Voice of reason or ?

Carnival Corp. announced they don't have plans to reinstate fuel supplement surcharges. Yay. Hooray for some common sense by at least one executive, Micky Arison, at Carnival Corporation. The cruise business is insane just now. We're selling BALCONY staterooms for the same price as INSIDE cabins less than five years ago. We are selling SUITES for what an inside cabin sold for fifteen years ago. We are processing 2 1/2 times as many transactions as we did fifteen years ago and earning the same amount. All that while labor costs and rent have doubled. We have seen some rough spots in this business before but nothing has threatened viability of the travel agent retail distribution system as much as this downturn.

In January I predicted that 1/3 of all agencies would be gone in two years. I now believe I was wrong. It will more than likely be half of them and in eighteen months or less. The worst part of this is that it is genuinely bad for the cruise lines for this to happen. One of the first things I learned in business school is to NEVER allow your product distribution be controlled by a handful of retailers or distributors. When that happens the tail starts wagging the dog and the supplier and the consumer both lose when a small handful of mega agencies control vacation travel sales.