Will NCFs ground the cruise industry?
As anyone who has sold cruises over the past few years will tell you, the commissions earned are falling. They are not falling because of reduced commissions. They are not falling because of reduced fares. They are falling because of the increase in the Non-Commissionable Fee or NCF.
As an agent that prides himself on offing transparency and value to my clients, I see two problems with the NCFs. First, the very idea that I have to explain the acronym to a client takes away from a smooth and fluid selling process. An agent should not be discussing commissions or non commissionable charges—ever! The mere fact that the word “commission” must be discussed is just plain wrong. Secondly, when quoting prices, the client is likely to be put off by “plus this and plus that”. The client deserves better. On many cruises, the add-ons can approach or exceed the base cruise fare. Cruise lines need to offer a more transparent and simpler pricing strategy. And, I am not alone in my thinking.
For a good example of how complex pricing strategies fail, we only have to look to the airlines. If you travel on a Monday between 9 AM and 11 AM and book 7 days in advance and stay over a Saturday night the fare is one price, but if you leave on Tuesday, it…well, you get the point. Consumers became frustrated and turned off –just like the agents.
The solution is simple. The cruise lines simply need to build their current NCF charges into a commissionable cruise fare; and build in the additional cost to fairly compensate their sales agents. This works for everyone involved in the process. The consumer gets a tranparent price, the cruise line still gets their extra fees and the agent earns a full commission on the cruise lines’ product. If other cruise lines follow the Regent lead, the pricing of cruises will be more clear for the traveler and more profitable for the “valued partner”—the travel agent.
I strongly believe that many competing cruise lines offer a truly comparable experience, pricing and itineraries. Agents need to align themselves with the cruise line they believe will deliver the best experience for their clients and then faithfully support that brand. This will result in moving market share to their preferred line. Moving share and growing business is the best way for agencys to reinforce their worth to their cruise line partners.
With capacity and technology growing the last thing we want is for the cruise lines to start thinking the way the airlines did in the mid 90s when they expanded their efforts in the direct to consumer business model. Look how well that has served the airlines. I don’t think that will happen with cruises in the near future for any number of reasons, the least of which is that the product is much more complex. But business is business and if agents don’t show they really can market and grow business, then that possibility can become reality.
So in the end let’s hope the cruise lines will embrace a simpler and more transparent pricing strategy and that agents will expand and enhance their marketing and brand loyalty by moving market share to their partners and growing their business with the myriad of marketing tools at their disposal.
Scott Grody is a world traveler and an expert resource on all aspects of the industry. With 40 years’ experience, Scott is the owner of Scott Grody Travel based in Delray Beach, FL. Scott can be reached online at www.scottgrodytravel or by email at email@example.com.