travel agent commission

[Melnie1]

How is the commission my travel agent earns on my RC cruises figured? When I ask her to do a price adjustment because the price goes down, does that ultimately cut into her commission from Royal?

[smokeybandit]

Yes, they'd get less commission. But a travel agent's goal is repeat business, not just a one and done sale.

[twangster]

Commision is a percentage of the base cruise fare.  Insurance, Air2Sea, transfers, gratuity, port fees and taxes, cruise planner purchases, excursions, etc. are not commissionable.  

If the rate goes down so does commision.  If you win a RoyalUp bid, commision increases.  

Not all travel agencies are the same.  Commission tends to be split between the agency and the agent. 

The rate of the split is highly variable.  Some agencies have full time employees who get a base pay and some amount of commission.  Some agencies have contract based employees with no base pay so they tend to earn more commission. 

Some agencies will offer incentives like cash cards at warehouse stores that are partially or fully funded by the commission paid by Royal.  In some cases OBC is offered but that reduces the commission available to be put in the pocket of an agent.  In some cases so much commission is used for incentive that there isn't a lot left for agents.  In these cases there may be little motivation for anyone to spend a lot of time servicing a booking.  In these cases an agent makes little on each booking so they need volume to make the numbers work and they can't spend a lot of time working on things like price adjustments.  Not only do they make less commision with a price adjustment but now they have invested more time so the effective hourly rate becomes peanuts.  More reputable agencies pay a decent commission so agents can focus on making long term relationships.

[Sharla]

20 hours ago, twangster said:

Some agencies will offer incentives like cash cards at warehouse stores that are partially or fully funded by the commission paid by Royal.  In some cases OBC is offered but that reduces the commission available to be put in the pocket of an agent.  In some cases so much commission is used for incentive that there isn't a lot left for agents.  In these cases there may be little motivation for anyone to spend a lot of time servicing a booking.  In these cases an agent makes little on each booking so they need volume to make the numbers work and they can't spend a lot of time working on things like price adjustments.  Not only do they make less commision with a price adjustment but now they have invested more time so the effective hourly rate becomes peanuts.  More reputable agencies pay a decent commission so agents can focus on making long term relationships.

Twangster's entire comment was correct, but this part is spot on. "Rebating" is a hot topic here because it's a competition between small, independent agents/agencies (such as MEI) and big box stores (like Costco or Amex Travel). 

 

20 hours ago, twangster said:

Commission tends to be split between the agency and the agent. 

This is true and varies by agency, as well as what percentage Royal Caribbean pays the agency (the more volume you do, the higher the commission percentage).

So yes, repricing to a lower fare affects commission (as does adding a casino code, which DRASTICALLY affects commission, don't get me started on that one).

Bottom line- We still stand by our service, and we have to get paid. I simply cannot give away $300 when I'm making $200.  

[DoomSlayer]

1 hour ago, Sharla said:

...

So yes, repricing to a lower fare affects commission (as does adding a casino code, which DRASTICALLY affects commission, don't get me started on that one).

...

Let me ask you this as a TA.  I used to use my TA for casino comps.  He always helped me out because I used him a lot for other travel needs, including my business travel.  I later learned his commission was as you described, extremely low and almost not worth his time normally, so I stopped using him for casino comps and just do those bookings myself because they are relatively low risk to me if I have to cancel for some reason.

But there are times where I upgrade using my casino comps.  For example, I am sailing on Allure in January, used my casino balcony comp and upgraded to a 2 bedroom grand suite and am taking my daughter's family along for the ride.  I paid about $3200 for the upgrade and to add them at casino rates.  As a travel agent, how much of that $3200 would you and your agency have received?  Would it have been a worthwhile commission even though it was through the casino desk?

[Sharla]

42 minutes ago, DoomSlayer said:

Let me ask you this as a TA.  I used to use my TA for casino comps.  He always helped me out because I used him a lot for other travel needs, including my business travel.  I later learned his commission was as you described, extremely low and almost not worth his time normally, so I stopped using him for casino comps and just do those bookings myself because they are relatively low risk to me if I have to cancel for some reason.

But there are times where I upgrade using my casino comps.  For example, I am sailing on Allure in January, used my casino balcony comp and upgraded to a 2 bedroom grand suite and am taking my daughter's family along for the ride.  I paid about $3200 for the upgrade and to add them at casino rates.  As a travel agent, how much of that $3200 would you and your agency have received?  Would it have been a worthwhile commission even though it was through the casino desk?

Basically we get $25 for interior, $50 for oceanview, $100 for balcony or suite. Then we split that with the agency of course. So I could have a $1000 commission that goes down to $100 in two seconds. 

So if that upgrade was even commissionable your agent gross commission would be no more than $100.  Sometimes upgrades aren't commissionable.