Royal Caribbean Praises Travel Agencies in Financial Report

Travel agents were front-and-center during Royal Caribbean Cruises Ltd.’s fourth-quarter financial report on Thursday. Several times during the hour-long call with analysts, RCCL executives talked about the importance of retailers to the company's business model.

“In difficult times, agents get the word out about what a great value cruising offers in a way that cruise lines just can’t do on their own,” CEO Richard Fain said. “We work hard to help them and keep justifying their trust in us.”

Cruise line presidents Adam Goldstein (Royal Caribbean International) and Dan Hanrahan (Celebrity) brought up the distribution system in their comments. Hanrahan talked about ASAP (Agent Support Action Program), which gives agents extra marketing assistance and a 1-point increase in commissions. RCCL launched the program to support agents during the economic recession.

Trade relations are rarely discussed during earnings calls, and when they are, analysts ask about commissions in relation to costs. This call was no exception.

Near the end of the call, Goldman Sachs analyst Steve Kent asked for RCCL’s percentage of direct, Internet bookings. “I guess I’d ask once again why that isn’t more of a focus given the high returns of that strategy,” he said.