ONBOARD OCEANIA'S VISTA -- Oceania Cruises is exploring whether and how to do away with noncommissionable fees (NCFs) like sister line Norwegian Cruise Line did this year, company executives said Sunday.
Harry Sommer, the former Norwegian Cruise Line CEO who takes the helm as CEO of parent company Norwegian Cruise Line Holdings on July 1, expressed confidence Oceania will ultimately adopt a strategy to do away with NCFs. The line is currently running a trial program among 50 of its highest-producing agencies from April through September.
"Assuming it will work out, which I'm confident it will, we'll find ways to expand it further to all of our partners across the world," Sommer said during a presentation to media during the christening sailing of the Oceania Vista.
In a play for guests who book further out, NCL did away with noncommissionable fees for qualifying advisors booking voyages at least 120 days in advance. To qualify, advisors were required to submit a marketing plan to NCL, which included marketing activities, budgets and a timeline.
NCL executives said guests who book further out are more likely to book again with the brand, rebook with that travel advisor and offer higher satisfaction scores from the sailing.
Oceania's motivation is different, said Oceania president Frank A. Del Rio. He said Oceania is the only brand in the NCLH family with competitors that have never had NCFs, such as Viking and the new Explora Journeys.
"We felt that it was starting to become just too much of an impediment, and an unnecessary one to be quite honest with you. When you do the math, it just didn't make sense to have something in the way," he told Travel Weekly. "It's time to put the whole NCF thing behind us."
Noncommissionable fees are the portion of the cruise fare on which advisors normally don't make a commission, including port fees and other pass-through charges. Cruise lines have historically declined to itemize those amounts, although the practice of not paying commissions on those amounts has at times irked the trade.
Oceania began testing an NCF program among core top-producing travel agencies globally, although the majority are in the United States, said Nikki Upshaw, Oceania's senior vice president of sales, whom Del Rio credited as a longtime advocate for doing away with NCFs. The trial will run through September, at which time Upshaw expects the line will decide whether to keep the program for its top-producing agencies or expand it potentially to the entire trade.
Del Rio said the line has not set benchmarks to judge whether the program is successful, but instead described the pilot as "a true test" to see to what extent agencies take advantage of the program. It has not been decided if the plan would require agents to achieve certain sales goals or require agents to submit a marketing plan to participate, said Del Rio.