Heavy discounting could lead to cruise agent commission cuts

High levels of discounting by agents in the cruise market could end up leading to cuts in commission levels, suggests the boss of a leading consortium.

John McEwan, the chief executive of Advantage Travel and chairman of the Triton Travel Group said that he sees a large percentage of agents resorting to deep discounting in order to close deals in the current, highly-competitive market.

He suggests, however, that this could backfire, eventually leading cruiselines to question whether current commission levels are too high, particularly if agents continue to sacrifice such a high percentage to make a sale.

He continued: “We’re not going to prevent discounting but the really good travel agents are finding a way of building a business without giving the shop away.

“If retailers in cruise continue to discount at the (current) levels, then if I was a cruiseline I would be questioning the level of commission I’m paying out.”

Steve Moore, the managing director of Air Viceroy, an Advantage member, agreed that agents should refrain from offering give large discounts just to close a deal.

He noted: “We don’t discount, we only price match where we can. I’m not of the opinion that something is better than nothing.”

McEwan issued a warning that the recent fuel cost increases, combined with a strong euro could cause price increases of £50 on a holiday costing £500.

He reflected: “I think the luxury market will take it (the prices rises) in its stride but I do think it is a problem for the mainstream.”

www.advantagetravel.co.uk