Travel agents applauded Royal Caribbean Cruises Ltd.’s move to raise commissions and increase co-op funding as part of a new initiative the cruise company calls Agent Support Action Program, or ASAP.
RCCL’s three North American brands said they were making the moves to help travel agents during difficult economic times.
"This economic environment is unprecedented, and our travel agent partners need our unprecedented support,” Vicki Freed, senior vice president of sales for Royal Caribbean International, said in a statement. “Like everyone, they are feeling the pain, and we need to help them through this.”
This is true. But RCCL is not a charity, of course, and while it no doubt wants to support the travel agent community, it also needs to support the travel agent community. RCCL’s move is smart business: It recognizes that travel agents and cruise lines are mutually dependent; what benefits one party benefits the other.
RCCL, like all cruise companies, can’t help but recognize the difficult position travel agents are in right now due to plummeting cruise prices and consumer skittishness. But while the company might position its program as an SOS for the travel agent community, it is also looking for a lifeline of its own.
Cruise lines need to keep their ships as full as possible during what could be the direst economic conditions in 70 years. This initiative is clearly designed to steer business toward Azamara, Celebrity and Royal Caribbean.
It is Economics 101: Adam Smith’s “Invisible Hand.” In Smith’s seminal 18th century essay from the “Wealth of Nations,” he wrote of a business owner who, by strictly attending to his own gain, is led by “an invisible hand” to promote an end beneficial to all.
The same goes for Silversea, which recently upped its commission to 25%. In a letter to agents, the line wrote, “Today's trying economy has touched all of us, and, as Silversea executives, we knew we needed to find a way to help our valued agents.”
In the cruise-selling business, unlike many others, cruise lines depend on the vitality of not just consumers but the distribution vector that brings in the bulk of its customers: the travel agent.