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Expect Royal Caribbean cruise prices to go up soon

In:
Category: 
24Jun2020

One of the few bright spots from the global pandemic has been lower cruise prices than we have typically seen, but don't expect these low prices to stick around for much longer.

Falling demand, along with hesitation in the marketplace, has caused Royal Caribbean to cut prices on its sailings in the short term. but these low prices will be going up sooner than we think.

Michael Goldner, Royal Caribbean Vice President of Revenue Management, commented on the nature of pricing today and why he believes prices will go up soon.

"I don't expect we're going to be at these prices very long. Our intention was to get our prices to a place where I would say our rock bottom, and then as we see business improve, which we're seeing each and every week, our intention is to raise prices."

Traditionally, Royal Caribbean cruise prices are generally set the lowest when a new sailing becomes available, and then prices increase over time.  Royal Caribbean calls this pricing model "low to high".

The idea behind the low to high model is it provides consumers with the confidence that they are getting the best deal.

With Royal Caribbean struggling, as so much of the travel sector is, with lower demand in spring 2020, Mr. Goldner indicated Royal Caribbean wanted to "reach our low point with pricing now."

With increasing demand for cruises in 2021 and beyond, it appears pricing we are seeing now will give way to higher prices soon.

"Our pricing is very attractive right now, especially if you compare to where we were in prior years. And I don't think we'll be here long. I think as business comes in, pricing will go up."

Strong demand pushing prices up

Despite the pandemic and months of cancelled cruises, prices going up may sound odd, but the cruise line is reacting to what it is seeing in the marketplace.

At the onset of the pandemic, many wondered if Royal Caribbean would offer deep discounts for their sailings. In fact, a lot of Wall Street analysts predicted the need for discounts to drive slumping sales.

While prices did go down, especially for certain sailings in 2020 and early 2021, rising demand for cruises in 2021 are behind why Mr. Goldner believes prices will only go up from here.

"The majority of the business that we're getting for 2021 is new bookings, new business. And I think this bodes really well for all of us because I believe there is a lot of pent-up demand for next year."

Mr. Goldner stressed that while Royal Caribbean is seeing a lot of bookings from guests who had cruises cancelled in 2020, the majority of business that Royal Caribbean is seeing from new bookings. 

How Royal Caribbean will let you take advantage of a price drop up until 48 hours before your cruise

In:
Category: 
13May2020

Last week Royal Caribbean expanded the option to take advantage of a price drop up until 48 hours before the start of the cruise.

The Best Price Guarantee allows guests to take advantage of a better price up to 48 hours before your sail date. If there is a better price, you can contact your travel agent or Royal Caribbean and have the new price applied.

If there is a price drop and you re-price the cruise, you will receive the difference as a non-refundable onboard credit inside final payment or rate adjustment outside final payment.

This is significant because prior to this announcement, once guests hit final payment date, it was not practical to make price changes past the final payment date.

The Best Price Guarantee is part of Royal Caribbean's Cruise with Confidence program, that aims to offer guests more flexibility and assurance that they can cancel or rebook if they so change their mind later.

Like other aspects of the Cruise with Confidence program, the Best Price Guarantee covers sailings booked on or before September 30, 2020, that set sail on or before April 30, 2022.

Best Price Guarantee FAQs

If I am issued onboard credit, when will I get it?

The difference in pricing will be added to the booking as an onboard credit and it’ll be applied within 14 business days, and a new confirmation will be generated with the Onboard Credit value.

If there is a price reduction, will it automatically be applied to my reservation?

No, pricing will remain unchanged unless you contact your travel agent or Royal Caribbean to reprice the reservation.

If I reprice my cruise under Best Price Guarantee, will I be able to keep promotional onboard credits previously confirmed on the reservation?

When you re-price a cruise, you accept the new promotional incentives, which replace any onboard credit or promos that came with the previous booking.

Do all rate codes qualify for Best Price Guarantee?

Select restricted rates are ineligible for Lift & Shift and Best Price Guarantee - including but not limited to Net rates, Casino rates, Travel Agent Friends & Family rates, Travel Agent Reduced rates, and complimentary staterooms. 

Will Royal Caribbean offer big discounts after cruises resume?

In:
Category: 
24Mar2020

Among the many unanswered questions RoyalCaribbeanBlog readers have had over the last couple of weeks, it has been "will Royal Caribbean cruise prices go up to make up for lost income?" and "will Royal Caribbean cruise prices have lots of discounts after they start cruising again?".

The impact of the voluntary suspension of cruises is only starting to be felt by the company, with concerns more sailings could be canceled as well. Needless to say, things are far from ideal for Royal Caribbean and they have a lot of tough choices ahead of them.

If you are also wondering what to expect, there is some compelling anecdotal evidence to consider.

Market impact

Perhaps the most noticeable way to gauge Royal Caribbean's plight in recent weeks has been to watch its stock price.  

Like the entire travel sector, Royal Caribbean's stock price has lost a tremendous amount of value in a very short time. Shares were trading at $28.19 when the market opened on March 24. That's down from a 52-week high of $135.32.

The cruise line has been fighting tooth and nail to reduce the impact of the shut down, as well as restore confidence and financial balance to their operations. They increased credit capacity, took out a $2 billion loan, and reduced 2021 capital expenditures and operating expenses.

On the bright side, Royal Caribbean's business was booming before everything changed. Royal Caribbean Cruises had about a $2 billion profit in 2019, and things looked promising for an even better 2020.

The damage, however, is done and it may take years for their share price to recover.

The Motley Fool characterized their stock outlook as:

"It's not pretty but Royal Caribbean can survive a lost quarter of revenue and, eventually, it can return to being profitable. It may have to put off building some new ships and it's certainly going to have to offer discounts to casual customers (and very good deals or comps to regulars) but the company will come through this."

Getting people back

Even if someone snapped their fingers and every cruise in 2020 that has not been cancelled goes forward, 2020 will be a down year in terms of annual passenger count. But there is no doubt when cruising returns, Royal Caribbean will work diligently to get passengers back onboard.

Barron's took a look at Royal Caribbean's position and estimates things will bounce back in the next two years, but that does not mean it will be an easy road.

I assume that in 2021 and 2022, the company will recover close to historical passenger counts, but negative sentiment will still linger, resulting in a below-100% average occupancy. 

The other major factor working against travel is a recession. When times are good, people spend money more freely, but when they feel the pinch, consumers cut back. Nonessentials, like vacations, go out the window for many folks.

A piece written by Bill McGilton for Daily Wealth compared what happened to Royal Caribbean back in 2009 during the Great Recession, and the cruise line strategy back then was to offer deep discounts to get people onboard, and make up the revenue with onboard spending.

During the last recession, a seven-day cruise to Alaska (normally more than $2,000 per person) was going for $499 per person on Holland America and $399 per person on Carnival. A four-day trip from Miami to the Bahamas (normally around $1,000 per person) was going for $200 per person on Norwegian Cruise Lines.

Once the passengers are onboard, the cruise lines nickel-and-dime them with extras like alcohol, specialty restaurants, and gambling. On paper, it sounds like a decent strategy. After all, cruise lines generate almost a third of their sales from onboard spending. And the deals are fantastic for the customers. But it doesn't work.

Even with these massive 75% to 80% booking discounts, onboard traffic fell at least 25% across the industry in 2009. Royal Caribbean's sales fell 10%. That might not sound like much, but it only takes a small decrease in sales to crush its profits... Sure enough, profits fell 75% in that same year.

Concerning ourselves with the consumer side of things, deep discounts for cruise fares in an economic downtown similar to the one we are experiencing in 2020 is a strategy we may very well see coming our way.

Dr Christopher Muller, a senior professor at Boston University’s school of hospitality administration, told The Guardian that he believes the cruise industry will bounce back from all of this as well, and also pinned the industry's rebound on pricing.

“The logical thing is they will have to have very deep discounts, and those deep discounts will be especially present in the next cycle of cruise seasonality in September,” he said.

“By August and September the consuming public will be enticed to go back on cruises because the pricing is going to be outrageously good with enormous discounts.”

Not out of the woods yet

Of course, we are still knee-deep in a cruise shutdown, the markets are anything but consistent, and consumers are not sure what they will be doing tomorrow, let alone this summer.

One the one hand, some people will be quite eager to get out of their homes and put all of this in the rearview mirror as they drive to the cruise port.  On the other hand, others may not be rushing to get back onboard so quickly.

Ultimately, we will have to wait and see if Royal Caribbean does offer discounts across the board, special promotions, or just targeted offers to bouy specific sailings.

Your Thoughts

Do you think Royal Caribbean's prices will rise or fall once cruises resume? Are you anticipating deep discounts on hotels, cruise fare, or airfare? Will you be ready to pounce on deals–or will you wait for a full economic bounceback? Share your thoughts with everyone in the comments!

Do cruise prices drop?

In:
Category: 
25Jan2020

Have you booked a Royal Caribbean cruise (or about to book one) and wondered if the price of the cruise could drop later? 

Prices of Royal Caribbean cruises have a tendency to fluctuate quite a bit, very similar to airfare pricing, and that kind of fluid price changes may concern some cruisers with fears of not getting the lowest price.

There are a few tips and strategies you can use to lock in a great price, and protect yourself in case there is a price drop later.

Royal Caribbean's 48 hour price guarantee

UPDATE: Royal Caribbean updated its Best Price Guarantee to allow anyone to get a better price up to 48 hours before your sail date for sailings booked on or before August 1, 2020, that set sail on or before April 30, 2022.

First and foremost, you should be aware of Royal Caribbean's price guarantee for any cruise fare booked in the first 48 hours following the reservation being made.

If you spot a lower publicly advertised rate available to the general public for the cruise fare you booked within 48 hours of reserving your cruise, Royal Caribbean will honor the lower rate by applying an onboard credit to the reservation equal to 110% of the price difference. For reservations outside of final payment period, the onboard credit may be replaced, upon request, with a reduction to the outstanding balance or a refund.

Group rates, membership programs, charters or other Travel Agent promotions not offered by Royal Caribbean to the general public, including but not limited to travel agent rebates are ineligible.

To submit a Royal Caribbean Best Price Guarantee claim, submit a request via the claim form. You will be asked to provide the lower rate amount and where the rate can be found.

The lower rate must:

  • Be for the same ship, sail date, stateroom category and number of guests.
  • Be available for reserving at the time Royal Caribbean reviews your submitted Royal Caribbean Best Price Guarantee claim form

All Royal Caribbean Best Price Guarantee claim forms must be submitted on-line within 48 hours of reserving your cruise and verified by Royal Caribbean in order to qualify for the onboard credit.

The Royal Caribbean Best Price Guarantee is applicable to North American reservations only.

Book early and reprice often

The tried and true strategy for cruisers who live in a country that allows price adjustments (United States, Canada and others) is to book a cruise as soon as they know they want to go on that sailing, and then re-price if the fare drops.

Royal Caribbean allows cruisers to reprice their cruise at the lower cruise fare if the price for that cruise goes down at any time before final payment date. As long as the price drops for the same ship and sail date that has been booked previously, and it is before final payment date, guests can reprice their cruise as many times as they want.

Unfortunately, residents of the United Kingdom cannot use this strategy since local laws prevent price adjustments.

The final payment date for Royal Caribbean cruises is 75 days prior to the sailing date for 1 - 4 night cruise vacations and 90 days prior to the sailing date for 5-night or longer cruise vacations. The payment schedule for groups is different from that of individuals. 

The strategy of booking early and then taking advantage of price drops ensure you always have the lowest price, as opposed to trying to time a price drop later (which may or may not happen).

Don't forget your booking incentives

If you spot a lower price and want to re-price, make sure you consider the perks included in your original booking reservation versus what is included with the new price.

Any onboard credit, instant savings or booking promotions can be lost if you rebook at the lower price. Weigh the value of your perks before pulling the trigger on a price drop.

How to check for price drops

The tried and true way to check for price drops is to periodically make a mock booking on Royal Caribbean's website and see if the price has changed. This is the most straightforward approach and works quite well for verifying the current pricing. 

Of course, manually checking the price means you have to take the initiative to regularly verify current pricing. Some cruisers make this easier by joining a Facebook group for their specific sailing and sharing information when a price drop is observed.

Some travel agents (the great ones) will check for price drops on your behalf.  In our experience, travel agents that take the extra step to check for price drops on behalf of their clients tend to do this when new sales and promotions are announced. Here is one such recommended travel agency that specializes in Royal Caribbean. If you are not convinced using a free travel agency that is recommended by Royal Caribbean is right for you, read our post discussing the benefits they offer.

There are websites that claim to check for you as well, but I have not used any of these to verify their claims. CruiseFish.net and Ship Mate offer price tracking tools, that may be worth investigating.

What if there is a price drop after final payment?

Once you are past the final payment date, there are very limited options if your cruise fare drops again.

Royal Caribbean's rules state that once you make final payment, the fare is essentially locked-in and price changes are not possible.

In general, price drops after final payment are rarer than they used to be, but they can occur.  If you do spot a price drop after final payment date, you should contact Royal Caribbean or your travel agent and (politely) inquire what can be done, if anything.

Despite the rules, on a case by case basis, some guests have had luck getting onboard credit or moving up to a higher stateroom when the price drops after final payment. That is not to say you should expect this to be the case for yourself, nor should you plan your cruise around taking advantage of a potential price drop after final payment date.

In short, there is no harm in inquiring about a price adjustment after final payment, but do not expect a price change either.

Spotted: Royal Caribbean raising prices of certain drinks above what the drink package includes

In:
07Jan2017

Many Royal Caribbean Blog readers have reported recently prices of certain alcoholic beverages have increased to the point they are no longer included with the unlimited alcohol package.

This first reports occurred on Royal Caribbean cruises that sailed around Christmas and New Years, and it was thought the price increase was a result of holiday demand.  Yet, the drink price changes remain in effect on cruises beginning after the holidays.

Royal Caribbean's deluxe drink package only covers beverages that are $12 or less ($13 on Oasis class ships).  Drinks priced higher than the included threshold are charged the difference to the guest.

Pub drink menu on Allure of the Seas. Photo taken January 4, 2017

Pub drink menu on Independence of the Seas. Photo taken January 5, 2017

Olive or Twist bar menu on Independence of the Seas. Photo taken January 6, 2017

Pub drink menu on Adventure of the Seas. Photo taken January 7, 2017

The drink package policy may change in the days or weeks to come to match these drink price increases. However, this is the first time since Royal Caribbean introduced its drink packages that we are seeing a notable amount of drinks priced outside the drink package allowances.

Royal Caribbean moves towards simpler pricing

In:
16Dec2010

In the United Kingdom, Royal Caribbean is trying to make pricing a cruise easier for its customers. Royal Caribbean will now adopt a "what you see is what you get" approach to pricing its cruises in an attempt to foster earlier bookings.

Mark Walter, Head of field sales for Royal Caribbean, thinks this move is a step in the right direction, "he new ‘what you see is what you get’ campaign from Royal Caribbean International marks a step-change in the promotion of cruising.  All the prices and campaign elements are aimed towards making it easy for first-timer cruisers who will be comparing a holiday at sea with traditional land resorts options. We’ve scraped the traditional cruise jargon and focused on the incredible value that a cruise represents."