Royal Caribbean and Celebrity have announced that they are prohibiting discounting by any TA, below the lines' posted fare. Few of us consider RCI, but some of us have cruised Celebrity, I have noticed. This seems to be a fare increase, but one which does not benefit the line. It is only a prohibition against the TA giving the customer back some of the commission. Rather clearly, it is an attempt by these lines to get a tighter grasp on fares, as a predicate for future rate hikes that will benefit the lines. It's caused a bit of stir among regulars on these lines.

The whole thing raises a question to me. Is a TA an agent for the line, the customer, or an independent retailer? If the TA is legally an agent for the line, this is all OK legally and ethically. It is just a fare hike, although a strange one. If TAs are agents for the customers or independent retailers, It raises interesting anti-trust issues (to which I don't have a definitive answer). Just curious. What is the agency status of TAs?

Thanks,
Richard :) :)

I've been watching the discussion on CC. I do agree that it seems to be a way to price fix the advertised prices on cruises which would logically cause a general increase in cruise fares that people actually pay. I think it's a bad business decision by the cruise lines but heck, what do I know? I'm just a consumer. I'd hate to think what this is going to do for pricing for the luxury and near-luxury lines though if they decide to do something like this as well. Carnival will be implementing this soon as well - will this mean that Seabourn will be affected eventually? And then the others?

Sorry, Richard - don't have any answers for you. Just comments. :) I would think though that TAs would be independent retailers.

Masaki

I've loosely read some of the discussions. My understanding is that T/A's are precluded from advertising lower rates, but, can continue to offer and produce lower rates. And, how will the cruise lines monitor that?

aaannnthony:

Originally when this matter was made public, it was thought to apply to advertising only and not pricing. Reportedly Carnival is restricting advertising but not pricing as of 1/05. But as RCI released further info, it became apparent that they were also fixing the PRICES that TAs could charge, and preventing the TAs from adopting any sort of "free hotel" or free air" promotions to get around the restriction. RCI has further announced that it will use employees to call the TAs, and act as the "cruise cops" to insure that there is no discounting (direct or indirect).

In this light, I'm still wondering whether TAs are agents for the lines, for the customers, or are independent retailers.

Not that I'm waiting with baited breath to book RCI! Been there, done that, ain't going back. I just did a little anti-trust litigation in my legal career, so the matter is of academic interest to me.

Thanks,
Richard :) :)

I, too, wondered about the relationship between the cruise line and the TA. I know that some TA's may be affiliated with a cruise line, i.e. Carlson Wagonlit is a franchise of the Carlson Comapanies, which also owns Radisson. And yet, some of those web sites say "wholely owned and operated by __". In addition, Carlson Wagonlit sells other cruise lines.

I wonder how the cruise line could tell a TA how to "spend" their money (isn't that in essence what the TA is doing when they rebate a part of their commission for a lower fare for their customer?). They only thing I can think of is from the accounting point of view. In other words, whose books are the discounts showing up on - the cruise line's or the TA's. Bean counters care about those things and CEO's care about what the stockholders perceive.

Obviously we don't know enough about the relationship between the TA and the cruise line. But we (the customers) are the one's that are going to feel it in the end.

From what I've been able to discern from the CC boards, Royal Caribbean has not been shy about making TA's tow their party line.

By the way, did you know that Carlson Companies started out as the Gold Bond Stamp Company?

vickie

Vickie:

Yes, I did know that Carlson Companies owned "Gold Bond" stamps.

The situation involved with RCI/Celebrity even goes beyond prohibiting a TA to give part of the commission to the customer in terms of lower prices. It also apparently halts the practice whereby TAs book a block of cabins/suites on those lines at a reduced price and pass that along to their clients --- even though the commission rate stays the same!

Enforcement is accomplished by RCI/Celebrity refusing to do further business with a TA who does not follow the policy. What a mess!

Thanks,
Richard :) :)

Richard - A few of the large online agencies have sent emails to their customers telling them that as of today, they will no longer offer RCI/Celebrity........My TA did tell me that her agency, and others, have legal counsel looking into the matter.

Claudia

Claudia M:

Your information is very interesting. Part of the story about this strange situation is that RCI/Celebrity claim to have adopted this policy at the urging of full service TAs to combat price undercutting by "no service dot coms." But I assume your TA is of the full service variety, and does not like being ordered around by cruise lines, either.

Let me be clear so there is no misunderstanding. I like full service TAs (such as Ngaire, our respected host on this board). If the full service TAs like the new RCI/Celebrity policy, and feel it will help their business, then I have no complaint with the policy, and the possibility it might spread. Good TAs have suffered too much from elimination of commissions from airlines and other sectors of the travel industry. I want to keep them around, as they are most helpful. But if, as I fear, this new policy is aimed at wiping out ALL cruise business done through ANY TA, then I hope this policy dies a quick death!

Thanks,
Richard :) :)

By the way this is really a "cruise talk" issue anything to do with cruises can go under that main thread, "cruise talk" Just cars, family, pets, jokes etc should go under off topic. No biggie but ANYTHING related to cruising can go either place.

Actually Richard, I fall somewhere between a full service TA and the dot.com variety. I discount like the dot.coms I do have a strong internet presence with rebates and I advertise those rebates. However, I do provide service to the clients, answer questions, give advice, make sure people have gold points, know about AMX etc have expertise in the product, do all the little extra services for the cruise booking.

A full service agency normally is a firm that does air, hotel etc and does not discount. I dont do all those extra services. The time it takes to handle hotels, air etc is amazing and they get very little for those efforts so with all they offer I can understand that they feel they cannot discount and match the .com agencies that simply make a booking and good luck getting any service after that.

I do have people who call take hours of my time, use all the knowledge for cruise and cabin selection, get brochures and videos my reports etc I send out and then find it for $50 less on a .com site somewhere and want me to match the price. I wont do it. If I did it for them then I would feel I had to go back and give the same additional discount to all my clients. That would be the ethical thing to do. This is a problem for the big full service agency also. In fact with my prices on the website I am sure that I am a thorn in their side. The day may come I have to take those prices off my web.

This is very interesting and I have heard rumors about this for a long time. There are many factors to the situation although there is no word about change from the luxury independent lines such as RSSC, Silversea and Crystal I imagine there will be a similiar trend.

I do not believe the lines are doing this to in any way hurt the primary Travel Agent community but to stop the increase in rebating that has taken over the industry with the advent of the .com age. The Virtuoso and big agencies do not like the .com pricing, with no service. So I am sure that the report you read that this was at the urging of full service TA was correct.

We will see what the future holds. There could be law suits from the .com agencies. If they have to price at the same rate as the full service agency the .com's will not stay in business. If you can get a cruise for a certain price with someone who is there to assist etc why would you book where you cannot get any service.

Since I am in the middle of the line I feel whatever will be will be.

Ngaire: You are a nice woman and I am glad I do business with you - Joanna

Is a TA not giving back part of their commission by reducing prices to their clients? If this is the case, how then can a cruise line dictate what the TA can and cannot do with that commission money?

Service is just about priceless, in my opinion. Without service, you'll pay dearly!

Ngaire and all:

When I refer to a "full service agency", I mean only one where the client can call and speak to a "real person", and the same one each time to assist if the client has experienced a problem concerning a cruise, or needs information. I was unaware that any TAs handled air anymore, as there is no commission in it.

There is some suspicion that RCI/Celebrity are doing this as a first step to stop doing business through ALL TAs, so the line can save the commission. Unfortunately, RCI is somewhat of an "industry leader". They started several things that soon spread to other mass market lines, like the infamous crackdown on bringing liquor or beer aboard, extra charge alternative restaurants, and several other abominations. If a line needs a fare increase to cover costs plus a profit, that's fine. Fuel costs must be astronomical. Radisson has had some general increases since we've been cruising them ---- and the cost of everything else has gone up too. OK. But cutting TAs "out of the loop" is not OK, IMO!

Thanks,
Richard :) :)

I may be naive but I really dont think this is a move by the cruise lines to cut out TA's. Renaissance tried that and it did not work as the TA's boycotted the line. They ended up going bankrupt. The cruise lines have seen that before. If they cut out TA's they have to increase staff to handle passengers and that increases expenses.

If anything I think it is a move by the cruise line to pacify the "strong" TAs and keep them in business and stop the undercutting by the .com companies. The .com companies wont respond to questions so the passengers start calling the cruise line. So the cruise line pays commission and then they still have to handle the passengers. I have also heard cruise line executives say they feel it devalues their product to see it advertised or sold at lower pricing.

If this comes to RSSC I will have to stop advertising my rebated prices and that will hurt my business a lot. It remains to be seen if an agency can still rebate and just not advertise or if they will allow "enhancements" without affecting the actual price. Whatever it is that is the way it will be.

Issues like this always have complexity that is not intially clear. I do not mean to imply that I understand or have any knowledge of the real reasons behind the move. These are just my opinions based on the facts as I perceive them.

Of course, no one can accurately predict the future or fully know the motivation of others, such as cruise lines.

But this brings me around to my original question. Are TAs agents for the cruise lines, the customers, or are they independent retailers?

Thanks,
Richard :) :)

Sorry, but I fail to see how ANY cruiseline can tell a TA what she or he may/may not do with THEIR commission. I'm hearing that RCI IS trying to ensure that most-if not all- pax start booking directly with the cruiseline. They evidently think that not paying TA commission greatly improves their bottom line.

I booked a Celebrity cruise right before this started. I had already decided that the upcoming X cruise would more than likely be the last for me. Now, the Sahara will freeze over before I book another Celebrity cruise!

What X is doing may well be perfectly legal, but it screams of price-fixing to me, legal or not.

I don't mind paying more for Radisson, because it is worth every penny. Same cannot be said for RCI/Celebrity!

Claudia

I guess the next few months will shake all this out. I am sure some law suits will be filed but that takes forever.

You are correct of course at this time going straight to the cruise lines is the most expensive way to buy a cruise. If all the pricing was the same direct sales from cruise lines would increase. However, I also know the Big Agencies are screaming about the .coms discounting.

I am sure that RSSC and others wont do anything until all this comes to light and the dust settles. For all I know RSSC may never have any attention of following suit anyway. The luxury lines are in a whole different place.

Personally I hope nothing changes with RSSC I like it just the way it is right now.

Ngaire:

I do too! If Radisson needs a fare increase, they don't sneak around --- they just do it! And it causes no comotion or criticism. After all, I shudder to think about the Voyager's fuel bills at today's artificially inflated prices.

In any event, back to my original question. Are TAs agents for the cruise lines, the customers, or are they independent retailers?

Thanks,
Richard :) :)

I dont have any idea about the legality of whether TA's are agents for the cruise lines, the customers or if they are independent retailers. May depend on the true legal definition of those terms and I certainly am not qualified to make that assessment.

Thanks, Ngaire:

Didn't mean to put you on the spot with that question. It's just that I've read some comments (by non-TAs) on other boards stating that "TAs are clearly the cruise lines' agents, and therefore the lines' acts of setting prices through TAs is not an antitrust violation." But (like you) it just does not seem that clear cut to me!

Thanks,
Richard :) :) :)