'Dodgy dot.coms' blamed for cruise discounting
Agents have demanded operators stamp out rampant discounting in the cruise industry by clamping down on commission rebating by “dodgy dot.coms”.
At this week’s UK Cruise Convention, lines were confronted by agents who complained they were being priced out of the market by online agents using preferential deals to trash the market.
Agents told TTG that lines had plenty of late ex-UK stock to sell following a 40% rise in capacity this year, ships were sailing with empty cabins, and there were deals for as little as £800 for two weeks in the Mediterranean.
One leading line also said the credit crunch in the US was causing customers to cancel when their payment was due, prompting lines to dump distressed stock in the UK.
Future Travel homeworker Jenny Jackson said: “The whole industry is being devalued by the heavy discounting, and it’s got to stop.
“We need to keep prices up, stop discounting and stop selling to dodgy dot.coms,” she said.
Advantage member Paul Stowe, Stowaway Travel owner, estimated he had lost up to 30 regular P&O Cruises customers to online
competitors due to discounting.
Peter Shanks, Carnival UK chief commercial officer, said UK law meant lines cannot determine what price agents sell their cruises for and that agents with the largest volumes will always be offered better commercial terms.
He said smaller agents should focus on offering customers added value, not the biggest discount.
“The market grew by 11% in 2007 and prices went up 3%. As the market grows you get more of everything – you get more last-minute beds, but average values are going up.”
Seamus Conlon, managing director of cruise.co.uk – not one of the accused online discounters – said he could not afford to trim margins due to big advertising costs.
“Yes, lines offer 10-15% commission, but if you keep it all you are doing very well,” he said. “There are big competitors, such as Thomas Cook, who have a standard discount policy. You can compete with that in several ways. We compete by the weight of our advertising.”
ttglive.com
Comments
Every known and unknown trick 'up the sleeve' or 'down the pants' is being used by Travel Operators of all forms to milk the last cent out of the intending traveller until it looks like all morality has been lost in the cause for getting the 'carrier' filled by hook or crook.
Everyday you come up with news of new antics for charging the passenger for this or that. The next time - you would have to pay for going to the loo; using water in the loo; using toilet paper in the loo and finally for the time spent in the loo. Hopefully this idea will be picked up by an Enterprising Airline CEO or Cruise Vessel including some Railways and Buses.
"Peter Shanks, Carnival UK chief ....agents with the largest volumes will always be offered better commercial terms. He said smaller agents should focus on offering customers added value,..."
In making the case for giving larger companies bigger discounts I am so tired of hearing how smaller companies can offer "..added value .." I often spend hours with clients advising and providing all kinds of helpful information but then, now that they know what to buy, they turn to the internet for a lower price. There will come a time when we all go out of business and then no-one will be sure what they are buying on the internet.
You would think its a great thing for the consumer that prices are coming down and this should drive occupancies up. Try upselling instead of complaining about your margins. If you have got it right(your business model) follow the consumer dont try and push the consumer...or you will lose and thats a .com you can bank!
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