Royal Caribbean, Celebrity Crack Down on Cruise Discounts

August 16, 2004

Shopping for Royal Caribbean and Celebrity cruise bargains just got a little harder. As of today (August 16), "No agencies can advertise, market or sell below our published or contracted pricing programs," according to an official notice from Royal Caribbean International.

What does this mean for bargain hunters? Essentially, travel agencies can still advertise cruises -- but not for lower than the respective cruise line's minimum retail selling price. In fact, Royal Caribbean and sister cruise line Celebrity are threatening to reduce sales commissions of any travel agent that advertises prices lower than the cruise lines' lowest published rates.

In the past, many agencies -- particularly those eager to attract new business -- have offered a portion of their commissions to consumers (in the form of discounts, cabin upgrades, value-added incentives, etc.), awarding travelers with fares lower than the cruise line's lowest price. The industry's move to halt this common practice may be in part an effort to level the playing field so that small and high-volume agencies have the exact same selling prices. However, the cruise industry may also be acting in fear that such practices will add fuel to the same "price war" fires that have burned the major airlines, especially since September 11, 2001.

Shoppers should still practice the habit of picking up the phone and asking for additional discounts, though. Several agents have reported that while they are planning to comply with the new policy, under their interpretation of the rules discounts are still allowable -- as long as they are not advertised on the Web (or other media outlets). Also, group booking discounts are not affected by the new policy at this time, and can still help cruisers save money.

Royal Caribbean and Celebrity are offering agencies a five-day period during which to implement changes; all agencies must be in compliance with the new rebate policy by Friday, August 20. Carnival Cruise Lines is introducing a similar "reduction in agency compensation" strategy to take effect January 1, 2005 -- phase two of the cruise line's already-in-effect level pricing program.