Wisconsin resident Jerry Wilkinson just wanted to find the perfect Mediterranean cruise for his group of 73 friends. He found the ideal 14-night European itinerary on Celebrity Cruises' Galaxy through a home-based agent who worked with a booking agency called Joystar. Wilkinson's group needed 35 staterooms and the agent quoted him an amazing rate of only $738.45 per person.
"We all thought it was a great deal," says Wilkinson.
The group paid their deposits in May and thought everything was smooth sailing until early August. That's when the group learned their travel agent had abruptly quit and their booking had been sent on to Joystar. Ordinarily, such a transfer wouldn't be an issue, but Wikinson's group got a nasty surprise: a much bigger bill. It seems that when Joystar reviewed the booking, its agents found a fare discrepancy. A new bill was issued, charging each passenger $1,399 — nearly double the initial price. Even worse, the new bill came less than a month before the final cruise payment was due, meaning the group had to act fast.
What happened?
Joystar told Wilkinson that Celebrity would not honor the agent's price because it was substantially lower than the published fare. Indeed, it appears the agent had engaged in "rebating," the practice of giving up some portion of an agent's commission in order to get the cost of a cruise down for a client. An agent might rebate his commission if the resulting price will land a client, especially on a high-volume deal, or if he thinks it will encourage future business. But this practice is frowned upon by most cruise companies, who publish a single base price for each stateroom category, and some cruise lines ban it outright. Cruise lines have cracked down on rebating agencies in response to complaints from traditional travel agents, who claim that discounts make it hard for them to compete.
Did Wilkinson's original agent rebate some of her commission to close the deal? We may never know. The agent has refused to comment, and no one can figure out how she came up with the $738.45 quote. Even a very sizeable rebate would not bring the $1,399 fare down that much. Travel agent commissions generally range between 10 and 18 percent, depending on the agent's booking volume.
Skeptical about the new bill from Joystar, Wilkinson asked Celebrity to send the invoice to him. Celebrity refused, citing a company policy that forbids sending invoices directly to customers who have booked through a travel agent (as 90 percent of cruise passengers do). Instead, Celebrity sent the invoice to Joystar, which conveyed the cost breakdown to Wilkinson. The breakdown did quote a rate of $1,399 per person, but Wilkinson was not appeased.
"Sending the travel agent an invoice, even if it is a PDF file, still allows it to be altered," Wilkinson asserts. "Even today, I can call 10 travel agents for a quote on this cruise and I'll get about three different quotes regarding the price. If you can't see the invoice, how do you ever know?"
Wilkinson wanted to sue the original travel agent, but he felt it was a lost cause because the agent did not have the resources for compensation. Instead, he turned to Joystar and Celebrity, asking that they reinstate the original fare. Only when Wilkinson threatened to cancel the entire group booking did the two companies try to work with him.
Joystar's agents contacted Wilkinson in late August saying they had "re-evaluated" the per person cost of the cruise. Here's the arithmetic: Celebrity's published rate for the group was $99,285.04, but the rate quoted by the original agent was $56,164.40 — a difference of $43,120.64. Joystar offered to give back its entire commission of $21,581.80, but said the group would be responsible for the remaining balance of $21,538.84, which amounted to $308 per person.
Wilkinson was still angry.
"Celebrity can say all they want about not allowing travel agents to discount the price, but in fixing this problem Celebrity is allowing Joystar, just this one time to discount! It makes no sense," he says.
But Wilkinson was stuck. Final payment was due. After a lot of checking around with other agencies, Wilkinson realized this was the best price he could get. So the group kept the booking.
Celebrity and Joystar speak
When I contacted Celebrity and Joystar, both said they had done the best they could under the circumstances.
"Apparently, [Joystar's] outside agent misquoted the price — lower than what was quoted to her from Celebrity Cruises," says Celebrity spokesman Raul Duany. "It is important to note that all rates published by Celebrity Cruises are the same whether a guest books their cruise through their trusted travel agent or directly with our company. There are no additional rebates or discounts to travel agents booking on behalf of their clients."
The Joystar response came from Zoraida Suastegui, general manager of Travelstar (Joystar's parent company), who stressed that Joystar's agents operate as independent agents and are not employees of Joystar.
"We created a special fare for the passengers in light of the situation," Suastegui says. "In this case, as a gesture of good will, the companies collaborated to assist the passengers by lowering the rate. I understand [Wilkinson's] frustration, but we've done everything possible to assist them in light of the situation."
Suastegui went on to say that it is unrealistic for a cruise customer to think he can get a 14-night European cruise for just $738.45 per person, especially when it is clear that other passengers are generally paying more than twice that. "The passengers should take some responsibility in knowing that something didn't make sense from the beginning," she said.
Fallout: Royal Caribbean torpedoes Joystar
Six weeks after I spoke with Celebrity and Joystar, Royal Caribbean International, Celebrity's parent company, sent a letter to travel agents announcing that its three brands — Royal Caribbean Cruises, Celebrity Cruises and Azamara Cruises — had terminated their business relationships with certain travel booking companies that they considered to be card mills. Royal Caribbean deems a company to be a card mill when it sells travel agency benefits to members of the public for a fee, assuring buyers that they can present the issuer's card to travel suppliers and receive discounts ordinarily reserved for travel agents. Royal Caribbean never named the companies in question; however, Joystar publicly stated that they had been terminated by Royal Caribbean and proclaimed it was not a card mill.
Joystar is fighting back, claiming it was targeted unfairly.
"We obviously are not and have never been a card mill," says William M. Alverson, chairman and CEO of Travelstar. He's taking the flight public on a Web site called Royal Mistake.com.
Jerry Wilkinson says he has learned a lot. He and his group had an "amazing" time on board the Galaxy in November and plans to book another group cruise in the future, albeit with a lot more wisdom next time around. He says he's still pursuing legal action to get his group's money refunded.
"Something needs to be done to prevent this from happening to me or anyone else in the future," he says.
It's a cautionary tale
Discounting the cost of a cruise vacation is not illegal, but it is very controversial. Cruise lines have a lot at stake and consider agencies that discount heavily to be a danger to the integrity of their product.
How can consumers protect themselves from problems like the ones Jerry Wilkinson encountered? Here are some simple guidelines:
Choose a travel agent for all the right reasons
Don't just pick the agent with the lowest price, look for an agent who adds value and offers guidance.
If you want a deal, look for an agent holding block space
While cruise lines discourage rebating, they are willing to sell discounted space to agents who reserve a large number of cabins, called "block space." Block space is sold at a group rate that is customarily 20 to 30 percent lower than individual rates.
Be wary of travel agents who push one cruise line over another
Such agents may be trying to increase their bookings with a particular cruise line in order to score a higher commission rate. Look for an agent who books with a variety of cruise lines and can steer you in the direction that is best for your needs, not the agent's.
Find a local agent who comes with recommendations
Ask for recommendations from family, friends and colleagues. A local agent that you get to know is more likely to take good care of you than someone you find on the Internet or through a toll-free number.
Use an agency that is bonded
Thousands of people have given their hard-earned money to agents who subsequently went bankrupt or left town without delivering the trip. Be certain your agency is bonded, and that all deposits can be recovered if the agency goes out of business before you set sail.
Check references and affiliations
The American Society of Travel Agents (ASTA) is a highly respected professional organization for travel agents. Agencies under its umbrella abide by a code of ethics that requires each member to deal fairly with clients. Not every good travel agent belongs to ASTA, of course, but it pays to remember that in this day and age, anyone with a computer can claim to be a travel agent.
All it takes is a little homework and your voyage will be worry-free and smooth sailing.
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