|Joni Rein, vice president of worldwide sales, Carnival Cruise Lines // Photo courtesy of Carnival Cruise Lines|
Today, Carnival Cruise Lines (www.goccl.com) lowered the boom on agencies and agency groups that promote to secure business with sizable onboard credits, gas cards, free vacation insurance and pricey gifts. The line says this is "disadvantaging" other small and medium-sized agencies.
Thus, effective August 1, Carnival will field a new promotional policy in what is clearly the most sizable change since it first addressed the issue of discounting in summer 2010. At that time, it adopted a new Advertised Price Policy to ensure a level playing field.
But "we continue to hear from the vast majority of our partners that it isn't enough," said Joni Rein, the line's vice president of worldwide sales. She called some of the promotional efforts "outrageous."
New Advertised Price Policy
To ensure "all travel partners have the equal ability to sell the Carnival product at the same great rate," Rein laid out the new version of that Advertised Price 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 $25 per passenger.
Examples of acceptable promotions (if the items per person cost less than $25 each) include tote bags, hats, beach towels, memory books, sunglasses and Carnival gifts (Bon Voyage items) delivered onboard.
Carnival’s former policy allowed non cash-equivalent value-adds that were less than five percent of the complete cruise fare or $25, whichever was greater.
In addition, the line previously allowed for cash-equivalent value-adds that were less than 10 percent of the complete cruise fare - with an approved Marketing Plan.
Now, anything given away or provided to a client in conjunction with a promotion for a Carnival cruise must not be a cash equivalent of any price nor anything that's more than $25, period.
Cash-equivalent value-add items that will no longer be considered acceptable to Carnival include the following: cash, gas cards, onboard credits, pre-paid gratuities, airline miles, third party cash back offers, free or discounted protection coverage, free or discounted shore excursions, free or discounted hotels nights, reduced airfare, gift cards or anything that equates to a cost associated with the cruise.
Other cash equivalent items not mentioned above are also banned, the line said.
So if an agency wants to give a free beach towel or scrapbook album of less than $25 value with every booking, fine. But it can't give a $25 onboard credit, a gift valued at more, or gas cards or insurance premium incentive that could be considered as having a cash value to the client.
|Carnival Breeze, the line's latest ship, now sailing in the Mediterranean // Photo by Susan J. Young|
As it makes this policy change, Carnival is doing away with the pre-approval process for promotions. Given that the giveaways must be $25 or less, it's unnecessary for either agencies or the line itself to spend time on the process, Rein noted.
But to avoid any unscrupulous agencies that attempt to circumvent the rules, Carnival reserves the right to review promotional offers to ensure they align with brand guidelines. And, it may request that partners remove or change offers should they not meet the new criteria.
"We take this very seriously," said Rein, who said the new requirements were not discussed with members of the cruise line's agency advisory board in advance. She said the line wanted all agencies and agency groups to hear the news about the new policy at the same time.
She also stressed that the decision to tighten the promotional value-adds had been made after consulting with tens of thousands of agencies over the past several years.
"We are a strong supporter of a level playing field for the entire distribution system," she emphasized, noting the importance of small and medium size players in small town across North America.
Carnival is one line that - because of its affordable fares - appeals to a very broad audience. It's also highly popular with first timers and to increase the pool of new cruisers, the line needs to assure it's sold in every nook and corner of North America.
Carnival’s objective with this revision is to create a structure that provides partners with the assurance that the rates they quote won’t be undercut by competitors, regardless of size.
Beyond that, what does Rein hope the new policy will accomplish? "We hope agencies continue to focus on the basics - relying on their knowledge and expertise and their service to customers rather than the ability to offer a promotional discount."
We asked Rein what would happen if an agency had received Carnival approval for a marketing plan that included an onboard credit, but that the end date of the agency promotion is September 15, for example?
She said any previously approved marketing plans and promotions would be "grandfathered in" but once the pre-approved promotion ends, that agency must then follow the new rules for future promotions.
If you are an agency owner or front-line agent, what do you think of Carnival's latest move? Is it good or bad? Will it have an impact on your business? If so, will it be positive or negative, and why? Let us know your thoughts in the comments below.