Q – We seem to be getting more and more cruise offers at home which would indicate that the cruise lines are in trouble. Yet, for the most part, you have indicated they are not. Why this flurry of deals and special offers from the top cruise like the ones Churchill & Turen represents and do you, quite frankly, have the same offers?
A – Love this question. Your perception is correct. There are more offers and part of the reason is that marketing folks have to earn their keep. Many years ago, we advised guests to always use the “Cruisetruth Mathematical Model” to determine the true price of your cruise.
Take the least expensive, outside balcony stateroom and determine the total cost including port charges but leaving off air and insurance. Then divide by two. Then, divide that number by the number of nights you will spend aboard the ship. That will give you the true “per diem” cost per person and you can then compare that pricing with other cruises you might be thinking about taking.
The cruise industry is not “in trouble”. There is considerable Pandemic-related debt to be paid down, but as of yesterday, for instance, Royal Caribbean stock was up 114% for the year. (They own Celebrity and Silversea)/ Several major lines are operating currently at occupancy rates above 100%.
As to the deals. We can use Regent Seven Seas as an example. They currently have an offer on a wide range of sailings that includes a three-night land program at the beginning or end. Sounds great. And, like virtually all cruise advertising, it assumes that the consumer is totally deal-focused and will believe anything. So what is missing in these deals? The worst thing that can happen on a Seabourn cruise, or a Tauck Tour, for that matter, is a discussion where a large number of loyal guests realized that if they had just waited until the last minute to book they would have received a better offer. And you know what? That does happen on Carnival, on Norwegian, and on Royal Caribbean. Last-minute deals happen all the time on a four and five thousand guest ships.
But the world’s top ten ranked cruise lines, which are the focus of our firm, do not generally do that because they realize that those who book earliest are their most reliable core clients. And they have absolutely no interest in alienating their most loyal guests. We know many of these top executives. They are highly intelligent and aware men and women who have no interest in trying to train high-income, sophisticated cruisers to wait until the last minute to score a price deal that can be bragged about over cocktails on the ship.
The cruise industry’s goal is not to simplify pricing so every consumer understands it clearly. Just the opposite. Their commissioned call center personnel are trained to try to get you to spend the most you can when you call.
The luxury lines fully understand that people talk aboard ships and it could cause major problems if those who booked last-minute received better pricing than those first 25% of guests putting down deposits – often more than a year in advance.
There is a major cruise myth perpetrated by the media that would make it seem that every cruise line goes out and negotiates different pricing with every travel agency group – with each price negotiated separately so there are hundreds of pricing models in the cruise line’s computer system. And, you have to believe that the cruise line management is so stupid that they put out pricing to the public that undercuts the pricing they are offering in-house.
What many of our guests do not realize is that the top lines have a regular schedule of rising prices as each ship fills. On one of the very top-ranked lines, for example, the prices generally are raised every 90 days. So while they may offer a land program, in the example you used, when you book it you are being charged a fare that has been raised several times which helps defray the cost of the package. You are not getting a better deal than those who booked earliest.
With tour operators that meet our stringent requirements, there is no discounting at all. The worst thing Tauck could ever do to a long-time tour guide is to have twenty-four guests on the bus who have paid a wide variety of prices for the same program. Guests would be unhappy and the company might well lose one of its best guides.
Finally, you asked about our firm. Since we have held executive positions in the industry and fully understand pricing models, we take a different approach. Instead of playing foolish and misleading pricing games, we state, in writing, that we will seek out the best current legitimate offer and we will refund 100% of that offer to the guests. We have not, in 38 years, ever retained any portion of the discounts due to any guest of our firm. We’re sure there are other luxury travel firms that share this policy but we feel better presenting it in a legal format.
Apologies for the long response. You hit a nerve. Every travel supplier wants its guests to take action to book. The best way to do that, they feel, is to make every guest feel that they are receiving a very special offer. That is why you keep getting mailing offers at home. Use our Cruisetruth Pricing Model and you will always know exactly how good an offer you have received. Define your own “Per Diem” comfort level and don’t be shy about advising your advisor about the figure you have in mind.
Thank you for your important question.