Carnival has banned onboard credits - a sign of things to come?

[Disneyfalcon]

I know a travel agent who told me she is simply not going to sell Carnival anymore at all, unless a customer comes to her with the exact itinerary and cabin category. Can't say I blame her after reading all this.

I'm a little confused by that. In theory she'll actually make more off Carnival bookings because she can't offer additional incentives.

Is it because she thinks ultimately Carnival is trying to get people not to use agents?

 

[nepalostparks]

From reading posts here and on other boards, it sounds like many agents are afraid that their clients are going to be running to Carnival to book direct, because they can't get the kickback anymore from their agent - yet the price will be the same.

If the agent was providing superior service over the Carnival call center, and had confidence in that service, they would have nothing to worry about. In fact, they would be confident in the fact that since a Call Center doesn't give personal service, that they should now expect new clients to come to them.

If DCL enacts the same policy as Carnival, I honestly expect my DCL business to increase since we give more personal service than the DCL call center.

Like I said above, my concern doesn't stem from worrying about my level of customer service, nor from losing current clients to the call centers of Carnival (or elsewhere). I don't book a lot of Carnival anyway, so it's not likely to have a huge impact for me personally.

However, since some customers shop on price alone, it makes it harder for any travel agency to entice that type of customer to book with them for the first time. A good travel agent/agency can then impress the customer with their service and get them to come back again and again for future trips. The issue I see is that if that type of customer doesn't see any value in using an agent vs. booking direct the first time, it's that much harder to get them to become a customer.

There is certainly the positive side to this, where it puts smaller and larger agencies on the same playing field. That means less competition for the same clients between agencies - hopefully that will offset the possible issue with potential new clients booking direct instead.

We'll all adapt to the changes, that's for sure. But I don't have to like the fact that a move like this across all cruise lines may end up costing me more out of pocket to attract new customers. Time will tell on that... I'm certainly confident once I have their business, I will be able to make it a long term business relationship. I just hope it doesn't cause more work to get a new client in the first place.

 

[sweetpee_1993]

From reading posts here and on other boards, it sounds like many agents are afraid that their clients are going to be running to Carnival to book direct, because they can't get the kickback anymore from their agent - yet the price will be the same.

If the agent was providing superior service over the Carnival call center, and had confidence in that service, they would have nothing to worry about. In fact, they would be confident in the fact that since a Call Center doesn't give personal service, that they should now expect new clients to come to them.

If DCL enacts the same policy as Carnival, I honestly expect my DCL business to increase since we give more personal service than the DCL call center.

Yes sir! I've never had the level of service from a call center that I've had with a good TA. That's why finding a great TA has changed the entire travel experience for us in such a positive way. It's so much less stressful to feel assured that you have someone knowledgeable keeping an eye on things & taking care of you as well as having a single smiling face to go to with questions, concerns, or advice. It's like the personal concierge service you get in the concierge level of the cruises before you ever get on the boat that doesn't cost you anything more to have. Why wouldn't you do it??? Serious as a heart attack here. Finding a great TA is such a blessing!

 

[tracyandalex]

Yes it would stink to not get extra on-board credit anymore, but you are still ultimately paying the same price for that cruise whether you book through a TA or the company. Personally, I am concerned about how this will effect the TAs. As someone else stated, it will be harder to attract new customers w/o incentives especially for someone like myself who wants the best deal. We were lured to KK because of the on-board credits, but now we love Tammy so much she is stuck with us forever, lol. However, w/o that incentive idk if we would have sought her out because we don't mind checking for deals ourselves and actually enjoy making most of our reservations ourselves. I hope though that for trips that require a lot of knowledge like a cruise and WDW TAs will still have the advantage over giant call centers with employees with questionable knowledge and customer service.
ugh I had another point, but I spent so long on the first one that i forgot it. Hopefully it comes back to me soon!

 

[DisneyJoe]

It's going to affect the TA's that currently offer on-board credits much more than those who currently don't.

Those that do offer them will need to learn other marketing techniques to show their value.

However, since some customers shop on price alone, it makes it harder for any travel agency to entice that type of customer to book with them for the first time. A good travel agent/agency can then impress the customer with their service and get them to come back again and again for future trips. The issue I see is that if that type of customer doesn't see any value in using an agent vs. booking direct the first time, it's that much harder to get them to become a customer.

We don't market to price shoppers, in the long run, they cost us more than they are worth in time and money. They are definitely the most difficult clientele to attract and retain. In my experience, those who don't care about price and who have a focus on value are the most loyal clients and will sing your praises to others of the same mindset, and your business will grow exponentially.

The change in agent mindset (when not giving on-board credit or working to attract price shoppers) also makes them better agents, as they believe much more in their own professional value - which increases their confidence, which helps them sell more and attract the right clients.

 

[ChuckElias]

Is it because she thinks ultimately Carnival is trying to get people not to use agents?

I think so, yes. I think there was something else she was upset about as well, maybe having to do with how they handled passengers who re-booked while still onboard. . . But I can't remember for sure.

 

[tracyandalex]

I remembered my other thought!!
I wonder how this will effect on-board "extras" sales. I know carnival has the casinos, so that it may not effect them as much as it might DCL. At least for me, I stick at keeping track how much we've spent compared to how much on-board credit we have and we always end up spending more than the credit amount. However, the first time we cruised w/o the on-board credit I was more cautious about the "extras" we were paying for. For some reason my thinks "oh we have a credit, we can go crazy." For me I feel like I am getting a much better value because of the credit and I wonder if not having the credits will effect on-board purchases.

 

[Master Yoda]

I'm a little confused by that. In theory she'll actually make more off Carnival bookings because she can't offer additional incentives.

Is it because she thinks ultimately Carnival is trying to get people not to use agents?

This is what I was thinking as well. With the old rules I might have been getting only a small percentage of the commission because so much was being given back because of incentives. Now I would get the whole thing.

One thing I have always wondered as a TA is why companies allow us to book anything at all. I can only assume that their data shows that what they give us in commission is made back plus some. If that is indeed the case the theory of locking us out entirely would be akin to getting ride of a $1000 a month billboard that brings you $1500 or more a month in profit.

 

[DisneyJoe]

One thing I have always wondered as a TA is why companies allow us to book anything at all.

At least 2 reasons:

1) We market their product at little to no cost to them.
2) We provide time and labor in handling the clients.
added 3) we develop personal relationships with our clients that help foster repeat and referral business, something that is difficult for a call center to do.

If they were to cut out TA's completely, they'd need to increase their marketing budget and efforts, as well as increase the call center staff to be able to handle the increased workload.

 

[Mkmommy]

I work in the hotel industry and we too have a love/ hate relationship with TA's.

Commision is a big expense and we would love to eliminate it, but TA's book a fair percentage of our revenue. Employees are way more expensive than TA Commision , so hotels continue to pay TA's, and until the commission expense line becomes higher than the employee expense line, TA commission will be paid.

 

[DisneyJoe]

Commision is a big expense and we would love to eliminate it, but TA's book a fair percentage of our revenue. Employees are way more expensive than TA Commision , so hotels continue to pay TA's, and until the commission expense line becomes higher than the employee expense line, TA commission will be paid.

Excellent info - thanks for sharing!

 

[Disneyfalcon]

Yes it would stink to not get extra on-board credit anymore, but you are still ultimately paying the same price for that cruise whether you book through a TA or the company. Personally, I am concerned about how this will effect the TAs. As someone else stated, it will be harder to attract new customers w/o incentives especially for someone like myself who wants the best deal. We were lured to KK because of the on-board credits, but now we love Tammy so much she is stuck with us forever, lol. However, w/o that incentive idk if we would have sought her out because we don't mind checking for deals ourselves and actually enjoy making most of our reservations ourselves. I hope though that for trips that require a lot of knowledge like a cruise and WDW TAs will still have the advantage over giant call centers with employees with questionable knowledge and customer service.
ugh I had another point, but I spent so long on the first one that i forgot it. Hopefully it comes back to me soon!

Thank you, Tracy! I appreciate it. And I don't mind being stuck forever with you!

 

[Disneyfalcon]

I work in the hotel industry and we too have a love/ hate relationship with TA's.

Commision is a big expense and we would love to eliminate it, but TA's book a fair percentage of our revenue. Employees are way more expensive than TA Commision , so hotels continue to pay TA's, and until the commission expense line becomes higher than the employee expense line, TA commission will be paid.

That is very interesting, Lisa! I agree, thanks for sharing!

 

[Master Yoda]

I work in the hotel industry and we too have a love/ hate relationship with TA's.

Commision is a big expense and we would love to eliminate it, but TA's book a fair percentage of our revenue. Employees are way more expensive than TA Commision , so hotels continue to pay TA's, and until the commission expense line becomes higher than the employee expense line, TA commission will be paid.

Thanks! This is pretty much what I thought.

 

[Computer Magic]

You sound like some one who thinks travel agents days are numbered, just like they said when airlines stopped paying us commission - decades ago; and again when they said that the internet was killing us.

We are alive and thriving because consumers want personal service. Recent studies have shown this.

Tell that to all the mom and pop stores out of business due to the big box stores.

As for the Internet, Talk to Barnes and Noble, Video stores because of Netflex. Can count how many brick and mortar travel agents exists in your town and the ones that closed?


Those that can reinvent themselves will survive. Look at KK they exists because they found a niche in WDW, the Internet and good customer service..

 

[DisneyJoe]

Those that can reinvent themselves will survive.

Precisely. This is true of any business.

My father owned a brick and mortar travel agency and fought the internet as hard as he could, and sold his business after 6 years. I've embraced a combination of internet/social media and highly focused local marketing (each of my agents markets to their local community with my guidance; we test each community to see what works there). I show my father my revenue numbers and he just about faints. I adapted, he didn't.

Many of the brick and mortar agencies who have adapted found that the brick and mortar is an unnecessary overhead cost - most have become virtual and their numbers are greater than you imagine. One travel host agency alone, Nexion, has over 5000 virtual agents.

These TA's who are now refusing to sell Carnival because they can't lure clients with onboard credits aren't adapting. Many don't know how to properly market without throwing money at a client. It's the first obstacle I need to overcome when I screen/hire/train new agents for my team.

 

[unkadug]

Tell that to all the mom and pop stores out of business due to the big box stores.

As for the Internet, Talk to Barnes and Noble, Video stores because of Netflex. Can count how many brick and mortar travel agents exists in your town and the ones that closed?


Those that can reinvent themselves will survive. Look at KK they exists because they found a niche in WDW, the Internet and good customer service..

However, a lot of the big box stores have now folded or are in Chapter 11/13. I do believe that the pendulum is swinging back to personal service.


I do agree about adapting though.

 

[bunnyman]

The way I travel makes me prefer to book by myself because I like to be in control. It drove me nuts and made me so stressed that any time we wanted to change something or add something we had to do it through the agent. I couldn't imagine doing my Disney vacations through an agent and having to give them all the dinning reservations I wanted and such. Now if I had a travel agent that had the power to simply book the reservation and then we could do all our dinning reservations and excursions and stuff ourself it would be great.

We've been cruising mostly from NYC (so obviously not DCL), and since we live locally we usually book direct since we have no travel involved. However, given the frequency of airlines changing schedules, if we have to travel to get to the cruise we'd use an agency (let them deal with changing flights, etc.).

 

[flynnibus]

A travel agency is a service business...

It doesn't make sense to 'race to the bottom' in a service oriented business. Yes, there are customers looking for only the lowest price and nothing else. So what.. don't chase those customers. Yes there are businesses who make their their core pitch - but such a model only survives on volume. And volume, combined with low margins, ultimately pulls them further and further away from service.

Carinval can promote such a change as a way to protect against these people trying to erode the service model by racing to the bottom.. but this rule set seems like so much more than that. Such radical changes are high risk.. for Carnival, TAs are their sales force. Undercutting and cutting incentives to pitch Carnival when the TAs can easily sell other products is risky.

IMO - such constraints ultimately hurt and don't have the intended effect. It's better to let the customers steer themselves to the type of providers that offer what they seek.

I can see Carnival requiring some sort of minimun level of services - to protect their brands... and possibly making it not so easy to turn their commission into Carnival 'dollars' - but I think their chosen path is a poor one.

 

[DisneyJoe]

Such radical changes are high risk.. for Carnival, TAs are their sales force. Undercutting and cutting incentives to pitch Carnival when the TAs can easily sell other products is risky.

I don't see it being that radical - since 2009, the cruise industry across the board has been steadily moving in this direction. Most have focused on forbidding advertising low rates and rebates, but this was the next logical step; Carnival took it first.

Make a good cruise product that people will clamor to buy, and there will be no need to give incentives to TA's to sell them - they will want to by the nature and demand for the product.

Another example - for many years, cruise lines have given TA's extra benefits, incentives and locked in rates for group bookings of 8 staterooms or more. Larger agencies, due to their size, would grab as many group rate stateroom blocks as they could when the pricing was first released. Over the last few years, DCL has made it tougher and tougher for this to happen, to help benefit all agencies (and DCL, I am sure), again "to level the playing field". Just last month, DCL announced that in 2013, there will be no more group cruise bookings and benefits, all will be treated as individual stateroom bookings, linked with a 'travel with' number, similar to how WDW does it. I recently read a travel industry article that said other lines may be doing something similar.