I think it is time again for me to get on my old soapbox in regard to agents complaining about the low commissions they receive when selling cruises that have a low lead-in price. I’m very aware that competition in the 3 & 4-day market has driven the commissionable fares so low that agents are not making very much on those sales.
I know my CLIA training taught me to sell up with the features and benefits of a cruise vacation, and to stay away from selling on price. However, I also know that a lot of travel agents spend a lot of time marketing low cost cruises, thinking that once the clients get back from one, they will spend more on their next cruise. Unfortunately, in my 25+ years of selling cruises, I found that folks that came to my agencies looking for a “great deal” were always looking for the next “great deal.” Today’s agents, and especially the growing number of home-based, agents need to value their time and get back to selling the higher price cruises that offer more value to their clients.
In this regard, I have been stressing to the home-based agents that I do personal coaching for the importance of prospecting for more “lifetime clients.” These are the growing number of active Americans who have already learned that true happiness comes from spending money on “lifetime experiences”, rather than just more “things.” They are out there, and today’s modern travel agents just need to learn how to use proper social media marketing to find them.
Norwegian Cruise Line Is Going To Give Agents A Method To Make More Commission
I think we would agree that many cruisers would feel they had a better “experience” if they had enjoyed unlimited drinks on their cruise vacation, as opposed to that big bill under their door the last night of their cruise. I think we would also agree that the cruise industry needs to continue to look for new ways to attract first time cruisers. Historically, they have used low lead-in prices to attract first time cruisers. As I mentioned above, this has only lowered the overall prices of cruises and results in agents making less commission on the base fare.
I just listened to NCL’s June Webinar and their President, Andy Stuart, spent some time discussing that beginning in January 2016, drinks will be free on their 3 & 4 day cruises out of Miami on the Norwegian Sky. At first this might appear as a questionable practice but when Andy explained some of their reasoning, it began to make more sense to me.
Andy stressed a couple of times that when you add in the price of unlimited drinks to the base cruise price they are in fact raising the price of the cruise and agents will end up making more commission. I am estimating that Norwegian Sky’s commissionable cruise price will go up around $180 on a 3-day cruise and around $240 on a 4-day cruise. Thus, using a 15% commission, agents should be getting another $54 to $72 commission per cabin. That is HUGE in my book.
Are We Seeing The Beginning Of A Major Paradigm Shift In Cruise Line Marketing?
I had another takeaway from NCL’s June Webinar, and that was that we might be seeing the start of a shift on how cruises are marketed. Most of us learned in our CLIA training to bring out all the things that were included in a cruise vacation. We also know that all-inclusive resort vacations have always stressed that unlimited drinks were included. I’m thinking that the cruise lines might be heading the same way.
We have already seen Regent Seven Seas (sister line to NCL) add unlimited drinks to their cruise pricing. I expect more luxury lines will need to follow suit. And remember, we are already seeing more and more cruise lines offering unlimited drinks to some of their higher end suites.
Before you start complaining that it is harder to sell these higher priced cabins, please stop and consider the growth in the higher end all-inclusive resort accommodations. Better yet, take a look at the growth of river cruising and the daily per diems that they are getting. It seems to me that the agents that get on board now and start learning how to sell all of these higher priced products will not be complaining about how their income is going down.
I Think It Is Time To Become True “Agents” With Our Cruise Line Partners
It just might be time to go back to the future and return to the days when we were asked to help fill the new ships that were being built, by becoming better marketers and sales agents. There is no question the cruise lines are doing everything they can to give us wonderful products to sell. I think it is up to us to do our part and work even harder and smarter to fill today’s modern fleets.
Let me step off my soapbox and leave you with one other thought. There is no question that the cruise lines will continue to build beautiful new ships and add more and more innovations to please more of our clients. We can only expect that the cruise lines will work harder to fill these ships, which could include increased direct marketing, if needed.
As always, it is up to all of us to prove our worth as a viable distribution system to both the all-inclusive resort and cruise Industry. It won’t come from rebating our commissions, a hard learned lesson from 2002 when the airlines cut our commissions completely. The answer boils down to today’s agents becoming better at “selling” the value and enjoyment of taking the perfect vacation or cruise.
Larry Norman, CTC, MCC is an icon in the industry. He continues to do training and personal coaching for over 3,000 Home Based Travel Agents and has trained an estimated 22,000 travel agents over his career. He was Travel Trade’s 1996 Travel Educator of the Year. Larry owned a four state network of 16 agencies, with annual sales of $28 million. Larry is known as “The Outside Sales Agent Expert” for his presentations on outside sales at Travel Trade Cruise-A-Thons, ASTA, ARTA and NACOA travel agent conferences among others. You can share your views with Larry at LarryNormanCTC@gmail.com or leave a comment here.