A costly TA lesson re cancellations

[CoachT]

Travel Agencies are a commission business and a retail business.

Many travel agencies do not just work on commission. They are fee based just like a Certified Financial Planner who also makes a commission on some of the products they recommend.

 

Fees are becoming the way of the industry and some will go direct but those who seek out the advice of a travel consultant are going to pay for that advice and pay when they make changes and cancellations.

[jagoffee]

Many travel agencies do not just work on commission. They are fee based just like a Certified Financial Planner who also makes a commission on some of the products they recommend.

 

Fees are becoming the way of the industry and some will go direct but those who seek out the advice of a travel consultant are going to pay for that advice and pay when they make changes and cancellations.

 

True, but there are many people who book cruises that are not seeking any advice. They are just booking with the TA instead of the cruise line for the extra financial benefits (or are doing the TA a favor). Many times the TA effort is just providing a quote, booking on their system, and then canceling.

The world is full of people who spend time on quoting or sales support who do not get the business thus no compensation from the potential customer. Retail store support, automobile sales, and builders are just a few examples.

[Lsimon]

Many travel agencies do not just work on commission. They are fee based just like a Certified Financial Planner who also makes a commission on some of the products they recommend.

 

Fees are becoming the way of the industry and some will go direct but those who seek out the advice of a travel consultant are going to pay for that advice and pay when they make changes and cancellations.

 

I've never heard of a cruise line compensating a TA for a cruise sale with a fee vs. a commission, nor have I heard of situations where TAs don't get commissions but instead charge a fee for cruises which is what I understand has been the case with air bookings for some time. Am I incorrect in this or has there been a change in the fundamental way cruise lines compensate TAs?

 

If an agency wants to stray from their compensation model by giving up the bulk of their commission to the client in order to attract their business with discounts instead of service, and then tack on fees for everything, then I guess that is their prerogative. But if that is the case then don't accuse us of thinking TA's should work for nothing just because we choose to select a TA who doesn't charge fees.

Edited December 9, 2013 by Lsimon

[CoachT]

I've never heard of a cruise line compensating a TA for a cruise sale with a fee vs. a commission, nor have I heard of situations where TAs don't get commissions but instead charge a fee for cruises which is what I understand has been the case with air bookings for some time. Am I incorrect in this or has there been a change in the fundamental way cruise lines compensate TAs?

The cruise line pays a commission for bringing them the client. Clients pay many travel agents a consultation fee for all the work they do for them. Many Travel Agents are paid by both the client and the cruise line.

 

So when a client cancels or makes changes, with many agencies, they must pay the TA for all of the work that has been requested regardless of the commission. Some work on a flat fee, some charge a la carte just like the airlines. These agencies also do not give up a dime of their commission and are turning away business they do not want or need.

Edited December 9, 2013 by CoachT

[YYC F/A]

I've never heard of a cruise line compensating a TA for a cruise sale with a fee vs. a commission, nor have I heard of situations where TAs don't get commissions but instead charge a fee for cruises which is what I understand has been the case with air bookings for some time. Am I incorrect in this or has there been a change in the fundamental way cruise lines compensate TAs?

 

A commission is paid by the cruise line, however there are significant "non commissionable fare" components built into your fare that are not disclosed to the consumer. For Alaska, this is usually over $200 per person of the fare, for Panama Canal I've seen it over $500 with some lines. Thus, if you book a $299 cruise fare in Alaska, yes the agency will be paid a commission. But it will be paid out on only 1/3rd of the actual cruise fare, or put another way, only around $15 per person commission. Of course, agencies are also not paid commissions on taxes/fees either.

 

I've seen instances where a customer is spending around $1,000 on the cabin adding in all the taxes/fees, but where the agency compensation is less than $30. As the non commissionable portions of cruise fares continue to rise, I expect to see more and more agencies either focus on higher end business, or charge fees for low margin business.

 

Airlines are blazing the trail. Call Delta or United and you'll pay $25 or $30 per person "direct ticketing fee" for the privilege of buying your ticket over the phone. Bag fees, fees for early boarding, fees for carry-ons... It's changing not just the airline model but will inevitably seep into other areas of the travel business.

 

For cruisers, the price to go on a cruise has fallen dramatically in real terms when adjusting for inflation compared to the 1980's and early 90's, but so too will the model continue to evolve for both fees (from agencies and cruise lines alike) and from onboard revenue charges.

[Lsimon]

The cruise line pays a commission for bringing them the client. Clients pay many travel agents a consultation fee for all the work they do for them. Many Travel Agents are paid by both the client and the cruise line.

 

So when a client cancels or makes changes, with many agencies, they must pay the TA for all of the work that has been requested regardless of the commission. Some work on a flat fee, some charge a la carte just like the airlines. These agencies also do not give up a dime of their commission and are turning away business they do not want or need.

I've heard of Travel Agents who do corporate travel working this way since the airlines dramatically reduced, or eliminated, commissions many years ago. But I've never ever heard of anyone booking a cruise from a travel agent and needing to pay them a consulting fee nor any other fee. The closest I've ever heard of is the few agencies that charge cancellation or change fees.

 

 

As I've said before, this is America (at least where I am posting from) and any business can operate however they'd like. If an agency wants people to pay them fees in addition to earning commissions they have the right. I also have the right to not book with such agencies. But a lot of this discussion is occurring because someone said something about people thinking TA's should work for nothing when in fact the majority (at least all I have dealt with) work on commissions only for cruise business.

[dmk]

Well said. Thankfully not all TAs have to take on clients that won't pay consultation or cancellation fees. There are far more people cruising than are on cruise critic.

 

Imagine doing customized work on a home and then deciding to make changes midstream or cancel the project all together. Some who don't know what they are talking about think it is JUST booking a cruise, but for the professionals it is far more than that!

 

I have never used a TA for advice. I have a TA that charges no cancellation fee and gives me an OBC. I know what I want. I have all the details and call up to book. Or I have transferred a booking from onboard a cruise.

It doesn't make any sense for me to pay a cancellation fee.

[Lsimon]

...For cruisers, the price to go on a cruise has fallen dramatically in real terms when adjusting for inflation compared to the 1980's and early 90's, but so too will the model continue to evolve for both fees (from agencies and cruise lines alike) and from onboard revenue charges.

 

This may very well be true but fees are not yet the mainstream business model for booking cruises - at least in my experience. And while an agency might want to blaze a trail by starting to charge fees I don't want to blaze the trail of paying those fees. So I'll pick TA's that don't charge them. There are plenty to choose from and the one I use has given me pretty good service and prices. Based on how thankful they seem to be for my business I'm fairly certain they're making a profit on the business I do with them.

[CoachT]

But a lot of this discussion is occurring because someone said something about people thinking TA's should work for nothing when in fact the majority (at least all I have dealt with) work on commissions only for cruise business.

Because people are making changes and cancelling their booking is exactly why more and more agencies are charging fees.

 

Just because you have never heard of an agency that charges a consultation fee doesn't mean they don't exist. Remember more people cruise than read or even know about cruise critic.