Rebating agent for Ponant?
#16
Join Date: May 2011
Location: San Antonio, TX
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Its certainly the marketing model, or perhaps the realty of the market. B 'n M TAs certainly have a lot of overhead. It'd seem that cruising (unlike car rentals and hotels, especially, air travel) is the last bastion for rather-generous commissions to be earned, due to the substantial portion of the market that seems to be fixated on a controlled environment, and/or require handholding. As such, cruiseco excursions and transfers are exorbitantly priced to take all risk and uncertainly away. Of course, there may be a (smaller) market of those too busy to deal with arranging anything. I imagine a lot of cruisers just want to book and have the TA (and cruiseco) handle everything while many of us here just treat the cruise like another flight or hotel.
If only cruisecos would treat their fares like airlines (no rhyme or reason at times, I know, + contracted pricing) at a best and final price for the masses and let those ho need handholding and arrangement pay for it as an extra.
If only cruisecos would treat their fares like airlines (no rhyme or reason at times, I know, + contracted pricing) at a best and final price for the masses and let those ho need handholding and arrangement pay for it as an extra.
Concurrently as part of a local restaurant/bar trivia team I had met a local travel agent. She was one of many agents of a large agency had seven or so different locations here in town. Can’t say they were huge but they easily dominated the local travel business. They’d hold annual travel fair with a heavy emphasis on cruising. Almost every line would send representatives handing out brochures and small gifts, giving presentations, door prizes, etc. She knew we didn’t book through her but she’d always tell about the fairs and asked that if we could please attend and register with her as our agent. Around 2008 she started complaining about the drop off in business but mainly attributed that to the downturn in the economy with a helping nudge by the ever growing Internet. The last fair I remember was 2011 and the closing of one by one of her agency’s satellite offices. Today they have only what was the main office with a hand full of agents. While they still book vacation travel including cruises most of their business is corporate business travel. Sadly my agent friend suffered a fatal heart attack five years ago so not only lost a friend but also my insider on the state of the brick and mortar travel agency business.
#17
Join Date: Aug 2004
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Brief History of Travel Agents--since we're talking about it
Sorry if this seems OT, but is feels the conversation is drifting this way. Here's a general overview of what has gone on with travel agents.
If you are old enough, you will remember when you needed to get air tickets, you had to either book them through a TA or at the airline counter at the airport. TAs received commissions from the airlines. When the airlines stopped paying commissions, many travel agencies closed. People pronounced it the end of TAs, but it was not. However, the industry contracted significantly as people (like most FTers) were able to book online or by calling the airlines. However, as cruise lines and hotels still paid commissions (and still do), the industry survived in a new form.
When 9-11, happened, there was a huge sudden loss of work for travel for about 6-12 months. Travel agencies closed up shop. The industry rebuilt until it was arguably bigger than ever (although in a new form). As the internet expanded, more an more TAs became independent contractors to a few large travel agencies or consortia. As you have noticed, although brick and mortars still exist, there are fewer and fewer because of the overhead.
Then the pandemic hit. Most TAs spent more time getting refunds, cancelling bookings, etc than they did booking new business. Obviously not a sustainable business model unless it is not your primary source of income.
Why do cruise lines and hotels still pay commissions? Because it is cheaper than hiring their own staff! A TA who books a lot of given cruise line (and TAs do tend to specialize) can provide the cruise line with more bookings than a full-time staffer with employment taxes, benefits, etc.
Most TAs now are more like Uber drivers than employees. They have their own small business but, to get training, computer system access, training, access to consortium discounts for their clients, etc, they join what are called in the trade "host agencies." These agencies take a cut of the commission--which can be anywhere from 60% to 10% of the commission the supplier provides. The TA usually pays the host agency monthly fees as well, whether they receive any commission that month or not. Then most American TAs, they will pay about 30% of the commission they in state and federal taxes. So if the commission were $1,000, the TA, at the end of the day MIGHT see a net of $300-$400. And while they definitely have low overhead, they don't have no overhead. Computers, phone, internet, marketing, etc. Finally, many suppliers don't pay the commission until after the trip is taken. So if I book you for a 2023 trip, I will do most of the work in 2022 but don 't receive a dime until after the trip (if you don't cancel!).
So more and more agents are starting to charge an upfront planning fee. Usually, the fee is refunded if you actually book through the agent. As others in this thread have noted, some clients are LOTS more work than others. There are also the shoppers, who ask a TA a million questions, get great suggestions, and then go book it themselves. The planning fee helps stop TAs from wasting hours of time planning a trip for someone who then books elsewhere using all the information the TA gave them.
Finally, thanks to Covid in a strange way, more travelers (especially casual travelers) have learned the value of using a TA. They don't have the average of 30 hours to spend on the internet researching and planning a trip, they don't want to be scammed, or planning travel confuses them. They want someone to take care cancellations, telling them what current Covid restrictions are, handling endless airline schedule changes, etc.
Right now, industry estimates are that travel, and use of TAs, has increased to pre-pandemic levels. Obviously, some people can and should plan their own travel. Of course, those who require the least hand-holding are the ones TAs are most likely to rebate some part of the commission to. Those of you doing this great--but remember the TA is probably paying 30% of whatever they give you in taxes
Not complaining, just explaining
If you are old enough, you will remember when you needed to get air tickets, you had to either book them through a TA or at the airline counter at the airport. TAs received commissions from the airlines. When the airlines stopped paying commissions, many travel agencies closed. People pronounced it the end of TAs, but it was not. However, the industry contracted significantly as people (like most FTers) were able to book online or by calling the airlines. However, as cruise lines and hotels still paid commissions (and still do), the industry survived in a new form.
When 9-11, happened, there was a huge sudden loss of work for travel for about 6-12 months. Travel agencies closed up shop. The industry rebuilt until it was arguably bigger than ever (although in a new form). As the internet expanded, more an more TAs became independent contractors to a few large travel agencies or consortia. As you have noticed, although brick and mortars still exist, there are fewer and fewer because of the overhead.
Then the pandemic hit. Most TAs spent more time getting refunds, cancelling bookings, etc than they did booking new business. Obviously not a sustainable business model unless it is not your primary source of income.
Why do cruise lines and hotels still pay commissions? Because it is cheaper than hiring their own staff! A TA who books a lot of given cruise line (and TAs do tend to specialize) can provide the cruise line with more bookings than a full-time staffer with employment taxes, benefits, etc.
Most TAs now are more like Uber drivers than employees. They have their own small business but, to get training, computer system access, training, access to consortium discounts for their clients, etc, they join what are called in the trade "host agencies." These agencies take a cut of the commission--which can be anywhere from 60% to 10% of the commission the supplier provides. The TA usually pays the host agency monthly fees as well, whether they receive any commission that month or not. Then most American TAs, they will pay about 30% of the commission they in state and federal taxes. So if the commission were $1,000, the TA, at the end of the day MIGHT see a net of $300-$400. And while they definitely have low overhead, they don't have no overhead. Computers, phone, internet, marketing, etc. Finally, many suppliers don't pay the commission until after the trip is taken. So if I book you for a 2023 trip, I will do most of the work in 2022 but don 't receive a dime until after the trip (if you don't cancel!).
So more and more agents are starting to charge an upfront planning fee. Usually, the fee is refunded if you actually book through the agent. As others in this thread have noted, some clients are LOTS more work than others. There are also the shoppers, who ask a TA a million questions, get great suggestions, and then go book it themselves. The planning fee helps stop TAs from wasting hours of time planning a trip for someone who then books elsewhere using all the information the TA gave them.
Finally, thanks to Covid in a strange way, more travelers (especially casual travelers) have learned the value of using a TA. They don't have the average of 30 hours to spend on the internet researching and planning a trip, they don't want to be scammed, or planning travel confuses them. They want someone to take care cancellations, telling them what current Covid restrictions are, handling endless airline schedule changes, etc.
Right now, industry estimates are that travel, and use of TAs, has increased to pre-pandemic levels. Obviously, some people can and should plan their own travel. Of course, those who require the least hand-holding are the ones TAs are most likely to rebate some part of the commission to. Those of you doing this great--but remember the TA is probably paying 30% of whatever they give you in taxes
Not complaining, just explaining
Last edited by gretchendz; May 19, 2022 at 2:06 am
#18
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Thanks tor the overview. I guess one can segment the market by at least sophisticated vs unsophisticated travellers, and those who have the time, inclination and/or knowledge to research and self-book and those who don't. The ones who will use a TA are the unsophisticated, those who don't have time, inclination and/or skills, and the unsophisticated who don't have the time, inclination and/or skills.
Not that I've spoken to any cruisco's sales rep off a ship (or actually, even on one) but I get the impression that they're foreign-based and perhaps outsourced? I don't have any problem speaking to a off-short sales consultant (my only request is "here is what I want, please provide me with your best and final offer") but I imagine a large proportion of the cruiser market would find that (speaking to someone offshore with an foreign accent) abhorrent. I somehow think this is why cruisecos don't have their own sales force, even if it is just a telephone bank.
I'm not familiar with U.S. tax laws but won't that be a legitimate business expense/deduction? Looks like it isn't deductible for whatever reason.
Why do cruise lines and hotels still pay commissions? Because it is cheaper than hiring their own staff! A TA who books a lot of given cruise line (and TAs do tend to specialize) can provide the cruise line with more bookings than a full-time staffer with employment taxes, benefits, etc.
I'm not familiar with U.S. tax laws but won't that be a legitimate business expense/deduction? Looks like it isn't deductible for whatever reason.
Last edited by YVR Cockroach; Mar 29, 2022 at 3:21 pm
#19
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I forgot to mention one of the large remaining B 'n M cruise TAs is Expedia Cruises which, at least where I am, has franchised(?) outlets. Almost a pyramid scheme as the TAs have to pay the franchisee who in turn have to pay Barry Diller (or whoever owns Expedia these days, Some people still say Bill Gates/Microsoft). .At any rate, cruises aren't the big money maker for TAs, but ancilliary services like air tickets, ground transportation, hotel, cruise excursions and other arrangements are.
#20
Join Date: Aug 2004
Location: GRR
Programs: Delta Plat & Million Miler
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Taxes
Thanks tor the overview. I guess one can segment the mrket by at least sophisticated vs unsophisticated travellers, and those who have the time, inclination and/or knowledge to research and self-book and those who don't. The ones who will use a TA are the unsophisticated, those who don't have time, inclination and/or skills, and the unsophisticated who don't have the time, inclination and/or skills.
I'm not familiar with U.S. tax laws but won't that be a legitimate business expense/deduction? Looks like it isn't deductible for whatever reason.
I'm not familiar with U.S. tax laws but won't that be a legitimate business expense/deduction? Looks like it isn't deductible for whatever reason.
As to sophisticated vs unsophisticated travelers, I would add some additional categories (maybe these are actually sub categories):
--Sophisticated travelers who know what they want and can pay for it, but who don't enjoy the planning process (surveys in the industry suggest that online travel planning can average 30 hours of planning per trip--a broad generalization, for sure). They are happy to work with an agent who knows them and what they like and will do all the "busy work" for them.
--Sophisticated travelers who can and do like to book their own but are interested in working with an agent willing to "rebate" some of the commission, saving the traveler some money (Hence, this thread!)
--Millennials who are the fastest growing segment of TA clients. They know how to use the internet, but they would rather spend their time doing something else
--People who like having a TA look out for deals for them. Case in point, when a certain European river cruise started giving out free cruises to doctors, nurses, firefighters, hospital staff, and police...Many people in those categories got a heads up from their TA . Those who booked saved 5 or 6 grand The more the TA knows you, the more they can keep an eye out for a offer you might otherwise miss.
--People who like having someone who spends all their time watching the travel industry. Checking the Covid restrictions for example. Another case in point, a year before Crystal Cruises went under, some TAs began warning their Crystal clients that there might be financial trouble. We talked clients out of giving Crystal tens of thousands of dollars. Lost commissions, but being ethical and looking out for your clients is good long term business.
Of course, not every TA does these things and the OTA's definitely do not. But not every traveler wants or needs those type of services. To each their own
Last edited by gretchendz; Mar 29, 2022 at 12:48 pm
#21
Join Date: Oct 2003
Posts: 2,297
--Sophisticated travelers who can and do like to book their own but are interested in working with an agent willing to "rebate" some of the commission, saving the traveler some money (Hence, this thread!)
...
--People who like having someone who spends all their time watching the travel industry. Checking the Covid restrictions for example. Another case in point, a year before Crystal Cruises went under, some TAs began warning their Crystal clients that there might be financial trouble. We talked clients out of giving Crystal tens of thousands of dollars. Lost commissions, but being ethical and looking out for your clients is good long term business.
...
--People who like having someone who spends all their time watching the travel industry. Checking the Covid restrictions for example. Another case in point, a year before Crystal Cruises went under, some TAs began warning their Crystal clients that there might be financial trouble. We talked clients out of giving Crystal tens of thousands of dollars. Lost commissions, but being ethical and looking out for your clients is good long term business.
I got the impression my the big online TA (and specific initial booking TA who hands it off to TA CS team for modifications) did higher volume with certain companies. They may not offer the largest rebate or lowest private fare for a cruise line they didn't get as much business for.
#22
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Didn't go for Ponant in the end but am in the process of booking a cheap cruise on Explora I. To show how much fat is there, the cruise is going for 50% off but, the TA is still providing €150 p.p. OBC and close to 12% cash back (so close to 20%) which was offered upfront and w/o asking in the initial quote. Food quality is said to be phenomenal. I'm seriously afraid of massive weight gain so good thing the cruise is only 6 nights.
Also got a much-better agent at oft-recommended TA this time. Hopefully the referral credit will go to Randyk47.
Also got a much-better agent at oft-recommended TA this time. Hopefully the referral credit will go to Randyk47.
#23
Join Date: May 2011
Location: San Antonio, TX
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Didn't go for Ponant in the end but am in the process of booking a cheap cruise on Explora I. To show how much fat is there, the cruise is going for 50% off but, the TA is still providing 150 p.p. OBC and close to 12% cash back (so close to 20%) which was offered upfront and w/o asking in the initial quote. Food quality is said to be phenomenal. I'm seriously afraid of massive weight gain so good thing the cruise is only 6 nights.
Also got a much-better agent at oft-recommended TA this time. Hopefully the referral credit will go to Randyk47.
Also got a much-better agent at oft-recommended TA this time. Hopefully the referral credit will go to Randyk47.
#24
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#25
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#26
Join Date: Jul 2000
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Explora.....about to board for 2nd time. First was 21 days and never more than 200 passengers. Next week looks like about 700 passengers. Not a ship I want to be on with over 500. It's a ship offering dining experience on par with the two Europa ships. Far, far above what you will find on the so called luxury ships marketed in North America. We'll see how long it lasts.
#27
Join Date: May 2002
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Same here - pay it forward to other fellow travelers! A number of times I have recommended Annette and never bothered inquiring about the referral credit - just trying to help out another cruiser and who doesn't like to save money, especially for cruises that average $1,000 day
#28
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Explora.....about to board for 2nd time. First was 21 days and never more than 200 passengers. Next week looks like about 700 passengers. Not a ship I want to be on with over 500. It's a ship offering dining experience on par with the two Europa ships. Far, far above what you will find on the so called luxury ships marketed in North America. We'll see how long it lasts.
At least MSC (at least the main container division) made a mint last year so have lots to spend on the brand. Just hope the good times last through May.
#29
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Explora currently at 500 passengers +/-50. Pretty consistent count for four weeks. We do early dinners, so not a good judge of restaurant crowding. Besides food, the crew is top notch at management level. Overall feel that ship not crowded at 500. But to answer your question about issues of a fuller ship. Personally, I do not want to be around so many humans. 500 seems tolerable, but not nearly close to perfect as 200.