Viking turns away Costco, agents grateful

Viking Cruises has stopped doing business with shopping club
Costco because it doesn’t comply with Viking’s policy against rebating
commissions.

In June, Viking adopted tighter restrictions on retailers.
The policy says that “cash marketing incentives may not be offered or
provided by or on behalf of travel agents to Viking guests/passengers as
promotions or incentives to sell Viking products.”

The policy further defines cash incentives to include gift
cards. Costco commonly gives cruise buyers gift cards with onboard credits that
are redeemable, if not used in full, for cash back to the customer’s credit
account. The gift card amounts are based on a percentage of the cruise fare.

Robert Huffman Jr., director of trade sales for Viking, said
that Viking stopped offering its river and ocean cruises through a wholesale
club on Sept. 1. “We walked away from millions of dollars of business,”
he told about 800 travel agents at the CruiseOne/Dream Vacations and Cruises
Inc. annual conference aboard the Harmony of the Seas. “We need your
support to help make that up.”

In an interview, Huffman confirmed that he was referring to
Costco.

Costco has become a force in travel retail, focusing on
cruises, rental cars and vacation packages. A spokesperson couldn’t be
immediately reached for comment on Viking’s decision.

Agents at the CruiseOne conference applauded Huffman’s announcement.
Amy Madson, a top-selling Viking producer in Orlando for Cruises Inc., said the
club’s cards are tough to compete against.

Madson said her clients would tell her that they would
stick with her, but that their friends were buying cruises through Costco.

“You felt like you had to give them something, but we
couldn’t match what Costco was doing. Gift cards were often in the $300 range,
Madison said.

Most other cruise lines continue to work with Costco. Adolfo
Perez, Carnival’s vice president of trade sales and marketing, said Carnival
stopped selling through Costco in 2012 but resumed last year. “We’re new
to the game. Everyone else has been doing business with them for years,”
Perez said.

Carnival’s policy, Perez said, is that any retailer can give
back up to 10% of the cruise fare in “value adds.”  He said that includes gift cards.