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The Future of Cruise Priceing


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In AARP magazine this month is an article "Cruise Ships are Revving Up".  Its speaks briefly on a few aspects of returning to cruising after COVID.

There is one segment that compares some vacation costs:

  • $2,720 A seven night Royal Caribbean cruise
  • $6,698 A seven night Oceania cruise
  • $4,981 Seven nights at Secrets Aura Cozumel resort
  • $7,299 Seven nights at Sandals Grande St. Lucian

Recently I read an article (I tried to find it again with no luck) about Royal Caribbean reconsidering its pricing.  The gist being, there was thought being given to equivalent land based vacations and that in general, cruising was under priced. The implication being, cruise lines, and RC in particular, may increase prices to be more in line with other vacation choices.

Though I certainly would hate to see prices at RC increase, I do understand. Not only does RC incur all the burden of a massive hotel, but it also must maintain its moving platform or ship.

Anyway, it was just an observation and I am interested in others thoughts or insight.

 

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I think the value has to be there. Liberty said in comparison to land vacation, that cruises are undervalued. However this is a fruit comparison as opposed to an apple comparison. Meaning they both are vacations but they differ vastly. Imho the only comparison is, cruises to all-inclusive resorts. You won't find the same value as going to Vegas for a week to cruises,  the same for a road trip or theme park.

I am okay if prices increase and offerings stay the same or also increase. What I'm not okay with is paying $100+ a night for a ship like Grandeur on top of reduced offerings.

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It is so personal, right? I mean when I woke up early morning of the Icon release credit card in hand I felt like I was punched in the face. The ship's enormous offerings of bells and whistles didn't speak to me. I honestly don't know what I was expecting but I knew even at day one pricing my enjoyment would not equal the price I would be paying. That said my style of cruising at this stage in my life isn't Icon. Clearly though it speaks to many many others and for that I am happy. The company will charge what we are willing to pay for the experience. I personally believe that if you are careful and choose what you know you and your family gravitates to then it is an amazing value vacation.

Same with Coco Cay Cabanas pricing. Previously I indulged in a few cabanas, Bare foot Beach, Oasis Pool, Water Park X 2. I loved the experience, I loved the home base as well as the comfort. Moving forward the prices being what they are I will enjoy a beach bed or lounger. Maybe a Coco Beach club pass, maybe. It's about my personal feeling of cost=enjoyment. I'm weird like that, if I feel it's fair I enjoy it more. 

While I enjoyed my one Star class sailing Sky is my happy place, but again full circle there is something for everyone with Royal and I still feel it's a great value vacation if you know how to make the most of your own choices. Prices going up everywhere, while I am not a Jason Liberty fan at all I get it. I am blessed to be able to vacation once in a while & I choose cruising every time. 

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1 hour ago, Ampurp85 said:

I think the value has to be there. Liberty said in comparison to land vacation, that cruises are undervalued. However this is a fruit comparison as opposed to an apple comparison. Meaning they both are vacations but they differ vastly. Imho the only comparison is, cruises to all-inclusive resorts. You won't find the same value as going to Vegas for a week to cruises,  the same for a road trip or theme park.

I am okay if prices increase and offerings stay the same or also increase. What I'm not okay with is paying $100+ a night for a ship like Grandeur on top of reduced offerings.

OK, but I think 100 per person per night for Vision class is fair. The room is worth 150 to 200 for a couple whether interior or ocean view. Food is 50 or more per person, and you are ahead already. I see port fees paying for destination travel, and entertainment is a bonus. I won't  count diamond vouchers since not everyone gets them. Two weeks ago Hamton Inn wanted to charge us 250 for a double in the middle of nowhere (Alabama). We declined and found a room at another chain across the street for 100. My point is that hotel prices vary, but cruising is competitive with Hilton brand. I don't think the ship matters that much.

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24 minutes ago, ChessE4 said:

OK, but I think 100 per person per night for Vision class is fair. The room is worth 150 to 200 for a couple whether interior or ocean view. Food is 50 or more per person, and you are ahead already. I see port fees paying for destination travel, and entertainment is a bonus. I won't  count diamond vouchers since not everyone gets them. Two weeks ago Hamton Inn wanted to charge us 250 for a double in the middle of nowhere (Alabama). We declined and found a room at another chain across the street for 100. My point is that hotel prices vary, but cruising is competitive with Hilton brand. I don't think the ship matters that much.

I would disagree not every ship in its class is worth it.....the same with hotels. I stayed in a Fairfield Inn in FLL and one in Miami,  roughly within pennies of each other. However, the one in FLL was not at all worth the $230+ per night, while the one in Miami was. The same for cruise ships. I don't believe Grandeur is worth more than $50/n for an interior, or $175/n for a GS or above. Very limited offerings, not to great food or even specialty restaurants. The larger classes can be but to say as a whole it's a better value, as a means to justify raising prices, isn't accurate.

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IMHO, the elephant in the AARP article comparison is as Ampurp85 was saying, not an apples to apples comparison. The land based options include all beverages, dining, internet and gratuities.  Most AI have multiple specialty dining restaurants on the upscale end, including the two referenced by the article. I could be wrong but I believe Oceania is also 100% all inclusive and more upscale. I’d think that to make an even remotely close comparison, AARP should have used the Star Class experience and pricing. As @Neesa said, it is really about what value means to you and I wholeheartedly agree. We’ve always loved RC but these days, maybe not always the best value for us when we are choosing a vacation and that is ok.  Doesn’t mean we will ever stop cruising, we may just pump the brakes a tad before pushing the deposit button. 

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Disney is a beast within itself, so they could require you signing your soul over for annual passes at $1 million a year and people would find a way to pay it.

Liberty's idea is that they can raise prices to match land-based offerings when the comparison is nowhere near the same. Yes, food and entertainment are included in cruising plus lodging and transportation in a sense. But we have to assign value to those offerings. The dancing show and comedian on Grandeur is worth about a $10 ticket combined, but the same on land could be worth over $200. The food less than $50 to equal those same types of meals. My real point is that when it comes to land-based vacations, they can be as expensive or as cheaper as the person makes, they aren't locked into choices like on a cruise. Yes, I can choose a smaller class, for a least expensive cruise but the offerings will still be limited and the same. They need to consider this, before they price themselves out. I think they are banking on them all being Icon. Many people booked once and a lifetime's cruises, paying $60k for suites, but they can't count on that being sustainable. 

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1 hour ago, CanHardlyWait said:

Cause prices go up at Disney all the time and less and less families now go. LOL. Think again. 🤔

Royal's execs have mentioned that's the demographic that they're targeting along with a general nod towards being 20% cooler less expensive. Multigenerational families who would consider vacationing at Disney or Universal or similar and don't have a problem paying the asking price. And there are plenty of potential customers who meet this description even if families and individuals are priced out along the way.  The AARP article mentioned at the start is making a bad comparison just based on where the c-suite at Royal is attempting to position the company.

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Having done both Sandals in St Lucia and done 7 night cruises, these are indeed VERY different. A $7000 room is MUCH larger than a $2700 room on RC. I can get a butler for $7k at Sandals. That’s not happening on RC for 7 nights at $2700.  Sandals includes all drinks and all specialty dining. Only up charges are for VERY expensive wines. At Sandals, I don’t have to watch the time to make sure I get back to the resort on time because the resort isn’t exactly going to leave without me. Comparing these are a whole lot closer when you are looking at a suite on RC as I have a feeling the $2700 they priced isn’t even for a balcony. Even then it’s just so different 

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22 hours ago, Ampurp85 said:

I would disagree not every ship in its class is worth it.....the same with hotels. I stayed in a Fairfield Inn in FLL and one in Miami,  roughly within pennies of each other. However, the one in FLL was not at all worth the $230+ per night, while the one in Miami was. The same for cruise ships. I don't believe Grandeur is worth more than $50/n for an interior, or $175/n for a GS or above. Very limited offerings, not to great food or even specialty restaurants. The larger classes can be but to say as a whole it's a better value, as a means to justify raising prices, isn't accurate.

Sorry, but $50 per night barely covers complimentary food and beverage, leaving the stateroom unpaid.  Good luck with your future plans.

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I have started tracking the Internet prices for our upcoming cruises.  I can't believe how the same product next month, bought during black Friday sale, could price out at $14.99 a day and by April 2024 the Internet is $24.99 a day.  

 

I think that RC is trying to keep the initial price low enough to get us interested and then slowly entice us with booking add ons.  Once we get us used to dining in the Specialty  Restaurants or having 24/7 Internet they have us hooked.  RC knows that many of us use a cruise as a treat and they are slowly increasing the cost of the drink package, gratuities and other price increases.

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18 minutes ago, Montemy2419 said:

I have started tracking the Internet prices for our upcoming cruises.  I can't believe how the same product next month, bought during black Friday sale, could price out at $14.99 a day and by April 2024 the Internet is $24.99 a day.  

 

I think that RC is trying to keep the initial price low enough to get us interested and then slowly entice us with booking add ons.  Once we get us used to dining in the Specialty  Restaurants or having 24/7 Internet they have us hooked.  RC knows that many of us use a cruise as a treat and they are slowly increasing the cost of the drink package, gratuities and other price increases.

I doubt that based on what they've said during investor earnings calls. Royal feels that they're too much of a good value and are slowly working their prices to where they'd like them to be when it comes to fare. On cruise planner purchases, it's what people are willing to pay. So many people feel that they need internet and a drink package that Royal still hasn't hit the price ceiling on these items yet. They may or may not be close, but there can always be another sale if purchases drop off. 

Edit: Black Friday pricing is to capture the market segment who waits for Black Friday for their purchases and those who can't or won't pay more. If Black Friday pricing ends up cannibalizing full-priced sales, I expect Royal to reduce the discount being offered during the sale. Much like they've changed around the discounts on last-minute bookings due to reduction in people booking earlier, at a higher price point, when there was sharp cabin discounts a few weeks before sailing.

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I still tend to think cruising is a good deal, you can make it expensive or go cheaper, inside cabin, etc. I know while cruising was down for covid, we did the land vacation to Key Largo and Key West, for a nice meal for two was around 40 to 60 before tip, add car rental if you fly ( which we do from Cincinnati) fuel, it adds up quick, p!us condo or motel coast, I personally think cruising is the best bang for your buck, but once again, its individual chosing.

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7 hours ago, ChessE4 said:

Sorry, but $50 per night barely covers complimentary food and beverage, leaving the stateroom unpaid.  Good luck with your future plans.

Not really as food and beverage overhead is spread out and probably only amount to less than $10 of that $50. $50/N for Grandeur is what I believe the value is, it's not a ship I would pay more than that for. So, my future plans involve ships that are worth it. 

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Some really good points being made here.

The comparison of cruise vs land resort vacations/cost is not easy.

Trying to distill it down to something relatively simple is not easy.

Cruise ships are more expensive to run. Anyone that has owned even a small boat, especially if it was kept at a dock in salt water, knows it is not cheap. Refueling a cruise ship can easily top a million dollars.

Here are some really rough numbers that are more indicative than actual.

  • Cruise ships are highly compact or dense. Lets say 4,000 passengers at about $1,000 each. That is 4 million for one week.
  • A hotel is not so much passenger as room based. A moderate size hotel of 400 rooms at $125 a night x 7 nights is $350,000 for one week.
  • A cruise ship can easily have 600 staff but those same passengers are probably paying at least another mandatory  $100 in tips or another $400,000 per week to help pay them.
  • A 400 room hotel will have a staff of about 500 people whose salary comes out of the room rate.
  • Cruise ships provide a whole list of free high tech entertainment (Broadway shows, ice shows, even computer controlled drone light shows) as well as shore excursions for additional cost.
  • Hotels, depending, offer WiFi and a swimming pool and the surrounding neighborhood for entertainment, all at additional cost..
  • All inclusive resorts generally include food and drink.
  • Cruise ships include food.
  • Hotels can offer a lot of space per person, room size averages about 350 square feet.
  • Cruise ships are compact and cabins average about 200 square feet.

Using these very arbitrary numbers, a cruise ship stay is about $200 a night (including mandatory tip) and a hotel is about $125 a night. An all inclusive resort can be about $200 per night and may include air fare.

Cruise ships and hotels are hard to compare in a lot of respects. It seems pretty obvious cruise ships are expensive to operate. When you compare basic cost of cruising to all inclusive resorts, the cost is similar. There can be a lot of difference in available activities and entertainment. Most all cruise ships offer gambling. Ships have yet to incorporate down hill skiing.

When you start looking at luxury or exclusivity or paying tens of thousands for butlers, multi level suits and so on, I can not say how they might compare.

Overall I would say cruising is a good value, competitive but not necessarily under or over priced. The cruise industry continues to grow with more ships, private islands and resorts. The cruise industry carries about 30 million passengers annually. Walt Disney World has about 58 million guests annually. If anything, this indicates the cruising industry has a lot of room to grow.

 

 

 

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On 3/17/2023 at 3:13 PM, Sea Squirrel said:

IMHO, the elephant in the AARP article comparison is as Ampurp85 was saying, not an apples to apples comparison. The land based options include all beverages, dining, internet and gratuities.  Most AI have multiple specialty dining restaurants on the upscale end, including the two referenced by the article. I could be wrong but I believe Oceania is also 100% all inclusive and more upscale. I’d think that to make an even remotely close comparison, AARP should have used the Star Class experience and pricing. As @Neesa said, it is really about what value means to you and I wholeheartedly agree. We’ve always loved RC but these days, maybe not always the best value for us when we are choosing a vacation and that is ok.  Doesn’t mean we will ever stop cruising, we may just pump the brakes a tad before pushing the deposit button. 

I think you raise an important point, I traveled on an Oceania trip to the Baltics in the summer of 2019. At the price point listed for Oceania in the article, we also had included: the equivalent of a refreshment beverage package, some excursions, 24 hour room service, a very elevated main dining room menu: duck, lobster, etc., internet included, afternoon tea service every day, lectures with professionals in the field almost every day, and  an impressive library with all of the newest NYT bestsellers. It is a very different experience. 

FWIW, I enjoy both types of cruising, but I don't think they are a fair comparison with one another.  

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I think for those of us who were lucky to cruise during the restart, we saw historically low prices. So, I know for me, when I saw the prices now compared to last year, I was thrown off. I had to adjust my expectations. But even before the restart I was able to reprice cruises. So far I have not, in fact all 4 cruises I have currently booked have doubled in price. Last year I booked balconies on Allure for about $530ish pp and now they are $912pp. I booked Mariner/Wonder this past Jan and now in March, again close to double the price. People are willing to pay it so prices will increase but Liberty needs to hedge his expectations as they could price themselves out. I do believe cruises offer excellent value in most cases.

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For many years we've taken advantage of cruise pricing to get out of the cold in the winter. We found that it was cheaper to go on a cruise (or two) than stay in a hotel in Florida for a week or two. Particular a hotel near a beach.  Cheap airfares helped, but then we started driving down to Florida.

Except for bucket list cruises we particularly look for cruises between Thanksgiving and Christmas and late Jan-early Feb when prices are at their cheapest.  We don't do suites, balconies, spas, photo packages, specialty dining, drink packages, or anything extra. Pretty much just enough to get somewhere warm.

Now with hotel and airline prices being what they are, cruises even though more expensive are still a good deal comparatively. We did an early Dec cruise last year and an early Feb cruise this year for very, very good prices. However looking at next Dec and Feb prices (so far) are about double.

At some point we will have to reassess whether we want to continue to do cheap off season cruises but in the mean time we have some bucket list cruises we'd like to do. May have to just bite the bullet on those.

 

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On 3/20/2023 at 6:10 AM, mac66 said:

we particularly look for cruises between Thanksgiving and Christmas and late Jan-early Feb when prices are at their cheapest. 

We did an early Dec cruise last year and an early Feb cruise this year for very, very good prices. However looking at next Dec and Feb prices (so far) are about double.

it’s like we are vacation twins!! 😂

we noticed this also - 2024 february season is wiiiiiiiiild. the only way we could swing it is if we got a screaming deal but otherwise it’s just too much. things get better during the quiet two weeks in the beginning of december, but RIP our february blues. 

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10 hours ago, asquared17 said:

it’s like we are vacation twins!! 😂

we noticed this also - 2024 february season is wiiiiiiiiild. the only way we could swing it is if we got a screaming deal but otherwise it’s just too much. things get better during the quiet two weeks in the beginning of december, but RIP our february blues. 

Well we just booked a bucket list cruise (11 night Panama Canal) the end of January '24 on the Celebrity Beyond. Way more than I'm used to spending but we got lots of perks and OBC to make it a bit more palatable. It may be the only cruise we do next year so there's that to consider.

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Part of the appeal of a cruise is that fact you can get a good deal versus a land based vacation, the issue becomes when you raise you prices to match it now loses that advantage/appeal. I might as well just go on a land vacation now as I have more freedom than on a ship that visits only specific ports. I also see people try to compare room prices, and for a land vacation you can get a cheaper price on a room that's the equivalent of a standard stateroom on a cruise ship. Sure that also means food is extra but a lot of places have cheap cafe's versus high end restaurants.  A dinner doesn't have to cost $50. What I find most often is that "Cruisers" are the ones who most defend this aspect, just the same as Disney fans defend every decision that company makes regardless of the absurdity of it. As someone above mention they don't mind being slapped in the face while their credit card is charged. You simply can't make an argument to them for the case of anything else. And if we remember correctly Disney park was created for all creeds to visit, not priced like it's a high rollers club that it seems to cater towards now. My family had to save for several years before we could go to Disneyland, and that's when it was still only $100 for every ride in the park and had been so since my dad went as a kid. If we had to pay the prices they're charging today we'd have had to wait even longer all the while prices increasing annually putting it out of reach with each passing year.  

What I find the most distasteful is when they do gratuity increases, yet cut back on said services that they encompass. 

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I've been looking at cruises for this year and next.  It used to be that you could get a cheap cruise for around $100/night/2. That's an inside with taxes, gratuities etc for 2 people.

We did an 8 nighter in early December that after refundable OBC it came to $107/night.  Our recent  7 night cruise in early Feb was $123/night. 

Looking forward It's tough to find a cruise under $100/night per person  i.e, $200/night for the cheapest inside cabin.  As I said earlier, we're cheap skates when it comes to our two annual getaway cruises. We'll pay more for bucket list cruises.

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Great points by all above.

The one weakness of the land vs sea comparisons I have found is that people often compare the land option to their local. Friends of ours that are lots of fun, refuse to cruise. They have more means than we do, as they never had children. They travel to the Caribbean twice a year and spend a week there. They rent a place and eat out at high end restaurants. They spend a grand on air fare, 6K on the villa and I have no idea on meals but a good bit. We don't want to go with them because cruising is much more affordable. They also don't spend any money on excursions as they sit on the beach all day.  I often hear people say hotels are  $100 a night and they can eat for 50 bucks. We were just visiting our son at UMass Amherst at $189 a night on a non event week in western MA.  Dinner at the Hope & Olive (GREAT!) was $30 per plate never mind the drinks as our son turned 21! Long way of saying if your going to do your land vaca in Podunk and eat mac and chees out of a box it can be a real value.  I'm concerned that cruise prices are on the rise. The day it starts to costs us 8K on a cruise we will be staying with our buds. 

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My family and I are going on Disney in January, 3 nights on the Disney Wonder (a 24 year old ship) and we still almost had to pay upwards of $10,000. But it's Disney so I'm not surprised. On my recent cruise I was speaking with the NextCruise person and was discussing cruising in Australia and how for the past 2-3 years, Royal has offered the same itineraries without changing anything and she said yeah it's unfortunate and she hopes that Royal changes up their itinerary for the 2024-2025 season.

It's a combination of:

  • New Zealand
  • South Pacific cruises
  • 3 days cruises to nowhere
  • Transpacific or repositioning cruises
  • Cruises around Australian cities

If Royal want to increase their prices - fine, but personally I think they should also consider other destinations/ports around the world to justify the price increase. Just my two cents 🤷‍♂️. I see so many cruise specials or last minute deals for Quantum sailing out of Brisbane and I click on them and half the rooms are unsold.... (okay, maybe not half, that's an over exaggeration, but it's still a lot unsold)

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On 3/28/2023 at 3:57 AM, Jamesszy94 said:

My family and I are going on Disney in January, 3 nights on the Disney Wonder (a 24 year old ship) and we still almost had to pay upwards of $10,000. But it's Disney so I'm not surprised. On my recent cruise I was speaking with the NextCruise person and was discussing cruising in Australia and how for the past 2-3 years, Royal has offered the same itineraries without changing anything and she said yeah it's unfortunate and she hopes that Royal changes up their itinerary for the 2024-2025 season.

It's a combination of:

  • New Zealand
  • South Pacific cruises
  • 3 days cruises to nowhere
  • Transpacific or repositioning cruises
  • Cruises around Australian cities

If Royal want to increase their prices - fine, but personally I think they should also consider other destinations/ports around the world to justify the price increase. Just my two cents 🤷‍♂️. I see so many cruise specials or last minute deals for Quantum sailing out of Brisbane and I click on them and half the rooms are unsold.... (okay, maybe not half, that's an over exaggeration, but it's still a lot unsold)

For Australia and New Zealand,  I'd suggest looking at Celebrity.  They have more varied and better itineraries. 

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