Time To For A Reality Check For Mr. Fain

[RocketMan275]

Supposedly there is a "chart" (for lack of a better word) developed by the cruise line regarding the number of bookings for each cabin category that need to be reached by certain dates. If these numbers are far below the "norms", you may sale promos for certain categories. If cabins are selling well at the current price levels (even for a new ship), prices will rise. Some times this results in outside cabins being priced higher than balconies. There will always be a certain number of passengers who want to be the "first" to sail on a new ship and will pay any price to do so.

 

MARAPRINCE

 

Suggest you read the first few posts in this thread. While it is specific to NCL, I see nothing that would not apply to any cruise line.

 

http://boards.cruisecritic.com/showthread.php?t=2115592

[Cruisin-Family]

Suggest you read the first few posts in this thread. While it is specific to NCL, I see nothing that would not apply to any cruise line.

 

http://boards.cruisecritic.com/showthread.php?t=2115592

 

Great thread reference...I had not seen, thanks!

[RocketMan275]

Great thread reference...I had not seen, thanks!

 

There maybe small differences but I imagine all the lines do this pretty much the same.

[insidecabin]

The issue with that thread is it is before the game change of added value that all cruise lines employ.

 

NCL Choice(mid Dec 2014) messed it up big time for at least a few months if not a year, things may go back to a more normal cycle but not yet.

[Paulette3028]

My question to fellow cruisers is.....what are some of 'added value' things that you feel should be on a cruise and included in your cruise fare? Are these things no included, and if not what would you pay to have them included?

 

This question could steer this thread off its' intended mark, and I apologize.

[John&LaLa]

My question to fellow cruisers is.....what are some of 'added value' things that you feel should be on a cruise and included in your cruise fare? Are these things no included, and if not what would you pay to have them included?

 

This question could steer this thread off its' intended mark, and I apologize.

 

So why not start a new thread instead of hijacking this one. :what:

[Paulette3028]

So why not start a new thread instead of hijacking this one. :what:

 

to give someone like you the opportunity to respond as you did.

[John&LaLa]

Ok, good for you

[Morecruisesplz]

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.

 

If anything you are saying were heartfelt and true to what you seem to believe then you would be sailing on Seabourn, not RCL. You obviously can not afford anything except feeling like a big man on RCL.

 

We could have spend pretty much any amount we want when on any of our 30+ RCL cruises, thanks to years of saving. We spend more when we find a "deal" because it feels easier to spend when not be gouged. Many of us "cheap cruisers" (also known as savy travelers) were cruising long before RCL found that you suckers would pay huge prices for a mid-range cruise experience and then buy all of your children the drink package so they will be happy to stay away.

 

It might have been you and your wife who we were sitting next to in the sun when your children came up to you. Was that really you who pulled a $100 out of his wallet, handed it to the kids and said: "This is our vacation -- stay away from us." Cause it sure sounds like you.

[teecee60]

This is my FIRST EVER visit to the R/C boards... after spending the last 5+ years as a fan of Celebrity...and before that, NCL.

 

I'm doing so because I just booked my first ever cruise(s) with R/C... and I was surprised and VERY pleased to find THIS most interesting thread, and these two posts in particular.

 

Being an RC stockholder, as well as a cruise fan...I am fairly interested in all aspects of the discussion.

 

 

Royal CEO Richard Fain promises no more last minute discounting.

 

WE CONTROL THE SHOW. Not him. We either book, or we don't. And we will book when we feel the value is there. Second of all, if you book early, and then the cruise is later discounted, reward early bookings with equivalent onboard credit. If you don't want to do that, you can deal with angry passengers or empty rooms-their choice, their problem.

 

But the reason he has no choice in the matter, is empty cabins are a pain not easily tolerated. These ships can not afford to sail less than 95 percent full.

 

If the ships book there will be no deals. If they don't they will either deal, or go bankrupt, again, their choice. And the first choice they will make were that to happen is to pink slip Mr. Fain.

 

Supply and demand will always rule the free market economy.

 

Nobody is forced to take a cruise for a vacation. There are other options.

 

Royal is making giant ships with huge overhead.

 

The desires and tastes of Americans and Canadians are constantly evolving.

 

 

Hope you don't mind that I edited it just a bit... :eek:;)

 

An absolutely fantastic analysis of economics in general, and the cruise industry more specifically... but not going quite far enough on one very important point.

 

The entire Cruise INDUSTRY is a hopeless victim of its own success!

 

Not only is R/C building more and larger new ships... everyone else is too!

 

Every year SEVERAL new LARGE ships are being built, and even with a recovering economy, more cabins will drive prices lower, not higher.

 

Unfortunately, those lower prices are driving cutbacks to the onboard experience, and an increase in added (nickel & dime) charges.

 

A reasonable outcome may be the further fragmentation of the market with differences between brands like Crystal Celebrity Carnival becoming even more finely graduated.

 

 

Dropping prices brought about cheap cruisers who did not spend once on the ship. They CAN afford to sail with empty staterooms. When the discounting started and the cheap cruisers came, onboard revenue went down as much as 75%.

 

He is a smart man and I for one am glad prices are going up and the discounting will come to an end!

 

 

Sorry to disappoint you Coach...but I just booked a 34 night B2B cruise on Explorer OTS for UNDER $50pp/day. That doesn't include taxes and tips, but also doesn't include a minimum of $450 OBC from the shareholder benefit. :cool: :p :rolleyes:

 

My Elite status at Celebrity has already been converted to Diamond on R/C, so I'm definitely looking forward to those GREAT perks.

 

Bottom line? R/C will not be making any where NEAR as much money off of me as the guy who spent 8,500 for a seven night cruise in a Penthouse suite... SOLO. But R/C has one less empty cabin to worry about. And I am a HAPPY CAMPER.

Edited May 18, 2015 by teecee60

[John&LaLa]

to give someone like you the opportunity to respond as you did.

 

http://boards.cruisecritic.com/showthread.php?t=2210473

 

Lots of responses, check it out :cool:

[John&LaLa]

http://boards.cruisecritic.com/showthread.php?t=2210473

 

Lots of responses, check it out :cool:

 

Up around 40 comments this morning. I guess it was a valid topic, just not in this thread.

[Maraprince]

RCL was able to raise pricing due to the inclusion of a large amount of non-US passengers who were able to take advantage of the declining US dollar. For them it was a bargain (in Euros, etc.) even at the higher prices. When the US economy hit bottom, the number of US passengers dropped.

 

With the building of larger and larger ships RCL had to fill them up someway. They had to look elsewhere for passengers who were willing to pay the higher prices and then spend on board. Non-US passengers also had to pay their tips and the full amount of the cruise price when they made their bookings. Nothing was refundable. RCL gained the use of these funds months in advance of the sailings. Then, RCL converted the currency spent on board to US dollars thereby costing these passengers more in the exchange.

 

Compared to what these passengers would have paid for the same shop items and liquor in Europe, the US prices on board were a bargain.

 

MARAPRINCE

Edited May 18, 2015 by Maraprince

[phred119s]

First, I haven't read the entire thread, but I am a little sad when it comes to recent prices.

 

We've cruised 9 times on RC since 2006. We are 8 nights from diamond. I had every intent to get there this year, but then I started watching prices.

 

I knew we were going to take the 8 night on Navigator after Thanksgiving this year. Then I saw how much it was for the 3 of us. I currently have a list of 13 cruises departing from Sept to Nov that range from 7-8 nights. I ranked them based on price numbers 10-13 are my 4 RC sailings. 1-9 are other lines. We are likely choosing CCL Sunshine or CCL Dream this year.

[Cruisin-Family]

Their occupancy is favorable year over year while their onboard revenue is down about 6%. So you could argue that their on board pricing increases have decreased their total sales volumes.

Edited May 20, 2015 by Cruisin-Family

[John&LaLa]

Their occupancy is favorable year over year while their onboard revenue is down about 6%. So you could argue that their on board pricing increases have decreased their total sales volumes.

 

Do the financials include Celebrity?

Do prepaid packages count as onboard revenue?

Are free and prepaid drink packages causing the decrease

[RDC1]

Do the financials include Celebrity?

Do prepaid packages count as onboard revenue?

Are free and prepaid drink packages causing the decrease

 

If they are prepaid by the individual then I would expect they would need to be accounted the same as if purchased on ship.

 

On the other hand if they are included in a promotion offer then they could handle them either by crediting on board and booking less fare revenue that would keep the books consistent, or they could just keep everything in fares and give zero credit to on board for an included drink package. They could do it either way. Depending upon how their chart of accounts is set up the former would be cleaner and generate more accurate numbers. Looking at the RCL financials that both Celebrity and RCCI and the number of promotions over the past year if they were doing the latter it might actual have generated a larger drop.

 

It could also be a bit of a miscalculation of the impact of emphasizing packages which would explain why both lines seem to be doing a lot of adjustments around their drink packages and prices on ships. Keep in mind on board spending is an area likely to be impacted by the strong dollar.

 

Without access to more detail then they put in their filings it is all just guesswork.

Edited May 20, 2015 by RDC1

[Ourusualbeach]

Their occupancy is favorable year over year while their onboard revenue is down about 6%. So you could argue that their on board pricing increases have decreased their total sales volumes.

 

Financial statements include results from RCI, Celebrity, Pullmanteur and Azamara so it's really hard to determine what effect the pricing increases have had at Royal. Different promos being run this year vs past years are also skewing the numbers making year over year direct comparisons difficult.

[RDC1]

Financial statements include results from RCI, Celebrity, Pullmanteur and Azamara so it's really hard to determine what effect the pricing increases have had at Royal. Different promos being run this year vs past years are also skewing the numbers making year over year direct comparisons difficult.

 

Not much detail in their reports that is for sure. Keep in mind that the pricing increases will be more of next reporting year issue. The big impact this past year has been more of the promotions and the push for prepaid packages.

 

This year report did have a section about some unique impacts at Pullmanteur, but as I recall those were not revenue impacts. If I was spending any time looking at it I would carve out the total revenue by line (which one can get), make an assumption of Azamara and Pullmanteur being relatively consistent (they are a relatively small percentage of RCL revenue) and then try some models for both celebrity and RCCI using some assumptions about their promos. Might be fun, but with a long trip coming up and no need to look at the stock for investment purposes I would leave that to others.

[ABoatNerd]

Excellent topic.

 

I am interested in the impact of the low Canadian $ on cruise lines.

 

Canadians travel significantly and often are 25% or more on a sailing.

 

My household as cancelled all travel as we are not prepared to pay significantly more for air and cruises; we are grounded for the foreseeable future unless the Can $ rises substantively.

 

Wondering if the cruiselines will enhance resident specials to entice Canadians to travel despite the low $.

 

Happy and safe cruising to all.

 

ABoatNerd

[Maraprince]

Their occupancy is favorable year over year while their onboard revenue is down about 6%. So you could argue that their on board pricing increases have decreased their total sales volumes.

 

Any increase in on-board prices will cause a decrease in profit. If the prices are raised to an unacceptable level, sales will suffer. Passengers have the option of purchasing in the ports as an alternative to buying in the shops on board. As a real example, it costed $8 US dollars for 2 aspirins and a paper cup. Really? It was almost cheaper to buy an entire bottle of aspirins!!!!!

 

MARAPRINCE

[John&LaLa]

Any increase in on-board prices will cause a decrease in profit. If the prices are raised to an unacceptable level, sales will suffer. Passengers have the option of purchasing in the ports as an alternative to buying in the shops on board. As a real example, it costed $8 US dollars for 2 aspirins and a paper cup. Really? It was almost cheaper to buy an entire bottle of aspirins!!!!!

 

MARAPRINCE

 

First sentence makes no sense, however the second one does. The challenge is to figure out what level of increase causes sales to suffer. I doubt you or I are qualified to determine that.

[John&LaLa]

Ran across a Pullmantur Monarch sailing next week for $259 for 7 days. Maybe they didn't get memory about late discounting

[Paulette3028]

Ran across a Pullmantur Monarch sailing next week for $259 for 7 days. Maybe they didn't get memory about late discounting

 

I know you meant 'memo' not 'memory' -- I am here for you.....as you are for others. Or the memo did not apply to the other lines in the parent company portfolio of cruises....I am not really sure if it will apply to this one either....time will tell.

[John&LaLa]

I know you meant 'memo' not 'memory' -- I am here for you.....as you are for others. Or the memo did not apply to the other lines in the parent company portfolio of cruises....I am not really sure if it will apply to this one either....time will tell.

 

Auto correct is the devil