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Del Rio calls Norwegian Cruise Line pay for NCFs an 'ROI-type of move'

Norwegian Cruise Line's break-out move to pay travel advisors for previously non-commissionable fares is expected to generate higher revenues, Frank Del Rio said Tuesday.

Anne Kalosh, Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

November 8, 2022

2 Min Read
CRUISE Frank Del Rio
'We have to find a way to draw [travel advisors] back to the cruise industry and away from land vacations, our No. 1 competitor,' Frank Del Rio told financial analystsPHOTO: ANNE KALOSH

NCL's new policy has been enthusiastically welcomed by the trade.

Why do it, and why now?

During Norwegian Cruise Line Holdings' third quarter earnings call, an analyst asked about the timing of that decision and said wouldn't it just result in a net-zero if competitors follow NCL's lead?

Del Rio explained the travel agency community isn't fully back to pre-pandemic levels. While cruise lines were shut down for 500 days, advisors sold more resort vacations to make a living.

'We have to find a way to draw them back to the cruise industry and away from land vacations, our No. 1 competitor, as opposed to other cruise brands, and we think this is a way to do it,' Del Rio said.

Test showed subsquent increase in sales

An experiment over the summer using a 'relatively good-sized sample' found that travel advisors paid commissions on NCFs 'increased their business with us significantly, such that the revenue they generated over a long period of time more than offset the increase in commission expense.

'So we think this is an ROI-type of move,' Del Rio said, referring to return on investment.

Del Rio hopes other cruise operators will follow

The NCLH CEO added he hopes competitors do match NCL.

'It would be great overall for the travel agency community, which we all rely on. And at the end of the day, it's not so much about commission savings, it's about generating additional revenue and filling the vessels that are coming on line for us and for the rest of the industry,' Del Rio elaborated.

'No company has ever made their mark by saving and saving and saving. You make your mark in the topline. That's what this move is meant to do: to generate more revenue.'

About the Author

Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

Anne Kalosh covers global stories, reporting both breaking and in-depth news on cruising's significant people, places, ships and trends. A sought-after expert on cruising, she has moderated conferences around the world, including the high-profile State of the Industry panel at Seatrade Cruise Global. She created and led the acclaimed itinerary-planning case study for Seatrade's cruise master classes held at Cambridge and Oxford universities. She has been the cruise columnist for AFAR.com, and her freelance stories have appeared in a wide range of publications, from The New York Times to The Miami Herald.

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