Agents must earn their keep: Royal Caribbean

Cruise operator Royal Caribbean International is considering reviewing its commission structure to ensure agents earn their keep.

While the company, which operates Royal Caribbean and Celebrity Cruises, will not ditch commission entirely, it could look at a pay for performance scheme, its regional sales director, International Representatives, Europe, Middle East & Africa, Helen Beck told Arabian Travel News during a recent trip to Dubai.

"We are not going to cut commission, but there is always a case for cutting it," she said.

"To me, looking at managing distribution costs effectively is part of being a responsible business. Like any business, we are always assessing our fixed costs and commission is one of these."

She said incentive overrides and pay for performance were two options under consideration in order to ensure travel agents added value to the cruise company.

"This is not to say we are doing this, but it's on the table," she added.

In the North American market Carnival Cruises recently axed commission on the airline component of its cruise packages and Royal Caribbean followed suit.

"We don't pay the 5% commission on the air ticket anymore, but we still pay commission on the cruise," said Beck.

"We haven't introduced this anywhere else though, not even in the UK."

Beck reminded agents that with so many airlines reducing or axing their commissions, cruise sales still offered some good revenue-earning opportunities for the travel trade.

Royal Caribbean has operated a Dubai-based office for some 14 years now and is yet to face stiff competition as other cruise companies have gone no further than appointing GSAs in the region.

The company has a strong relationship with the local travel trade with more than 90% of sales generated by agencies and operators, according to Beck.

Royal Caribbean International reported its best Middle East sales yet for the year January to September 2007.

A 35% hike in sales for this period represented "the biggest growth year-on-year that we've ever had," said Beck.

See the November edition of Arabian Travel News for more information.

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