Markup on cruise sales?

[GenieDana]

Curiosity Question:

DCL and many indepedent agencies sell cruises at competing rates. Often the agenies offer better deals than DCL direct too.

<b>My first question is this - What is the "cut" an agency gets from the sale of a cruise? Is it a percentage, a fixed margin?</b>

It seems to me independents pay DCL some threshold price for the sale of a trip, and I'm looking for ball park numbers on the markup, nothing specific.

Its easy to find very specific numbers on items like automobiles (through Consumers Reports), but what about travel?

<b>Question two is it seems agencies buy blocks of rooms well in advance of a particular sail date, I presume for an additional discount. They later sell these rooms at the market rate. Is this just another way to profit?</b>

Thanks for what anyone is willing to share!

 

[mac_tlc]

GenieDana,

I'll try to answer your Q's. Not all cruise line commission structures, or airlines or tour operators for that matter, are the same. DCL has a tiered commission structure .. the more you sell, the more you make. The range is from 10% to 16%, excluding all taxes and port charges and some other stuff.

As far as your second Q, agencies do it differently. Again DCL is somewhat unique in that their prices rarely if ever go down as the sailing date approaches. Acquiring a block of cabins as soon as they are available can almost always assure that the price you have cannot be beat ... unless an agency rebates back part of their commission , which happens.... Whether an agency "marks them up" to the market rate or is happy selling them at its acquired price is a matter of business choice. Again, DCL does not give an agency an "additional discount" for blocking space early, you simply can get the lowest price that the particular sailing will ever have available.

What is interesting, at least to me, is people's sensitivity to price, and how that varies depending on what product they are buying. Regardless, whatever price anyone gets by calling DCL directly can be matched or beat by just about any agency that you would call. The distinguishing item is the quality of that agency, or the particular agent involved. It is the service provided that is truly valuable, and typically available for little or no cost to the customer. Not too many industries where that is the case. Of course, there is a wide variety of competencies, in the travel industry as in any other industry.

mac_tlc

 

[Mjasp]

Mac-TLC...So if an agency buys a block of rooms and doesn't sell them, can they give them back to Disney or do they own them, so to speak.

Travel is very interesting.
Thanks

 

[GenieDana]

Thanks MAC-TLC!

 

[CathyCanada]

Actually any unsold rooms are released back into DCL inventory 4 months prior to sailing, mjasp. The deposit put down to hold them is given back to the agency for unsold rooms.
CC

 

[Mjasp]

Thanks Cathy...Always wonder how these things work. I should be a TA, but with the internet no one uses TA's hardly anymore.

I'm always on line on travel sites. My next obsession is Turks and Caicos Beaches resort. Hmmm and for anyone who thinks DCL is pricey they should check out Beaches in Turks and Caicos prices.

Thanks Again
Joanna

 

[mac_tlc]

GenieDana - your welcome !!

mjasp - I think there will always be a place for knowledgable people who an add value and convenience to people's lives, especially with the "not-enough-time-I-have-too-much-to-do-and too-many-places-to-go" lifestyles we seem to have knowingly, or unknowingly, embarked on ..

As far as releasing unsold rooms, Cathy is absolutely correct.. DCL gives you a call at 4 months prior. However, for a little more $$, you can retain the inventory, if you feel you can fill it. This is particularly attractive if you are close to the magical "8 cabins", which qualifies you for a free "cruise-only" fare. That additional free passenger or the dollar equivalent, is another way that many agencies create attractive prices and packages for their clients. So, if you reserve inventory early, and then can sell at least 8 cabins, you can really create value. So .... get those family reunion/church group/little league groups together.. do it early .. and you can lower your cost substantially ....


mac_tlc

 

[Worldtraveler777]

Mjasp replied:

"I should be a TA, but with the internet no one uses TA's hardly anymore."

I'm sorry, but I have to disagree with your statement.

I am a Travel Consultant for an Atlanta Ga. agency. Although many agencies have suffered since 9/11, our agency has tripled growth since then. The most affected agencies were those that relied heavily on corporate business. The leisure travel industry on the other hand has been increasing on a steady pace since then. Domestic and Caribbean/Bahamas travel has been very good.

Contrary to popular belief, many people still use good travel agencies. The aspect of a knowlegable agent personally handling your vacation cannot be touched by 'faceless' internet companies. The fact that I am able to personally handle a vacation that may have cost several thousand dollars is comforting to clients. I'm not even going to get into the horror stories of people trying to handle problems after booking through internet companies. We've had several people come to us to try and deal with these companies after having problems with their customer (no)service departments. Unfortunately, we can't help someone who has already booked air or a vacation with one of these companies. Please remember that if you make a 1 keystroke error on an air booking(ex.- misspelled name), you're going to have a major headache on your hands. Airlines charge heavily for even a 1 letter mistake.

Besides the personal service that travel agents offer, we see specials well before the general public does. This way, I can alert my clients when these deals become available. Also, I have not had a problem beating most internet deals when a client approaches me with one. A saavy agent will always search for the best price for his/her client.

So remember, a good, knowlegable agent is an invaluble resource to entrust your hard earned vacation. Don't let the faceless internet companies lull you into a world of hidden charges and customer (no)service. Thank you.

 

[Worldtraveler777]

I would like to also add that most agents go on familiarization trips on many cruise lines and to various resorts in order to experience first hand what what our clients will experience. This gives us invaluable insight and information about the ships, resorts and destinations that are frequented most by our clients. We then can gladly determine the best choices based on preferences and budgets. So hopefully, you can see the advantage of planning a vacation with a good travel consultant.

Also, mac_tlc was correct about the securing of blocks of cabins. We often block groups of cabins in order to give more attractive prices to our clients. Also, many agents will use bonuses they might earn from these large bookings to discount these cabins even lower. I have done this several times to help my clients receive the best possible price on a cruise. This helps keep my clients loyal and most everyone returns for repeat business...internet or not.