ARTA Challenges Non-Commissionable Fares

One cruise executive insists taxes and fees are stable, attributes reduced agent pay to discounted cruise prices

By: Theresa Norton Masek

A leading travel agent association is challenging cruise lines to detail what is included in the non-commissionable extra fees tacked onto the price of a cruise.

Nancy Linares, chairwoman of the Association of Retail Travel Agents and owner of CWT-Holidays 'N Travel in Austin, Texas, is sending letters to the chief executives of companies that belong to the Cruise Lines International Association.

"It seems as though the base cruise price, which we are paid off of, is getting lower and lower, while more is shifted into taxes and fees," Linares said. "It seems like they are obviously trying to pay us less money."

Linares is asking the cruise line executives to respond within 30 days.

"If cruise lines are truly charging our clients only those fees and taxes that consumers should be paying directly, then we will need to know that in writing," Linares wrote in an ARTA message. "If cruise lines are padding their non-commissionables, though, then we need to know that."

The extra charges commonly added onto cruise fares were formerly known as "port charges," but that term was dropped several years ago in a settlement with the Florida Attorney General's office.

As part of that settlement, the major cruise lines agreed to include non-commissionable fares, or NCFs, in the advertised prices of cruises to avoid surprising customers with unexpected charges.

The issue has recently resurfaced on another front. A Miami law firm is seeking class-action status for a suit charging that Royal Caribbean Cruises Ltd. collects more in government taxes and fees from passengers than it must pay.

RCCL said the lawsuit's claims are "dead wrong."

Terry Thornton, vice president of marketing planning for Carnival Cruise Lines, said his company basically has added fees in two components: non-commissionable fares and government taxes and fees.

The non-commissionable fare includes all costs incurred in ports that are not assessed on a per-passenger basis, such as dockage and wharfage.

This levy generally amounts to $89 for a three-day cruise to $139 for a seven-day voyage, Thornton said. Those charges aren't detailed because the cruise lines negotiate confidential agreements with ports, he said.

He said the taxes that passengers pay are U.S. departure taxes, user fees imposed by U.S. Customs and Immigration, and port fees assessed on a per-passenger basis in home ports and ports of call.

Carnival is not padding the NCFs, Thornton said.

"I know that perception’s out there," he said. "But the NCFs and taxes have remained pretty stable. The commissionable portion has gone down, but that's because the fares have gone down rather than the fees going up. ... Our cruise pricing has been very volatile, much more volatile than we’d like it to be," he said.