American Queen Voyages, one of the largest domestic cruise ship operators in the US has been dropped by nearly every travel agency due to its back office.
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Dropped By *Every Agency
Behind the scenes, even independent travel agencies like mine belongs to a buyer’s group (consortium) to secure better rates and terms with suppliers. Over 77% of travel agencies belong to one of the 5-6 major consortia which have all dropped American Queen Voyages from their preferred vendor lists. The remaining 23% of agencies in theory represent a large contingent, however, the majority of this remaining minority have limited sales and may also have discontinued sales of AQV.
The craziest part is that the boycott has nothing to do with their onboard product or customer experience. In fact, even despite the recent departures, most report good client experiences onboard. For what it’s worth, American Queen brought a style that was adored by travelers for its distinctly American approach which contrasts from river cruise giants like Viking, Azamara, and AmaWaterways and their European roots.
AQV has been shunned by nearly all consortia and thus nearly every travel agency in the United States for one clear reason: Its back office is terrible. American Queen Voyages is not paying commissions on such a massive scale that nearly every travel agency has stopped selling their product.
Request for Comment
I reached out to the cruise line hoping to get its side of the story. Here are the questions submitted a few weeks ago:
- Some consortia, large host agencies, and industry groups have either stopped selling American Queen Voyages or have not renewed a partnership. Can you please detail the issues that have been relayed to AQV, and AQV’s response to those issues specifically with commission delays, customer service issues, and response times?
- How much of your passenger base is sold through those channels and how will that impact AQV’s business?
- What steps, if any, is AQV taking to resolve their concerns?
- Some have pointed to a management shift following a merger with Hornblower, was there a material shift in departmental management following the merger? If so, do those replacements remain in their roles now following the sharp industry response?
- Is AQV considering a change to their approach with consumers like going direct?
- Nearly every source has indicated that the onboard experience remains excellent at AQV, what do you credit for this continuity?
- Is there a message management has for the industry and consumers?
I received the following response:
“We acknowledge and apologize for the issues. American Queen Voyages deeply values all of our travel agent partners and are taking all matters very seriously. We are working to address the situation as quickly as possible.”
Unfortunately, this is the same response it gave to several other requests for comment as consortia announced their decisions against the company.
Don’t Mess With Compensation
I have encountered this far more times (though mostly outside the industry than inside) in which a supplier’s accounting is so problematic that it costs sales.
There are a lot of reasons to lose sales for a travel company and they mostly relate to the Four “P”s:
- Placement – either the market isn’t ready for or doesn’t like your product
- Boxed Macaroni and Cheese isn’t sold in British supermarkets because no one would buy it, the “cheese” is the wrong color and it’s not cheese.
- Product – Not every product is great for every market, and for a long time, river cruises were not beloved in the US despite large customer bases traveling to Europe for the product
- Price – Not every client can afford your product, or you may be too high for the market.
- Promotion – Plenty of great products have falled by the wayside due to lack of consumer awareness, Silver Airways was a good example of this. I still meet people that fly business class back and forth from the US to Europe and don’t know about La Compagnie.
None of those are because your accountants can’t get their act together. And in fairness to those accountants, it may not be up to them, but someone is making or made an active decision to restrict or withhold payments due and withdrawing responsiveness to related queries.
It’s an active choice, not negligence nor ignorance. Reports of trouble with commission payments started more than six months ago. Big ships turn slowly, but perhaps none slower than travel consortia. For all of them to pull their relationship – in theory, worth a great sum of money – over the same issues, that’s cataclysmic.
Conclusion
All of the consortia have indicated that should AQV make a change in their business model, integration back into the system is possible. However, the longer the cruise line goes without meaningful partnerships, the less likely it is that the service will remain operational at all. There are a lot of reasons businesses lose clients but a lack of accounting should not be one of them. Clearly new management hasn’t made changes fast enough or in significant roles to materially improve the issues. It’s a shame because customers seemed to love the product on board. How long they last without dramatic changes to its processes will be for others to speculate but it’s possible the company won’t survive at all.
What do you think?
This would have been an article, but you give no information at all as to what issues the “back office” and “accountants” are actually causing. What kind of issues are they causing agencies? How much money is being lost? How long has this issue been going on? None of that is reported here. Instead you give a marketing lesson and talk about a brand I’ve never heard of.
This sentence just above the conclusion answers two of your three questions: “Reports of trouble with commission payments started more than six months ago. ”
I am sure someone who runs a travel agency is not going to, or perhaps is not allowed to, report the dollar amounts of their commissions, so I doubt you will get the answer to your third question.
@Jason – Sellers are not getting paid their commissions. I had taken for granted that back office was mostly concerning accounting. In retrospect, when reading it back maybe I needed to say “American Queen Voyages is not paying commissions on such a massive scale that nearly every travel agency has stopped selling their product.”
As to how much money is being lost, neither the consortia (representing hundreds of thousands if not millions of agencies) have not disclosed figures nor has American Queen. I asked them, as you can see in my line of questioning, and they didn’t answer. That doesn’t mean there’s not a problem with reporting. I couldn’t say how much, but for all of the agencies to drop them, it’s likely in the tens of millions if not more owed to agency owners large and small. Also, I did state the timeline in the post, I’m not sure how closely you read it before commenting, “Reports of trouble with commission payments started more than six months ago.”
Oh so that’s why there’s an article: you’re not getting your little % from re-selling something people should buy themselves online.
SNOOZE. Get a real job.
We don’t sell them. They don’t owe us a dime. However, if Rosewood stopped paying commissions and every travel agency dropped them, is that not news regardless of whether my agency sells them?
I fully agree with Jason. WHAT IS THE ISSUE?
Check your facts- packaged mac and cheese is very much available in British supermarkets! https://groceries.morrisons.com/products/morrisons-macaroni-cheese-110740011
@PM – Since we are checking facts: that’s, a can, not a box.
The point is that people do buy it, despite the lack of actual cheese!
This was more vague than Trump’s plans on making America great again. Great job, Kyle!
More articles like this and I’ll be completely skipping Sundays here. Oh well, at least I gave it a shot.
Sounds like hustlers (your consortium) being hustled by other hustlers.
F#$king the public over under the guise of “helping them” always comes with a cost. Simply the risks of the life you have chosen.
This so-called article has no context, no information, but plenty of random commentary nobody cares about.
Nobody cared about this prior to your article, and now even fewer care. Looks like a dumpy boat too.
If Hornblower is the new owner, I see their business plan is operating partial day harbor and party cruises which does not require an agent. Multi day to monthly cruises catering to the less traveled client paying in the $1000s. They won’t make it a year without agents and seem to have burned their bridges already. Persoally I do not use an agent unless I am going to an unusual or difficult to reach site, and the Missippi River is not one of those.