MIAMI — Norwegian Cruise Line certainly made a splash earlier this month by announcing it will start paying commission on non-commissionable fares (NCFs) for reservations booked outside the 120-day window starting Jan. 1.
The news was widely welcomed by travel agents, who have long griped about NCFs and what’s included in them. Historically, NCFs represent the portion of a cruise fare that doesn’t pay commission to agents, which typically means port charges, government fees, taxes and just about any other fee a cruise line wants to include. What makes NCL’s announcement so groundbreaking is the fact that this marks the first time a major cruise line has offered to pay commission on NCFs for an extended period.
But if agents are hoping that NCL’s move will cause a chain reaction among other cruise lines, think again.
At Trevello’s Partner Launch Event in Mississauga earlier this month, Travelweek asked Celebrity Cruises’ Allan Brooks, Director of Market Sales-Canada, whether he thinks Celebrity will follow suit.
“I don’t think so,” he said. “We did the math on it, and found that with everything we do with commissions, we actually pay out more on average. With our all-included model, we pay the highest commission based on that. So everything’s included, meaning the cost of the cruise might be a little higher but it’s all commissionable.”
Trevello’s President and CEO, Zeina Gedeon, was also skeptical about a possible new wave in the cruise industry, telling Travelweek that NCL’s announcement will most likely be unique to the line as a way to stand out from the crowd.
“The reality of it is that we’re all trying to innovate or differentiate ourselves. Everybody’s trying to find a different niche, maybe another cruise line will come up with something different tomorrow,” she said.
But while the debate surrounding NCFs reaches new heights amid NCL’s announcement, there’s the small handful of cruise lines that have never introduced NCFs to begin with, trying to separate themselves from the crowd, too. This very small club includes Viking and Virgin Voyages.
John Diorio, VP, North American Sales for Virgin Voyages, reached out to Travelweek recently to remind travel agents that its stance against NCFs has been in place long before NCL’s move, since its official launch back in 2020.
“When we launched the brand, we explored what the pain points were that advisors had in selling cruise and NCFs was number one on the list. So eliminating them since we launched was a no brainer for us. We want to ensure that our partners are earning what they should be earning,” he says.
Adding that there are no rules, requirements or terms and conditions when booking Virgin Voyages, Diorio says that travel advisors, who the cruise line refers to as First Mates, “get the full commission on the voyage fare without NCFs, without any kind of asterisk next to it.”
When asked why Virgin Voyages never implemented NCFs from the start, Diorio says it was a way for the cruise line to simplify the booking process.
“Nobody really understood what NCFs were and how they were calculated. So we made it very simple and just never had them, period. It’s been a big, big part of our value proposition to the trade,” he says.
With First Mates at the core of its business, Diorio adds that fostering this relationship with the trade has always been a top priority from day one. This is evident not only in Virgin Voyages’ stance against NCFs, but also in its lucrative commission model (16% commission on the voyage fare, plus an additional 10% on Shore Things, hotels, airfare, bar tabs and more), a new booking platform developed with feedback from advisors, and a robust sales team that continues to grow. In fact, in the last four months, the cruise line has more than doubled its sales team, which includes its first sales manager based in Canada, to work more closely with travel advisors in North America.
Diorio admits that growth in the Canadian market has been slow since launch, compounded obviously by the global pandemic. However, with a representative now in Canada and borders fully reopened, he expects demand to increase, spurred largely by travel advisors.
“For those Canadian First Mates who were able to come down to Miami and board the Scarlet Lady over the past year, we’ve been welcoming them with open arms. But now that restrictions have lifted, we’re seeing a lot more demand for training from our First Mates in Canada, we have officially joined ACTA, and now we’re putting a whole strategy to not only bring more exposure to the First Mate community, but also build our brand across Canada. We’ve got a whole rollout plan we’re going to do in Canada come Q1 in 2023.”
The new campaign will build on the momentum currently being seen heading into the winter season. According to Diorio, Virgin Voyages is seeing a “tremendous amount of growth,” particularly from the trade, with Q3 bookings more than doubling over Q2.
“The momentum is definitely building with our advertising and making consumers aware of what our brand is,” he says. “But we’ve also doubled down and spent more money with our trade partners to tap into their customers. Right now, we’ve got some great promotions running and we’re in the midst of planning a really aggressive wave promotion for the beginning of the year.”
In a nutshell, Diorio says Virgin Voyages as an adults-only brand is redefining what luxury travel means, far removed from the black-tie galas of ultra-luxe cruise ships, and closer to an “always included luxury” concept that’s less “stuffy formality” and more “chilled and relaxed.” About 80% of guests are between the ages of 34 and 62, and 60% of those leave kids under the age of 18 at home. And for those who say Virgin Voyages isn’t a family-friendly line, here’s an interesting fact: more and more guests, says Diorio, are bringing along their adult kids onboard for a one-of-a-kind family getaway.
All this, coupled with the fact that there are no NCFs, will hopefully put Virgin Voyages top of mind among Canadian travel advisors. And if you ask Diorio, who’s been in the industry for 30 years, travel advisors are the key to any kind of success here in Canada.
“We are building a brand new cruise brand and we know that travel advisors are going to be our biggest advocates in helping us sell what that experience is going to be like on Virgin Voyages,” he says. “I’ve always seen the true value of what the travel advisor brings to selling travel. Now more than ever, with a lot of confusion and information out there as a result of the pandemic, the travel advisor really helps provide that consultant-type approach. Just as you would lean on an expert for financial planning and banking, consumers are much better served using a travel advisor.”
Virgin Voyages currently has two ships sailing – Scarlet Lady and Valiant Lady. Resilient Lady and Brilliant Lady will be launching in May and December 2023, respectively. For more information go to www.virginvoyages.com.
Got a story idea? Reach out to Deputy Editor Cindy Sosroutomo at firstname.lastname@example.org.