Travel professionals that sell Disney Cruise Line have been up in arms by the recent announcement from DCL regarding on-board rebookings. In a nutshell, if your client rebooks with DCL while still onboard the cruise you booked, your commission for the future booking is capped at ten percent. For agencies that only make 10% to start with, this has no direct impact on them right now. However, for agencies making between 11% and 16% commission on bookings, this is a loss of income.
Years ago industry insiders (including TRO’s own John Frenaye) started predicting that the cruise industry would eventually follow suit with the airlines and eliminate paying commission to travel professionals. Of course these insiders were outnumbered by those who didn’t think cruise lines could ever afford to completely cut us out of the distribution pipeline. But as non-commissionable cruise fares (NCCFs) increase as a percentage of what passengers pay (and what we don’t earn commission on), we are effectively seeing our commissions decrease. Cruise lines cap commissions on bookings transferred to us, and in the case of DCL, when clients rebook while still onboard a ship that also decreases commissions paid out.
I am honestly not surprised by this move by Disney Cruise Line. They have never acted like a more traditional cruise line, ever since their inception. One past DCL executive put it this way: DCL is “not a cruise line; we are part of a larger entertainment company.” When he said this, he was addressing their resistance to adding new ships to their line up (at the time only having the two original ships). He went on to explain that being a part of an entertainment company, and not a stand-alone cruise line, their decision-making process differs from their cruise competitors. I believe this philosophy of theirs applies to their decisions about paying commission. We can see it with the Disneyland Resort and Walt Disney World Resort. At the resorts there are many booking components that they do not pay commission on at all, or limit commission to 5% or 8% (depending on the component). And they cap everyone at 10% for room reservations. It’s not surprising then that they are finding ways to cap our commissions on the cruise portion of their entertainment company. I also won’t be surprised in the future if they cap all cruise commissions at 10% regardless of agency productivity. I won’t be happy with it (none of us will) but I won’t be surprised either.
What can travel professionals do? Threatening to stop promoting or selling their product will likely have little or no impact on DCL. They know they have enough dedicated fans to fill their ships, they already feel like they don’t need us. Look at how they did away with their group cruise program. They didn’t need it to fill ships, so why were they going to give away unnecessary incentives to achieve a goal that they felt they could achieve without the program? Goodbye groups. So threatening to withhold business probably won’t resonate with them.
If the time comes then travel professionals will need to make a hard decision: stop selling Disney altogether, or start charging fees for our time, expertise, and knowledge. When airlines stopped paying commissions, this was the decision that agencies faced at that time. They couldn’t stay open by booking airfare for free. So they either focused on other products still paying commission and stopped selling airfare, charged fees for booking airfare, or closed up shop.
What will your option be if cruise lines further reduce, or cut out paying commissions altogether in the future?
Susan Schaefer is the owner of Ships ‘N’ Trips Travel located in Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations, she focuses on travel for 18 to 23-year-olds. Susan can be reached by email at email@example.com or by phone at (888) 221-1209.