More profitable? Sea Days or Port Days?

At the risk of asking a question that has likely been dealt with before, do cruise companies, generally, make more money on sea days or on port days?

The fact that, with the key exception of repositioning cruises, most cruise vacations are packed with ports of call, suggests that they produce more profit than sea days. But costs such as port mooring fees and land-side services can't be cheap, either.

I'm guessing that passenger change-overs must be relatively unprofitable days?

Anyone in the know about this, please?

Thanks,

Canuker

I would hazard a guess that sea days are more profitable - more drinking, gambling, shopping, etc.

Just out of curiosity, why are you asking?

As a rule of thumb, the cabin ticket price pays the overhead for the cruise, and any profit is generated by "onboard revenue". This includes upcharge dining, drinks, bingo, casino, internet, and ship sponsored shore excursions. Spas, shops, and art auctions (any left?) are concessions, so they pay a pretty much flat rate to have the space on the ship. The shore excursions, really don't add that much to the overall profit, as the cruise line has to pay the excursion operator, and generally there is more insurance cost because of the cruise line's backing.

So, port days have little onboard revenue, but also little fuel cost. Sea days have higher onboard revenue but commensurately higher fuel cost. On average, the sea day provides a little more profit than a port day, but not by much.

Accounting--even honest accounting--can be creative at times. How do you price the crew's shore leave? I assume the fuel charge is taken on the sea days, and not on port days when you fill up? What about transactions which occur between the cruise line and the port's businesses (such as advertising)? Are we talking top-line revenue, or bottom-line profit?

I imagine sea days have more income but port days have less expenses. And if the line offers drink packages that gap may be even greater.

most cruise vacations are packed with ports of call

Actually over the last few years the net amount of hours in port has certainly decreased. For example, an Eastern Caribbean seven-day cruise from Florida used to have four days in port; now one of those days is either only a 4 or 5 hour quickie at Nassau or Grand Turk, or just an extra sea day. Which leaves only three port calls, one of which is often at a cruise line owned private beach.

Compare any region's itineraries to those a decade ago and you will find there are now more hours at sea to sail between increasingly close-set ports. Obvious result is saving fuel but of course that encourages onboard spending. The Casino, Spa, Art Gallery, and on some ships the higher-end boutiques, are the largest revenue centers as they are run by outside contractors who offer both guaranteed rent and a cut of the profits to the ship.

You may now be asking, aren't shore excursions guaranteed income as well? Yes they are but again compared to a decade ago the selection is less, both in quantity and variety. Demand is down as more new cruisers arm themselves with the foresight to arrange their own day ashore, and with the itineraries so repetitive long-time cruisers certainly are no longer interested in ship's tours. So only a handful of the highest marked-up tours remain.

I'm not pretending to be "in the know" but simple observation of these trends clearly indicates the sea day is the revenue king onboard.