Understanding pricing - TA vs Princess

[S.S.Oceanlover]

It is always smart to compare the Princess direct pricing with the TA's. However, do not compare the price on Princess.com....it is often wrong, and will nto necessarily get you the best Princess direct price. There are regional promo's and specials that a call direct to princess can get you.

 

Most often you see prices from agents that say "from" and it least a "lead in" price. That is a published price for a specific cruise from the cruiseline. TA's are prohibited from advertising pricing below the published prices. But that does nto stop them from discounting....Joe

 

Joe,

When did they stop the TA's from advertising discounted pricing on Princess? I have in the past seen discounted prices on TA's websites and still do?:confused:

 

I know RCI and CCL don't allow advertising a lower price byt wasn't aware of that policy being implemented on Princess.

 

Bottom line Mike is......what's the hurry giving it to a TA? Book what you want and follow the Princess pricing. I do this all the time and very rarely to I start with a TA/ I end with one, yes, but do my own monitoring until I'm ready to turn it over.

 

I also just booked 2 cabins for June 6, 2010 and yes, those prices are high. But I will bide my time and watch them come down. And come down they will. Eventually. The good pricing I need from a TA comes after I'm satisfied that Princess isn't going to go much lower and of course before final payment.

 

I hope Princess doesn't go th route of it's sister line Carnival and change that policy.

 

It has been reported that effective May 1, 2009 that once you book with CCL you only have 30 days to transfer a booking. After that it has to stay with Carnival.

 

Bill

[Joe Pflanz]

I was told most lines have gone to it, and an agent I know was told that they could not do the advertising of any prices without special permission. The lines are trying to protect the little guy, meaning the smaller agencies. The big boys could do volume discounting and easily advertise pricing that misleads, just to get clientele to their sites.

 

In most copy all you see is a lead in price....which state something like "Inside rooms from $499....but they do not mention , except in small print that it depends on the ship and sailing..and all they have to have is one sailing with that pricing to be "legal" I do know that agencies have been called on the carpet for it, but not exactly sure by which lines.

 

Lines limit the number of Groups an agency can book in various ways. But you are right, many agencies will block off groups in hopes of being able to offer the preferential pricing. But in some cases, the preferential pricing is not totally passed on, as the agency can charge whatever, by callign it service fees or whatever fees. That is why it is important to compare apples to apples. I am not saying it is wrong to not pass on group pricing to individuals, as it is simply a way for the agency to make more money. From an agency perspective, less and less of the total cost is commissionable. so they are being squeezed.

 

Shrewd agents know the recall dates on valuable and high demand cruises, and will check for cabins being recalled, and perhaps a lowering of prices if a great number of cabins are recalled from agencies that coudl not sell them.

 

The bottom line is we all know that no one shoudl be paying brochure prices, but where to get the best possible deal and service is an entirely different matter. Best bet get an agent and agency that you trust and do repeat business with...They will probably do good by you. and I stress the agent over the agency...

[Pia1913]

Pia -

Thanks for your insight. It reminds me that I'm still learning. Maybe I could convince you to share other tips from your experience. I believe I'll be on the Coral when you are in September. Libations are on me. I appreciate your willingness to help others with advice on the boards.

Cruisenovice

 

Boy, are you going to get away cheap. It's only an occasional dos equis for this coffee/pepsi drinker. :D BTW, how about popping into the roll call? You've only been there once. :)

[kywildcatfanone]

Seemed a very honest type who said 'Of course if the price goes down then my commission goes down also'.....Im I supposed to feel guilty ?

Personally I feel if a TA has bought a block of cabins on a certain sailing thats when you get the very best price with a TA.I always ask and know if they don't maybe a will get a couple of hundred off only. One cannot sqeeze water out of a stone . The TA has to make commission its Him/Hers living.

 

Does the TA's commission "have" to be based on a percentage of the bottom line price? I would be fine giving a flat fee commission to a TA who saved me a bunch of money on the cruise itself, or does it just not work that way?

 

Mike

[kruisey]

Does the TA's commission "have" to be based on a percentage of the bottom line price? I would be fine giving a flat fee commission to a TA who saved me a bunch of money on the cruise itself, or does it just not work that way?

 

Mike

I am certainly not the expert on TA's that some are but according to this TA

told me that if the price of the cruise went down so would the commission.

On my next cruise the air fare is only $200 lower than the cruise.

 

All these fees that are added and the air are costing me 150% above the cruise fare. Example say a cruise cost $2000 then with air and additional fees and taxes totals up to $5000. Natuarally the air will depend on were the ship embarks and disembarks.

 

Really think its not the cruise price that is the problem. Its the added taxes and fees and airfares never used to be as high.

 

Could someone be making money on some of these extras?

We as the customers just have to accept that these are correct.

With one of the airlines last year the rumour was they were adding too much to their fees and taxes above the airfare and making their money that way.

I have told Princess if they add $9 per day for fuel I will cancel before final payment.

 

I feel the TA's are having a rough time of it these days due to all these uncommissionable charges added making it much harder to sell.

[Joe Pflanz]

Mike,

 

The travel agency get the commission, and it is based off of the agreeemnt they have with the line based on volume of business....Some agencies get as little as 8-10% of the commisionable part of the trip. Things like government fees and taxes are nto commissionable, and on some lines airfare and excursions are not either. Other agencies can get 16% or more based on their volume. And on top of that, if an agency meets a goal, they get an additional override of a few % points, something like 4% more. so if a angency had a 16% rate and attained a 4% override, the agency woudl get a 20% commision onthe commisionable fare. The split between the agent and hte agency could be anythign dependingon how they agreed to work together. But typically the agent would receive 8% and the owner of the agency would get 12%

 

Now how the agencies works is very important, and very varied. Some agencies give the agent a specified %...sometimes half of the standard commission. Most agencies do not share the Over ride amount. So if an agency gets 8%...and has no override, the agent may only get 4% of the commisionable fare.

 

If an agency is at 8% and has a 4% over ride, the agent woud get 4% while the agency would pocket 8%

 

If the agent sells into a group being held, again by contractual agreement, they may or may not participate in the benefit of the GAP points or TC credit value.

 

I will explain this in more detail at the end.

 

So depending onthe agreement between the agency and the agent, the agent may not be making very much on the deal at all. And typically any discounting is done out of the agents portion. At least the agent is free to discount up to and including their entire commission, but must seek approval to discount into the agencies part. Sometimes this is done to either gain new business or keep valued business.

 

Now back to the group amenities and TC credits. When agencies book groups, when there is no actual group requesting the sailing, they have the luxury of utilzing the GAP points and TC credit, if it is attained, however they wish. GAP Points are perks that the cruisline offers to groups. A perk may be conducive to a passenger or can be conducive to an agency. Example, it can be used to give trinkets to the passengers, or it can be used to give on board credit or discounts to the passengers.....but it can also be utilized to provide additional commission to the agencies. This is why agencies book groups....it gives them the potential opportunity to increase revenue. If an agency sells 8 cabins to individuals sailing onthe same date as a booked group sailing,...the individuals woudl nto necessarily receive any benefit of the groups..The agency coudl take hte extra commission and the TC credit ( which is the advertised free berth ). Instead of taking the free berth, they get the value of it as revenue. Once again this usually only benefites the agency, not the agent.

 

deep into the inner workings of a travel agency...the key is when dealign direct with the cruisline they will quote you the same price regardless....if you do deal with them, they save paying any commission...but that does not save you a penny. Your only ability is to save is to actually book a full group with them..and then you get hte same group rate the agencies have. But you lose the ability to negotiate for the perks and rebates of some of the commission.

 

Cruise lines pay commissions because it is a lot of work planning for and administering to clients. It certainly does not make business sense to have staff on board to cater to clients that are going to cost you revenue. Cruiselines have a contingent staff for this..and that is the travel agent. They pay them commissions to handle this for them...They are going ot lose the revenue anyway, but why have to staff to do so.

 

There are some lines that sell exclusively through agents, and will not book directly. And yet there are some cruiselines who would like ot go exclusively to direct and cut out the agents all together. Most have settled on a combined plan.

 

Again I hope this helps.

[Joe Pflanz]

The services of a travel agent is typically free to the client...as they are paid by the cruiseline....unless they add service fees and such....using a TA cost you nothing.

[kywildcatfanone]

Mike,

 

The travel agency get the commission, and it is based off of the agreeemnt they have with the line based on volume of business....Some agencies get as little as 8-10% of the commisionable part of the trip. Things like government fees and taxes are nto commissionable, and on some lines airfare and excursions are not either. Other agencies can get 16% or more based on their volume. And on top of that, if an agency meets a goal, they get an additional override of a few % points, something like 4% more. so if a angency had a 16% rate and attained a 4% override, the agency woudl get a 20% commision onthe commisionable fare. The split between the agent and hte agency could be anythign dependingon how they agreed to work together. But typically the agent would receive 8% and the owner of the agency would get 12%

 

Now how the agencies works is very important, and very varied. Some agencies give the agent a specified %...sometimes half of the standard commission. Most agencies do not share the Over ride amount. So if an agency gets 8%...and has no override, the agent may only get 4% of the commisionable fare.

 

If an agency is at 8% and has a 4% over ride, the agent woud get 4% while the agency would pocket 8%

 

If the agent sells into a group being held, again by contractual agreement, they may or may not participate in the benefit of the GAP points or TC credit value.

 

I will explain this in more detail at the end.

 

So depending onthe agreement between the agency and the agent, the agent may not be making very much on the deal at all. And typically any discounting is done out of the agents portion. At least the agent is free to discount up to and including their entire commission, but must seek approval to discount into the agencies part. Sometimes this is done to either gain new business or keep valued business.

 

Now back to the group amenities and TC credits. When agencies book groups, when there is no actual group requesting the sailing, they have the luxury of utilzing the GAP points and TC credit, if it is attained, however they wish. GAP Points are perks that the cruisline offers to groups. A perk may be conducive to a passenger or can be conducive to an agency. Example, it can be used to give trinkets to the passengers, or it can be used to give on board credit or discounts to the passengers.....but it can also be utilized to provide additional commission to the agencies. This is why agencies book groups....it gives them the potential opportunity to increase revenue. If an agency sells 8 cabins to individuals sailing onthe same date as a booked group sailing,...the individuals woudl nto necessarily receive any benefit of the groups..The agency coudl take hte extra commission and the TC credit ( which is the advertised free berth ). Instead of taking the free berth, they get the value of it as revenue. Once again this usually only benefites the agency, not the agent.

 

deep into the inner workings of a travel agency...the key is when dealign direct with the cruisline they will quote you the same price regardless....if you do deal with them, they save paying any commission...but that does not save you a penny. Your only ability is to save is to actually book a full group with them..and then you get hte same group rate the agencies have. But you lose the ability to negotiate for the perks and rebates of some of the commission.

 

Cruise lines pay commissions because it is a lot of work planning for and administering to clients. It certainly does not make business sense to have staff on board to cater to clients that are going to cost you revenue. Cruiselines have a contingent staff for this..and that is the travel agent. They pay them commissions to handle this for them...They are going ot lose the revenue anyway, but why have to staff to do so.

 

There are some lines that sell exclusively through agents, and will not book directly. And yet there are some cruiselines who would like ot go exclusively to direct and cut out the agents all together. Most have settled on a combined plan.

 

Again I hope this helps.

 

Joe, very thorough response again. Thank you for taking the time to help me understand all of this.

 

Mike

[ShipShapeinFL]

I was going to use an online travel agency for our upcoming cruise. Yes, they were going to give us a great price, but I also found out they charged ridiculous fees for cancellations and changes made to our reservations. We decided to stay with the TA that charged a little more for the cruise itself, but didn't charge any fees for additional services they may need to provide.

[Mapu]

I was going to use an online travel agency for our upcoming cruise. Yes, they were going to give us a great price, but I also found out they charged ridiculous fees for cancellations and changes made to our reservations. We decided to stay with the TA that charged a little more for the cruise itself, but didn't charge any fees for additional services they may need to provide.

 

Good point! Also if you are planning a particular cruise there is a possibility that your TA can book group space on that sailing and have amenities available to add to your booking. The group does not have to fill, even one cabin will get the extra amenities.

[WCAB]

Have read all the posts and I am a bit confused. Say I book with a TA and the price is 1600.00. On Princess the price is $2100.00. Does Princess have to drop their price to below $1600.00 to ask my TA about a reduction? Or if Princess were to drop their advertised price to 1900.00, could I contact my TA about getting a price drop. I would think Princess would rarely go lower then what I paid when booking with a discounted TA. On the other hand should I be watching other TA's prices and if I see TA, #2 had a rate of $1450 advertised, do I then call my TA and ask for the reduction? So, I guess I am asking do I ask in example #1 or example #2, or both examples.

 

I have always looked for the best price I can find and then stop checking once I have booked.

 

Carol

[Joe Pflanz]

for the TA's price to be cheaper than the Princess price......They have to be holding group space and are willing to share that pricing with you OR the travel agency is discounting out of it's commission structure.

 

Now, let me also say, that Group space is set very early in the cycle when cruises are first announced. And in today's economy, it did not take long for the Group pricing to become irrelevant, as the FIT Pricing quickly became lower than the Group pricing. Once Set the Group pricing seldoms if ever gets lowered. The lines simply lower the FIT pricing. And the TA then calls to get the people who booked the group rate the lower FIT fare. Any booking either into FIT Fares or Group fares count towards the Group.

 

In previous economies, the Group pricing typically stayed the better fare, up to the Final Payment Date, when price matching was no longer going to be a issue.

 

Currently on cruises that became open about a year ago, the group pricing structure is moot. The FIT Pricing is lower

 

Now as for Travel Agencies passing along the saving from their holding group space to individual bookings, remember they have no need to do this, except to win your business from another agency that will. All Agencies receive the same FIT Pricing structure. If they booked group space when they had no group assigned to it, they were doing so in hopes of padding their revenue, not in hopes of passing that savings to you as an individual booking. Remember you would not qualify for hte Group pricing unless you had the 8 Cabins. And for those that say you can still get your amenities...I beg to differ in somne respects. Each cruiseline is slightly different, but each amenity has a identifier and some require a minimum number of cabins to qualify. Some amenities will be given as long as there is at least 5 cabins. But remember, Princess now requires the agency to choose the Amenity up front. Now let me think, should the agency choose a room credit or price discount per cabin...or a increase in commission. Even if they chose the room credit, they coudl not promise it to you, when they are not assured of meeting minimal occupancy for the group allotment.

 

The best way to assure you will get everything, is to actually have the TA reserve at least 8 cabins for you under the group arrangements. Princess requires no deposit for starting a group in this fashion. There is per room deposit required if you want ot preserve over 8 cabins. At this time you will be told of how many GAP Points you will receive, and you can choose hwo to use them, and also the TC ratio, which is the number of rooms sold to qualify for a free room. Typically 8 double occupoied rooms get one person a TC credit. The number of GAP points you receive depend on the sailing and length of hte trip....and hte GAP points do change as the ship fills up, but once you are told you have a certain amount , that is what you have. If you obtain a group like this, the agency will be glad ot help you fill any rooms, with booking they have, as any agency booking will count towards the goals. But remember if you only filled 2 cabins, and they filled 6. It is very likely they will negotiate you out of yoru amenities and they would possibly take the value of the TC credit.

 

OK, now you have the 8 rooms set aside at the predetermined Group pricing....if you sell the rooms fine...if not at the very least you still have the preferred group pricing, or can get better FIT pricing once it is offerred. If a Agency offers you group pricing, it does not mean it is offering you the amenities or the TC credit...They are simply helping themselves get to the level to begin to qualify for the amenties or TC credit.

 

They are not in business to get you a best deal, they are in business ot make money. And if they can help you while doing that , it is great.

 

Once you have a group under your own name, you can trade allotted cabins and get whatever category you want, that still is available inthe overall group allotment. You can book either FIT priced cabins or Group space as held by you or by your agency.

 

Bottom line is an Agency and agent can either make money or not....but there is a break point where it will not be beneficial for them to do business with you.

They did nto book and hold Group space in hopes of you coming later to book an individual booking, They booked it in hopes of being able ot sell a sufficnet number of individual bookings on that sailing to enable them to gain some extra commission.

 

Now remember an agency that is being paid 16% may be more willing to rebate some of that back to you than an Agecny that is making only 8-10%

 

 

Now this bring me to my last point....Not anythign that will interest people specifically look at Princess Cruises....But each Cruiseline offers tot he AGecny varies based on its volume....So if a Agency does a good amount of Royal Caribbean Business and qualifies for a 16% commission rate fromt hem, and only sells a relatively low amount of Princess or Cunard....Where do you think they will lead you to think about cruises? A good agent uses your qualifications and the match to what you are looking for to offer suggestions, but many agents will come up with every reason for pushing you to RCCL. Remember they are in business to make money for themselve not to just save you money.

 

Joe

[tiyana4]

As another poster mentioned, we have yet to see a price drop on Princess; much less one that was lower than my TA's pricing. However, we have seen the price escalate. We like to book fairly early and let the TA do their job. On every other line we have sailed, we have been able to take advantage of price drops or at the least a cabin upgrade w/OBC. Not so with Princess........at least not yet:D.

 

Final payment is coming up for our Alaskan cruise on June 5th. I purposely left a $100 balance in the event the price drops. If not, I still got a great deal on the original price with $300 in OBC.

[cruisenovice]

Boy, are you going to get away cheap. It's only an occasional dos equis for this coffee/pepsi drinker. :D BTW, how about popping into the roll call? You've only been there once. :)

 

You probably thought I dropped off the plank. Though retired, I have several volunteer service projects that eat up my time......I'm sure that that Crooner's will have an ample supply of XX. You should try an XX with COB back. Now that the New England schedule has been released for next year, I'm trying your technique on a direct booking, then laying in wait. I keep and index of those mailers from Princess and note that in March preceeding the Fall sailings, they send a mailer announcing "new" prices. Anyway, I'm still learning. I'll transfer the booking to my TA just before final payment. Re: Roll Call, I really don't get excited until after final payment and when I set up our cruise box for essential stuff.