Other lines following Royals lead in ending discounting

[Ken at the beach]

Looks like the other lines are going to follow royals lead in eliminating last minute discounting of cruises.

 

 

Last-minute discounting on Carnival cruises is also being eliminated, similar to changes underway at Royal Carnival and Norwegian, much to the chagrin of deal-seekers. Booking a cruise is beginning to purchasing an airline flight -- if one pays earlier, the rate is cheaper than if waiting for the last minute.

 

http://www.thestreet.com/story/13154034/1/carnival-ceo-aims-to-bust-the-biggest-myths-about-the-cruise-industry.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Edited May 25, 2015 by Ourusualbeach

[bUU]

So effectively they're all following American Airlines' lead. Interesting, and a bit disappointing as we were hoping, now that we're driving distance to NOLA, to pick up some last minute deals to the Western Caribbean.

[Thetrail]

So effectively they're all following American Airlines' lead. Interesting, and a bit disappointing as we were hoping, now that we're driving distance to NOLA, to pick up some last minute deals to the Western Caribbean.

that RC no longer sails out of NOLA?

[bUU]

Yes sorry... got my wires (forums) crossed. The article was about Carnival, and it is Carnival that I was hoping to cruise.

[RSLeesburg]

I wonder why the cruise lines do not offer discounts or incentives for paying off your entire cruise in advance of final payment date - maybe X percent if you pay off 300 days in advance, Y percent if you pay off 200 percent, etc. They want people to book and pay them earlier, this might do it - rather than these BOGOHO endless sales.

Edited May 26, 2015 by RSLeesburg

[American Bear]

So the Carnival CEO said something as stupid as the RCL CEO.

Last minute price breaks on ships with empty cabins isn't ever going away!

Anyone that believes them, 'we got some 'prime' Florida swamp land for ya!':D

[marci22]

Well they can blame the last minute discounts on themselves. Too many people got tired of booking early and then seeing their price drop at the last minute.

 

If they are going to price early bookings lower than later bookings, that's great. Now let's see if they are able to do it.

[nelblu]

They are dreaming of a perfect world, however, we live in an imperfect world.

Unless they are planning on reducing capacity, a the airlines have, they will not achieve their objectives.

[Beachcampin]

This is all really easy for the cruise lines to implement while bookings are running strong. Some of the last minute cruises I took last year are about half what I would need to pay this year. If bookings are strong in the short term, they can say no more discounting and try to encourage more future and long term bookings. However, all markets are cyclical, including this one. Eventually the hurricanes will start rolling in (we have been in a lull for a while), Carnival will have another fire and Costa will do something stupid. Things always change.

Edited May 26, 2015 by Beachcampin

[teecee60]

This is all really easy for the cruise lines to implement while bookings are running strong. Things always change.

 

I just booked a 34 night B2B on Explorer OTS for UNDER $50pp/day. :eek: :D :cool:

 

So I'm not quite ready to panic just yet. :rolleyes:

 

 

Unless they are planning on reducing capacity, they will not achieve their objectives.

 

I agree! Celebrity is about the only major cruise line to reduce its cabin capacity... by selling off Century. (and even that was just a "transfer" to another entity, as those cabins are still on the market in Asia)

 

Will ships be allowed to sail with 10 empty cabins? or 50? or 100? or 250? or maybe even 500?

 

I'll believe it, but not until I see it. :rolleyes:

Edited May 26, 2015 by teecee60

[nelblu]

I just booked a 34 night B2B on Explorer OTS for UNDER $50pp/day. :eek: :D :cool:

 

So I'm not quite ready to panic just yet. :rolleyes:

 

 

 

 

I agree! Celebrity is about the only major cruise line to reduce its cabin capacity... by selling off Century. (and even that was just a "transfer" to another entity, as those cabins are still on the market in Asia)

 

Will ships be allowed to sail with 10 empty cabins? or 50? or 100? or 250? or maybe even 500?

 

I'll believe it, but not until I see it. :rolleyes:

 

But, they also introduced newer/bigger ships. I guess the BOGOHO is working as I just got an e-mail indicating that Azamara (sister company) is running a similar sale, plus up to $500 OBC. What sales! lol

[iancal]

Really?

 

Perhaps Mr. Fain should take a look at RCI or Celebrity's 'Tuesday Specials' page. It would appear to contradict his statement.

 

There is still lots of discounting for bookings inside the final payment window and for last minutes. This is how we cruise. The trick is be flexible and match good air fare with good cruise fare.

 

If you are in any doubt of this simply check out the last minute discounting for Alaska.

Edited May 26, 2015 by iancal

[DirtyDawg]

So the Carnival CEO said something as stupid as the RCL CEO.

Last minute price breaks on ships with empty cabins isn't ever going away!

Anyone that believes them, 'we got some 'prime' Florida swamp land for ya!':D

 

I'd say more wishful thinking than stupid. Just like I wish that I was taller and better looking (think Brad Pitt vs. Barney Fife). But, I'm afraid all the sweet talking in the world won't end the reality of last minute discounts or improve my odds of getting a date with Kate Upton. ;)

Edited May 26, 2015 by DirtyDawg

[BigB0882]

I would imagine a lot of Carnival's core demographic are people and families who go on cruises at the last minute because they can get the good deal. I don't understand why they would want to alienate this group. I sail on Carnival so I am not judging, not in the least.

 

It doesn't make sense to sail out at less than full capacity if you can fill those rooms, even for a big discount. That is better than not making any money and those people will often spend money on board.

 

I imagine these lines will still discount last minute sailings but they will just do so in a way that they can avoid certain wording and say they aren't discounting anything. Maybe "special offers" wont count as a discount, etc.

[grandgeezer]

I know Carnival Corp is made up of many cruise lines, with one of them being Carnival Cruise Lines. There is an online website that has, what they call a 90 day ticker. It supposedly list all the deals coming up for the next 90 days. If you go to the Caribbean listing, take out the one Spanish line, and it could pass for a Carnival Cruise web page. Royal has a few as well as the other lines, but Carnival, is by far, the star of the show. Yet, they won't discount last minute cruises??

[NightOne]

I don't understand why everyone seems to have such a hard time with this.

 

The CEO(s) of a cruise line say that the company is going to get rid of last minute discounting and everyone here responds "No you're not".

 

I believe them when they say it.

[ATC cruiser]

Really?

 

 

 

Perhaps Mr. Fain should take a look at RCI or Celebrity's 'Tuesday Specials' page. It would appear to contradict his statement.

 

 

 

There is still lots of discounting for bookings inside the final payment window and for last minutes. This is how we cruise. The trick is be flexible and match good air fare with good cruise fare.

 

 

 

If you are in any doubt of this simply check out the last minute discounting for Alaska.

 

 

Those Tuesday sales are no longer what they use to be. I just did a dummy booking for my July 24th Vancouver to Seward cruise. Those so called sales are about $1200 for an balcony, compared to when I booked it about a year ago. Add to that, try a get a descent airfare to Vancouver this close to your sailing date.

[DirtyDawg]

I don't understand why everyone seems to have such a hard time with this.

 

The CEO(s) of a cruise line say that the company is going to get rid of last minute discounting and everyone here responds "No you're not".

 

I believe them when they say it.

 

It's just that the statements fly in the face of Economics 101 and Business 257 (that was our intro - business course) where we studied topics such as fixed vs. variable costs, contribution, competitive industries vs. oligopolies, market power, price takers vs. price setters etc, etc.

 

Believe them all you want. Hey, my kids believed in the tooth fairy for a long time too.:p

Edited May 26, 2015 by DirtyDawg

[John&LaLa]

It's just that the statements fly in the face of Economics 101 and Business 257 (that was our intro - business course) where we studied topics such as fixed vs. variable costs, contribution, competitive industries vs. oligopolies, market power, price takers vs. price setters etc, etc.

 

Believe them all you want. Hey, my kids believed in the tooth fairy for a long time too.:p

 

Some companies are successful at holding the line on discounts. Looks like cruise lines may be testing the waters so to speak. I don't know how long they have allocated to changing the public mindset, but I think they are going to try

[bUU]

It's just that the statements fly in the face of Economics 101 and Business 257 (that was our intro - business course) where we studied topics such as fixed vs. variable costs, contribution, competitive industries vs. oligopolies, market power, price takers vs. price setters etc, etc.

 

Believe them all you want. Hey, my kids believed in the tooth fairy for a long time too.:p

 

I taught both Economics 101 and Business 257 (as such). It comes down to discipline. If market data shows that discounting adversely affects the bottom line, and that the pain of transitioning the market (based on expected consumer reaction and the affect of competition) is such that there is a break-even point in the medium-term, then a rational business will pursue such a strategy. Heck - there have been businesses that have proceeded with pricing policies deliberately intended to alienate certain customers and drive them away, hopefully to the competition. It's really just a matter of how much fortitude and control the decision makers have.

[Big_G]

I don't doubt they're trying it. We were supposed to sail Freedom May 3rd but had to cancel. I was watching pricing all the way up until the week before and they never came down. I paid less three months before the cruise.

[NightOne]

It's just that the statements fly in the face of Economics 101 and Business 257 (that was our intro - business course) where we studied topics such as fixed vs. variable costs, contribution, competitive industries vs. oligopolies, market power, price takers vs. price setters etc, etc.

 

Believe them all you want. Hey, my kids believed in the tooth fairy for a long time too.:p

 

How does maintaining higher price points " fly in the face of Economics 101" ??? LOL

 

Sorry, but that is not an argument I can agree with. Higher overall prices in the long run will outweigh any short term negative impact that might occur because of the discontinuation of last minute fire sales.

 

This does not even factor the investment earnings on the float that can be increased with more early bookings.

[NightOne]

I taught both Economics 101 and Business 257 (as such). It comes down to discipline. If market data shows that discounting adversely affects the bottom line, and that the pain of transitioning the market (based on expected consumer reaction and the affect of competition) is such that there is a break-even point in the medium-term, then a rational business will pursue such a strategy. Heck - there have been businesses that have proceeded with pricing policies deliberately intended to alienate certain customers and drive them away, hopefully to the competition. It's really just a matter of how much fortitude and control the decision makers have.

 

Agree.

 

Sometimes you have to fire your customers who are costing you more than they are worth. :)

[DirtyDawg]

I taught both Economics 101 and Business 257 (as such). So Have I. Good to meet you! It comes down to discipline. If market data shows that discounting adversely affects the bottom line, and that the pain of transitioning the market (based on expected consumer reaction and the affect of competition) is such that there is a break-even point in the medium-term, then a rational business will pursue such a strategy. Heck - there have been businesses that have proceeded with pricing policies deliberately intended to alienate certain customers and drive them away, hopefully to the competition. It's really just a matter of how much fortitude and control the decision makers have.

 

Sure they will try. And it's a good time in the market to try it given stronger U.S. demand anyways. (I can't imagine there will be many Euro's flying over for Caribbean cruises this Fall) But, and it's a big but, when have you ever seen a high fixed cost business, in a highly competitive industry, which I would argue has fairly elastic demand, have much fortitude when demand weakens just a bit?

 

We'll see what happens but I give this "no discount" as much chance of success and the chance the Toronto Maple Leafs will win the Stanley Cup in the next couple of years - not impossible but not likely either.

[DirtyDawg]

How does maintaining higher price points " fly in the face of Economics 101" ??? LOL

 

Sorry, but that is not an argument I can agree with. Higher overall prices in the long run will outweigh any short term negative impact that might occur because of the discontinuation of last minute fire sales.

 

This does not even factor the investment earnings on the float that can be increased with more early bookings.

 

Carl, what are the 'investment earnings on the float'? Increased interest earnings on an increase in deposits? If so, it's not much in a low interest rate environment ( ie a 10% increase in deposits = $200M. At 1% interest = $2M per year - that's not much.

 

As for how higher prices mat affect demand see my answer in my previous post.

Edited May 26, 2015 by DirtyDawg