Six Tips to Save On Your Cruise Purchase

| Tuesday, 17 Jul. 2012

1. Do NOT Pick the Destination First 2. Avoid the Peak Season 3. Which Cruise Region Is Not Selling This Year 4. Understanding the Full Payment Due Price Drop 5. The Truth About "Last Minute Cruises"

Have you ever heard the expression "timing is everything?" Well, it is certainly true when you are talking about buying a cruise. Here are six tips for timing your cruise purchase to have better and more affordable cruises.

Do you take advantage of any of these strategies to find bargains yourself? Talk about it in the Cruise Deals forum.

Tip #1 – Do Not Pick the Destination First

Most people think about where they would like to cruise first, and then they think about a convenient time to take a vacation. This is backwards. Getting a real cruise bargain is like finding a Van Gogh in a garage sale – you never know when you will see a great cruise bargain or where it will be going, but when you see one grab it quickly or it could disappear.

Many novices mistakenly believe cruise prices are calculated like train fares, with prices set according to mileage for recurring routes and timetables. Nothing could be further from the truth. The cruise industry has created a business model that depends upon filling up every ship at any price – similar to airlines or Las Vegas hotels. Pricing is purely based upon supply and demand where the supplier has a "perishable commodity," meaning they can't sell a stateroom on a cruise that has already sailed.

Cruise prices are set almost two years in advance, and the price will usually remain much the same until the sail date gets about six months out. Then they will decide whether the ship has too many unsold rooms and adjust the prices week by week. Prices can potentially drop drastically as the cruise gets closer. The price changes will depend on how successful they are at selling the ship. If lowering prices a little bit one time sells a lot of cabins that may be as low as the price ever goes, but if the ship does not sell quickly then prices can drop even lower.

Logically, this implies that the best deals may be had by waiting until the last minute, but there is no guarantee that prices will follow this course. In fact, if a ship suddenly sells a lot of cabins quickly it can become more expensive than ever at the last minute with the few remaining cabins going higher priced than where they started. If a ship suddenly becomes very full then the cruise lines know that anyone who still wants to cruise on that specific ship at that late date probably has a good reason; it's their only vacation time or they want to join friends onboard. They know these people will pay a premium to get on that ship. So waiting for the last minute can be a big mistake if you really want to be on that specific ship.

But if a ship is about to sail and it still has a lot of empty cabins they may keep lowering prices every week until the ship sails. But you never know which direction prices will go until you see them change. They may go down one week and up drastically the next. So, there is no "best time to buy a cruise" rule – there are merely rough guidelines and understanding cruise pricing strategy. We will explore this further below.

Tip #2 – Avoid the Peak Season and Other Timing Considerations

There are times of the year when a cruise is considered less desirable. I am talking about when the cruise sails, not when you buy the cruise. For example, when it comes to time of year, the most expensive weeks to sail are the Christmas and New Year holidays. The most expensive season for cruising is summer when kids are on vacation because cruising is by far a family vacation, not a haven for singles, seniors or other tiny demographics as so often depicted in the media.

The next most expensive period is the winter season after the holidays. This is actually a very active period called "wave season." There is a myth that Wave Season is a good time to pick up a bargain – not true. The cruise lines know many east coast and Midwesterners want to get out of the snow and visit the warm Caribbean so cruises are not cheap – except if sales are slow, then they may get cheap.

The cheapest time of year to cruise is after summer vacation but before the holidays; September through mid-December. More people are pre-occupied with getting the kids settled in school, political elections and the holidays. The cheapest specific weeks of the year to cruise, historically, are the three weeks before Christmas vacation and the first week after the New Year's Eve cruise.

Tip #3 – Which Cruise Region Is Not Selling This Year

Any given year there is a cruise region which for various reasons is not selling well. It usually happens when there are too many ships in the area and not enough demand.

Here are examples of yearly pricing anomalies I have seen: in 2007 the Caribbean was soft in demand solely because it was considered boring. In 2008 Mexico's west coast was slow selling because there were too many ships going there. In 2009 Alaska was slow due to too many ships, in 2010 it was the Eastern Mediterranean, in 2011 it was the Western Mediterranean. In 2012 it is the entire Mediterranean for many reasons:

The Mediterranean has been experiencing soft demand largely because of the political strife in Athens and Northern African states like Algeria, Libya, and Egypt. Higher airfare costs due to oil prices also slowed down demand in Europe last spring, but oil prices and hence airfares have dropped recently.

The biggest factor in Europe was the January 2012 Concordia tragedy. The event received far more press in Europe, where it happened, than it did in the U.S. Furthermore, Europeans are even more leery of cruising in general as they are newer to the experience than Americans. Of course, no one predicted the Concordia disaster would happen, so when it did it was too late to change the number of ships scheduled to sail in the Mediterranean that summer (2012). As a result, the cruise prices there in summer, 2012, are as low as they have ever been. We are seeing 10-day cruises as low as $499 per person.

So, one should try to understand what cruising regions are on sale in any given year. It changes almost every year, so if you follow the industry trends instead of thinking about where you want to go first you can save a lot of money. If you choose to see Alaska this year instead of Europe you may pay twice as much, but Alaska was dirt cheap in 2008 – so you would have already seen it.

So, here is the secret: The best approach to cruising is to grab a bargain when you see one. In my experience, if you do this for five years you are likely to cruise to a different region every year. Let the whims of nature decide where you are going to go and eventually you could see every cruise region you want to see.

Tip #4 – Understanding the "Full Payment Due" Price Drop

The cruise booking process starts with a deposit, as low as $100 per person, but at some point the full payment for the cruise becomes due and non-refundable. At that point some people are going to give up their deposit and cancel the booking. So, assuming you can and wait until a cruise is just two or three months away and then pay in full, knowing the "full payment due date" can be a great time to start shopping.

Cruises of five days or less generally have a due date of 60 days before the cruise sails, cruises of six to nine days may have 75 days, cruises of 10 days or more may have a 90 days due date, but it varies by cruise line so be sure to check. How do you figure out when final payment is due for a specific cruise? Go to the web site of the cruise line and search for the "cancellation policy." It will tell you when final payment is due according to length of the cruise.

There is a good chance any cruise will get cheaper the week after final payment is due if many people drop out. But here is another caveat – you should wait at least 48 hours after the penalty period begins, because they will not drop prices until their "best price guarantee period" has lapsed. That period is 48 hours.

Tip #5 – The Truth About "Last Minute Cruises"

There are a few web sites out there that claim the cruise lines give them special prices to sell cruises quickly at the last minute. This is just plain not true – no travel agency is ever given special pricing for any reason. The cruise lines have a pledge with all cruise agencies to keep them selling cruises on an even keel so no one agency has an advantage. Any agency that tells you differently is lying and should be avoided.

Some travel agencies compare their prices to "brochure prices" and claim to have "75% off" – etc. Brochure prices are a joke and have had no bearing on real cruise prices for almost a decade. Don't think twice about brochure prices.

There are some cruise agencies that will give you an incentive to book with them; airline miles, shipboard credit, free trip insurance. These incentives are real and should be considered as long as the price is the same. Just always make sure you are comparing apples to apples. Always get the FULL price quote with taxes and fees before you commit to a company with additional incentives.

What I said above about "full payment due" is what most agencies refer to as "last minute cruises." I often get the question "can I go to the pier and get on a ship ready to sail away at a bargain price?" The answer is that it is about as likely as an airplane ticket – not very.

Last minute cruises – less than a month out

However, it does happen that a cruise can have many empty cabins when it is less than a week from sailing, and if you live close by you may be able to book this ship very cheaply. If that is the case you will see the price online. Do not wait until the same day; book it at least 48 hours out if you can. If that ship suddenly sells a number of cabins then the fare you see could double the next day.

Tip #6 – Grab a Bargain When You See It – SALES!

This is just reiterating what I said above – the fact is that you never know when a fantastic price will pop up or how long it will last. Another very new aspect of cruise pricing is short term sales offers when the lines drop prices significantly for just a few days and then raise them again.

Look for these sales – they are real. The cruise lines have lately found sales are a good way to "fix" problems with empty ships. If a ship is not full enough they may drop the price drastically for just a few days, sell a few hundred cabins, and then put the price back up.

Subscribe to as many cruise line newsletters as you can so you get notification of these sales. And by the way – they never give advance notice of a sale coming – that would only stop people from booking at full price. Also be aware that there is no longer a price guarantee (except for Carnival Cruises "Early Savers Program"). If you buy a cruise and it goes on sale the next week too bad for you. But you DO have a 48 hour price guarantee after you book any cruise. If that sale comes the next day or two then DO call and demand the lower price.

Do you take advantage of any of these strategies to find bargains yourself? Talk about it in the Cruise Deals forum.

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