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.
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.
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?