Cruise Ships Cutting Prices

[Ned]

There was a very interesting article in the Wall Street Journal yesterday, by Avery Johnson, talking about the almost 50% cut in growth of the North American passenger cruise market. For the last 20 years there has been an 8% growth rate in the number of North American cruises per year. This year, the growth rate is expected to be somewhat over 4%. This drop in growth has occured at a time where the cruise industry has continued to add stateroom capacity with great dispatch to record levels.

The problems of fire while at sea, piracy, the now well publicised missing persons from cruise ships at sea, hurricane fears, and the weak demand for Caribbean cruising are causing the cruise companies to offer some very deep discounts to fill staterooms.

Royal Caribbean is offering deals to the Bahamas, Mexico and Caribbean cruises which the 3rd and 4th cruisers sail for $99 each. Carnival is offering a 7 night eastern Caribbean cruise with prices starting at $529.

What I thought was perhaps the most interesting point in the article was that it reports travel agents say that Royal Caribbean's new mega-ship, Freedom of the Seas, on which Mary, John and other Tripsonians have already booked staterooms, is stealing some bookings from other cruises.

While statistics aren't readily available for cruises in areas other than the Caribbean, it appears that there's some weakness elsewhere as well.

When looking for cruises you're interested in, have you noticed the same thing? Have you seen discounting going on for the upcoming cruise you're looking to book?

To read the whole article you can go to In Wake of Problems, Cruise Ships Cut Prices (http://online.wsj.com/article/SB114471871120222487.html?mod=travel_left_column_h s), but I believe you will need a subscription to the WSJ.

[Anita Dunham-Potter]

Hi Ned,
I read that piece. Interesting. I think the WSJ is now applying its airline reporting methods on cruise lines. The thing is with cruise lines (unlike airlines) if the market isn't working out here, they can move the ships somewhere else in the world -- China is being eyeballed heavily right now by Carnival. No, the big problem right now for the cruise lines is fuel. I am almost certain you'll be seeing a big increase in complaints about port changes as cruise lines will start making all sorts creative changes to save fuel.

Anita

[bodega]

I can't read the article, but statistics do not always tell the full story. 20 years ago, ships were smaller, hence less passengers per sailing. The reports are that a some point the market will get saturated with too many ships and not enough passengers, but this has been said for years and so far this hasn't materialized. Every cruise I have been on or even done site inspection on prior to sailing, have had signs stating that no upgrading allowed as the sailing is sold out.

Regarding prices, yes cruise prices have remained low, but on board the cost of things has gone up or been added. We took a 7 day, eastern Caribbean cruise in 1984. We paid almost the same price in 1992 and last year our balcony cabin wasn't too much higher. The cruise lines charge for certain on board restaurants, bottled water, spa treatments and such which help make up for luring passengers with their low cruise rates. Gone are the days of getting the drink of the day for $1.75!!

[Anita Dunham-Potter]

Hi Bodega,
When I was at Seatrade last month, cruise line executives noted that onboard spending for the extras is up 24%. Cruise prices have remained stable, so oboard revenue is where the action (and money) is for cruise lines.

Anita

Originally posted by bodega@Apr 12 2006, 10:56 AM
I can't read the article, but statistics do not always tell the full story.* 20 years ago, ships were smaller, hence less passengers per sailing.* The reports are that a some point the market will get saturated with too many ships and not enough passengers, but this has been said for years and so far this hasn't materialized.* Every cruise I have been on or even done site inspection on prior to sailing, have had signs stating that no upgrading allowed as the sailing is sold out.

Regarding prices, yes cruise prices have remained low, but on board the cost of things has gone up or been added.* We took a 7 day, eastern Caribbean cruise in 1984.* We paid almost the same price in 1992 and last year our balcony cabin wasn't too much higher.* The cruise lines charge for certain on board restaurants, bottled water, spa treatments and such which help make up for luring passengers with their low cruise rates.* Gone are the days of getting the drink of the day for $1.75!!
24303

[Eileen Sellers]

No, the big problem right now for the cruise lines is fuel. I am almost certain you'll be seeing a big increase in complaints about port changes

It will be interesting to see the complaints when the advertised price is less than the port charges. Of all the changes that need to be made in consumer advertising, this is one of them. The port charges are the same for all cabins on the ship, and I think it should be required to included them in any advertised price.

[Rich G-H]

I just returned from my second Disney cruise (Eastern Caribean) and was very pleased. After all, it is Disney. I think that the cruise lines have to begin to show us just how they are ensuring passanger safety and publish crime statistics on their web site. Those long corridors can seem like an alley between buildings especially late at night. I've never experienced problems but I can see how some people would feel uncomfortable with several thousand strangers on board (passangers and crew included). Maybe more uniformed security on each deck would help.

[Kairho]

Originally posted by Rich G-H@Apr 13 2006, 11:41 AM
I just returned from my second Disney cruise (Eastern Caribean) and was very pleased.* After all, it is Disney.* I think that the cruise lines have to begin to show us just how they are ensuring passanger safety and publish crime statistics on their web site.* Those long corridors can seem like an alley between buildings especially late at night.* I've never experienced problems but I can see how some people would feel uncomfortable with several thousand strangers on board (passangers and crew included).* Maybe more uniformed security on each deck would help.
24400

Are not these "alleys" the same as long corridors in hotels? Or long, domewhat dark, walks to rooms at resorts?

[joyceandrews]

Actually the port charge is in the advertised price. The government fees are not however. And they advertise 1 discounted day 11 months in advance in a cabin with bunk beds.
My comment to potential clients is always the key word in that ad is "from".