July 12, 2010
Here's how the policy changes, which we've boiled down into two main points, will work:
One: Travel agents can only sell Carnival cruises at the set rates provided by the cruise line. Under the current policy, which first appeared in 2005, agents are prevented from publicly advertising discounts but can offer them in person or over the phone. (Typically, a portion of agents' commissions is offered to consumers in the form of lower fares, upgrades or value-added perks -- a strategy known as rebating.) However, as of August 1, agents won't be able to change the prices at all. So, if Carnival says this cruise is $399 a cabin, it's $399 a cabin, and agents won't be able to sell the cruise at a lower price.
Interestingly, Royal Caribbean and Celebrity already have similar no-rebating policies, instituted back in 2004, in place -- Carnival is now essentially matching those lines' levels of strictness around discounting.
Two: Carnival will also restrict the types of value-added amenities agents can offer. If travel agents wish to offer a "non cash-equivalent value add" (a phrase basically meanings bonus gifts, i.e. transfers, insurance, handouts like wine or tote bags) worth more than five percent of the total cruise fare or $25 (whichever is greater), they will need to have their marketing plans approved by Carnival. Lower-value gifts do not need to be approved. Any perks worth more than 10 percent of the cruise fare are not allowed at all.
For cash equivalent gifts -- onboard credit, pre-paid gratuities or gift cards -- agents can offer perks worth a maximum of 10 percent of the cruise fare. However, all cash equivalent gifts must also be approved by Carnival.
In an e-mail to travel agents, Carnival explained the purpose of this policy is "to help minimize consumer confusion over pricing and in return increase sales. Prior to the implementation of this policy, consumers were exposed to a variety of price points in the marketplace for the same cruise. This naturally caused them to lose confidence in their purchase decision and the Carnival brand."
So, is this change good or bad for you, the consumer? We've identified both pros and cons:
Less shopping around. With all agencies offering the same rates publicly, you won't need to search as many different places for the best deal.
Group rate discounts are still available. Agents can't advertise them, but they can offer Carnival-approved group rates over the phone, in person and through e-mails and direct mail.
Fewer discounts. Let's face it -- although Carnival can lower rates on sailings, the agents have no power to offer you better prices. Keep in mind that Carnival will still offer its targeted discounts for residents, seniors and military personnel.
Fewer perks. Your agent is now limited in all the fun extras he or she can offer to you with your Carnival booking.
What do you think of this new policy? Are you happy to do less deal hunting or sad to lose out on agent discounts? E-mail your thoughts to email@example.com.
--by Erica Silverstein, Senior Editor