Last week, Disney Cruise Line decided to trim even more fat when they announced to travel agents that their commissions for onboard bookings will be fixed 10%. Previously, agents had been able to earn upwards to 16% depending on the agent’s sales volume and other criteria.
From the travel agents we spoke with over the past week and the reports in other news stories, this will potentially lead to agents discouraging guests from booking onboard and waiting until they are back on land to get the higher commission. This could definitely impact the travel agent’s ability to offer extra onboard credit to their client for use on the cruise. In my mind, this will be the second change agents will make for clients booking onboard following the discouragement of booking onboard.
As a result of this change, Royal Caribbean’s senior VP of Sales took a shot across the bow during an interview with Travel Weekly.
Vicki Freed, Royal Caribbean International’s senior vice president of sales, said, “We believe that those future bookings made onboard are the most valuable bookings we can get. … You should have the full commission. And when a competitor makes a move like [Disney] did yesterday, it concerns us because we don’t want to ever misbehave. And I don’t know of another way to word that. We never want to misbehave with our travel agent partners. Our success is dependent upon your success. We’re not stupid. We are having the best year ever, our stock’s about to hit $100, and that’s thanks to the support of the travel agent community.”
Freed said Royal Caribbean is looking at how the cruise line can pay agents more money for onboard bookings. She said that Royal Caribbean President Michael Bayley told her, “Vicki, find a way to pay travel agents even more for those bookings that are made onboard. Let’s do some incentives. Let’s give them back-end overrides.”
It is a good thing Disney Cruise Line decided to diversify their onboard vacation destinations aboard the new Disney Dream with the Disney Vacation Planning Center for all your Disney Destination needs because once the reduced commissions start rolling into agencies there could very well be a drastic reduction demand for onboard bookings.