With cruise lines and the travel agency distribution channel facing tough, perhaps unique, economic challenges, a commission protection policy that will lock in the agents' commissions based on the original sale price is necessary to retain a strong distribution channel, Steve
Tracas, Vacation.com's president and CEO said in an interview with Travel Agent. Currently, the supplier's low price guarantees require the agents to continually reissue reservations for less and less compensation.
"In the long term, cruise lines will clearly benefit from a strong and vibrant agency distribution channel that is knowledgeable and experienced when it come to generating higher per diem transactions," Tracas said. "At a minimum we should initiate a constructive dialogue on the issue
that impacts virtually all cruise selling agents. A commission protection program would be a major selling incentive to cruise agents who are now seeking alternative travel opportunities for their clients that fully compensate their efforts.
"Unique times call for unique solutions," Tracas continued." The massive ongoing investment by the cruise lines in new ships, services and itineraries is welcomed, but will be undercut by a fragile agency channel. A commission protection plan— over the next 18 months— is necessary to keep the focus on selling cruises."
Tracas, now in his third year at Vacation.com's helm, has overseen strong growth in Vacation.com's programs and productivity, including cruise sales. Cruise sales now account for almost 60 percent of Vacation.com's sales.
Fifteen cruise lines and two river cruise lines are included in Vacation.com's new EZguider booking technology. EZguider, a major initiative of Vacation.com, promises to increase member agents cruise sales and productivity.
"In our experience, the discount pricing is a serious disincentive and when combined with non commissionable components result in a significantly weaker distribution channel," Tracas said.
While concerns that an 18-month program might be difficult to roll back once in place, it is imperative during these unique times, Tracas believes. Tracas' proposal won a strongly favorable reaction from agents attending Vacation.com's recent 11th Annual Conference in Las Vegas.