Blatant Cruise Rebating Is On The Rise Again

Cruise Week

The longstanding competition between cruise discounters and agencies with more service-oriented models shows no signs of slacking off. Indeed, agents report rebating is accelerating once again in tandem with an overall increase in ticket prices.

“The higher upfront cruise price apparently is providing more maneuvering room for some rebaters,” says one agent. As an example of the practice in play, one veteran agent owner sent CruiseWeek a link to a large retailer that is promoting rebates via a spreadsheet.
The spreadsheet identifies the amount of money to be sent back to the purchaser based on the price spent by that buyer on the cruise.  For instance, if the buyer books a cruise priced between $501 and $1000, the cash back promised is $50. A buyer purchasing a cruise for prices between $5001 and $7500 is promised back $400, and so forth... the higher the price, the greater the rebate.
“I honestly can say I’ve never seen anything so blatant,” says Howard Moses, The Cruise & Vacation Authority. “Does anybody care about this any longer? My understanding was the cruise lines don’t allow this practice.”
One insider answered Moses’ question with one possible explanation:  “There’s nothing that cruise lines can do to stop rebating after the cruise ends. The contract between the passenger and the cruise line and the travel agent and the cruise line is over once people get off the ship.”
So now the action takes place once the trip is over. Verbiage used by one discounter on the web illustrates how the practice is presented: “Just call to book a qualifying voyage. Once you’ve returned from that sailing, you’ll be eligible to receive up to $1000 cash back.”
One supplier told  Moses the cruise lines have spent time and money implementing anti-rebating policies and are vehemently opposed to the practice. “That said, there seems to be recognition that whatever the policies are, the suppliers can’t take into account the creativity and the ingenuity of the rebaters,” says one cruise seller. “The cycle is endless: suppliers come up with a policy discouraging rebating, and discounters come up with ways of getting around the policies.”
In at least some cases there’s another dynamic going on: suppliers maintain close working relations with several rebaters. Why else would the names of the perceived rebaters today be pretty much the same as in years past?
They may not be large in number, but they are in volume and have stayed in business. Clearly there is a working relationship with at least some of the cruise lines or this would not be the case.  For instance, one cruise supplier pointed out that their price tracking indicates several national rebaters who book clients with their line actually sell tickets at a higher price than is normal for the brand.
“They may be rebating, but in effect they are encouraging the consumer to book at a rate higher than the purchaser normally would have done,” he said. “This same purchaser not only pays more money upfront to us than is the norm, but their guest also on average tends to spend more with us once onboard.”
That’s important because the cruise companies that ultimately perform best on Wall Street are those lines that attract higher spend for both ticket prices and onboard spend. What’s unclear is whether these suppliers believe some of these high spending deal seekers need to be convinced they are somehow receiving a better deal than other cruisers, or they would not book the cruise.
One retailer who is frustrated by rebating because it hurts the flow of his business says that rebating is once again prevalent after a slight slowdown; however, such views vary considerably by category.
“There’s precious little rebating on Carnival or lower categories on Royal Caribbean, Norwegian, etc.,” he says. “Once you get to balconies and suites, and get up to some upper end lines, the commissions are high enough to attract a whole other kind of retailer. It seems they know just how far they can push the limits."

Harry Schneider - August 21, 2015 @ 17:08
cruise discounting will to lead to reduction in commission for all of us.

Harry Schneider - August 21, 2015 @ 17:08
Cruise Discounting will certainly lead to a further reduction in cruise commissions for all.

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