Cruise Price Juggling

| Friday, 05 Mar. 2010

 

 

In years past, the cruise lines did their utmost to teach consumers that they should book early to get the lowest prices. It certainly makes sense that the lines would want to reward the customer whose money they've had the longest with the best prices.

 

But September 11 brought a change to cruise industry booking patterns. Previously, cruisers booked their vacations two to four months prior to departure. After 9/11, the booking pattern changed to 60-90 days out and has remained that way.

Historically, cruise line set their prices in the shape of a bell curve. The farther in advance of the sailing date, the lower the prices, which then rose as the weeks passed -- and then, if necessary to fill unsold cabins, went down again as the ship's sailing date neared. Even though prices at the beginning and the end of the curve were similar, there were still significant advantages to booking early: namely, getting the best choice of desirable cabins and cabin locations.

For the most part, this marketing model worked pretty well, as experienced cruisers bought into the premise and many booked their cruises a long while before their sailing dates.

But for a variety of reasons, cruise pricing has recently become much more of a juggling act for the cruise lines. The timing of massive industry-wide new ship construction programs combined with the impact of the 9/11 attacks has undeniably changed the way prices are set.

Initially, out of economic necessity to stay "afloat", the cruise lines tried to lure travelers by slashing prices. Slowly over the past year and a half, the cruise lines had been able to return to almost "normal" pricing on most sailings. But there were still certain sailings where the cruise lines had to lower their rates to attract more travelers to fill unsold cabins (no doubt with the hope that their onboard spending would contribute to covering the costs). After all, it's better to get some revenue for a cabin than to let it sail empty.

With strained political situations and a strained world economy, we're seeing more and more of this close-in price discounting -- and cruise consumers are becoming more aware it. Obviously many cruisers are abandoning the longstanding "book early for the best price" philosophy in the belief that if they're flexible with their travel plans, they can save money booking closer to their desired cruising dates.

But shouldn't consumers be able to have the best of both worlds? Shouldn't they be able to book early for the best cabin, to lock in a specific cruise, and then rebook at a lower fare if one becomes available?

I asked the major cruise lines what their "official" policies are regarding price protection for those who still book early. I found that their policies varied.

Here's what they had to say... followed by my own comments about each policy, as a consumer.

From Princess:

"Princess has one of the most flexible rebooking programs in the industry. In general, the majority of passengers who do find a lower rate after they book are able to take advantage of the lower fare, without a penalty, if they qualify for that rate (for example, a promotional fare might be offered on a regional basis).

From time to time, however, a lower rate may be introduced for which a passenger does not qualify, and therefore rebooking would not be possible without penalty (penalty only applies if they are inside final payment, otherwise no penalty). If they don't qualify, they won't get the fare even if they rebook. These fares are generally offered as an incentive to "top off" a remaining few cabins on a particular sailing. These low rates have various restrictions. There are very few of them, they're offered quite close in to sailing, and they're available only for a limited time, mainly expiring 10 days after their introduction. Because these fares would be used to sell a small number of cabins to fill the ship shortly before sailing, these rates apply to new bookings only."

Sorry, Princess, but it appears to me, from this explanation, that once a passenger is inside of their final payment date there is NO flexibility to rebook if rates should drop. It seems the previously booked passenger is unlikely to get any rebate or consideration of any kind if Princess chooses to lower the cost on a sailing that they're previously booked on. Certainly if the price drop occurred before final payment is due the passengers can cancel, without penalty, and rebook at the lower price.

From Carnival:

"In instances where cruise prices have dropped and consumers are looking to rebook at a lower rate, Carnival Cruise Lines tries to be as flexible as possible in its response and looks at these events on a case-by-case basis. Carnival typically offers alternatives to refunding money such as providing upgrades or shipboard credits.

Seeking price stability and searching for alternatives to refunds is consistent with our pricing model in which we do our best to reward consumers who book early with the best prices. We believe that this provides consumers with the best value for their money.

Carnival's penalty period varies according to sailing length - for two- to five-day cruises, guests can cancel with no penalty up to 61 days, six- to eight-day cruises 71 days and Alaska cruises, CruiseTours and voyages of 10 days or longer, 76 days."

Though it seems unlikely that passengers can expect direct monetary refunds should the prices drop below what they've paid, Carnival's policy does seem to leave some room for negotiation and compromise. It appears the Carnival passenger in this situation could expect some compensation in the form or cabin upgrades or shipboard credits.

The key to dealing with this situation if you're on a Carnival cruise and find yourself in this situation would likely be the level of influence your travel agent has with Carnival. That probably depends on the volume of business your travel agent does with Carnival.

RCI/Celebrity:

According to a spokesperson at Royal Caribbean and Celebrity, "If the passenger meets the eligibility for that price (for instance, if it's a price program that requires a certain residency or age) and there is space available, they can rebook at the lower rate without a fee up until the sailing closes (typically a day or two out from departure). This is one reason why guests should feel comfortable booking early. We encourage guests to book early as it gives them the best choice of staterooms, dining and shore excursions (they can book shore excursions online), and they can rebook without penalty if a lower price is offered later."

This seems like the most direct response to the situation. It seems with RCI or Celebrity, one could feel safe booking early, knowing that they would be able to rebook without penalty if the price on their cabin on their particular sailing dropped, provided the discounted price was general in nature, and not a specific promotion, or a senior discount that they didn't qualify for.

NCL: did not respond to my requests for information. The bottom line for passengers to insure they are price protected in the event of discounting on their sailing is firstly to book with a professional Travel Agent. Secondly when booking I recommend asking directly what the policy of the particular cruise line you're sailing is, and ask the Travel Agent to get that policy in writing for you, directly from the cruise line. A good Travel Agent will monitor pricing for you, however it is unreasonable to expect them to have the time to check your booking daily. They can have hundreds of clients at a time waiting to sail, so a wise consumer will monitor pricing themselves. And don't think your agent isn't doing their job if you find a reduction before they do. Simply inform them of the reduction, and have them go to work for you.

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