Cancellation after final payment - what happens to the travel agency commission?

[IDLnyc]

Due to a health emergency, I have to cancel a cruise that departs next week.  Obviously, we are way past the final deadline to cancel the cruise and get any kind of refund from the cruiseline.

I used an online travel agency.  It is their policy to charge a fee for any cancelled booking.  I will also NOT accrue any points for this cruise, since I did not complete it.  (Points are my main incentive for using this travel agency).

I can understand charging a cancellation fee to discourage people from making frivolous reservations, then cancelling them for a 100% refund  But in this case I am not getting any refund on the substantial cruise cost I paid in full. 

In this circumstance, what happens to the amount of the cruise fare that would have been the agent's commission? 

          If the agency gets the commission anyway, then I would strongly argue they shouldn't charge me a cancellation penalty, and they should give me the point awards linked to the value of their commission.

         If the travel agency doesn't get the commission, then the cruise line must be keeping the full fare plus the commission portion.  Is that what is happening?

 

(In case it's relevant, I'm based in the USA, as are the travel agency and the cruise line.  Also, in case you are wondering if I will get any money back from insurance, the answer is partially - my credit card company will reimburse me about 1/3 the cost of the $9,000 cruise.  I didn't buy separate travel cancellation insurance - c'est la vie.)

Edited September 11 by IDLnyc

[GeezerCouple]

10 minutes ago, IDLnyc said:

Do to a health emergency, I have to cancel a cruise that departs next week.  Obviously, we are way past the final deadline to cancel the cruise and get any kind of refund from the cruiseline.

I used an online travel agency.  It is their policy to charge a fee for any cancelled booking.  I will also NOT accrue any points for this cruise, since I did not complete it.  (Points are my main incentive for using this travel agency).

I can understand charging a cancellation fee to discourage people from making frivolous reservations, then cancelling them for a 100% refund  But in this case I am not getting any refund on the substantial cruise cost I paid in full. 

In this circumstance, what happens to the amount of the cruise fare that would have been the agent's commission? 

          If the agency gets the commission anyway, then I would strongly argue they shouldn't charge me a cancellation penalty, and they should give me the point awards linked to the value of their commission.

         If the travel agency doesn't get the commission, then the cruise line must be keeping the full fare plus the commission portion.  Is that what is happening?

 

(In case it's relevant, I'm based in the USA, as are the travel agency and the cruise line.  Also, in case you are wondering if I will get any money back from insurance, the answer is partially - my credit card company will reimburse me about 1/3 the cost of the $9,000 cruise.  I didn't buy separate travel cancellation insurance - c'est la vie.)

 

For background, we've had quite a few travel insurance claims, including some large ones.  Almost all of them were for trip costs, not medical costs.

 

I'm a bit confused.  You wrote:

 

"...I have to cancel a cruise that departs next week.  Obviously, we are way past the final deadline to cancel the cruise and get any kind of refund from the cruiseline.

I used an online travel agency.  It is their policy to charge a fee for any cancelled booking.  I will also NOT accrue any points for this cruise, since I did not complete it.  (Points are my main incentive for using this travel agency)..."

 

So the agency is going to collect their full commission AND charge you an additional fee?

Sounds like a sweet deal...

 

Also, just a quick question:  What type of "points" do you get such that you must use this particular travel agency?  We always get the "points"/awards from our charge card, not any agency.  (Maybe we are missing out on something?)

 

We have had to cancel a few trips after the 100% penalty stage, and our understanding (directly from our travel agent) is that he still gets his regular commission.  (What I don't know is what happens if one is in, say, a 75% cancellation period... does the agent get *any* of their commission?  I'll try asking him at some point.)

We've always had travel insurance, so we did recoup all of the costs when we cancelled for medical reasons.  So the cruise line kept all of their money, our agent got his money, and our insurance refunded us what the line kept.

 

So in the former situation, with 100% cancellation, at least with the cruise lines we've dealt with when we've had such a cancellation, no, the cruise line doesn't also keep the commission.

PLUS... in most cases, they have some chance to re-sell the cabin/suite to someone else, so they are then getting a nice profit!  Even if they sell it at a big discount, such as very shortly before sailing date, they are still doing well.

(We also once had a chance to grab a very nice Owners Suite not too long before sailing date, at a very attractive discount, so we've been on "both sides" of that issue.)

 

GC

[IDLnyc]

Thanks for responding @GeezerCouple!

 

To answer your questions:

a) Yes, I get no money back from the cruise line or the travel agency since I'm cancelling so close to the cruise date (100% non-refundable)

b) Yes, I'll also owe the travel agency a cancellation fee.  It's a nominal amount, but annoying since I'm already losing so much money.

c) The travel agency I use is affiliated with an airline, and I get airline points which are 4-7x the dollar cost of the cruise (depending on cabin grade, etc.)  They've told me I wont get any points for this trip because they only award points "on completion of the cruise"

d) Which leads to my overall question.  IF the travel agency gets no commission for a cancelled cruise, then I think it's fair to charge a cancellation fee for processing.  And it's also fair that they don't award any points if they received no revenue.  BUT if they did receive the full commission, then I think I should receive the same benefits I would have received from them if I took the cruise.

 

It sounds like you are reasonably sure that a travel agency DOES receive the commission in this scenario.  If I get additional feedback supporting that idea, then I have reason to demand better treatment from the travel agency.

[GeezerCouple]

8 minutes ago, IDLnyc said:

Thanks for responding @GeezerCouple!

 

To answer your questions:

a) Yes, I get no money back from the cruise line or the travel agency since I'm cancelling so close to the cruise date (100% non-refundable)

b) Yes, I'll also owe the travel agency a cancellation fee.  It's a nominal amount, but annoying since I'm already losing so much money.

c) The travel agency I use is affiliated with an airline, and I get airline points which are 4-7x the dollar cost of the cruise (depending on cabin grade, etc.)  They've told me I wont get any points for this trip because they only award points "on completion of the cruise"

d) Which leads to my overall question.  IF the travel agency gets no commission for a cancelled cruise, then I think it's fair to charge a cancellation fee for processing.  And it's also fair that they don't award any points if they received no revenue.  BUT if they did receive the full commission, then I think I should receive the same benefits I would have received from them if I took the cruise.

 

It sounds like you are reasonably sure that a travel agency DOES receive the commission in this scenario.  If I get additional feedback supporting that idea, then I have reason to demand better treatment from the travel agency.

 

It sounds like you are using something like (making this up!) "American Airlines Travel Service".  (I know there are such groups affiliated with the airlines, but we've never used them.  And we don't use the group "travel portals".  I have *not* explored this, but I've wondered [worried?] that the prices through the portal may be higher than "doing it ourselves", or the choices more restricted or something...?)

 

Why are you using a group like this?  Do they advertise some special rates or some other special benefit?

As an aside, I'd be VERY surprised if they give you "better treatment", but it probably doesn't hurt to try! 😉 

 

As for whether the agent/agency/etc., does or doesn't get the commission if someone cancels, or if the timing of the cancellation matters (and if so, how!?), all I know if from the *one* travel agent we've asked. And even with him, I don't know whether it would be the same from other cruise lines or vendors, etc.

 

We don't work with the type of travel agency sometimes mentioned here (it's not allowed to name agencies) who will share their commissions with some sort of rebate or perk to the traveler.  That does seem appealing, especially as our cruises tend to be in suites, so a percentage back would be noticeable!  However, our agent offers other help that can be very valuable.  (One of those that is very important to us is that he is also an "awards agent", meaning he helps us get the Business or First class airline seats using points/awards.  Those are getting increasingly difficult to get.  I tried *once* and had terrific success getting two F tickets using awards on JAL.  Wonderful flight!!  However, I couldn't even find awards tickets of any type on the return flight.  And it's only gotten worse, I think.

Given that we need to travel "flat bed" on any lengthy flight or just not go, this is incredibly helpful for us.  Or we'd need to pay cash; thus far we only needed to do that once, on very short notice, so there wasn't time for him to search and search.  That was our "fault", and it was painful to pay for those full-priced tickets! 😡

 

I guess I just don't understand why any agent/agency would collect the commission AND charge a cancellation penalty,  I'll be charitable and assume they do *not* get the commission?  (But if they are part of that network, that doesn't really seem likely...)

OTOH, it sounds like you are getting a LOT of points! 🙂 

Are these regular "airline" points?

 

GC

 

 

[IDLnyc]

@GeezerCoupleThe travel agency we use is a third party company with an affiliation with the airline frequent flyer program.  (There is a link to it from the airline website.)  We get  4 - 7 points for every dollar spent on cruises.  It works for us - we've accumulated enough points to go business class to Australia and book an urgent last minute ticket home from Europe.

Edited September 12 by IDLnyc

[sanger727]

If your travel agent charges a cancellation fee, it was in the terms and conditions of the booking.  If they charge a cancellation fee, why would they not charge it now? You aren't talking about a small, locally run agency where they are dependent on repeat business. This is a large agency that makes millions a year.  I'm sure they aren't in the habit of making exceptions because logically they should.  

[ontheweb]

This is an interesting question by the OP. It is my understanding that the TA does not get paid until you complete your cruise. So, the question becomes what happens in the example cited in the original post when the cruise line is paid in full but the passenger has not gone on and obviously not completed their cruise.

 

I would think any of us who are not TAs would be only guessing. It would take a TA who has had this happen with a passenger he or she booked to know the answer. And if could be possible that different cruise lines have different policies when it comes to this situation.

[IDLnyc]

@ontheweb Thanks for your interest and response.  I searched the internet to see what was said on this topic and found one old (2009?) article saying that travel agents get their commission at final payment, but that there were exceptions.  Yes, it would be interesting and helpful to get more current feedback from a travel agent.

 

@sanger727- Yes, I’m sure that the ‘World Domination Travel Agency” has no need to consider my feelings as an individual.  But I am a good and frequent customer.  In the past I have received some compensation from cruise companies, if only in the form of a credit, when THEY dropped the ball in a major way.  
The travel agency and I are in a marriage of convenience, but it would stop being worth it to me if I thought they were cheating.  (Boy, that metaphor went too far.)

[ldubs]

15 hours ago, IDLnyc said:

Thanks for responding @GeezerCouple!

 

To answer your questions:

a) Yes, I get no money back from the cruise line or the travel agency since I'm cancelling so close to the cruise date (100% non-refundable)

b) Yes, I'll also owe the travel agency a cancellation fee.  It's a nominal amount, but annoying since I'm already losing so much money.

c) The travel agency I use is affiliated with an airline, and I get airline points which are 4-7x the dollar cost of the cruise (depending on cabin grade, etc.)  They've told me I wont get any points for this trip because they only award points "on completion of the cruise"

d) Which leads to my overall question.  IF the travel agency gets no commission for a cancelled cruise, then I think it's fair to charge a cancellation fee for processing.  And it's also fair that they don't award any points if they received no revenue.  BUT if they did receive the full commission, then I think I should receive the same benefits I would have received from them if I took the cruise.

 

It sounds like you are reasonably sure that a travel agency DOES receive the commission in this scenario.  If I get additional feedback supporting that idea, then I have reason to demand better treatment from the travel agency.

 

Well, I think your case is completely rational and justifiable.  Problem is you apparently have the fine print going against you.   I think you should make your case in writing directly to the agency.  True they will survive if they lose one good customer, but they don't want to lose a good customer.   I'm not going to be surprised if you have already done this. 

 

I hope the health issue has a positive resolution.   

 

 

Edited September 12 by ldubs

[CDNPolar]

Regardless of whether the agency still gets the commission, if the cancellation fee is in your terms and conditions and you agreed to it, then you have to pay it.  Just my opinion.

[ontheweb]

1 hour ago, CDNPolar said:

Regardless of whether the agency still gets the commission, if the cancellation fee is in your terms and conditions and you agreed to it, then you have to pay it.  Just my opinion.

1. That does not answer the question of whether the TA is paid or not by the cruise line.

 

2. One should look for a TA who does not have a cancellation fee.

[leaveitallbehind]

On 9/22/2024 at 7:20 AM, ontheweb said:

2. One should look for a TA who does not have a cancellation fee.

While there are TA's that do charge separate fees not charged by the cruise line for modifying or canceling a booking made through them, who I agree should be avoided, I think the cancellation fees referred to are the scaled penalties charged by the cruise line for post final payment cancelations.  TA's have no control over those.

Edited September 23 by leaveitallbehind

[IDLnyc]

@leaveitallbehind- You were correct in your first sentence.  The cancellation fee I was talking about was charged by the travel agency, and was separate from the cruiseline cancellation penalty. 

I can add an ending to this thread by reporting that the agent who processed the cancellation for me told me that the agency would credit the cancellation fee toward my next booking, as long as I make another booking within a year, which I most certainly will. 

So I feel better about that.  Although no one has said so explicitly, I now suspect that this travel agency gets no commission until the cruise is "completed".  If that is the case, then it is also fair that I don't get any other benefits (airline points) for the close to 10K I spent (and lost) on this trip. 

In this scenario, the cruiseline is keeping the money it would have paid out in a commission.  It would be "nice" if some of that went into the crew fund, to make up for the money I'm not contributing (by being last minute-awol for this cruise).

[leaveitallbehind]

18 hours ago, IDLnyc said:

Although no one has said so explicitly, I now suspect that this travel agency gets no commission until the cruise is "completed".  

This is correct.  The TA does not receive their commission until after the cruise is taken, the books are closed for that sailing, and payments processed by the cruise line from that closed cruise.  Typically 30 - 60 days or more after the cruise is taken.  So if you book a cruise a year out, the TA typically would not be paid until 13 months+ later.

[ontheweb]

 

This is correct.  The TA does not receive their commission until after the cruise is taken, the books are closed for that sailing, and payments processed by the cruise line from that closed cruise.  Typically 30 - 60 days or more after the cruise is taken.  So if you book a cruise a year out, the TA typically would not be paid until 13 months+ later.

It should be noted that this was especially hard on TAs after Covid. The cruise lines were getting deposits and final payments, but the TAs had to wait even longer. I know the first cruise we booked after Covid was in late October 2021, but did not sail until mid August 2023. Meanwhile TAs were also doing a lot of work on cancellations with no payment for them.

[leaveitallbehind]

1 hour ago, ontheweb said:

It should be noted that this was especially hard on TAs after Covid. The cruise lines were getting deposits and final payments, but the TAs had to wait even longer. I know the first cruise we booked after Covid was in late October 2021, but did not sail until mid August 2023. Meanwhile TAs were also doing a lot of work on cancellations with no payment for them.

Good point. The pandemic was tough on everybody and many businesses struggled.  But those whose livelihood was based in the travel industry suffered greatly as no income was generated or received for more than a year, and often longer when you consider how the cruise industry typically pays only after the travel is completed.

[ontheweb]

1 hour ago, leaveitallbehind said:

Good point. The pandemic was tough on everybody and many businesses struggled.  But those whose livelihood was based in the travel industry suffered greatly as no income was generated or received for more than a year, and often longer when you consider how the cruise industry typically pays only after the travel is completed.

At one point I spoke with our TA, and he said that if he knew at the beginning of the pandemic how bad it would get, he would have got out of the business. As it was, he (he is president of his company) laid off all his staff but one. I believe he eventually gradually brought people back.

[leaveitallbehind]

10 minutes ago, ontheweb said:

At one point I spoke with our TA, and he said that if he knew at the beginning of the pandemic how bad it would get, he would have got out of the business. As it was, he (he is president of his company) laid off all his staff but one. I believe he eventually gradually brought people back.

I'm certain there are 100's of equally sad war stories, but I will add one regarding a TA friend of ours who was a storefront agency, who had to close the store, layoff direct office staff, and took a part time retail based job at an essential business during the pandemic.  As the agents are commission based, they also were out of work during that period.

 

He also had to resolve several bookings that had deposits with some associated international providers who refused immediate refunds, one rather major company that would only issue a future use credit for all monies deposited or paid in full. Very difficult situation. He has since recovered well but downsized in that he never reopened the storefront or hired back any direct staff.

Edited Tuesday at 02:52 PM by leaveitallbehind