Travel advisors were disappointed but not surprised when Norwegian Cruise Line (NCL) announced the reinstatement of noncommissionable fares (NCFs) in 2024. The decision comes just one year after the introduction of the program to incentivize more bookings. Travel agencies had a strong year in 2023, making it difficult to demonstrate the effectiveness of NCL’s program, according to industry experts. Alex Sharpe, president of Signature Travel Network, stated that with everyone doing well, advisors did not have sufficient opportunities to showcase the benefits of the program. Additionally, advisors were simply trying to keep up with the high demand.
Matthew Eichorst, president of Expedia Cruises, noted that travel agencies have been so busy this year that agents have shifted their focus from ‘order-making’ to ‘order-taking.’ The resurgence of the cruise industry has resulted in a significant increase in business, leaving agents with little time to proactively sell specific products. Eichorst described it as a “perfect storm” where agents are primarily responding to the booming business rather than seeking new opportunities. This timing may have contributed to the challenges faced by NCL’s program.
Anthony Hamawy, president of Cruise.com, revealed that NCL’s program lost its staying power when competitors failed to follow suit. Hamawy expressed skepticism from the start, stating, “The day they started it, we knew it was only a matter of when they were going to stop it.” It became apparent within a week that no other cruise line would adopt a similar program. The success of such an initiative relies on industry-wide adoption, and without the support of other cruise lines, NCL’s program lost its impact.
NCL’s Decision to Discontinue Commission on Full Cruise Fare
During NCL’s President’s Club meeting held on December 14 in New York, John Chernesky, NCL’s senior vice president of sales, announced the discontinuation of the program to pay commission on the full cruise fare. Instead, the line plans to reinstate NCFs after March 31, allowing agents to continue earning larger commissions until the end of Wave season. The program implemented over the past year rewarded travel advisors with full cruise fare commissions for bookings made at least 120 days in advance. Approximately 2,500 agencies were enrolled in the program, requiring NCL’s approval of their marketing plans.
While the program initially served its purpose to generate more agency bookings and provide financial support to travel advisors recovering from the pandemic, NCL decided to phase it out. The funds previously allocated for the program will be redirected towards marketing efforts or strengthening relationships with agencies. Chernesky expressed that the program did not generate the desired interest or focus on NCL as initially anticipated.
Norwegian Cruise Line’s decision to reinstate noncommissionable fares in 2024 has left travel advisors disappointed. The challenges faced by NCL’s program, including the lack of industry-wide support, the overwhelming demand for travel agency services, and the shift of focus from ‘order-making’ to ‘order-taking,’ contributed to its termination. Travel advisors will now need to adapt to the changes and explore alternative strategies to maximize their commissions and provide exceptional service to their clients.