Well, it has been just over a year since Lisa Bauer, Dondra Ritzenthaler, and Royal Caribbean took the gutsy move to terminate relationships with companies they deemed to be card mills. It has also been almost a year and Carnival Cruise Lines has been mum on the topic.The question I have for Micky Arison and Gerry Cahill centers around if that was a good move or not? At what cost did you receive any incremental revenue? Did you receive any?
According to the 3rd Quarter SEC filings, it seems that Royal Caribbean's income is up 4.2% for the quarter and 7.4% for the year; while Carnival is down 3.2% for the quarter and 4.4% for the year. I know it is hard to compare apples to apples when Carnival has so many brands that are really diverse, but the bottom line is telling.
I wish I could find a breakout by brand because I content that continuing to do business with MLM or Card Mill agencies is indeed bad business.Looking at the bottom line, it appears that the expected incremental revenue from Royal Caribbean never materialized for Carnival.
If we look at one of the known agencies that was terminated by Royal Caribbean (YTB) is it obvious from their own SEC numbers that they bulk of their people do not sell much product. The Referring Travel Agents were responsible for a reported (yet unverified) $211 million in sales for 2007. There are claims that 2008 sales are higher, but that remains to be seen since their enrollment has dropped significantly.
So the question to Carnival remains was the $33 million paid in commission really worth the additional sales? The YTB numbers indicate that the vast majority of sales made are for personal travel and not to that of legitimate clients. The California Attorney General has also alleged this in his $25 million lawsuit against YTB. So why is Carnival happy with essentially discounting cruises by 16% that they likely would have captured in any event? Sure, there are a lot of people in YTB that took cruises ONLY because of the discount, but come on--$33 million? And that does not even cover the override agreement in place. So is this really good business?
What about the bad press? Remember the YTB Travel Agent in Tennessee that sold a Carnival Cruise to "Grand Caymen" to hundreds of high school seniors and then vamoosed with the money? What was the cost to the reputation of Carnival and YTB?
What about your additional cost? There are marketing costs to attend their events, costs to facilitate the product update calls, and let's not forget that Carnival flew res center agents to Wood River to handle consumer calls for the recent "Sail-A-Thon". Why doesn't Carnival send res agents to all travel agencies to handle consumer inquiries? I think I know the answer--and I bet Carnival does as well.
Have you noticed a decline in bookings from legitimate agencies that used to support Carnival in years past? Has Royal Caribbean seen an increase?
I contend that accepting Card Mill business is likely bad business. Your bottom line sure seems to support this as well.
2009 looks to be one of the more challenging years facing the travel industry. Who is better positioned to help out Carnival Cruise Lines? Is it the travel professional who knows your product and sells to the public? Or is it the "I just bought my credential" agent that is looking for a 16% discount on his own cruise.
While I agree with many of the points in this article, I really don't think you should draw any correlation between their bottom lines and YTB.
ReplyDeleteFor example, YTBers might have had to use a real travel agent to book their cruises if they hadn't used their own website, and Carnival would have still paid the comission.
As for the other points, I absolutely agree. Does Carnival really want to be associated with trips booked by YTB? I would be interested to see how much of a mess it has caused when all of these RTAs told their clients to just call Carnival if they had any problems.... Effectively increasing Carnival's cost to support the trips.
I am not tying their bottom lines together. Just saying that YTB was crowing all about the RCCL business that they were going to be giving to CCL. If indeed that was true, in terms of a percentage, CCL should be able to see that.
ReplyDeleteIf you look at just Carnival and just Royal Caribbean (and leave the other brands out) the two are very similar in terms of product and pricing. If YTB threw all of their RCCL bookings, one woudl think that CCL might see a proportionate increase.
Another point is that YTB thinks they have all this pull in the travel industry that they are the spearhead of Carnival's success. They made a video about stickin it to RCCL, but with allll the bookings they did with RCCL you would think Carnival would see an increase right?
ReplyDeleteAs a matter of fact getting rid of RCCL seemed to do favors for RCCL. Maybe Carnival should follow suit.
As a matter of fact getting rid of RCCL seemed to do favors for RCCL. Maybe Carnival should follow suit.
ReplyDeleteEdited to correct above.
As a matter of fact getting rid of YTB seemed to do favors for RCCL. Maybe Carnival should follow suit.
Why dont you talk about the other Cruise lines...
ReplyDeletePrincess, Norwegian, and Costa.
My Clients have booked on all these cruise lines thru my YTB website. I have yet to book a Holland cruise yet. Guess I have to find some old retired people to book on Holland.
Oh, and RTA's dont get a 16% discount on Carnival Cruises... It's actually 11.2% 70% of the commission for qualified RTA's.
And you dont need to buy a credential anyway.
You yourself, John have said the RTA Credential is worthless anyway, so quit using it as an example for RTA's to obtain discounts.
I have never used mine for discounts.
Carnival only discounts after you book 8 cabins on the same cruise. And I dont need a YTB Card that.
I understand it getting late in the year and your readership is dropping so you got to make stories up to try and convince yourself that your not losing the touch.
Hand it up... you lost it...
Happy New Year!
If you actually were part of the travel professional community, you would realize that Princess, Costa and Holland America are part of the Carnival Corp family and are therefore included in the subject of Johns post. And for your future reference - it isn't only old retired people that sail on HAL.
ReplyDeleteAs for the rest of your post - your mis-information is asounding.
and your point is?
ReplyDelete"The YTB numbers indicate that the vast majority of sales made are for personal travel and not to that of legitimate clients."
ReplyDeleteWhere can I find the FACTUAL Backing for that statement?
John Spoke it.
ReplyDeleteIt's a biblical TRUTH when he speaks it.
Yeah... what Debbie said.
ReplyDeleteJohn is ALL KNOWING. He only Speaks TRUTH.
If he starts a RUMOR and it dont become true, he just removes that post and denies it ever existed.
REPEAT after ME...
I believe everything I read and hear on Johns Blog.
Congratulations, you are officially a NOTRAVELMLM JOHNNBIE... Come on John just made a FRESH BATCH of KOOLAID... DRINK SOME!
And here they come sneaking out looking back to make sure Coach Daddy doesn't tell them to stop!
ReplyDeleteGeez this WAS a peaceful post...
What about the bad press? Remember the YTB Travel Agent in Tennessee that sold a Carnival Cruise to "Grand Caymen" to hundreds of high school seniors and then vamoosed with the money? What was the cost to the reputation of Carnival and YTB?
ReplyDeleteOMG someone miss represented YTB? No one has ever done that before in the history of business!
Well, if you look to the study Perrillo did before they kicked YTB to the curb he noted that (and I don't recall the exact number) 90% of the YTB bookings had the same agent AND passenger.
ReplyDeleteAsk yourself honestly how many cruises you have sold and how many were for you personally.
"Oh, and RTA's dont get a 16% discount on Carnival Cruises... It's actually 11.2% 70% of the commission for qualified RTA's.
ReplyDeleteAnd you dont need to buy a credential anyway.
You yourself, John have said the RTA Credential is worthless anyway, so quit using it as an example for RTA's to obtain discounts."
Oh, that's intersting. So last week I got off a Crytal Cruise and I paid port/taxes only. It was a FAM. Why was I able to pay so little on a seven day cruise of the cruise line rated the top by T&L and Conde for over 13 years? Because I am a REAL Travel Agent and Crystal knows that from my personal sales - not from the aggregate of over 140,000 "members".
And BTW, I sell plenty of HAL to working families.