Time To For A Reality Check For Mr. Fain

[orville99]

Here is what I learned here:

1. There are many people here that I am glad have nothing to do with my business budget.

2. RCL should be bankrupt in a short time.

3. Poor people should be forced to cruise other lines.

 

Here was what was forgotten by all but a few...BALANCE. Every business needs balance. RCL has years of financials to back up their decisions, and for the ones who asked others to "prove it" it is in the annual report. I am not saying the opinions on past revenue given here are right or wrong, I have not looked at numbers, but the proof is published for all to see. Empty berths translate into reduced food and beverage consumption, reduced energy to power the ship and so on, my point is that there is cost associated with each berth and it may be better to let some go unfilled than to discount at a loss. There were some very valid points made on both sides in this discussion, too bad people are not mature enough to accept the different views and their insight was overshadowed by their personal attacks and short-sighted comments.

 

 

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[AZAficionado]

There is a business/marketing aspect to all of this that I think most people are missing. Market position is a valid and key element to business. You see this all over the place and probably don't think much of it.

 

Walmart sells clothes. Saks Fifth Avenue sells clothes, at a much higher price. How is Saks still in business?

 

Ford, Chrysler, and GM all sell a wide range of cars. Not a one of them has a car that is close to the starting price of the cheapest Lamborghini (ok, maybe one super-car each). Yet, Lamborghini remains in business.

 

The closest and most relevant example would be hotels. Motel-6 has rooms by the night. So does the Ritz-Carlton. You can bet that the Ritz-Carlton has many nights throughout the year with empty rooms. Yet, they keep their prices high and continue to profit.

 

The point is that a business can be entirely successful without being a low-cost leader. There are many other viable market positions and some of them depend on high pricing to keep the product/service "exclusive". It is not discrimination to do this as anyone with the money is more than welcome to purchase the product/service. The catch is that many simply cannot afford it.

 

Royal is clearly going from a Motel 6 position to a Ritz-Carlton position (ok, maybe not that big of a jump). Intelligent minds can disagree if that is a move to a new position or a return to an old position. Personally, when I look at the Song of Norway and it's super-swanky lounge called the Viking Crown, I lean towards a return to an old position. Either way, those whose budgets/values/preferences no longer fit with the new position are going to be upset. To put it bluntly, they are being shown the door. By the same token, those whose budget/values/preferences fit with the new position will welcome another option to consider.

 

There is no guarantee this new position will work out for Royal. Maybe it will, maybe it won't. Given some of the other more "exclusive" options out there, I would be surprised if it doesn't work out for them.

[Host Jazzbeau]

Supply and demand. Trying to discourage people waiting until last minute bookings.

It's a very simple concept.

It's not discrimination.

It's about the bottom line, and satisfying the owners (shareholders.)

 

The point which the numbers debaters are overlooking is that RCL doesn't have just one cruise to sell -- they have hundreds of cruises each year, and the year after, etc. So if they lose money by sailing with some empty cabins for a while, but in the process reset everyone's expectations about the cost of a cruise, they will quickly recoup the lost revenue with higher fares in the long run. I'm glad RCL has a CEO with a long-term view, because it raises the hope that RCL will be able to continue delivering the product we expect (at each level on their different lines) and not continue this awful race-to-the-bottom cut, cut, cut.

[Paul65]

I am at a total loss.

 

Just about every top thread on this board is about another change that RCCL is making that affect return cruisers.

 

Whether it be charging a la carte for a specialty restaurant, the disgraceful BOGOH special that refuses to die, the higher prices, the elimination of last minute 'sales', the constant exclusions of any specials for Quantum class ships, the redesign of the next cruises, changes to dining - whether MTD or fixed, the email offers that never seem to make it to many mailboxes, and I'm sure I'm leaving something out.

 

I am at a loss as to why you would think this kind of stuff was "new." There have been changes all along; some for the better, others not. It wasn't that long ago that specialty restaurants were a totally new concept. There have always been marketing gimmicks. The old WOW sales, in my opinion, weren't any better or worse than the current BOGO sales. In the end, they're all just gimmicks to try to attract bookings.

 

Specials for the latest and greatest ships have always been hard to come by. There's a lot of demand for the latest and greatest, therefore not much opportunity to get it at a discount. This is not only not new for RCCL, but it's the way things work in just about every facet of a free market. The hottest trendy restaurants don't offer coupons; the big blockbuster movies don't offer discount tickets; etc.

 

There's always a laundry list of things that someone is complaining about. Maybe I'm wrong, but it doesn't seem to be a longer list now than a couple years ago; the details have just changed a little bit. If things change, people complain. If things don't change, companies become obsolete.

[whitecap]

The point which the numbers debaters are overlooking is that RCL doesn't have just one cruise to sell -- they have hundreds of cruises each year, and the year after, etc. So if they lose money by sailing with some empty cabins for a while, but in the process reset everyone's expectations about the cost of a cruise, they will quickly recoup the lost revenue with higher fares in the long run. I'm glad RCL has a CEO with a long-term view, because it raises the hope that RCL will be able to continue delivering the product we expect (at each level on their different lines) and not continue this awful race-to-the-bottom cut, cut, cut.

 

I agree with you Host Jazzbeau; I took exception to the poster on this thread that several times stated that those that sought "discounts" or who spent less (he called them Cheap Cruisers) were of a "lesser class" than himself who was willing to pay a high cruise fare to keep those lesser people from being able to afford to cruise with RCCL. Thanks for weighing in.

 

p.s. Poncho hurt my feelings! :)

Edited April 21, 2015 by whitecap

[xeonpro]

I am at a loss as to why you would think this kind of stuff was "new." There have been changes all along; some for the better, others not. It wasn't that long ago that specialty restaurants were a totally new concept. There have always been marketing gimmicks. The old WOW sales, in my opinion, weren't any better or worse than the current BOGO sales. In the end, they're all just gimmicks to try to attract bookings.

 

 

 

Specials for the latest and greatest ships have always been hard to come by. There's a lot of demand for the latest and greatest, therefore not much opportunity to get it at a discount. This is not only not new for RCCL, but it's the way things work in just about every facet of a free market. The hottest trendy restaurants don't offer coupons; the big blockbuster movies don't offer discount tickets; etc.

 

 

 

There's always a laundry list of things that someone is complaining about. Maybe I'm wrong, but it doesn't seem to be a longer list now than a couple years ago; the details have just changed a little bit. If things change, people complain. If things don't change, companies become obsolete.

 

 

Web said!! We wouldn't want Royal Caribbean to become obsolete, would we?

[svillager]

Paul65 - I agree with many of your points, however, recently I think many of the changes are changes that affect past cruisers, regardless of your C&a level, more than previous changes.

 

Recently there was an article in a magazine - I thing advertising Weekly, that they have turned to agencies to develop an advertising campaign for winter 2015 - to focus on the first time RCCL cruisers, who did not return to book a second cruise.

 

It is the first time/ second time cruiser that RCCL is attempting to attract.

 

The population of cruisers who are loyal are not being WOWed - yet these are the majority of passengers in the fall/winter non-holiday long sailings, be it repo or an extended cruise.

 

Without them - ships will sail empty. Many, including myself, cruise several times a year. Changes in prices, whether cabins, liquor, restaurant will only be recognized by those who experienced them previously.

 

Transparency is the word of the day in business - but I do not feel that is RCCLs direction.

 

They might be going for the new, moneyed cruiser - but I think that eventually these changes will impact people's willingness to be loyal and rethink their vacation/leisure travel.

 

Just my opinion.

[Oppalopa]

Agreed.

Agreed :)

[Camlott]

Pricing a mass market line out of the reach of the mass market seems like a illogical marketing plan.

 

This is the best quote of this entire thread so far!

 

So you have 100 cabins that you sell at 2000 apiece, and at that price, you sell 100%- with revenue of $200,000.

 

So raise the price by 50% to 3000 total per cabin- to get the same 200,000 of revenue, you only need to sell 67 cabins (66 and 2/3 technically, but you can sell part of a cabin).

 

33 fewer cabins are used, and there is the same revenue.

 

On top of that, some of the cost to cruise goes down, since there are 1/3 fewer passengers- the only real fixed cost is fuel and labor (assuming the labor numbers stay the same). Food costs go down by 1/3.

 

So basically Fain was saying they need to return to smaller ships. I know quite a few people around here who will be thrilled with that even if it means higher prices!

[Paul65]

Paul65 - I agree with many of your points, however, recently I think many of the changes are changes that affect past cruisers, regardless of your C&a level, more than previous changes.

 

Recently there was an article in a magazine - I thing advertising Weekly, that they have turned to agencies to develop an advertising campaign for winter 2015 - to focus on the first time RCCL cruisers, who did not return to book a second cruise.

 

It is the first time/ second time cruiser that RCCL is attempting to attract.

 

The population of cruisers who are loyal are not being WOWed - yet these are the majority of passengers in the fall/winter non-holiday long sailings, be it repo or an extended cruise.

 

Without them - ships will sail empty. Many, including myself, cruise several times a year. Changes in prices, whether cabins, liquor, restaurant will only be recognized by those who experienced them previously.

 

Transparency is the word of the day in business - but I do not feel that is RCCLs direction.

 

They might be going for the new, moneyed cruiser - but I think that eventually these changes will impact people's willingness to be loyal and rethink their vacation/leisure travel.

 

Just my opinion.

 

In your earlier message, the specific items you mentioned didn't seem at all to be particularly bad for the "loyal" cruisers, except perhaps the change in onboard open bookings. I suppose the last-minute discount thing might be in there, too, but that's just a specific subset of cruisers who have the luxury of making last-minute plans. I suppose the next cruise thing is, in a way, too, because you still get a pretty good incentive, if you're planning ahead and picking a specific sailing, but not for an open "I'll sail again at some point" next cruise.

 

I don't think for a minute that they only want to attract new cruisers. They need new and repeat customers. If they don't attract any new customers, they will die, but similarly, if they don't create customers who want to come back, they will die.

[BecciBoo]

I am also going to pursue your banning from this site, CoachT. Your blatant prejudice has no place here.

 

Correct....not one word of the poster bashing going on here has a place here.....just sad that won't stop it.

 

We are supposed to be criticizing cruising here, not each other.:(

[vacationers]

The economic reality is FACT. When the prices dropped and the discount seekers and cheap cruisers came, onboard revenue dropped. It makes more sense to keep prices higher where people will and do spend money on board.

 

Those who bought at a discount, were not prepared and did not spend as before. This is a verifiable fact. It is not elitist to state reality. Richard Fain has been stating for years that cruise prices across the lines were artificially far too low for the value offered. As a shareholder, this is a brilliant strategy to end this discounting nonsense.

 

 

CoachT you must be a company executive making a lot of money. :eek:

No consideration for the other middle class who we do count our dollars.

[vacationers]

And they are going to do that by charging them a premium and this makes me so happy! Richard Fain has repeatedly said prices are artificially low and now they are approaching the levels they need to be. Yay for new cruisers at higher prices!

 

 

I think CoachT is Richard Fains right hand!! LOL

[Suzieanna]

I suppose they can say what they want and do what they want, and if the company feel that keeping prices up in an attempt to gain/retain exclusivity is a good idea, then that's up to them.... The final decider will be whether enough people continue with RCI or will they take their vacation dollars to a different supplier? It might be viable to have a half filled ship leave port, but for how long?

Edited April 21, 2015 by Suzieanna

[micmacmissy]

I am also going to pursue your banning from this site, CoachT. Your blatant prejudice has no place here.

 

Prejudice? Because he disagrees with you? Banning from the site? Wow, a little extreme, don't you think?

[micmacmissy]

Correct....not one word of the poster bashing going on here has a place here.....just sad that won't stop it.

 

We are supposed to be criticizing cruising here, not each other.:(

 

I agree with you. But...what about the other posters on here, calling Coach T elitist and making political comments and mocking him? Just because someone has a different viewpoint makes it okay to bash them?

 

He did absolutely NOTHING that would get him banned. That is a really ridiculous suggestion.

Edited April 21, 2015 by micmacmissy

[vacationers]

I suppose they can say what they want and do what they want, and if the company feel that keeping prices up in an attempt to gain/retain exclusivity is a good idea, then that's up to them.... The final decider will be whether enough people continue with RCI or will they take their vacation dollars to a different supplier? It might be viable to have a half filled ship leave port, but for how long?

 

Correct!!!! The fact is that a good CEO with good marketing skills does not insult the population and cruisers that allowed him to have this job. He can have his opinion but not insult the middle class working people who clearly the only way they can do vacation is on a budget. There is nothing wrong with that.

 

Like someone mentioned "He determined that the two classes were "discount seekers" and "cheap cruisers" and clearly stated that he was ok with raising prices so as to keep those two classes of cruisers from being able to afford the cost. He may think this but should not make a public statement where clearly can be taken as discrimination. It is like saying, if you can spend enough, we do not want you on my ship

 

We do have choices and even if other cruise lines might have comparable prices we can always jump companies.

Edited April 21, 2015 by vacationers

[Paul65]

Correct!!!! The fact is that a good CEO with good marketing skills does not insult the population and cruisers that allowed him to have this job. He can have his opinion but not insult the middle class working people who clearly the only way they can do vacation is on a budget. There is nothing wrong with that.

 

Like someone mentioned "He determined that the two classes were "discount seekers" and "cheap cruisers" and clearly stated that he was ok with raising prices so as to keep those two classes of cruisers from being able to afford the cost. He may think this but should not make a public statement where clearly can be taken as discrimination. It is like saying, if you can spend enough, we do not want you on my ship

 

We do have choices and even if other cruise lines might have comparable prices we can always jump companies.

 

He did not insult the middle class working people. He made comments that they intended to stop the practice of making last-minute discounts and cited the fact that such discounts often tend to upset those who booked in advance at a higher price.

 

Someone on here may have characterized it as him "clearly stating" that he was OK raising prices to keep those "classes of cruisers" from being able to afford the cost. But that is not at all what he said. At least that was not in any of the quotes from Richard Fain that I saw. If I missed something, please direct me to an article that quotes him talking about "discount seekers" or "cheap cruisers."

[wolfganghowell]

The Texas economy is going to struggle,

 

......ummm.....I'm still reading the 7 pages but this made me laugh. You must not live in Texas. We are a lot more diversified than big oil. Guess that's why Toyota and State Farm just moved enormous hubs here - creating 1000's of jobs in Dallas alone.

[Honeybearhollow]

I suspect CoachT is an employee of the cruise line.

[idamae3218]

He did not insult the middle class working people. He made comments that they intended to stop the practice of making last-minute discounts and cited the fact that such discounts often tend to upset those who booked in advance at a higher price.

 

Someone on here may have characterized it as him "clearly stating" that he was OK raising prices to keep those "classes of cruisers" from being able to afford the cost. But that is not at all what he said. At least that was not in any of the quotes from Richard Fain that I saw. If I missed something, please direct me to an article that quotes him talking about "discount seekers" or "cheap cruisers."

 

Those two terms were Coach T. I think they combined responses to two different comments.

 

Sent from my SAMSUNG-SGH-I337 using Forums mobile app

[bplazo]

I have stopped sailing with RCCL, bigger is not better.

[Paul65]

Those two terms were Coach T. I think they combined responses to two different comments.

 

Sent from my SAMSUNG-SGH-I337 using Forums mobile app

 

Yeah, I saw what was going on - people were confusing posters' rantings about what Mr. Fain said with what he actually said.

 

The fact is, there are a small percentage of cruisers who benefit from the reduced prices of a "last-minute sale" and the majority of us, who have less flexibility and need to plan somewhat in advance, don't. So, I think he (Fain) is probably right that it does more harm than good.

 

Of course, they will still want to fill their ships, so that could possibly lead to more aggressive pricing earlier on ships/itineraries that are a long way from being sold out. I don't think there is much chance of them letting ships sail half or 3/4 full. So, they'll still have to do what it takes to get people onboard.

[orville99]

Three comments and then I'm done. First, I just finished going through the complete MarketLine report on the cruise line industry and Mr. Fain is on solid ground. Second, Based on what I read, I expect all of the other lines to follow suit. Third, I expect the other lines not to shoot themselves in the foot by announcing their intentions to the world.

[BekkaW]

A very un-educated comment. Apparently you know nothing of the laws against discrimination.

 

Please explain how exactly it is discriminatory at law to price something so that not everyone can afford it?

 

Edited to add: I see that you've clarified your comments and I get that, I get why you would find it upsetting that people are making reference to class, but it doesn't help anyone to start claiming that RCI is breaking discrimination laws. Or to state that other people don't understand those laws when your own comment is factually incorrect.

Edited April 22, 2015 by BekkaW