Richard Fain comments today about pricing

[cruisingsince94]

Okay, I exaggerated a little bit with the "outrageous" comment but the point I'm trying to make is, I'm not seeing "current rates going ever higher". Sure, I can find 7 day cruises that cost four times what I paid in the past. Those aren't the cruises I book. There's too many factors involved in cruise pricing, most of which is timing. In my experience, cruising with RCI for twenty plus years, I've not seen prices going ever higher.

 

What I have seen over the last several years is the tendency for RCI to nickel and dime passengers to death. In that regard, I would say it's getting outrageous.

 

We have also been sailing with RCI for over 20 years as well. The nickel and dining is indeed getting a bit much. We cruise the same regions for the same length of days during the off season months. The rates have risen quite a bit. We can still find deals now and then.

The main point in the post has to do with his statement that they have not raised ticket prices in 6 years. Their own 2014 SEC filing clearly states otherwise.

[Biker19]

The SEC filing by RCCL specifically spoke of a price increase of 2.4%. It had absolutely nothing to do with increased capacity numbers or additional passenger revenue. The filing says they raised rates plain and simple.

 

Here is the SEC filing that talks about the increase:

 

"Passenger ticket revenues comprised 73.0% of our 2014 total revenues. Passenger ticket revenues increased by $171.1 million, or

3.0%, to $5.9 billion in 2014 from $5.7 billion in 2013. The increase was primarily due to:

• a 2.4% increase in capacity, which increased Passenger ticket revenues by $134.6 million"

 

The 2.4% increase talked about in the filing is capacity increase, not rise in the base fare.

 

The following section is even more telling:

 

"an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a

decrease in ticket prices for Caribbean sailings, all of which contributed to a $99.1 million increase in Passenger ticket revenues"

 

Basically, what RCI is saying is that unless you sailed in Europe or Asia, they made LESS money per passenger from base fare in 2014 than 2013.

 

I assume Fain was talking about 2014 numbers compared to 2013 - for Americans sailing the Caribbean (the huge majority of the CC posters), he didn't lie.

 

All of this is not relevant to the current discussion - most folks in this thread are talking about the current prices vs. some time in the past. We won't have RCI SEC filing numbers to judge that till next year. I suspect prices increases, if any, especially in the Caribbean, will be minimal.

 

Biker, who was bored this morning and read most of the 100+ pages that makes up the RCI SEC filing.

Edited March 21, 2015 by Biker19

[The_Big_M]

"an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a

decrease in ticket prices for Caribbean sailings, all of which contributed to a $99.1 million increase in Passenger ticket revenues"

 

Basically, what RCI is saying is that unless you sailed in Europe or Asia, they made LESS money per passenger from base fare in 2014 than 2013.

 

No, actually what the above says is unless you sailed in the Caribbean they made more money per passenger from base fare in 2014 than 2013.

 

And given the overall situation was a net benefit, it means that the increases elsewhere outweighed the significant number of Caribbean cruises, which means the general increase has been highly significant.

[merlindog22]

Apparently people from the UK took 80,000 less cruises last year. It is not surprising as prices in the UK are way higher than those given in the US. Plus most cruises being offered by RC have now got a drinks package attached, which a lot of people do not want. Why should we pay for something we don't want. Also the ships are going to the same old places year in year out, a lot of us Brits like to do and see different things while on holiday, once in a while.

I think it is totally wrong that there should be a price difference between the Countries. I have absolutely nothing against any person not from the UK but I do think that everyone should be paying the same price on all cruises. They most diffentantly are not at the moment.

[American Bear]

.

 

 

Richard Fain is the total Gentleman.

I have had the pleasure of meeting and Dining with him many times on various RCCL ships.

 

I believe his view on cruising and pricing.

Why would anyone doubt him ?

 

 

 

 

 

Because he is lying!:eek:

[American Bear]

I'm a few hours delayed getting back to you, but it seems like several folks share my own skepticism on your report. I'll go point-by-point:

 

1) They have raised prices, a lot! BOGO...ya right! Makes them more money.

 

This isn't factual, it's relative. I have gone on 3 cruises in the last year that were, in fact, quite a bit cheaper than similar (or lesser) cruises that I took in years past. I can look and find plenty of cruises that are very comparable in price, plenty of cruises that are cheaper, and plenty of cruises that are way more expensive. It's relative to when/where/what ship you are cruising. We took Mariner for 7-nights on an Eastern Caribbean, inside room and then spent nearly $300 less for the same route on Oasis in a balcony room. Same time of year, same route, 8 years later.

 

2) They have also implemented new tactics to not reduce prices when they drop. (if you touch your booking everything is re-priced) Saves them money.

Meh. I won't argue this one, but I think it's ticky-tack. I personally find it offensive how some cruising hobos try to constantly work the system, so I like that it more difficult. HOWEVER, I don't like that this means the honest folks get penalized. I'll just walk away from this one.

 

3) Can't use multiple discounts (stock owners) like before and other companies do allow this. Saves them money.

 

Again... I'm really OK with them plugging loopholes like this. That's good business sense. This isn't some OMG CONSPIRACY thing, it makes it more even across-the-board for most cruisers. However, I think this can be taken too far and hope it doesn't go there. However, the point remains that this is misleading in regards to profits. It's not like they are shafting most people on this, they are keeping most people from shafting them by abusing the system.

 

4) They have raised port fees/taxes (on exact same ports other companies charge less, where is this extra money going?) Why do they fluctuate so much?

 

This was much better explained by chengkp75. THOSE are facts. This is some serious misunderstanding of the system on your part.

 

5) They have reduced employees pay structure, now that tips are automated. Saves them money.

 

Seriously explain this without using a phrase like "well, I befriended some crew members and we're BFF on Facebook." What are your source facts?

 

6) They have reduced the quality of service by employing less qualified staff. Cost them less.

 

Seriously Part II, Electric Boogaloo, explain this without using a phrase like "well, I befriended some crew members and we're BFF on Facebook." What are your source facts?

 

7) They have increased the prices of Drinks and specialty restaurants. Makes them more money

 

OK. I believe this is true. Although, to be fair, I'm sure that it's not pure profit like food/bev costs have stayed flat or dropped over the years. Is this a for-profit business or UNICEF we're talking about?

 

8) Diesel is at an all time low. Saves them a ton of money.

 

I'd love to see some facts for this one.

 

 

 

 

Is that detailed enough?

 

 

My question is do you work for RCL, because you're making a lot of excuses!

[American Bear]

You left out one point. This is a business, they have one obligation and that is to shareholders. Don't like it, don't use the product

 

 

Sent from my iPhone using Tapatalk

 

 

You are correct, because I am a shareholder, and I rarely use the product anymore!:D

[spunks]

check out their stock over the last 52 weeks, nothing to write home about. over a year and 4 months ago, this stock was in the toilet..Now these big WOW scam sales and stock has doubled....guess its not based on fare increases.

 

 

Well...Thats wrong...the stock has gone up 47% in the last 52 weeks...dont you wish YOUR IRA was totally in that stock..a year and a half ago it was in the toilet??? The RCCL stock has in fact been a rocket ship almost straight up for the last 5 years ( we bought it at $9.98)...we can all bitch about the drink prices, but the stock price has been astonishing

 

Doug

[Biker19]

No, actually what the above says is unless you sailed in the Caribbean they made more money per passenger from base fare in 2014 than 2013.

 

And given the overall situation was a net benefit, it means that the increases elsewhere outweighed the significant number of Caribbean cruises, which means the general increase has been highly significant.

Statistics can used to ones purposes anyway one sees fit. My statement is still true. You may have seen prices increases in your market, but that was not true for the vast majority of CC posters (who mostly care about Caribbean pricing).

 

Also, the numbers in the SEC filling are for the overall RCCL corporation - there's no detailed breakdown between the several brands (RCI, Celebrity, Azmara, Pullmatour, CDF).

 

People have to realize that you can't equate your own personal pricing experience with that RCL presents in SEC filings and what Fain may say about those numbers - two totally different things. As has been pointed by many on this thread, your own experience may show an increase in prices, but at the same time Fain can be truthful when saying prices have barely budged. Fain is talking numbers for the RCL as a whole - individual posters are talking about their individual numbers.

 

I'm sure Fain would love to say that fares are going up because that would further inflate the RCL stock price. He also can't say fares are going up considerably because shareholders would sue when they see that the SEC filings don't bear that out. He has not reason to lie about the numbers and lots to lose if he did.

Edited March 21, 2015 by Biker19

[cruisingsince94]

This thread has nothing to do with inflation.

 

The OP pointed out that Fain stated that they have not been able to raise ticket prices. The SEC filing indicates that they have indeed raised ticket prices. The percentage is irrelevant.

 

Thank you. At least you get it. 3 times in the span of 6 pages in their 2014 SEC filing RCI says they increased ticket prices in various markets. It matters not the percentage or where they did so. An increase is is a raise in pricing however you wish to interpret it.

[cruisingsince94]

Here is the SEC filing that talks about the increase:

 

"Passenger ticket revenues comprised 73.0% of our 2014 total revenues. Passenger ticket revenues increased by $171.1 million, or

3.0%, to $5.9 billion in 2014 from $5.7 billion in 2013. The increase was primarily due to:

• a 2.4% increase in capacity, which increased Passenger ticket revenues by $134.6 million"

 

The 2.4% increase talked about in the filing is capacity increase, not rise in the base fare.

 

The following section is even more telling:

 

"an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a

decrease in ticket prices for Caribbean sailings, all of which contributed to a $99.1 million increase in Passenger ticket revenues"

 

Basically, what RCI is saying is that unless you sailed in Europe or Asia, they made LESS money per passenger from base fare in 2014 than 2013.

 

I assume Fain was talking about 2014 numbers compared to 2013 - for Americans sailing the Caribbean (the huge majority of the CC posters), he didn't lie.

 

All of this is not relevant to the current discussion - most folks in this thread are talking about the current prices vs. some time in the past. We won't have RCI SEC filing numbers to judge that till next year. I suspect prices increases, if any, especially in the Caribbean, will be minimal.

 

Biker, who was bored this morning and read most of the 100+ pages that makes up the RCI SEC filing.

 

Forget about the percentage. 3 times in the filing it says they increased ticket prices in various markets. An increase is a raise, just as a pay increase is. Your assumption that he was speaking about just the Caribbean market is IMO not factual. This panel was discussing the industry as a whole in all markets.

[Biker19]

Forget about the percentage. .

Really? Do you think this discussion or whole thread would exist if posters were seeing a 1-2% rise in their individual price searches?:rolleyes:

[The_Big_M]

Statistics can used to ones purposes anyway one sees fit. My statement is still true. You may have seen prices increases in your market, but that was not true for the vast majority of CC posters (who mostly care about Caribbean pricing).

 

That may be true, but I wasn't aware Fain's statement was only directed to CC posters.

 

Moreover the fact there has been an overall net increase with a fall in only one market means that more people incurred an increase than not.

 

Also, the numbers in the SEC filling are for the overall RCCL corporation - there's no detailed breakdown between the several brands (RCI, Celebrity, Azmara, Pullmatour, CDF).

 

That's true that it covers several brands but there's nothing been given to show that RCL's percentage increase contribution was the lesser of those. You haven't provided anything to support that there is any difference in contribution between brands.

Edited March 22, 2015 by The_Big_M

[Royalty X]

The price of cruises departing Australia have definitely increased. The pricing is absolute highway robbery. I would've thought with Princess bringing more ships into the market, Carnival upping their offering to two ships (with a rumoured third coming) and local operation P&O Australia adding another two ships to make a total of five in their fleet, that RCI would at least try and compete with their pricing, but it doesn't seem to be the case. It's disgusting and sadly, it's making me consider other options. :(

[poncho1973]

My question is do you work for RCL, because you're making a lot of excuses!

 

No.

 

Show me an excuse.

[3dog]

Moreover the fact there has been an overall net increase with a fall in only one market means that more people incurred an increase than not.

 

That could be a faulty interpretation ("more people incurred an increase than not").

 

If, for example, prices for a cabin on a ship in the Caribbean was $100 per night per cabin and that cabin on a ship in the Mediterranean was $140, moving a ship from the Caribbean to the Mediterranean incurs a $40 increase in prices, yet the people see no increase at all (still paying $100 or $140 per night). Further, if that fare in the Caribbean dropped to $95 and the Med fare didn't change, the company sees increased fares by regional re-deployment, but more passengers see a decrease than an increase (in fact, in this example, nobody sees an increase).

 

 

The above is just a hypothetical example, but over the last decade I have looked at prices of cruises in the Caribbean/Mediterranean markets (and to some extent what I have seen recently in the Asia/Australia market) prices in these new markets appear to be higher than in the prices in the Caribbean market. So it is reasonable that a 1% increase in fares is driven by deployment to regions where they can charge higher prices than some general price increase (either overall or in a particular region/deployment).

 

 

Further, even if there were direct fare increases, pricing structures just don't fit a 1% increase that will affect a majority of consumers. Look around anywhere: prices will be stated as $99 not $100. Prices in just about every cruise brochure are listed per-person and at the cheapest price that can be had per-person (and always ending in 9 - part of the complaint with the BOGO or BOGOHO, the price listed is per-person after the discount is applied). To support a specific fare increase means increasing only those numbers that can be visually easily increased (won't change a $999 fare, but may change a $1499 fare to $1799), such that increases will probably be seen by a minority of consumers than a majority. And spot increases (e.g. Christmas cruises) are definitely not seen by a majority of consumers.

 

 

But somehow, folks seem to want to find some conspiracy or to catch some executive in a lie. So even if only one in hundreds of fares had increased, that executive must be lying.

[Thetrail]

To be honest, when I think about what I was paying for cruises from 2007-2010, I don't think I'm paying more now. Taxes and tips have gone up, but not the base fares. Then and now, we typically cruise in the off or shoulder seasons, so maybe peak season fares are up if that's what others are seeing.

Have looked at the prices I have paid for cruises from 1999 to 2015 and many of my recent cruises are actually lower! My father and stepmother just dida B2B with me out of N.O. on Serenade....the price, a whopping 399.00 person per week. There are many lower prices out there if you keep an eye out....:)

[Thetrail]

Royal Caribbean in the last 5 years has more than tripled in value as a corporation!

 

They make more money today per passenger than ever, why?

 

1) They have raised prices, a lot! BOGO...ya right! Makes them more money.

2) They have also implemented new tactics to not reduce prices when they drop. (if you touch your booking everything is re-priced) Saves them money.

3) Can't use multiple discounts (stock owners) like before and other companies do allow this. Saves them money.

4) They have raised port fees/taxes (on exact same ports other companies charge less, where is this extra money going?) Why do they fluctuate so much?

5) They have reduced employees pay structure, now that tips are automated. Saves them money.

6) They have reduced the quality of service by employing less qualified staff. Cost them less.

7) They have increased the prices of Drinks and specialty restaurants. Makes them more money

8) Diesel is at an all time low. Saves them a ton of money.

 

All of these factors increase revenue therefore causing the stocks to rise as the company is more profitable today then ever....

 

I understand that business is business but seeing as they are making more money then ever...why are they making so many cut backs and providing such a sub par service lately?

Some of your comments you make are "your opinion" and others I'm sure you have no evidence to back up other than "I heard this from so and so". You have "a few" valid points, but when you make the statements you have made, maybe a bit of research and "facts" would help make your post more believable...:rolleyes:

[zeridan]

The poster may be talking about the taxes and port fees.

 

There was a recent example of a "sale" with "free" beverage package. The website gave a cruise fare. When you entered the code (I believe it was "beverage"), the price jumped by $500 pp in my case.

 

Your price was not "going up" like some mystery bait and switch. It was the terms of the promotion. Your price went up "$500" because you could get the BOGOHO --> OR <-- the free beverage package for 2. The beverage package for 2, with gratuities, cost around $58 per person per day. Assuming this is a 7 night cruise, that is a value of $812. So if you would make good use of the beverage package you were coming out ahead by $312. You would even come out ahead on a 5 night cruise.

 

To everyone else moaning about prices, cruise ships sail with a relatively set amount of revenue in mind by the cruise companies, some people get great deals, some do not, it all balances out to about the same amount of money that the company expects to make per-sailing, on-board revenue aside. So for every "great price" someone else is getting a "not so great price". As the customer you have to decide if it is worth it to you or not. Every room will book at the price the market will bear.

[Cuizer2]

This thread is not about "Prices". It is about the STATEMENT about prices.

 

It is not about why prices rise and fall. It is about the claim that prices did not rise.

 

It is not about who got a good deal and why, or who did not get a good deal and why, or who pays more than who, or the overall cost of the cruise. It is simply about the claim that prices did not rise.

 

This thread is not intended to be a lesson on supply and demand. It is not intended to be a lesson on cruising economics. It is not a debate on how little the prices rose or how much the prices rose. It is only concerned with IF the prices rose.

 

It is also not a ten or twenty year study. It does not matter how much or how little prices rose, fell or stayed the same for the cruise industry. It is only concerned with prices for the ships that Richard Fain has control over and only for the last six years.

 

Any post NOT focused on "the statement" could be right or wrong or opinion or fact. However, such a post would be irrelevant to the subject of this thread.

 

Some of you are making points that have no relevance to the subject of this thread. Read post number one, then comment. Don't read the other posts (including this one) and then comment.

[3dog]

This thread is not about "Prices". It is about the STATEMENT about prices.

 

I disagree. It is a thread about if he lied when making "the STATEMENT".

 

So all of the factors that dictate price fluctuations or interpretations of the "STATEMENT" or other data may well be relevant.

[American Bear]

No.

 

Show me an excuse.

 

 

 

POOF you're an excuse!:D

Point is loyalty shouldn't hide lies, and RCL mgmt. is doing the 'trust me' routine, even though the truth is there for everyone to see!

Prices have gone up, (cruise price, drink prices, specialty restaurants, excursions, gratuities) and benefits have been reduced!

[cruisefrost]

Right on American Bear. Been cruising since 86 with most being with RCL, Diamond Plus.Done with cruising at this point in our lives. Love the Sea but seems they just keep cutting back and raising the prices. Not worth it to us anymore. 70 dollars for a meal for two in Chops is just plain stupid when the good meals and service were part of the cruise in the past. Eat there every night as some of the people on this board do it $490.00 more (7 night cruise)for a cruise on top of all the other nickle and dimming. Not to mention the security of the ships in port is getting very dangerous. Many people will jump all over this post because they refuse to face the facts. recent events in Tunsisa bears this out. Just a matter of time before this kind of thing happens on the side of the pond.

[The_Big_M]

That could be a faulty interpretation ("more people incurred an increase than not").

 

If, for example, prices for a cabin on a ship in the Caribbean was $100 per night per cabin and that cabin on a ship in the Mediterranean was $140, moving a ship from the Caribbean to the Mediterranean incurs a $40 increase in prices, yet the people see no increase at all (still paying $100 or $140 per night). Further, if that fare in the Caribbean dropped to $95 and the Med fare didn't change, the company sees increased fares by regional re-deployment, but more passengers see a decrease than an increase (in fact, in this example, nobody sees an increase).

 

Fair example to demonstrate that point.

 

However, in that situation then the fare on that ship has still increased, even if the person paying it hasn't suffered that.

 

In which case, the original claim is still incorrect, as fares have increased.

[cruzsnooze]

Apparently, he's never booked a cruise through their website. I have yet to find a cruise that you could actually book at the advertised price. When you get through to the part about picking a cabin, the price magically jumps up, and is not what you see on the search screen.

 

At least you could navigate their horrible web page LOL