Will Cruise Lines Pay Commission on Shore Excursions

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Susan SchafferThe short answer to that question is: maybe. Of course it could also be, maybe not. In a recent trade event onboard Royal Caribbean’s Freedom of the Seas, the topic came up in a Q&A with Michael Bayley, President & CEO of Royal Caribbean International, and Vicki Freed, Senior Vice President of Sales, Trade Support and Service. Bayley was noticeably stunned at the results when he asked agents to raise their hands if they sold third party shore excursions. A majority of the agents in the room raised their hands.

He did try to make a case for booking cruise line excursions: they thoroughly vet their vendors, look at safety records, hold the ship if an excursion is late returning. But I think he realized that was falling on deaf ears. Most of us book with reputable third party excursion companies that also vet their vendors (often using the same vendors as the cruise lines use). And they also provide guarantees that if you miss the ship because of a delayed excursion (because of course they can’t detain the ship), they guarantee to get you to your next port, at their cost. Last time I spoke with the owners of Shore Trips, they said they’ve never had to actually pay to get anyone to their next port, because they never have missed returning a client to a ship on time.

Freed did make one point that does stick: passengers with cruise line excursions booked are guaranteed first off the ship in port. This is the one advantage that they can continually deliver that no one else can touch. But is that enough for you to sell cruise line excursions with no commission? By the show of hands in the Q&A, I’d say the resounding answer is NO.

Freed also pointed out that Royal Caribbean is already paying shore excursion commissions, but only on group excursions. When asked about FIT excursions, there wasn’t a concrete answer. Bayley admitted that this was an issue for Royal Caribbean (and I would surmise other cruise lines as well), and they are seeking out an answer. Will that answer be to pay commission? I think it’s too early to hook my wagon to that horse, but I think it’s at least on the table for discussion.

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And by far, this is not unique to Royal Caribbean. Carnival introduced a low price guarantee on their excursions, hoping to keep the cost-sensitive passengers from jumping ship on excursions. And a few years ago there was a bit of a rift caused when Carnival supposedly tried locking in their shore excursion vendors so that contractually they could only work with Carnival and could not work with third party excursion companies when Carnival ships where in port.

So what is a travel agent to do? If you are comfortable, as many agents appear to be, with booking third party excursions, you have to do what is necessary for your own bottom line. But it would also help for you to communicate with the cruise lines, i.e. through your BDM, and let them know how much you are off-selling every year in excursion revenue (revenue they are losing). This is not going to be fixed over night, but the cruise lines may come along slowly. At first, they may decide to include excursion sales in our overall sales revenue (which is used to determine our commission levels). Royal Caribbean, Celebrity and Azamara already do this with their Choice Air (clients book airfare through the cruise line, and we get that credited towards our total sales revenue, although it’s not commissionable). So it is possible that, as a step in the right direction, they may do something similar with shore excursions.

Eventually, however, it would be nice if they simply paid commissions on excursions.


Susan Schaefer is the owner of Ships ‘N’ Trips Travel (www.shipsntripstravel.com) located in Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations (www.kickbuttvacations.com) she focuses on travel for 18 to 23 year olds. Susan can be reached by email at susan@shipsntripstravel.com or by phone at (888) 221-1209.

 

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