Professional Travel Advisors have gotten a well-deserved and much-appreciated break after a tough few years – a raise!
Norwegian Cruise Line’s decision to pay commission on non-commissionable fares – known as NCF – continues to draw accolades from the trade.
While other cruise lines have similar policies, NCL noted that it is the first major contemporary cruise line to compensate travel advisors on NCFs for bookings made outside of the 120 window. days. Historically, NCFs are a loosely defined part of the total fare; commissions will not be paid on government taxes or shipping costs, NCL said.
The amount of the increase depends, of course, on the cruise and the type of accommodation booked, but travel agency network executives said it could mean 3-10% more money in the pockets. travel advisors.
“It’s a really big deal. It’s something advisers have been asking for a long time. The NCFs have made some cruises unprofitable to book,” said Jackie Friedman, president of Nexion Travel Group. a difference.”
His colleague, John Lovell, chairman of the Travel Leaders Group, agreed.
“For a cruise line that hasn’t paid this in the past, that’s a big deal. There are cruise lines in the market that have had a no-NCF policy for quite some time,” a- he said, citing Viking and the new luxury line Explora.
Viking said it compensates advisers on every part of the booking, including port taxes, drink packages, airline programs, and more. Explora offers rolling commissions, paying on booked installments, for example, within 21 days. Explora has no NCF and offers a commission of up to 18%.
Virgin Voyages has also eliminated NCFs and pays 16% commission, plus 10% on extras like shore excursions, drinks, hotel and airfare.
“When Virgin Voyages was founded, we listened carefully to the feedback from travel advisors, and one of the things they asked for was that there were no commission-free fares. ‘ve ever offered from NCF, and we never will,” said John Diorio, vice president of North American sales. “Our first companions are such an integral part of our brand, and our goal is always to to be smart with whom to do business. It seems the industry understands what we have always believed in, and I hope we pave the way for others to evaluate their NCF policies.
Some travel agent-friendly policies take a slightly different form. Scenic Group USA – which includes Emerald Cruises, Scenic Luxury Cruises & Tours and Mayflower Cruises & Tours – has extended its prepayment commission program through 2023. Registered advisors who book guests on any Scenic cruise or Emerald with a departure of at least six months, will receive their commission within 21 days of full payment of the reservation.
“I can’t begin to tell you how great it has been to finally receive an upfront commission from a supplier as soon as my customers pay in full instead of waiting after browsing months or a year later” , Toni Lanotte-Day of Toni Tours said in a statement to Scenic. “The immediate reward of receiving my hard-earned commission within three weeks of booking and paying has been a real boost to my bank account! And it’s also been an easy sell to my clients, especially when they realize the savings they make by participating in the prepayment program.And I don’t worry about commission reminders because I sell insurance to all my clients that provides commission protection.
Additionally, the day after NCL’s announcement, small but fast-growing American Cruise Lines issued a press release stating that all cruise prices for new bookings will now include port fees and taxes, making the total commissionable for travel agents. The policy came into effect on November 1, 2022.
“We aim to do everything we can to support the businesses of all of our travel advisors,” said Susan Shultz-Gelino, vice president of business relations for American Cruise Lines. “They are valued partners and they work extremely hard on behalf of their clients. We intend to put structures in place on our end that will increase Advisor sales, increase commissions, and improve the overall booking experience with American Cruise Lines.
To be eligible for NCL’s NCF commission, travel advisors will need to submit a marketing plan through Norwegian Central by December 31, 2022. Lovell and Friedman applauded the requirement.
“They’re willing to put their skin in the game, but they’re asking the same in return, which I think is exactly what they should be asking for,” Lovell said.
Lovell praised Frank Del Rio, chairman of NCL’s parent company, Norwegian Cruise Line Holdings Ltd., for approving the move.
“He understands that the travel advisor distribution channel is really important to them and to the cruise industry as a whole,” Lovell said. “The financial strength of the travel advisor distribution channel has really been tested over the past two or three years. He wants to make sure that this vital channel stays healthy. Congratulations to Frank and his team.”
Jesse Morris of We Book Travel, an independent agency of Avoya Travel, has announced NCL’s move.
“The recent announcement of Norwegian Cruise Line paying commissions on the entire cruise fare is fantastic,” he said. “It’s starting to become a trend and I think it will spread to most, if not all, other cruise lines. Virgin Voyages, Viking and now NCL and American Cruise Lines have all moved to this model. The obvious is that these lines are a more profitable sale for advisers.What is less obvious, however, is that the shorter and cheaper crossings that were once shunned due to extremely low commissions will start to become more attractive to sell. FNCs and taxes left so little commission to pay on, so advisors avoided promoting or selling these options.This will be good for cruise lines, as advisors will have an incentive to fill ships even when down last minute prices.