John Werner, president of MAST Vacation Partners called Royal Caribbean’s plan to increase the commission threshold for agents the “second largest commission cut in the history of the industry.”
Werner, a veteran agent and consortia leader, told Travel Agent that: “RCCL's executives have lost sight of the conditions for small and mid-size agencies who may only have a total of a quarter million to as much as a million dollars in annual cruise sales across all cruise lines.”
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. This includes Azamara Cruises, Celebrity Cruises and Royal Caribbean. This is the first time since 1999 that Royal Caribbean Cruises Ltd. has raised its sales commission thresholds.
“These agencies don't grow in one year by the kind of volume RCCL expects," Werner said. "When agencies of this size increase sales, that growth is distributed among more than just one supplier. The plan is unrealistic and causes agencies to lose heart and look elsewhere for better yields.
“It really sends mixed signals when agencies, with respectable cruise sales, are told their business is very important, they are thanked for their support, but their sales are worth less today so they must accept less commission but keep their volume up,” he said.
Werner said that he anticipated that “other lines will make adjustments but not right away and not by the same percentages.”
MAST Vacation Partners is an agency-owned cooperative with 170 agency locations in eight states.
Werner’s comment followed recent statement by Vacation.com’s Steve Tracas, President and CEO and Travelsavers Jim Mazza, questioning the RCCL decision. At presstime the American Society of Travel Agents declined comment, as did several agencies that cited the sensitivity and confidentiality of their agreements with RCCL.