Midway through the holiday season, Norwegian Cruise Line decided to get every travel advisor's attention by offering a gift: The day before Christmas Eve, NCL announced that it was doing away with the noncommissionable portion of fares, or NCFs.
And it was doing so permanently and with no strings attached.
The change was effective Dec. 26 for all cruises departing on or after May 1.
John Chernesky
NCL's decision, which agency executives called "bold" and "a significant financial commitment," was in response to clear feedback from travel advisors about its commission rates, said John Chernesky, the line's senior vice president for sales in North America. Those rates were holding advisors back from selling its product, he said, so the cruise line decided to make a sweeping change to its commission structure to directly address the problem.
Positive responses flooded in after the announcement, he said, which was intentionally timed to go out Christmas week.
"We wanted to get in people's minds," Chernesky said. "We wanted to make a big splash."
Paying commission on NCFs, which include items like port charges and government fees and taxes, has occasionally been used as a marketing tool or to try to shift share within the trade. Some lines, like Viking, Explora Journeys and Virgin Voyages, have done away with NCFs.
NCL sister brand Oceania Cruises eliminated NCFs for some of its sellers on a pilot basis in early 2023, and that program has continued.
"We consistently engage with our top-producing partners to review and strengthen those programs and others to maximize the benefits to our partnerships and business," Oceania said in a statement.
NCL experimented with eliminating NCFs in 2023; in that scenario the program didn't apply to all bookings and advisors had to submit a marketing plan to be able to participate.
It ended the experiment in early 2024, feeling it was too costly to justify continuing, Chernesky said. Then, in the past year, it began hearing from advisors that unfavorable commission rates were holding them back, he said.
It was clear there was a problem that needed to be solved, so the line returned to the idea of eliminating NCFs and thereby increasing advisor pay. They thought about how it could be better executed than the last time around.
The answer? Simplifying it.
All of the previous nuances -- certain bookings being excluded from qualifying, advisors needing to opt in to the program -- had confused trade partners, Chernesky said. That went contrary to one of his overarching goals at NCL, which is to make NCL the easiest cruise line for travel advisors to work with.
"Our solution was not to trim around the edges and just adjust our commission rate," he said. "It was to go very big, and that is to eliminate NCFs."
Theresa Scalzitti
Cruise Planners COO Theresa Scalzitti called it "a bold, decisive step in support of the travel advisor community."
It's a change that makes advisors feel heard, said Caroline Hay, vice president of cruise at host agency Trevello World Holdings. Advisors at her agency had noticed noncommissionable fares increasing at NCL, which had become challenging for them because margins were being eroded, she said.
"Removing NCFs is a significant financial commitment, and the focus on permanency is what really stands out," Hay said. "What this decision does is give advisors more earning potential, while continuing to sell a product they so confidently believe in."
NCL didn't set any conditions on its new NCF policy, but Signature Travel Network CEO Alex Sharpe said that the trade community must now embrace NCL wholeheartedly, proving that the decision is one of true value.
"We need to get behind it and send a strong message," he said. Advisors should not take the change for granted, Sharpe said, but should treat it as something they have to continue to earn.
"As an industry, we get excited about things, but then if we don't deliver, the cruise lines or publicly traded companies, they're no dummies," he said. "They're going to figure out, does this help them grow their share of the pie? And if it doesn't, then they're going to reconsider it."
Sharpe also said he didn't think a change will sweep the whole cruise industry. It's a strategy that is meant to set NCL apart in advisors' minds.
"They're the underdog," he said of NCL, which has a smaller fleet than both Carnival Cruise Line and Royal Caribbean International. "Sometimes you have to be more bold to get your … unfair share of [advisors'] attention."
Royal Caribbean International did not respond to a request for comment; Carnival Cruise Line declined to comment.
Chernesky, too, called the elimination of NCFs a "unique differentiator."
So what happens now? He isn't making any predictions about just how much or how quickly the cruise line will see sales growth, but he's expecting it to "be big in '26."
He'll be hosting a webinar in the new year about the change, and advisors should expect to see a line item on booking invoices that shows zero NCFs.
They shouldn't take that as an indication that the change is temporary -- it's not, he said -- but rather as visual proof that it applies to every booking.
"We are not planning in any way, shape or form to use this as a test," Chernesky said. "This is not going to be, 'Well, in a few months, if it's not taking hold ….' None of that. This is our new way of doing business, and it's our way of rewarding the trade."