Question on OBC & travel agencies

[MissMeidak]

Anyone booked through Costco who isn't from the US? I'm a Costco member but from the UK

 

[tinkerone]

Anyone booked through Costco who isn't from the US? I'm a Costco member but from the UK

Canadian costcos do not have a travel agency and we are not allowed to book through the u.s. Costco. leaves us out or I would.

 

[MunFam]

That can't be a direct dollar-for-dollar reduction in commission, can it? At DU, they give $250 OBC for a $5,000 cruise. Now, I am sure DU drives enough business to receive top-tier comp from DCL, but just to keep it simple, let's go with the 10% agency commission, with 60% of that going to the TA.

At $5,000, the agency would get $500 in commission. $300 (60%) goes to the agent and $200 (40%) goes to the agency. If the $250 OBC comes out of the TA's commission, that means they only make $50 on the $5,000 cruise? 1%? Who in their right mind would do that for $50?

If the OBC comes out of the agency's cut, that would mean they are net negative for (-$50), which makes even less sense.

Even if DU gets a heightened 15% payout ($750 split $450/$300), that would mean that after the $250 OBC comes out, the TA gets $200 ($450-$250 OBC) for booking a $5,000 cruise, or the agency only makes $50 ($300-$250 OBC). Neither option seems to deliver an acceptable ROI.

I specifically do corporate travel, but had a friend ask me to look in to a DCL reservation for her. I did and when I saw how incredibly small my commission was going to be and how crummy the OBC was for her, I pointed her to Dreams Unlimited. Our agency does not do anything with Disney, so we are in their lowest tier. It was definitely not worth the amount of work for the commission. She used Dreams Unlimited and was very satisfied with their service.

 

[squirk]

when I saw how incredibly small my commission was going to be and how crummy the OBC was for her, I pointed her to Dreams Unlimited.

I am confused. Information shared earlier in the thread made it sound like OBC was totally within the TA's discretion and came directly out of their commission, but your response sounds like the commission and the OBC were coming from two separate buckets?

 

[terramei]

I am confused. Information shared earlier in the thread made it sound like OBC was totally within the TA's discretion and came directly out of their commission, but your response sounds like the commission and the OBC were coming from two separate buckets?

The OBC comes out of the agents commission. That commission is a percentage of the fare sold. Agencies that book a larger volume with Disney get a higher %. The pp works with a company that doesn't book much Disney and is in the bottom commission tier. Their commission would be significantly smaller than other agencies that sell a lot of disney which would translate to a smaller OBC.

 

[squirk]

The OBC comes out of the agents commission. That commission is a percentage of the fare sold. Agencies that book a larger volume with Disney get a higher %. The pp works with a company that doesn't book much Disney and is in the bottom commission tier. Their commission would be significantly smaller than other agencies that sell a lot of disney which would translate to a smaller OBC.

Right, I get that. But again, isn't the OBC discretionary on the TA's part? When the PP said "when I saw how crummy the OBC was" for her friend, it suggests that she (the pp) wasn't the one deciding the OBC amount.

 

[lanejudy]

isn't the OBC discretionary on the TA's part? When the PP said "when I saw how crummy the OBC was" for her friend, it suggests that she (the pp) wasn't the one deciding the OBC amount.

Keep in mind that "TA" may refer to a single agent, working in a sole-proprietorship (or other individually owned/managed business enterprise). Such a TA makes all business decisions as the owner/operator of the business.

"TA" may also be used to refer to an agency that hires several agents. I suspect most agents who work for a larger agency may not have any choice about offering perks to their clients; the owner or business manager makes such decisions and requires all agents in their employ to follow policy. The actual commission is likely paid to the agency who then distributes it accordingly based on their compensation policy.

Most travel agents/travel agencies in the U.S. do not charge their customers directly but are paid through commissions. No agent or agency is going to give away all revenue received as OBC. The business would fold. Whether to offer OBC and how much to offer is a business decision and considered part of the operating expense.

 

[squirk]

I suspect most agents who work for a larger agency may not have any choice about offering perks to their clients; the owner or business manager makes such decisions and requires all agents in their employ to follow policy.

Yes, that is what I am getting at. Are individual agents forced to offer OBC (thus cutting their own commission) by some travel agencies that sell cruises?

If true, I could see that for someplace like DU that (I assume) gets the highest tier of payout from DCL. Yes, the agent has to give up some comp involuntarily, but if the OBC is skimmed off a higher "base payout", maybe it all evens out to still be competitive in the travel industry.

But for someone like @MunFam, whose company gets the lowest tier of payout - is she still required to eat into her own commission and offer OBC?

 

[MunFam]

But for someone like @MunFam, whose company gets the lowest tier of payout - is she still required to eat into her own commission and offer OBC?

At my company, no, I am not required to cut in to my commission to be competitive. Perhaps other companies would. As I mentioned before, we exclusively do very large corporate work. I mostly do large air/flight purchases, so I have my IATA card, and qualify to sell DCL and other individual vacations, BUT we do not sell that type of product so we are in the lowest tier, always. If I wanted to be competitive with other agencies who sell individual travel, I would have to cut in to my commission to offer a competitive OBC or other perk. I do not want to do that...so I always refer individual travel to other agencies.

 

[OKW Lover]

When DU (or any other agency) advertises "$XXX of onboard credit when you book with us", is that OBC given only when you initially make the reservation through the travel agency? Or will agencies give you the advertised OBC if you re-book with DCL (i.e., while on-board for the discount and the DCL-granted OBC) but put your TA on the reservation when booking.

In other words, can you double your OBC by rebooking onboard (for the DCL OBC) and then "moving" the reservation to a travel agency (to get the agency's OBC as well)?

The answer is "it depends". When talking about DU specifically, you can get both the DCL OBC and the Dreams OBC. No need to "move" the OBB reservation to them. Just go ahead and specify them as your TA when you rebook on board.

When talking about other TA's though, you'll need to ask them specifically what their policy is. This is an agency by agency decision so you'll find different answers.

 

[WebmasterJohn]

It is certainly understandable that Disney Cruise Line's recent changes to their onboard booking policies has raised many questions. Let me see if I can assist with the questions specifically directed to rebooking with Dreams Unlimited Travel.

Within the past year or so DCL has made two significant changes to their onboard booking policies that specifically affect travel agencies and their clients:

1. In the past anyone booked directly with Disney Cruise Line previously (i.e. not already associated with a TA) could name a TA when rebooking a new cruise while onboard. This allowed DLC guests to get all the onboard booking perks from DCL in addition to all the perks offered by their chosen TA. That policy has changed and now if your current cruise is booked with DCL you cannot name a TA while onboard. If you still wanted to work with that TA once you returned home that reservation would have to be transferred to that TA. DCL does not like TAs to solicit transfers so I am reluctant to talk more about this here - just be aware that DCL has policies in place for transferred cruises (i.e. within 30 days, deposit must be paid, cannot be paid in full, etc). In addition Disney Cruise Line has capped the amount of commission a TA receives on a transferred booking so that could affect things like the onboard booking amount that a TA can offer. As always you should check with your TA to make sure you understand what their policies and procedures are and how they fit with DCL as well as how they might affect you.

2. As of October 22, 2015 Disney Cruise Line has made a policy change regarding the amount of commission a TA can receive from an onboard booking, that amount is now capped just like the amount for transferred reservations. As you might imagine this is upsetting to the TA community as we feel these are guests we worked hard to bring to DCL. In addition we work hard to provide support and information to our clients about the benefits of rebooking a new cruise while onboard the ship (believe it or not, not everyone reads these boards and are as well informed on DCL procedures as you all).

So here is how this affects our Dreams Unlimited Travel clients:

Dreams Unlimited Travel receives the highest commission rate possible from Disney Cruise Line. This is based on our sales of Disney Cruises and something we have earned since DCL first announced they would be going to a tiered commission structure for agents many, many years ago.

Dreams Unlimited Travel uses a significant portion of the commission we receive above the base amount offered by DCL as a Shipboard Credit to our clients. Because we are at the highest commission we feel comfortable giving a significant shipboard credit that still allows us to compensate our agents appropriately and pay our bills.

Due to the reduced commission received for onboard bookings Dreams Unlimited Travel is no longer able to offer the same shipboard credit for onboard bookings as we do for 'direct' bookings (i.e. not transfers and not made onboard the ship). After careful consideration we have decided to go to a system that offers one shipboard credit amount for bookings made directly through us and another shipboard credit amount for bookings made while onboard the ship. This new policy will go into affect for all onboard bookings made on or after 11/15/2015. We chose this date as it allows us time to make the necessary changes to our site and systems as well as communicate it to our clients sailing on or after 11/15/2015. You can see the details of our shipboard credit offer here on our site http://www.dreamsunlimitedtravel.com/cruise/specials.htm#sbc

It is unfortunate that we have to do this but we feel it is the best solution to make sure we are offering our clients the most SBC possible and still be able to compensate our agents and operate our business.

Dreams Unlimited Travel would never discourage any of our clients from rebooking a new Disney Cruise Line sailing while onboard, especially if the reduced deposit, discount and DCL shipboard credit is applicable. There are times when rebooking isn't a better deal than what a client already has so every reservation is reviewed to make sure all the numbers add up to what is in the best interest for our clients. It's our job to make sure all our clients get the best price possible and have the most magical Disney Cruise possible while still being able to compensate our agents, employees and maintain our business.

If you have any further questions please feel free to email me at John@DreamsUnlimitedTravel.com

 

[WebmasterJohn]

Ooops - sorry for the double post

 

[OKW Lover]

Thanks for the update(s) @WebmasterJohn

 

[isabellea]

Makes sense @Webmaster John.

Let say I book a place holder while onboard and I realize it would be better financially to book directly with DU instead, will I loose any money if I cancel this place holder?

 

[OKW Lover]

Let say I book a place holder while onboard and I realize it would be better financially to book directly with DU instead, will I loose any money if I cancel this place holder?

As long as you are outside the cancellation period (which varies according to cruise length or itinerary) there would be no penalty.

 

[WebmasterJohn]

Let say I book a place holder while onboard and I realize it would be better financially to book directly with DU instead, will I loose any money if I cancel this place holder?

As long as you are outside the cancellation period (which varies according to cruise length or itinerary) there would be no penalty.

This is correct.

Just keep in mind that cancelling your onboard booking would mean you would lose any and all incentives from Disney Cruise Line for rebooking while onboard (10% discount, DCL SBC, etc.) There are certain sail dates, and certain staterooms, that are blocked out from these discounts so that might be a case where rebooking directly with Dreams Unlimited Travel is in your best interest.

 

[emilyann415]

I'm not sure that's accurate; at least, it wasn't for me. One year, I was sailing on the Fantasy on a cruise booked with travel agent "A". When I was doing my OBB, I told the CM that I wanted to use TA "B" (who was also with a different agency to boot) instead. He seemed surprised I was switching TAs, but he did it with no fuss.

Maybe he wasn't supposed to, but did it anyway?

It's exactly what happened to us the first time I tried to use a TA while booking onboard. They wouldn't let me book onboard and assign a TA because I hadn't used them before. I did receive OBC but I believe it was half because I transferred after I booked onboard.