Business Travel News - December 15, 2008 - (Page 22) ADVERTISEMENT BTNonline.com TRAVEL GROUP NELLA VELDRAN, Vice President & Group Publisher • JOHN DEJESU, Publisher Tel: (646) 654-4461 Fax: (646) 654-4456 (jdejesu@btnonline.com) BY STEVE TRACAS SPONSORED BY THE AMERICAN SOCIETY OF TRAVEL AGENTS ronment, they will need a strong, vibrant and well-aligned distribution channel. Even Micky Arison, CEO of Carnival Corp., stated that: “We need to continue to support travel agents as they have shown that they can give us higher yields.” The cruise industry needs to reinstate a viable commission program that pays for doing what agents have been trained to do: selling products and selling up. Products like shore excursions, port fees, air, insurance and all components that encompass the entire cruise experience should be commissionable to keep the travel agent an effective advocate and partner for the cruise industry or risk damaging the channel that currently provides 77 percent of sales at a revenue premium over other channels. Corporate travel agents and corporate travel departments are still working their way through the airlines’ dismantling of the traditional distribution channel. The results have not been pleasant for these corporations or their travelers. Let’s learn from these past lessons and steer the cruise industry to a better destination. It will take exceptional management and leadership within the cruise industry with vision and strength to resist the pressures of short-term cost cuts and to embrace a long-term vision of an effective, efficient distribution channel driving high-yielding revenue to fill those 36 new ships and 77,000 new berths over the next few years. ■ NORTHEAST/MID-ATLANTIC JILL ALTMAN, Account Director—Eastern Region Tel: (646) 654-4453 Fax: (646) 654-4456 (jaltman@btnonline.com) MIDWEST/WEST/INTERNATIONAL EDIE GARFINKLE, Advertising Director Tel: (805) 383-1326 Fax: (646) 390-7759 (egarfinkle@btnonline.com) CANADA CYNDY FLEMING, APR Media Ltd. Tel: (416) 363-1388 Fax: (416) 363-2889 MEXICO VERONICA CASTRO, Cass Media Tel: 5255-5605-1757 MACAU/HONG KONG/CHINA STEPHEN HUTTON, Hutton Media Limited Tel: 852-2528-9135 Fax: 852-2528-9281 JAPAN ASAKO KUBO, Pacific Business Inc. Tel: 81-3-3661-6138 Fax: 81-3-3661-6139 KOREA JUNG WON SUH Tel: 82-2-3275-5969 Fax: 82-2-3275-5960 MALAYSIA/PHILIPPINES/THAILAND ANNIE BLANCHARD, Media Services Tel: 632-645-7296 Fax: 632-645-1853 SINGAPORE LAVENDER TAN, AL Media Ltd. Tel: 65-469-9321 Fax: 65-469-8028 • MARKETING JENNIFER PEPPER STAM, Sr. Marketing Manager Tel: (646) 654-7263 (jennifer.pepperstam@nielsen.com) SUBSCRIPTION SERVICES (847) 763-9050 Fax: (847) 763-9037 LIST RENTAL/POSTAL INFORMATION JULIUS SINGLE (845) 731-2731 E-MAIL INFORMATION WAYNE NAGROWSKI (845) 731-3854 CUSTOM REPRINTS OF 500 PIECES OR MORE: KRISTI FULKERSON, The YGS Group (800) 290-5460 ext. 144 (BTN@TheYGSgroup.com) PRODUCTION JOHN SARTORIS, Group Production Director Tel: (646) 654-7294 Fax: (646) 654-7318 JAY KAPLAN, Production Manager Tel: (646) 654-7310 Fax: (646) 654-7318 BTN EDITORIAL & SALES OFFICES 770 Broadway, New York, NY 10003-9595 All Rights Reserved CRUISE LINES COULD LEARN A LOT FROM AIRLINES Earlier in the year, I read about the elimination of the United Airlines override programs with Carlson and Uniglobe and I am always concerned when one company’s problems trickle down to impact other businesses. At the time, fuel was an astronomical expense for the airline industry and it was stated that: “The airline industry’s business model wasn’t made to sustain $140 a barrel for fuel!” It should also be noted that similarly: “The travel agency distribution channel wasn’t made to be sustained without commission revenue.” Over these past five years, the resilient travel agency community has reinvented itself and adapted to the significant reduction in airline commission revenue by being innovative, creative and adaptive to the harsh realities of the marketplace. For the most part, leisure travel agencies have moved away from air sales and are now responsible for almost 77 percent of all cruise and tour sales and by any measures making a strong comeback among consumers. A recent Travwith 36 new ships with 77,000 new berths by the year 2012, they are also under pressures to cut costs. They have embarked on practices similar to the strategies airlines used to eliminate most commissions, such as “noncommissionable”items and “carve-outs,” like shore excursions, air segments, fuel surcharges and port fees. This results in declining commission payments to travel agents on a per-transaction basis, which in many cases results in earnings below the agent’s cost of doing business. This is not a good outcome in an industry where the cruise lines desperately need the professional travel agent to promote the value and features of their complex products, while the consumer desperately needs an experienced agent to differentiate products, features and amenities! The “chipping away” at commissionable products is one of the reasons for the distrust that seems resident between supplier and agent. The real problem for the cruise industry is that it has resulted in the weakening of the very distribution channel that represents 77 percent of their sales. The disconnect between the cruise lines and their eroding support of the distribution channel was noted recently by an analyst from Credit Suisse when he asked the executives at Royal Caribbean Cruise Lines: “Aren’t you concerned about the health of your agency partners, and are you contemplating any strategic moves to support the channel?” It is evident that in order for the cruise lines to capture the opportunities presented by this growing market and challenging economic envi- For more information, contact cahearn@asta.org el Weekly survey reinforced that the travel agent is the “most trusted” source of information when the consumer considers a vacation. This fact was coupled with a PhoCusWright report that concluded: “The travel agent channel offers a significantly higher average transaction value than online channels. It reinforces that both the consumer and the supplier benefits from a healthy travel agent distribution channel.” You obviously can’t turn back the clock on the airline industry, but other industries can learn from past mistakes. As the cruise industry grows Steve Tracas is CEO and president of Vacation.com. 22 Monday, December 15, 2008 www.BTNonline.com Business Travel News President: Greg Farrar Senior Vice President, Human Resources: Michael Alicea Senior Vice President, Marketing: Mark Hosbein Senior Vice President, Finance: Derek Irwin Senior Vice President, Entertainment: Gerry Byrne Senior Vice President, Marketing, Media & Visual Arts: Sabrina Crow Senior Vice President, Retail: David Loechner Senior Vice President, Online: Linda McCutcheon Senior Vice President, Building & Design: Joe Randall Senior Vice President, Central Services: Mary Kay Sustek Vice President, Licensing: Howard Appelbaum Vice President, Manufacturing & Distribution: Jennifer Grego Vice President, Audience Marketing: Joanne Wheatley http://www.BTNonline.com http://www.Vacation.com http://www.BTNonline.com
Table of Contents Feed for the Digital Edition of Business Travel News - December 15, 2008 Business Travel News - December 15, 2008 Contents Inside Track Profiles In Travel Mgmt Forum Aviation Lodging Ground Transportation Travel Management Meetings Today Washington Wire Business Travel News - December 15, 2008 Business Travel News - December 15, 2008 - Business Travel News - December 15, 2008 (Page 1) Business Travel News - December 15, 2008 - Business Travel News - December 15, 2008 (Page 2) Business Travel News - December 15, 2008 - Contents (Page 3) Business Travel News - December 15, 2008 - Inside Track (Page 4) Business Travel News - December 15, 2008 - Inside Track (Page 5) Business Travel News - December 15, 2008 - Profiles In Travel Mgmt (Page 6) Business Travel News - December 15, 2008 - Profiles In Travel Mgmt (Page 7) Business Travel News - December 15, 2008 - Profiles In Travel Mgmt (Page 8) Business Travel News - December 15, 2008 - Profiles In Travel Mgmt (Page 9) Business Travel News - December 15, 2008 - Forum (Page 10) Business Travel News - December 15, 2008 - Forum (Page 11) Business Travel News - December 15, 2008 - Forum (Page 12) Business Travel News - December 15, 2008 - Forum (Page 13) Business Travel News - December 15, 2008 - Aviation (Page 14) Business Travel News - December 15, 2008 - Aviation (Page 15) Business Travel News - December 15, 2008 - Lodging (Page 16) Business Travel News - December 15, 2008 - Lodging (Page 17) Business Travel News - December 15, 2008 - Ground Transportation (Page 18) Business Travel News - December 15, 2008 - Ground Transportation (Page 19) Business Travel News - December 15, 2008 - Travel Management (Page 20) Business Travel News - December 15, 2008 - Meetings Today (Page 21) Business Travel News - December 15, 2008 - Meetings Today (Page 22) Business Travel News - December 15, 2008 - Meetings Today (Page 23) Business Travel News - December 15, 2008 - Meetings Today (Page 24) Business Travel News - December 15, 2008 - Meetings Today (Page 25) Business Travel News - December 15, 2008 - Washington Wire (Page 26) Business Travel News - December 15, 2008 - Washington Wire (Page 27) Business Travel News - December 15, 2008 - Washington Wire (Page 28)
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