Friday, August 1, 2008

Perspectives on Travel Agents - "Only The Best Are Likely To Survive"

Last night I received a most unusual, and welcome, email from CruiseMates.com; a website that I visit once in a great while. It is more of an information hub than a message board community (which also has information but mostly from its members) such as CruiseCritic.com. The CruiseMates email was entitled, "Thank Your Travel Agent". It is posted on its website and is worth a read.

It tries to succinctly explain that travel agents are under tremendous pressure in this economy because many in the cruising population are also feeling the pinch, so they cruise less often, on slightly less expensive cruises or worse: after much effort by the travel agent, are cancelling the cruises when final payments become due.

One of the points mentioned is that travel agents are paid a commission on the sale of a cruise, but not on the total cruise cost. Now, with added fuel supplements ($12 per person per day), increased taxes (ex. Alaska's $50 per person tax) and higher port charges and "NCFs" (Non-Commissionable Fares), the travel agent is earning a commission on a smaller percentage of what you are paying...which results in you potentially receiving a smaller discount than you might be expecting.

But, from the travel agent's perspective things actually get worse. The way commissions generally work is that the more the travel agent sells the higher the commission the cruise line will pay him/her. But some of the cruise lines are moving the bar, so that now travel agents have to sell more cruises, with commission earned on a lower percentage of the total cruise fare, before they earn higher commissions.

I will now add to the mix a statistic that a cruise line representative shared with me at a private lunch the other day: On average a travel agent only retains 20% of its clients for booking future cruises.

With such a lack of loyalty and the loss of the ability to discount the total cruise prices, things seem pretty bad. Is it all "gloom and doom"? Is the Perfect Storm about to strike????

To the contrary, things are looking pretty good for the best agents. Why?

I look at the posts on sites such as Cruise Critic, the growing list of other message boards, and the emails I receive asking me to post on those boards. It always makes me wonder why all of the "customers" that read the message boards just don't ask their travel agents for the information. The reason is that, in large part, they opt for purchasing the lowest cruise fare, but no or poor support. When a "customer" takes that approach there could never be any loyalty because it is the price...and only the price...that brings the client to the travel agent. (Of course it also brings the potential for problems, misunderstandings, disappointments, lost upgrade opportunities, wonderful shoreside opportunities to be lost, lesser quality tours, etc., etc., etc.)

Then there are other ways to improve the quality of a cruise experience for a client.

1. I am a member of a consortium, Ensemble Travel, which provides my clients with numerous added values including such things as negotiated discounts, complimentary shore excursions, onboard credits, complimentary spa treatments, in cabin gifts, etc.

2. If you have not been to an particular area I provide you with the latest guide book on the area as well as another gift after your final payment.

3. I provide real support and information for my clients. If you are going to Greece, I have a fantastic driver-guide. If you want to know how to see Barcelona I can tell you, in detail. I have a wealth of information Russia...including the differences between cruising on Cruise Line X vs. Y. In fact, as my map below shows, I have been to a significant majority of the ports you probably would visit on your cruise. And for those I haven't visited, I probably have input from clients that have visited them.

4. I have an excellent relationship with the cruise lines. I push for upgrades, fight for exceptions and, if necessary, rebook clients so they get the best value.

5. I am there before, during and after the cruise to address whatever the issues are...even if they are issues that I really have no responsibility for.

6. I discount and/or give added value (cruise line restrictions dependent) on literally every cruise.

As the CruiseMates article ended, so shall I, "So, let's hear it for the travel agents. If you have a good one then stick with her and make sure she always gets her commission (even if you book directly). This is one business where they really earn their money, with their knowledge, attention to detail and dedication to doing the job right. If you have a good travel agent you know it. If you don't, then it is time to shop around for a new one. Only the best are likely to survive the current economic conditions."