Carnival Cuts Out Air Commissions

A letter faxed to U.S. and Canadian travel agents on Tuesday outlines Carnival Corp.'s necessary move to cut out the payment of commissions on the air portion of cruise bookings. The new policy will go into effect for all new bookings beginning October 15.

The letter, written by Carnival Corp.'s vice president of marketing, Jack Anderson, outlines the reason for the switch. "As you are aware," he writes, "several years ago the airlines stopped paying commissions on airfare. However, our cruise brands continued to pay commissions to agents for air bookings. During this period, airline prices to cruise lines have increased. The combination of increased rates from the airlines and our unique payment of air commissions have reduced the competitiveness of our air programs."

Travel Agent spoke with Anderson regarding the matter and he made it clear that the policy change in no way was a move to generate higher revenues. "There is no profit motive," he said. "It's to restore a competitively priced product."

Anderson went on to say that nearly 88 percent of agents opt to book air elsewhere, instead of through Carnival, which effectively precludes them from receiving commissions anyway.

Some agents, however, are already expressing discontent with the policy shift. "With the cruise lines' already high non-commissionable fees," says Linda Grauer, owner of Four Seasons Tours and Cruises in Largo, FL, "that leaves such a small profit that if the cruise lines do this to us we'll have to rethink our way of doing business or change the lines we deal with."

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