Carnival Tightens Policy on Value-Adds Agents Can Give to Clients
By Theresa Norton Masek
July 06, 2012 2:05 PM
Carnival Cruise Lines is tightening its policy that limits the amount and type of value-adds that travel agents can give clients who buy a cruise. Effective Aug. 1, value-add booking incentives can only be non-cash equivalent items valued at $25 per passenger or less. Previously the non-cash-equivalent value-add limit was less than 5 percent of the complete cruise fare or $25, whichever was greater.
In addition, Carnival allowed for cash-equivalent value-adds that were less than 10 percent of the complete cruise fare with an approved marketing plan. Non-cash equivalent items include tote bags, hats, beach towels, memory books, sunglasses and Carnival gifts delivered onboard.
Examples of cash-equivalent value-add items that will no longer be accepted include, but are not limited to, cash, gas cards, onboard credits, pre-paid gratuities, airline miles, third-party cash back offers, free or discounted protection coverage, free or discounted shore excursions, free or discounted hotels nights, reduced airfare, gift cards or anything that equates to a cost associated with the cruise. Moving forward, there is no pre-approval process for value-adds. But Carnival can review promotional offers to ensure they align with brand guidelines and may request that partners remove or change offers should they not meet these criteria.
Carnival said the policy was tightened to ensure “that all travel partners have the equal ability to sell the Carnival product at the same great rate.” Carnival’s added that its objective with this revision is to create a structure that provides travel agency partners with the assurance that the rates they quote won’t be undercut by competitors.
Carnival’s move follows other cruise lines’ efforts to counter rebating, the practice where a travel seller offers a further discount to customers using commission income or other bonuses to sweeten the deal. Crystal Cruises recently updated its policy to counter rebating, and Paul Gauguin Cruises, Regent Seven Seas Cruises and Oceania Cruises also have updated their anti-rebating policies.
7/9/12
I wish it were true that they are leveling the playing field but I, as well as most, see through this. I do think Carnival has dug a big hole for itself by being so "PUSHY" in it's efforts for direct bookings. Many people who have been marketed to by CCL state that they constantly receive telephone calls and many of their advertising practiees were misleading.
7/9/12
The spinmeister who wrote the copy should get a raise.
In a nutshell it boils down to cutting costs and keeping more money in their pockets.
They can spin it how ever they want, but the fact of the matter is that the cruise lines are doing everything in their power to increase sales to the direct booking channel to lower their costs. Why pay a travel agent 15-18% when you can force consumers to book direct by cutting out any incentives the travel agents are able to offer besides their expertise.
Think about it .... Consumers given the choice to book direct or book with a travel agent at the same rate are going to book directly with the cruise line. Much the same way they would book an airline ticket directly with the airline instead of through Expedia or Travelocity, etc.
So in reality the new policies have nothing to do with leveling the playing field. These new policies do just the opposite and stack the deck for cruise lines
7/9/12
This is not specific to Carnival this comment applies to all the cruise lines. I do not believe they care about a level playing field for travel agencies. I believe they want to ensure that their call centers are competitive with us, so if they limit the "value adds", then they will get more direct bookings.
7/9/12
If Carnival were serious about trying to improve its earnings, it would take action to eliminate speculative group space. Also, it would level the playing field so that agencies that book online would make the same commission rates as the big guys. Right now, a "mom-and-pop" makes 10%, but a big agency that blocks group space gets 16% or more PLUS 6% more when it sells its Tour Conductor slots. As a stockholder and an agency owner, I'm outraged. Carnival execs have to be smarter than this!!