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Why Independent Agents Are Moving to Higher Yield ProductMay 15, 2014 By: Newswire Travel Agent
Independent travel consultants have been pulling away from mainstream and mid-market cruise lines to mitigate low cruise fares and non-commissionable fees (NCFs), the National Association of Career Travel Agents (NACTA) reports. The association says agents are selling all inclusive vacations, luxury and river cruises and flexible, independent travel (FIT) packages.
“Our research shows it has been a natural progression for our travel consultants to opt for the higher yielding sales of luxury and small ship cruises, tours and FIT packages replacing the lower yielding cruise sales,” NACTA president Ann van Leeuwen told independent travel consultant members attending a conference of NACTA Chapter Directors at the Grande Rivera Sandals resort in Jamaica.
"NACTA itself is broadening our product portfolio beyond the contemporary cruise lines whose pricing practices return lower profits for our members.” In particular, she adds, NACTA is developing more robust partnerships with luxury lines, all-inclusive resorts and FIT package providers that are tailoring their offerings to the desires of clients of NACTA’s member consultants.
Van Leeuwen points to its strong and growing partnerships with luxury, river and small ship cruise partners like Crystal Cruises, AMAWaterways, Paul Gauguin, and Alaskan Dream Cruises, as well as new entrants to the market like Scenic Tours and CroisiEurope.
"These companies continue to invest in the independent travel consultant channel. NACTA’s exclusive and newest partnership with ITeXplorer will allow its members to build tailor-made multi-destination FIT packages for their clients in minutes," NACTA said.
“We are continuing to look for new partnerships that will increase client satisfaction, travel consultant productivity, sales and commissions,” Van Leeuwen said.
‘We will sell what’s best for our clients and what’s best for our business’ bottom line. Cruises lines and other suppliers who choose to reduce their commission expenses risk losing travel consultant loyalty. Cruise lines have choices and so do we. We will continue to build our relationships with suppliers who invest in our members and that is becoming increasingly so with the high-end vacation sector," Van Leeuwen said.
More agents also are specializing so they can customize cruise and other travel for clients, van Leeuwen said. NACTA cites ASTA’s 2013 survey on the NACTA membership which shows a 16 percent shift in their business away from cruise sales since 2010, where 60 percent of the members overall business was cruise based, to 2013, which reported at 49 percent of their overall business.
Van Leeuwen cited evidence that cruise sales are more and more time-intensive for agents, which translates to lower profits. Also, low fares and higher (NCFs) cut into compensation which, in turn, makes it harder for agents to reach sales goals, move to higher commission levels, and make continued investments in their talent and overall business operations.
Agents say they are finding it impossible to make enough money on commissions on inexpensive cruises, says van Leeuwen.
NACTA continues to support all types of cruise lines, says Van Leeuwen. For example, long time cruise line supporters Celebrity Cruise and Holland America Line will be front and center at this year’s NACTA annual conference at the Sheraton Wild Horse Pass in Phoenix, October 30-November 3, 2014.
In addition NACTA members will participate in the Global Convention of its parent association, the American Society of Travel Agents (ASTA), September 14-21, 2014, held for the first time at sea aboard Norwegian Cruise Line's Norwegian Breakaway, a new cruise ship sailing out of New York.
“This 'Seas the FUTURE' convention and annual general meeting will give our agents a good look at one of the newest ships from a cruise line that values the sales our members generate for them," Van Leeuwen said."It is in the best interest of all cruise lines to compensate travel consultant professionals fairly to ensure a sustainable and healthy distribution system that the cruise lines can rely on to fill their ships.”