Monday, 16 December 2013

Azamara-Virtuoso model mulled

Azamara-Virtuoso model mulled

By Tom Stieghorst
Azamara_JourneyThe new commission model unveiled recently by Virtuoso and Azamara Club Cruises is getting mixed reviews from agents, with some praising its emphasis on paying for quality but others fearing it could shift customers to a cruise for which they’re not suited.

Hailed as a breakthrough, the deal creates an override for booking clients who choose upper-end accommodations, book early or sign up for back-to-back itineraries.

Under the plan, Virtuoso agents get not only a larger commission from a higher stateroom category but, in addition, an override for delivering an extra-value customer to Azamara.

“It’s a win for the client, it’s a win for Azamara and a win for the adviser,” said Bill Smith, vice president of cruise sales for Virtuoso.

But not everyone is so sure.

Eric Goldring, president of Goldring Travel of Colts Neck, N.J., said the deal gives agents an incentive to shift business from other luxury lines to Azamara for a short-term gain.

“If I was to say to my client, ‘I have a deal with Azamara’ — or, worse, don’t say it — and say Azamara’s a great product and you should take it, I get that client one time,” Goldring said.

“It sounds good, but it really isn’t good,” he said. “It will fill some spots for Azamara, but I guarantee you the person that really likes Oceania isn’t going to like Azamara. It’s a different product.”

Goldring also said he thinks that the deal gives Azamara the halo of the Virtuoso brand.

“Azamara is trying to get upscale through co-branding,” he said. “That doesn’t mean that Virtuoso is doing anything at all other than giving its name.”

Goldring is a member of the Ensemble Travel Group, a consortium that competes with Virtuoso.
BillSmithSmith said he didn’t think Virtuoso agents would risk displeasing long-time customers for a bump in commission. Rather, it gives an agent with a customer who is open to a variety of brands a reason to talk up Azamara.

“No travel agent is going to put a client on Azamara that would be better suited on another brand,” Smith said.

The deal generally lets agents earn 3% overrides, according to Virtuoso agents, although Smith said it could be more than that in some cases. He said he couldn’t discuss the exact numbers because Azamara is part of Royal Caribbean Cruises Ltd., which is a publicly traded company.

Several Virtuoso agents said they thought the deal made sense.

Nancy Cutte of Court Travel in Charlotte said she would prefer earning the same commission for booking three high-end clients that she does placing seven average-yielding clients.

“For me, that’s the way to go,” she said. “We’d all like to work less for more.”

Smith said he did not believe Virtuoso agents would actually work less but that their compensation would more fairly reflect the work they already put in because of the high-touch nature of their clientele.

The deal grew, he said, out of a recognition that Virtuoso agents were generally not going to earn overrides based on volume, yet that they specialized in something of value to Azamara.

“We just don’t do volume, but I can get you a few clients that reward you much more than if I give you a whole bunch of lower-yielding clients,” Smith said. “No two customers are the same.”

For Grace DeVita, marketing manager at Post Haste Travel in Hollywood, Fla., the deal could mean Virtuoso is in on the ground floor of a new trend.

“If this works for Azamara by paying Virtuoso agents the higher commissions for the higher-value clients, a lot of the other cruise lines may follow suit,” she said.

Smith said only time would tell.

“I think there’s a lot of interest out there,” he said. “It’s a good model. It may not be for everybody. The key question is: How can we be more profitable and not just raise the cost of doing business?”

One potential pitfall lies in the fact that Azamara is now compensating some agents more than others based on their affiliation — or lack of an affiliation — with Virtuoso.

Bonnie Buchanan, a CruiseOne agent in Tucson, Ariz., said she puts a lot of clients on Azamara.

“I’m an advocate of Azamara,” she said. “I’d like to say I think it would be fair if it was available to everyone.”

Buchanan said she sees the logic in paying extra for quality, not just quantity.

“What it could do is take the passengers who are suite passengers on other lines and maybe convert them,” she said.