Twelve years ago I wasn’t a travel agent, but I definitely used one. In 2004 we booked a Disney cruise for the summer 2005 Panama Canal eastbound itinerary. At the time we booked, the final payment was due 60 days before departure. However, somewhere along the line Disney changed their policy, making final payments due 75 days before departure. All existing bookings were grandfathered and still allowed to pay at the 60 day mark and fall under the old cancellation penalty schedule. Of course, they had incentives to pay your balance early: For example, you could not make online reservations for the adult-only restaurant, book excursions, or spa appointments unless your booking was paid in full; and they opened for booking 75 to 90 days before departure (based on your loyalty program status). Pre-booking these items online was a new feature they rolled out at the same time they changed their final payment deadlines.
Why do I mention this? Recently Norwegian Cruise Line announced a change in their final payment dates and cancellation penalty deadlines. Like Disney, Norwegian is allowing bookings created before January 1, 2016 to stick to the old payment deadlines (grandfathered) and cancellation penalty schedules. It is only bookings created on or after January 1, 2016 that are subject to the new payment and penalty schedule (you can see both the old and new schedules here: https://www.ncl.com/about/payment-schedule).
So what is all the hullabaloo about? I have heard a lot of travel agents up in arms about this change, and I’m scratching my head. Admittedly when Disney made their change back in 2004/2005 I was a consumer, so I am not aware if travel agents were coming unglued in the background. Disney also created an incentive to make us WANT to pay earlier… the whole thing about being able to make online reservations for the spa, excursions, and the adult-only restaurant. As a consumer I had no issue with it. Moving forward I knew any future bookings would have a final payment date that was a couple of weeks earlier than I had paid in the past, and I adjusted accordingly.
I have been hard on Norwegian Cruise Line about some of their policy changes in past columns. But this time, I’m not ripping them apart for this decision. First, it does not affect anyone with a booking made before January 1. Second, we were given sufficient notice by Norwegian that they were making these changes. I would have been up in arms if we were notified on December 31, but we weren’t. With the advanced notice we got, we had a marketing opportunity. “Book your cruise by December 31 to take advantage of the more lenient payment and penalty schedule.” After that, you simply tell clients what their final payment dates are and move forward. Third, this benefits travel agents. Norwegian has one of the more lenient commission payment schedules out there (so far). They pay after final payment, even on group bookings! Many cruise lines pay after final on individual bookings and after travel for groups. With early final payment dates, travel agents will receive their Norwegian commission checks just a bit earlier as well. I think it is safe to say that is not the reason Norwegian made this move, but it’s a nice byproduct of the decision.
I really don’t see much of a downside to this particular policy change. If anyone sees a downside, please comment below and let’s talk about it.
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.