Travel Agency Commissions?

[Present Monkey]

First, Thank you to LeeAnne for posting "Shopping for OBC" and it made me want to ask....Does anyone know what percentage of the booking the Travel Agency and/or Agent receive? Just curious. Thanks

 

Lin

[jagoffee]

It would be an advantage for a consumer to know what kind of commission is being paid in order to negotiate the best possible OBC. Of course it would vary depending on the cruise and the cruise line, but it sure would be nice to have the information.

 

It is not the same as asking someone their salary. You are not asking the TA for their P&L and their overhead structure.

 

Isn't it like knowing the new car costs when negotiating the price for a new car or other major purchase? I am sure that most of the car dealers do not like the fact that this information is available to the consumer. (of course this varies by volumes and rebates, etc.) It is not as if you are asking the car dealer their salary or total profit.

 

I can certainly understand why any business would not want the consumer to know their costs and profit margins, but it is not the trend with consumers these days. The availability of information on the Internet and other sources help consumers control costs.

 

It is one of my "pet peeves" when someone says that it is not any of the consumer's business to know the true costs of what they are buying. In my opinion it is the consumer's right to know. Businesses that hide behind "it is not anyone else's business" will lose business over time.

[bobbyleduck]

It would be an advantage for a consumer to know what kind of commission is being paid in order to negotiate the best possible OBC. Of course it would vary depending on the cruise and the cruise line, but it sure would be nice to have the information.

 

It is not the same as asking someone their salary. You are not asking the TA for their P&L and their overhead structure.

 

Isn't it like knowing the new car costs when negotiating the price for a new car or other major purchase? I am sure that most of the car dealers do not like the fact that this information is available to the consumer. (of course this varies by volumes and rebates, etc.) It is not as if you are asking the car dealer their salary or total profit.

 

I can certainly understand why any business would not want the consumer to know their costs and profit margins, but it is not the trend with consumers these days. The availability of information on the Internet and other sources help consumers control costs.

 

It is one of my "pet peeves" when someone says that it is not any of the consumer's business to know the true costs of what they are buying. In my opinion it is the consumer's right to know. Businesses that hide behind "it is not anyone else's business" will lose business over time.

 

I agree!

 

Happy cruising to all who can still afford to cruise!

 

Bob

[Sky Sweet]

It would be an advantage for a consumer to know what kind of commission is being paid in order to negotiate the best possible OBC. Of course it would vary depending on the cruise and the cruise line, but it sure would be nice to have the information.

 

It is not the same as asking someone their salary. You are not asking the TA for their P&L and their overhead structure.

 

Isn't it like knowing the new car costs when negotiating the price for a new car or other major purchase? I am sure that most of the car dealers do not like the fact that this information is available to the consumer. (of course this varies by volumes and rebates, etc.) It is not as if you are asking the car dealer their salary or total profit.

 

I can certainly understand why any business would not want the consumer to know their costs and profit margins, but it is not the trend with consumers these days. The availability of information on the Internet and other sources help consumers control costs.

 

It is one of my "pet peeves" when someone says that it is not any of the consumer's business to know the true costs of what they are buying. In my opinion it is the consumer's right to know. Businesses that hide behind "it is not anyone else's business" will lose business over time.

 

Hi jagoffee :)

 

I agree that there is a difference between knowing the commission structure of a business and discussing a person's actual income.

 

However, my gut feeling is that a TA's commission can vary considerably depending upon the structure of the agency, its sales volume with the cruise line, and the productivity of the specific agent.

[Present Monkey]

I appreciate ALL opinions regarding this post and truly believe that each and every one should be acknowledged. We are not a society of robots…thank goodness! I am not shy when it comes to asking questions and found that each time I do regardless of the answer, I learn something. . I am also not at all surprised at the passion of the posts given the climate of our economy these days. Where money is concerned you will always have very strong opinions. I would much rather have my TA get a decent percentage than give it all to the cruise line. Personally, I have never asked my TA for an OBC but I have been surprised when I entered my cabin with a nice note from her with one.

 

I have a new job (under 1 year) and have found that when I mention going on a cruise people tense, get distant or have a certain attitude which is hard to explain…(They think I have mega money and it is a status thing) I find myself explaining to them that I have to save for over a year, not take extra vacation days, and work very hard to budget everything. I really shouldn’t worry about what others think when it involves my vacation plans but there is a stigma out there about cruising. It is hard to have a conversation with co-workers when they have never taken a cruise.

 

As far as folks that can still afford to cruise, researching the best deal, asking for/or not for OBC’s, and all that goes into our cruise experience, all the hints, tips and suggestions posted on the boards we have ultimately helped each other toward our goal….Having a wonderful vacation!

 

Thank you for this forum where we all can share our thoughts.

Lin

[meow!]

Most cruise lines pay the TA 10% of the fare (and more if that agency sells large volume). The individual agent gets a portion of what is paid to the agency. Many discount TAs give the consumer half or more of the 10% as rebate, though full service agents often want the entire 10%.

P.S. Occasionally some agencies cooperate with the cruise line (and indirectly the air line) to offer super air-cruise package deals (and we have just purchased one such package lately). When that happens, you can save a lot more than the nominal 10% commission. So when you find such package opportunity, grab it!

[forensic]

There is no one answer to your question. It depends on the amount of sales that an agency does with a particular cruise line as to what commission that cruise line will give for a booking. THEN it depends on the contact the agent may or may not have with the agency they work for what the commission split is.

 

The first agency I worked for I got 75% of any commissions. I now have my own agency but I have a contractual agreement with a Host Agency and therefore get 80% of commissions. IMO this is very fair as they provide a lot to me. For one thing I get a higher commission rate to start with than I would on my own. But every cruise line pay a different commission rate. Some pay 5% and some pay 16% and everywhere in between.

 

So say I get a $210.00 commission. My Host Agency gets $42.00, that leaves me $168.00. Now if I discount the cruise fare $100 and give a $50 OBC that leaves me $18.00. Hmmmmmmmmmmmmm? I send all my clients nice lanyards with clear holders for their sail and sign cards, a few of my business cards and a few nice pens. So with postage I am probably losing money on this cruise.

[eileen & jay]

Do travel agents make commission on the ship's port excursions that their clients book? Have been wondering about this. Thanks for your responses.:)

[Present Monkey]

There is no one answer to your question. It depends on the amount of sales that an agency does with a particular cruise line as to what commission that cruise line will give for a booking. THEN it depends on the contact the agent may or may not have with the agency they work for what the commission split is.

 

The first agency I worked for I got 75% of any commissions. I now have my own agency but I have a contractual agreement with a Host Agency and therefore get 80% of commissions. IMO this is very fair as they provide a lot to me. For one thing I get a higher commission rate to start with than I would on my own. But every cruise line pay a different commission rate. Some pay 5% and some pay 16% and everywhere in between.

 

So say I get a $210.00 commission. My Host Agency gets $42.00, that leaves me $168.00. Now if I discount the cruise fare $100 and give a $50 OBC that leaves me $18.00. Hmmmmmmmmmmmmm? I send all my clients nice lanyards with clear holders for their sail and sign cards, a few of my business cards and a few nice pens. So with postage I am probably losing money on this cruise.

Hi forensic,

 

That's what I was afraid of, I didn't think that TA's get paid enough even if the customer does some of the leg work. For all the TA does and the security they offer the client it is amazing that some clients expect a discount and OBC. That is one of the reasons I would never ask for nor expect an OBC. When my TA has left one, I am very appreciative and make sure to send a heartfelt thank you along with a little gift from our cruise.

 

I do appreciate your candor and hope others can learn from your post.

 

Thanks again,

Lin

[Host Anne]

If we're going to apply "we should know all the costs" theory, shouldn't you dig a little deeper and apply it to the cruise line, too? Do we anaylze their profits before determining what cruise to take? Maybe some do but we don't.

 

I caution everyone to be careful what you ask for. I still believe that TAs work hard for their customers (harder than a lot in the service industry) and as conumers constantly try to get more and more for them, they won't be able to maintain their businesses. In the long run, we will end up booking with the cruiselines who has a customer service staff with little incentive to work hard for the customer.

 

I have absolutely no connection to any particular travel agents but I strongly believe that the cruise buying consumers are far better with them "in the picture" than without.

 

Just my two cents.

 

By the way, everytime I go out and compare the overall cruise value of what we get from our TA, we still get a great deal from her. I certainly want her to make a fair living from the work she does.

[Host Anne]

Eileen and Jay ~ I believe the answer to your question is no. Excursions are booked directly with the cruise line (or independently) and the TA isn't involved at all. Perhaps some agencies will book excursions for you (never tried that) and may get commissions that way, but they don't get anything from excursions you book with the cruiseline.

[jagoffee]

Cannot disagree with that statement.

[chessbriar]

There is no one answer to your question. It depends on the amount of sales that an agency does with a particular cruise line as to what commission that cruise line will give for a booking. THEN it depends on the contact the agent may or may not have with the agency they work for what the commission split is.

 

The first agency I worked for I got 75% of any commissions. I now have my own agency but I have a contractual agreement with a Host Agency and therefore get 80% of commissions. IMO this is very fair as they provide a lot to me. For one thing I get a higher commission rate to start with than I would on my own. But every cruise line pay a different commission rate. Some pay 5% and some pay 16% and everywhere in between.

 

So say I get a $210.00 commission. My Host Agency gets $42.00, that leaves me $168.00. Now if I discount the cruise fare $100 and give a $50 OBC that leaves me $18.00. Hmmmmmmmmmmmmm? I send all my clients nice lanyards with clear holders for their sail and sign cards, a few of my business cards and a few nice pens. So with postage I am probably losing money on this cruise.

Another thing to keep in mind The commission is only on the cruise fare and not your total price. On one of my upcoming cruises, I am paying $1200/pp. The TA is only being paid on the cruise fare of $990. They are not being paid on port charges or taxes. This price does not include fuel surcharge, something else they are not being paid for.

 

Keep in mind they people have overhead

[tuggers]

Anne, I'm with you on the worth of an agent as opposed to the cruise lines phone operators (and that's what they are - poorly paid phone operators). You may never know the true value of your agent until something goes wrong but if you cruise (or do any vacations) something is going to go wrong at some time.

Take the recent b2b Grandeur I was on. We were due into Baltimore at 7 AM. We never pulled along side at the pier until after 2:30 and the first of the non-self assist passengers did not walk off the ship until after 5 PM.

At 11 PM the night before when most people were standing in long lines to get hotel reservations for the next night (our arrival was so if-fy time wise that lots of people opted to spend the night and fly out the next day), one call to our agent resulted in rooms for all of us who had booked with her plus she let us throw in a couple of friends. With one cell call she made all the reservations, emailed us confirmations and had a bus there to pick us up.

We all went to bed while the line for free phone calls was still going strong.:)

In every instance where I've traveled and needed help, she was always right there, making the calls, ironing out the problems. Whatever she makes it's not enough!

[c-legs]

Do travel agents make commission on the ship's port excursions that their clients book? Have been wondering about this. Thanks for your responses.:)

Hi, Eileen,

Answer is NO !

We only get commission ( at a variable rate, some of which we like to keep for ourselves...:rolleyes: ) on the BASE rate of the stateroom berths, before port charges, taxes, fuel surcharge, etc...etc...

How's Jay doing ??

Each time I see MERCUry up here, my mind drifts back to that wonderful group of folks we met Dec '06 Panama sailing, including the co-founder of the ''friends of ZZZ '' movement....:D

 

 

Cheers

;)

[c-legs]

Hi forensic,

 

That's what I was afraid of, I didn't think that TA's get paid enough even if the customer does some of the leg work. For all the TA does and the security they offer the client it is amazing that some clients expect a discount and OBC. That is one of the reasons I would never ask for nor expect an OBC. When my TA has left one, I am very appreciative and make sure to send a heartfelt thank you along with a little gift from our cruise.

 

I do appreciate your candor and hope others can learn from your post.

 

Thanks again,

Lin

Lin,

Good evening, and genuine thanks for your comments. This is very appreciated and makes a TA feels a bit more respected than just being expected to automatically turn over his/her little commission to clients.

Cheers

:)

[c-legs]

Anne, I'm with you on the worth of an agent as opposed to the cruise lines phone operators (and that's what they are - poorly paid phone operators). You may never know the true value of your agent until something goes wrong but if you cruise (or do any vacations) something is going to go wrong at some time.

 

Take the recent b2b Grandeur I was on. We were due into Baltimore at 7 AM. We never pulled along side at the pier until after 2:30 and the first of the non-self assist passengers did not walk off the ship until after 5 PM.

 

At 11 PM the night before when most people were standing in long lines to get hotel reservations for the next night (our arrival was so if-fy time wise that lots of people opted to spend the night and fly out the next day), one call to our agent resulted in rooms for all of us who had booked with her plus she let us throw in a couple of friends. With one cell call she made all the reservations, emailed us confirmations and had a bus there to pick us up.

 

We all went to bed while the line for free phone calls was still going strong.:)

 

In every instance where I've traveled and needed help, she was always right there, making the calls, ironing out the problems. Whatever she makes it's not enough!

Thanks, Tugger, for this well worded commendation on our industry. Appreciated.

Cheers

:)

[rubrrick]

I have been reading this thread and find it very interesting that in an industry (TA's) most work very hard to make a living......most of them doing something that they very much enjoy........that is helping others have a wonderful vacation.

 

In the old days........TA's got commissions from flights and many other areas........that today are gone. For a TA to make a living, they must do quite a volume of business with an agency that has a good rate with the cruise lines. The good agents make me feel like I'm their only customer........as they are always there for me.

 

Thanks Tuggers for your story. That's a prime example of a "great" agent.:)

 

Rick

[barryod]

As has been expressed by most in this thread, TAs , for the most part, provide a valuable service. If they don't, they loose business. If they're big and not very good, they must hussle for business.(I don't deal with that type). I'm of the school that if you provide me a service(which I solicited from you) and you perform well, then you deserve what you charge. My TA, who now lives and works many states away, has had my travel business for 29 years. She treats her clients like Tuggers' treated her. I have met people on vacations and cruises who seem to think that the purpose of a TA, is to place blame should something go wrong. Please allow me to paraphrase what a cruiser told me on my last Millie cruise..."wait till I get back and talk to my TA. She should have known and told me that the condition of this ship was poor. I'll get something for this". I then excused myself and went to read my book elsewhere. Some people are just miserable and some TAs get to meet and do business with them.

 

Barry

[forensic]

Eileen and Jay ~ I believe the answer to your question is no. Excursions are booked directly with the cruise line (or independently) and the TA isn't involved at all. Perhaps some agencies will book excursions for you (never tried that) and may get commissions that way, but they don't get anything from excursions you book with the cruiseline.

 

 

Anne - First, thank you for the nice things you said about TA's. I do work hard, I am willing to settle for not a lot of money per client per cruise. The trick is, for me, is to be able to have loyal clients that will repeat and refer friends. Then I would have a little bit but a lot more often. In return I am willing to work as hard as I possibly can for each and every client. Service is the #1 thing that I have to offer them, along with the discount and OBC. I can only try to continue to do that. My biggest problem is that it is SO hard to get your name out there.

 

Second, you are correct, I make no money on the booking of shore excursions. Commissions only on the cruise and sometimes 5% on air. I also make a commission on Travel Insurance, but I usually recommend insurance other than the cruise line. I have 2 main ones that I recommend, they are higher rated, cost the client less, and I get a small commission which I also split with my Host Agency. I have a wonderful Host Agency I would never change and they have been wonderful to me.

 

Mostly I feel terrible with some TA's treat clients badly or out and out cheat them - it gives the little guy, like me, a bad name!

[Host Anne]

forensic ~ it's just like any other business....some are outstanding and provide great customer service (although those are becoming few and far between) and others do a lousy job and take advantage whenever they can. It's sad and pervasive. I'm hopeful that those who still care and provide great service and value for their customers can survive. Even though some don't find a need for the services of a good agent, many of us still do....and appreciate the work you do!

[eileen & jay]

Eileen and Jay ~ I believe the answer to your question is no. Excursions are booked directly with the cruise line (or independently) and the TA isn't involved at all. Perhaps some agencies will book excursions for you (never tried that) and may get commissions that way, but they don't get anything from excursions you book with the cruiseline.

 

 

Thank you Host Anne!!:)

[eileen & jay]

Hi, Eileen,

Answer is NO !

We only get commission ( at a variable rate, some of which we like to keep for ourselves...:rolleyes: ) on the BASE rate of the stateroom berths, before port charges, taxes, fuel surcharge, etc...etc...

How's Jay doing ??

Each time I see MERCUry up here, my mind drifts back to that wonderful group of folks we met Dec '06 Panama sailing, including the co-founder of the ''friends of ZZZ '' movement....:D

 

 

Cheers

;)

 

Hi Claude, Thank you for your response! Good to hear from you. The co-founder and SoCal President of the "friends of ZZZ" movement sends his regards!:D We have fond memories of that Dec., '06 Mercury Panama sailing...a wonderful group of people!!:) Take Care!!

[Leejnd4]

First, Thank you to LeeAnne for posting "Shopping for OBC" and it made me want to ask....Does anyone know what percentage of the booking the Travel Agency and/or Agent receive? Just curious. Thanks

 

Lin

 

Darn I just noticed this thread...and there I am named in the first post...oh well! Glad my other thread got some people thinking, and asking questions. This is a great topic, with good perspectives in this interesting thread.

 

I personally don't see a problem with wanting to know the commission a TA is making. It's all part of the equation of cruise shopping. They don't have to tell me, and I won't hold it against them if they don't, but I wouldn't feel at all bad about asking.

 

As I explained in the other thread, I'm probably not yer "standard" cruise shopper - I have very little need for TA service during the planning stages of my trip, so I comparison shop for OBC's. When I find the best deal, I will do some due diligence research on the TA, and if it seems like a company that will come through for me on what little I need, then I'll buy my cruise from them. As long as they seem to be doing well in business, have a good reputation, and are not in jeopardy of going under, I'm happy.

 

I agree that I want my TA to be making money off the deal...because if they're not, then they are a business risk. This is why I am leery of TA's who "give the store away", i.e. give huge OBC's while offering full-service trip planning. As I pointed out in the other thread (which the final poster in there seemed to miss), whatever commission is made on the sale does not all go into the TA's pocket - business expenses must come out of there as well. So if they are giving away too much too often, this is just not a business model that can be sustained.

 

On the other hand, I recognize that some TA's are willing to do the occasional money-losing deal to win a client and get referrals, hoping to make a profit on future deals. I've done that myself a few times. You just have to worry about TA's who are TOO willing to give away the store...too often.

 

My goal is to find that balance - the TA that is able to give me the best OBC, without compromising their business to the point where they are a risk. Any company that is in trouble financially is not going to be able to give me the service that I DO require - which, for me, is more about handling any problems that might arise after the sale is made, as opposed to helping with trip planning. That is why I usually purchase my cruises from discount online TA's, whose business model is pretty much designed for my style of cruise buying. But I have also purchased from full-service TA's in the past, who were willing to offer me a great deal because they knew I would not require much work.

 

I have no qualms about asking for an OBC. I already know that my sale will require little effort from them, so I see nothing wrong with asking for a better deal because of it. If they don't want to give it to me, that's fine...I'll just buy from someone who will. There's no emotion tied to this transaction, as far as I'm concerned. It's just a numbers game to me.

 

I have great respect for full-service TA's, many of whom helped me along the way to become a more educated travel consumer myself. :)

[Jade13]

I personally don't see a problem with wanting to know the commission a TA is making. It's all part of the equation of cruise shopping. They don't have to tell me, and I won't hold it against them if they don't, but I wouldn't feel at all bad about asking. :)

 

The one I have used has given me this info. For example they tell me which "travel companies" do not allow discounting such as Tauck or Abercrombie and Kent, as well as cruise lines such as Celebrity and RCCL. Recently I was booking an Antarctica Cruise and they they told me they received a bigger commission on Regent vs Abercrombie & Kent (Both do not own the ship they use in Antarctica). If I could go on Regent they received a bigger commission and could give me a larger portion, but I had to evaluate that A & K's dates were better for us and actually cost less anyway etc. They tell me their percentage commission with different agency's and thus how much they will give back to me, also which lines such as HAL, Princess and Carnival they can discount off the bat, others such as Celebrity and RCCL they give OBC or pre-paid gratuities and which do not allow discounting so I have to pay the full amount and they give money back after I return in the form of an agency check (such as Tauck if I ever book through them). They volunteer this info btw.

 

This agency deals on large volume. I do the work and just ask for the price on the cruise that I want. Remember, they are making money off of me....