Cruiseline economics +/vs. Pax

[Seadoc]

Ah...the boon of insomnia!

 

Have just completed several hours of insomnia-induced post (didn't count, but suspect a thousand or so) reading.

 

Tentative conclusion?

 

Current cruiseline economics, net-net, benefit seller (cruiseline) more than buyer (pax). Recent pricing policy events only exacerbate the "imbalance". Inexorable demographics will accelerate the "imbalance": Ship cabins are rapidly becoming(like many other elements in the American economy, including airline seats, durable and non-durable goods, autos, foodstuffs) simple commodities. Cruise marketing/pricing/distribution is rapidly morphing into the WalMart business model (increased market share=increased control=increased profit margin=fewer alternatives for customer). Customer reactions (complaints?) run the gamut from increased "nickel-and-diming" through dramatic short-term (year-over-year) cruise price increases to cruiseline strategies for future development (e.g., more ships=more cabins=more revenue=customer perception of overall diminution of brand identity and, hence, brand loyalty).

 

Example: Recent decision by NCL+RCI/X to dramatically change "pricing policy". T/As, it would appear, are no longer "rewarded" for efficiencies or superior marketing strategies...rather, the good ones are penalized under the rubric of "leveling the playing field", the not-so-efficient T/As are rewarded for inefficiency (or high profit margins at the expense of the consumer) and the net loser is the consumer. I found NCL's Pres/CEO, Colin Veitch's remarks telling: "...It also becomes clear that the introduction of Open Access Pricing available to ALL (caps mine) agents would strengthen our partnership with the entire travel agent community...". Note, please, the absence of any mention of the "partnership" with the consumer or brand loyalty to NCL (if such even exists). The net effect of these pricing policies is that you and I will be paying more (much more?) to cruise in the near future than in the recent past. If this new "policy" of NCL+RCI/X is successful, we'll witness the working definition of the word "nansecond" in the time it will take all other cruise lines to adopt identical "policies". It appears to me that this represents the beginning of the WalMart-ism of the cruise industry.

 

Demographically, impending boomer retirement is a (the?) numero uno consideration for cruise lines (as well as realtors, real estate developers, insurers, the SSA and Medicare, healthcare players and morticians - just to name a few) as they position themselves to exploit the phenomenon. New ships, more cabins, increased nickel-and-diming, increased pricing, increased demand, increased centralization (read "carnivore"), decreased brand identity/loyalty and decreased cruiseline "capital risk" are all in the stew.

 

The Question: If all/much/any of the above is correct, who will be the

"winners" and who will be the "losers"...and what, if anything, can the "losers" (read "you and me") do to become "winners"?

 

PS: Sorry, am too sleep-deprived to select an icon!

[Twaincruisers]

I have trouble understanding the latest cruise selling policies as a part of Walmart-ing. Personally, I do not shop at Walmart because of their labor policies, pricing to drive other companies out of business, and I just don't want to contribute so much to the Chinese economy. I believe the latest cruiseline sales policies contribute more to the OPEC model of trying to eliminate competition and control the price. Never have liked monopolies or oligarchies.

[Danno]

Seadoc...I think you just defined what I felt happening and couldn't explain why. I think I'll book an island for next year...at least each island has a different look, feel, personality...

 

If this is happening because I, and people like me, are reaching the age where we will considering retiring within the decade...can I expect to get STUPID as I get older, because I know good from bad now and I don't expect that will change.

[venicecruiser]

Seadoc - Well done! You said what some of us have been thinking perfectly!!

 

Claudia

[benjamins]

Yes, agree with your points. I'm looking now for products that are own and ran by smaller outfits or are not targeted for the North American customer. For ships, maybe Oceania, not sure, maybe MSC. Celebrity's getting further and further away from what I desire (though I still have interest in the Century ships).

[albertiger]

book a cruise ship, they're becoming as big as some islands and too big to go anywhere that doesn't have the largest piers! if they get much larger might as well put a flattop and hanger deck on and just anchor way offshore! ;)

[Petoonya]

Seadoc,

You express my sentiments exactly but have never heard it expressed as eloquently and succinctly as you do. I have yet to give up on X, but can feel the changes coming as I head towards retirement age.

 

Next month will be our first and possibly last Oceania cruise as this may be the last time we will be able to afford it. As cruise lines (X included) move towards "Wal-martism" won't the next niche be the next level up... what Oceania is now? And the demand create higher pricing. Sigh.

 

Sorry you could not sleep, but appreciate your thoughtful analysis. :)