Norwegian Cruise Line has ended its relationship with CruiseCompete, a website where travel agents bid for consumer leads. The decision was praised by a number of agents.
In a letter announcing the decision, Camille Olivere, senior vice president of sales-the Americas for Norwegian, asked travel agents to “cease to bid on Norwegian Cruise Line product effective immediately….A contracted travel partner’s ability to market and sell their own ‘packaged’ product during periodic timeframes is disrupted by a tool that facilitates a bid process for Norwegian cruises, nor is there a way of monitoring Norwegian’s rebate policy in such an environment. For these reasons, Norwegian does not want our partners to bid on Norwegian Cruise Line product in a facilitated site.”
Norwegian asked CruiseCompete to stop using its proprietary materials on the company’s site, and the website has complied. Norwegian’s name was removed from a list of participating cruise lines; virtually all other cruise lines are on the list, including Norwegian’s main competitors, Carnival Cruise Lines and Royal Caribbean International.
“It has also come to Norwegian’s attention that some travel partners have chosen to bid down their commission or otherwise use net rates which are intended for packaging purposes to discount Norwegian Cruise Line’s product,” Olivere wrote. “Not only is this activity a breach of the sales and marketing agreement that travel partners like you have signed with Norwegian, it is also negatively impacting the great progress we have made with the Norwegian brand and business.
“To be clear, going forward we will not contract with accounts participating in CruiseCompete and in the meantime we will avail ourselves of all contractual remedies available to us under the sales and marketing agreements with travel partners including, but not limited to, canceling accounts that are found to have bid on the site,” Olivere wrote.
Many travel agents wrote messages in support of Norwegian’s position on Olivere’s Facebook page. “Bravo, Camille. Thank you, thank you, thank you for upholding the integrity of hard-working, professional cruise consultants everywhere (re CruiseCompete)!” wrote Lu Maggiora, an agent in the San Francisco Bay area.
Steve Cousino, owner of Journeys by Steve near Madison, Wis., said he doesn’t like the message CruiseCompete sends to consumers “that price and freebies are more important than making sure the cruise line, ship, and itinerary are right for you and what you want. It also sends a message to travel agents that you need to resort to earning next to nothing or use cutthroat tactics in order to get business. The whole premise is not illegal, but it certainly does de-value the cruise product, and undermines the vital service travel agents provide.
“I know a few travel agents who have made a lot of money from booking on CruiseCompete, because they count on the back end overrides they get from selling volume,” Cousino added. “And that’s okay, but for me personally, there’s much more work that goes into those kinds of bookings and it takes a while to get that kind of volume built up to earn those overrides. I think it destroys the entire premise of using a travel agent/agency in the first place, and in the end it really isn’t a sustainable process because the agent/agency doesn’t control the product. Later on, it causes problems for the entire industry.”
Kelly Eaton Rivera, an agent with Always The Best Travel in Portland, Ore., said Norwegian’s move would help protect the integrity of its product and enforce its own rebating restrictions. “I only hope that more cruise lines follow suit,” she said.
CruiseCompete CEO Bob Levinstein said he has reached out to Norwegian to address their concerns. “The door is still open, as far as we are concerned, to find a solution. We are all about providing the consumer with choices and fair competition in the marketplace, as mandated by ethics and the law,” he wrote in an email to Travel Pulse. “We believe all of our cruise line contacts and agents feel the same way. We are successful because we are focused on providing the best expertise in the market to consumers seeking vacation consultations.”
He said CruiseCompete transactions are not solely based on price. “Over 55 percent of the bookings that are generated by the leads from the site are not the lowest price offered,” Levinstein said. CruiseCompete “promotes cruising to a very wide audience from the novice to most experienced cruise traveler” and helps consumers choose a cruise using the site’s tools and guidance “from some of the most knowledgeable and educated travel experts” in the industry, he said.
“We remain willing to cooperate with any cruise line to help them better understand the value that CruiseCompete provides to their line, the cruise industry in general, and to work proactively to address any concerns they may have,” Levinstein wrote. “Our continued policy for cruise sellers through our site clearly obligates those sellers to conform to cruise line policies.”
In fact, CruiseCompete sent an email to participating agents telling them they must follow the rules of cruise lines. “Norwegian’s position is ONLY regarding quoting Norwegian Cruise Line products and DOES NOT refer to the site in general,” CruiseCompete wrote in the agent email. “Norwegian cannot legally restrict its agents from quoting other lines as this would constitute intentional interference with contractual relations.”
CruiseCompete also said it offered Norwegian the ability to monitor quotes, but the cruise line declined. The website also said it is reaching out to other cruise lines to give them the ability to monitor quotes for compliance with their rules and restrictions. Since its launch in 2003, CruiseCompete said more than 3,000 cruise sellers have provided over 10 million quotes to over two million requests. It said it now has 300 member travel agencies.