Commission ThresholdsJune 4, 2008 By: George Dooley, David Eisen
Vacation.com, the 5,100 member agency consortia, expressed disappointment with a recent move by Royal Caribbean Cruises Ltd. to increase revenue thresholds in 2009. In a statement, Steve Tracas, president and CEO reaffirmed the value of travel agents to Royal Caribbean and the industry.
Royal Caribbean confirmed with Travel Agent that in order for non-affiliated travel partners to maintain a 16 percent commission level, they would have to raise revenues from $1.25 million to $1.5 million in sales for Azamara Cruises, Celebrity Cruises and Royal Caribbean.
“We at Vacation.com are extremely disappointed at the recent move by the Royal Caribbean brands to increase the revenue thresholds throughout the travel agency industry,” said Tracas. “The added knowledge, time and education required to sell the ‘values’ of cruising to a consumer market with only a 17 percent penetration rate, coupled with the current economic environment should spur support for the agency community—not the raising of the bar. This is certainly a conflicting message compared to some of their more recent communications to the agency community."
“The emphasis of the cruise industry has been to differentiate their products, ports and benefits to the traveling public. This worthy goal takes time and resources on behalf of the professional travel agent to communicate the vast array of new product possibilities. The true value of any distribution system is to have knowledgeable motivated sellers,” Vacation.com said. “Raising sales thresholds to earn the same pay is counter productive.“
“Furthermore, this restructure comes at a time when fuel surcharges and other non-commissionable items are at an all-time high," Tracas added. "The bottom line is that agencies that promote and sell the cruise lines to their clients will get a smaller percentage of a continuously shrinking pie.”
This is the first time since 1999 that Royal Caribbean Cruises Ltd. has raised its sales commission thresholds.