4) Taking aim at commissions
They’re not the sole source of revenue, but commissions are still crucial, and any news about commissions makes headlines, good and bad.
In October Disney Cruise Line announced that agent commissions on future Disney Cruise Line sailings booked by an agent’s clients while onboard the ships had been capped at 10%. “We continually evaluate our business practices and makes changes from time to time,” said a Disney spokesperson. The move prompted Virtuoso to terminate its 14-year preferred supplier relationship with Walt Disney Travel Co., Inc.
On a positive note, Carnival Cruise Line said is planned to reduce the number of sailed cabins required for each commission tier. The sailed cabin requirement to reach each tier will be reduced, on average, by 32% for the 11-15% commission tiers. The new commission structure is applicable to new bookings made starting Jan. 1, 2016.
“The new commission tiers will enable our travel partners to reach higher commission levels faster and earn more money when selling Carnival,” said VP of Trade Sales Adolfo Perez. “This change positions our commission program as one of the most competitive in the industry and is a demonstration of our commitment to travel agents and how much we value their support.”
It wasn’t just the cruise lines making commission changes. In March Air Canada Vacations said it was aligning its leisure sales structure with Air Canada’s and changing its current compensation on air-only bookings as a result. Effective April 1 for all travel agencies, all air-only bookings with ACV became non-commissionable. All air-only bookings with ACV are now reported to Air Canada and agencies are compensated according to their existing program with AC Sales. Agents can mark up air-only bookings up to $50 per passenger, and a 4% credit card fee will be applied for amounts over $50. No minimum mark up is required.
And in March WestJet announced it was following Air Canada’s lead and making changes to its commissions for bookings within North America, effective Oct. 1.
Commissions changed from 7% to 4% on Flex fares, 8% on Plus fares and zero commission on Econo fares.
“After assessing where we want to go with our pricing, we have made the difficult decision to follow a major competitor in their approach to no-frills fares, in this case by changing the commission structure,” said Lyell Farquharson, WestJet vice-president, sales. Commissions on WestJet Vacations’ packages and for groups were unchanged. International bookings stayed at 7% for Econo and Flex bookings and rose to 8% on Plus fares.
