NCL stock down on mixed earnings results.

[RDC1]

Sorry, that stuff is lost on me:o. I care about how much I have to pay for a cruise and the value it represents to me and my family. NCL gave us some great cruises that provided a great value to us. Now, it is possible that we could have a similar experience if we sailed on NCL but no one has been able to articulate what enhancements have been done to the onboard experience to make it worth what NCL is currently charging. I don't mind paying $10 for a $10 burger but I don't want to pay $14 for a $10 burger.

 

Here is per passenger cost from most expensive to least expensive using revenue to passenger market share ratio

 

Crystal 5.0

Regent 5.0

Oceania 3.8

Azmara 3.5

Seabourn 3.5

Cunard 2.88

Hal 1.46

Celebrity 1.35

Princess 1.11

NCL .91

Royal Caribbean .85

MSC .80

Carnival .38

[FLSteve11]

I consider lux to be very few. Regent, Crystal, maybe one or two others. Premium are those in the same range as Oceania, Azmara, maybe Cunard at the bottom end of Premium. Celebrity, HAL, Princess maybe at the higher end of mass market, but still mass market, NCL, RCCL lower down, and CCL at the bottom.

 

Distinguishing characteristics: what is included, quality of the experience, size of ship, service levels, customization, etc.

 

I don't think there's anyone outside of NCL who thinks of RCCL as being lower down then NCL, I would say it's more likely the other way around.

[NLH Arizona]

I don't think there's anyone outside of NCL who thinks of RCCL as being lower down then NCL, I would say it's more likely the other way around.

I would have to agree, as I think Royal Caribbean is a few steps up from NCL.

[richstowe]

I enjoyed the part where Del Rio partially blames the Brexit and subsequent British pound decline for NCL's earnings woes.

 

That's a standard go-to for all companies doing business with international customers. If the international currency gets weaker, they claim those customers can't afford their product as much anymore. If the international currency gets stronger, they claim either that operations become more expensive in those countries, or that it changed people's spending habits in a negative way for them.

 

All of these earnings statements (whether actual or forward-leaning) are full of BS excuses if the news is bad. You rarely gain any real clarity by reading the statement from the CEO.

 

However, I do believe his "minimizing discounting" line. As has already been stated here, that has been Del Rio's M/O since day one, and in fact I believe he is trying to push out all "value" cruisers. This is the reason for all of the recent customer-hostile changes. Even the "no bringing food back to your room" was meant to push out value cruisers (with the goal being retention of cruisers who don't mind the room service charge, while getting rid of those who do mind it), but it backfired because it pissed off everyone, rather than just the cheapskates.

 

I believe that they haven't budged on the water/soda thing because they don't want most customers who are unhappy about it. If you happily buy the exorbitant water and/or pay for a soda package, then you're Del Rio's target demographic.

 

He already pretty much killed the last-minute-cruising model described in that now-obsolete post linked in my signature.

Since I began cruising ,not so long ago , one constant has been promises to minimize discounting . I've heard it again and again . The issue is, are the cruiselines willing to let cabins sail empty . This is even more the case for NCL which works hard to ding its passengers as much as possible and more once onboard . Yes minimizing discounting is a noble goal (if you are the CEO) but will remain a goal rather then reality . It's a delicate dance and big discounts are unpleasant but low occupancy rates are even worse .

 

As a side note , my Epic Med cruise at this summer was priced at 100 a day with lots of perks . By anyone's definition this was maximum discounting .;) They did however do their best to recoup this low price .

Del Rio can say what he wants but goals and aims will always butt up against reality .

[RDC1]

I don't think there's anyone outside of NCL who thinks of RCCL as being lower down then NCL, I would say it's more likely the other way around.

 

Actually I was lumping RCCL and NCL as both being lower than Celebrity, HAL and Princess. Not RCCL below NCL

[sparks1093]

Here is per passenger cost from most expensive to least expensive using revenue to passenger market share ratio

 

Crystal 5.0

Regent 5.0

Oceania 3.8

Azmara 3.5

Seabourn 3.5

Cunard 2.88

Hal 1.46

Celebrity 1.35

Princess 1.11

NCL .91

Royal Caribbean .85

MSC .80

Carnival .38

 

I get that numbers are your life. They aren't mine. I earned that D- in math :o. As I said, the only thing that matters to me is my experience onboard and that can't be expressed in numbers (other than what I am paying to get onboard in the first place).

[sparks1093]

I would have to agree, as I think Royal Caribbean is a few steps up from NCL.

 

That squares with what I have read about RCCL. NCL fares are about equal to what RCCL is charging so if someone isn't interested in a "free" beverage package they would presumably receive a better value on RCCL.

[my3sonsnj]

Here is per passenger cost from most expensive to least expensive using revenue to passenger market share ratio

 

Crystal 5.0

Regent 5.0

Oceania 3.8

Azmara 3.5

Seabourn 3.5

Cunard 2.88

Hal 1.46

Celebrity 1.35

Princess 1.11

NCL .91

Royal Caribbean .85

MSC .80

Carnival .38

 

Love this comparison! Discussing qualitative differences is a matter of individual perspectives, opinions and resources. With this information, qualitative differences can be evaluated within the quantitative :D

[RDC1]

I get that numbers are your life. They aren't mine. I earned that D- in math :o. As I said, the only thing that matters to me is my experience onboard and that can't be expressed in numbers (other than wehat I am paying to get onboard in the first place).

 

As you mentioned earlier this topic is about ncl stock price. As such numbers are relative. There are many other topic about experience.

 

The chart shows that carnival will be substantially cheaper as you found when comparing fares.

Edited August 30, 2016 by RDC1

[sweetride]

Here is per passenger cost from most expensive to least expensive using revenue to passenger market share ratio

 

Crystal 5.0

Regent 5.0

Oceania 3.8

Azmara 3.5

Seabourn 3.5

Cunard 2.88

Hal 1.46

Celebrity 1.35

Princess 1.11

NCL .91

Royal Caribbean .85

MSC .80

Carnival .38

 

What quarter are these numbers based on? This number can also be skewed because the higher end lines cater to singles and couples and the lower lines cater to families so the room cost is spread across more customers but minors in a room aren't paying for drinks and gambling

[RDC1]

What quarter are these numbers based on? This number can also be skewed because the higher end lines cater to singles and couples and the lower lines cater to families so the room cost is spread across more customers but minors in a room aren't paying for drinks and gambling

These are 2015 annual numbers from Cruise Market Watch. I provided a link a few posts ago.

[sweetride]

These are 2015 annual numbers from Cruise Market Watch. I provided a link a few posts ago.

 

Which don't come close to being current numbers because Del Rio started to gouge people in the spring. I am very curious how much higher the 16 annuals are

[mking8288]

If CCL can managed and continue to serve the average cruise passengers - not in a suite or Haven - items like shrimp cocktail, lobster tails (yes, frozen), crab cake, petite filet mignon, and better pizza at no extra charge, and maintain those "quantitative numbers" going forward, then shame on NCL's provisioning in not sourcing those for the gallery operations. Cheerleaders can make fun of CCL for all they wish to and are free to do so, but they remained being #1 and paying dividends while turning another quarter of profit.

 

But, I suspect - my guess - that some of those numeric values presented herein are skewed in part because of the costs for Haven & the other 2 upscale lines under NCLH. Qualitative differences, like opinions about food, can varied widely & become very subjective ... i.e. I give failing grades for those so called egg drop soup and hot & sour soup once served in the Asian Fusion restaurant onboard, thankfully gone & now with a striped down, almost naked "Shanghia" menu with a handful of items.

 

The stock is near the bottom of the most bearish price target and barely bounced a little bit from its new low yesterday (this week is traditionally quiet on Wall Street & many analysts are away from their desk, taking their summer vacation ... should be interesting when September come around the corner to watch for the investment fund's signals).

 

With all the discounting right now (if in doubt, just take a look at those prices posted on NCL's own website ... wow, all over the places.) Granted, they might have just a handful of GTY cabins unsold, not all of them are truly last minute offering, and, too many empty ones aren't good either.) With all that Free At Sea offers, it's easy to see that overall onboard spendings missed their targets. Hence, I am not seeing evidence, yet, for a convincing turnaround & upward trending with NCLH's stock price between now and the release of Q3's results, due in about 2 months. The competitions are doing the same on price wars - fair games being played out.

Edited August 31, 2016 by mking8288

[RDC1]

Which don't come close to being current numbers because Del Rio started to gouge people in the spring. I am very curious how much higher the 16 annuals are

 

We will know about March of next year. Could look at the last 10Q compare it to last year and see the increase and make an educated guess. Of course the other have probably gone up a little as well.

 

The use of this data set is more of a relative comparison. While it is a good first glimpse. It is impacted by average length of cruise differences between the various lines.

 

A better data set would be cruise passenger days, not passengers. Unfortunately that is not available since the cruise line companies do not break out the individual cruise line data in their SEC filings.

[RDC1]

If CCL can managed and continue to serve the average cruise passengers - not in a suite or Haven - items like shrimp cocktail, lobster tails (yes, frozen), crab cake, petite filet mignon, and better pizza at no extra charge, and maintain those "quantitative numbers" going forward, then shame on NCL's provisioning in not sourcing those for the gallery operations. Cheerleaders can make fun of CCL for all they wish to and are free to do so, but they remained being #1 and paying dividends while turning another quarter of profit.

 

But, I suspect - my guess - that some of those numeric values presented herein are skewed in part because of the costs for Haven & the other 2 upscale lines under NCLH. Qualitative differences, like opinions about food, can varied widely & become very subjective ... i.e. I give failing grades for those so called egg drop soup and hot & sour soup once served in the Asian Fusion restaurant onboard, thankfully gone & now with a striped down, almost naked "Shanghia" menu with a handful of items.

 

The stock is near the bottom of the most bearish price target and barely bounced a little bit from its new low yesterday (this week is traditionally quiet on Wall Street & many analysts are away from their desk, taking their summer vacation ... should be interesting when September come around the corner to watch for the investment fund's signals).

 

With all the discounting right now (if in doubt, just take a look at those prices posted on NCL's own website ... wow, all over the places.) Granted, they might have just a handful of GTY cabins unsold, not all of them are truly last minute offering, and, too many empty ones aren't good either.) With all that Free At Sea offers, it's easy to see that overall onboard spendings missed their targets. Hence, I am not seeing evidence, yet, for a convincing turnaround & upward trending with NCLH's stock price between now and the release of Q3's results, due in about 2 months. The competitions are doing the same on price wars - fair games being played out.

 

Keep in mind that there are a number of different cruise lines under CCL. The corporation is profitable, but it has the greatest economy of scale, largest over all fleet (twice the size of the next largest), low capital investment compared to fleet size, and corresponding low debt level for the industry. Carnival the cruise line handles a lot of passengers, but relatively low revenue. A lot of short cruises. Princess carries 1/3 the passengers, but generates more revenue. Would be interesting to see each brands profitability, but unfortunately that information is not available.

 

On Carnival some of the items you mentioned have disappeared from the MDR. Some are available, but have an up charge. They are generally still there on some of the others.

 

 

 

Analysts are a bit mixed on NCL, one raised the one year forward looking target price to the mid 50's, another lowered it to the low 50's.

 

I still expect it to drop to support at 32, maybe dropping to 30 before rebounding. At 30 it would still be up 21% from IPO price Jan 2013. All of the cruise lines be impacted if fuel prices go up. It really comes down to see if the Fed raises interest rates. If they go up, then all of the Cruise line companies, but especially NCLH and RCL will be impacted.

Edited August 31, 2016 by RDC1

[pokerpro5]

I would look at it a bit differently. I think it is more that there are certain savings and can be obtained, processes simplified, that generate value to the company and reduce expenses. If it doing so they lose some customers, those that abuse some of those items, then they are perfectly willing to suffer that attrition.

 

The crew space on a cruise ship is a limited space. The number of crew that can be carried is limited.

 

Let take a look at room service. How many crew does it take to meet the demands for room service and where do they come from? Are they waiters from other dining venues that also have to spend time doing room service? How many head count were they able to reduce by making the change? Did that mean that the head count could be used else where? You can be pretty sure before making that change the company would have done an analysis and spliced and diced the data. They would know by room category what percentage of their passengers used room service and how often, They would also know how many were really frequent users (maybe multiple times a day), how often they cruised, how much they spent, what room categories, etc. Then an economic analysis is performed, including an estimate on loss and retention of existing customers.

 

I would expect the primary goal of putting a cost on room service was in priority 1. Reduce the use and abuse 2. Decrease the staff requirements, both in food delivery and in dish cleanup. 3. Have the user of the service pay for a portion of the costs, instead of being absorbed in the general ticket price.

 

I may not always agree with how some of the decisions have been implemented but I can see the logic behind them and why they might do so.

 

NCL has been moving away from traditional man dining room for a number of years. First being going fully to anytime, then going to the large number of separate dining venues of different types, with the majority being additional fixed fee, then going to some be ala carte pricing. If I was prone to guessing I would suspect that there end model is to basically convert to land type dining on ship. Move what people are used to on to the cruise. Every change they have made is a step in that direction so why would people be surprised when they go another step in that direction. With the selling of dining packages they almost seem to be following a Walt Disney Resorts schema.

 

I think you are focusing a bit too much on the room service thing.

 

I'm not saying you're incorrect. There is a good chance they analyzed room service usage and realized that it wasn't a good utilization of their resources -- at least not for free. There is also a good chance that the customers using room service the most were ones they'd prefer not to have anyway.

 

However, the room service charge (as well as the ill-fated "no bringing food back to your room" rule) are all part of a bigger plan by Del Rio to drive away "value cruisers" and fill each room with customers who spend the targeted amount of money for each room category.

 

Del Rio is trying very hard to transform NCL into an experience where no customer gets away cheap.... and if they do, it will be unpleasant enough of an experience to where they probably won't want to come back.

 

You are probably correct that NCL is slowly pushing toward a pay-per-use model with food onboard, which contradicts the traditional "all you can eat for your base fare" model that has long been associated with cruising. He may very well be successful at some point in achieving this, too.

 

But again, it's all about pushing out the value cruiser. The value cruiser has forever been the enemy of cruise lines. Sure, they almost always sail full, but does that mean a profit? Not necessarily.

 

The whole "Free At Sea" long-running promo exists to punish value cruisers. Now you are virtually forced to pay for premium services. You get these "free" perks, but at the same time, the base fare is higher to pay for them. This way, people who would use these perks anyway are happy with it overall, and those who want to cruise at bargain rates and spend nothing onboard hate them. Mission accomplished! Also, the refusal to provide Free At Sea to last-minute discounted rooms is another way to ensure that value cruisers don't get that good of a deal.

 

Taking the latest water/soda fiasco... NCL is very aware that their water prices on board are horrendous, and people will hate it. But which people will hate it? Del Rio thinks the loudest angry voices will be from those who bring water/soda onboard as part of a general pattern of thriftiness -- something he doesn't want on his ship.

 

Regarding Carnival vs NCL, the biggest difference between the two is actually clientele. Carnival tends to cater to both a younger/party crowd and a working class crowd, while NCL's clientele tends to skew older and more middle class. NCL is by no means a premium line (and never will be), but many people (myself included) don't like cruising with the typical rowdy Carnival passenger. Princess, also owned by Carnival, is much more comparable to NCL.

Edited August 31, 2016 by pokerpro5

[richstowe]

I think you are focusing a bit too much on the room service thing.

 

I'm not saying you're incorrect. There is a good chance they analyzed room service usage and realized that it wasn't a good utilization of their resources -- at least not for free. There is also a good chance that the customers using room service the most were ones they'd prefer not to have anyway.

 

However, the room service charge (as well as the ill-fated "no bringing food back to your room" rule) are all part of a bigger plan by Del Rio to drive away "value cruisers" and fill each room with customers who spend the targeted amount of money for each room category.

 

Del Rio is trying very hard to transform NCL into an experience where no customer gets away cheap.... and if they do, it will be unpleasant enough of an experience to where they probably won't want to come back.

 

You are probably correct that NCL is slowly pushing toward a pay-per-use model with food onboard, which contradicts the traditional "all you can eat for your base fare" model that has long been associated with cruising. He may very well be successful at some point in achieving this, too.

 

But again, it's all about pushing out the value cruiser. The value cruiser has forever been the enemy of cruise lines. Sure, they almost always sail full, but does that mean a profit? Not necessarily.

 

Again , your points are well reasoned and I believe you spell out the Del Rio mindset very well . What is missed is that this approach alienates everyone not just the " value" cruiser . It further reinforces the impression that NCL is not the a la carte cruiseline but the nickel&dime brand . There are cabins to fill , not during prime cruise season but the rest of the year . Those ships must be filled week after week .

 

Perhaps full ships doesn't necessarily mean profits , but empty ones are much worse . Variable costs for a cruise line are a fraction of even the lowest cruise fare . What exactly is saved by not selling a discounted ticket ? Not much . Are these small savings or small additional income gained by recent changes worth the harm to the brand ?

 

I believe RCL has done a better job of trying to "weed out" this value customer starting with reducing last minute price discounts that really annoy those that paid more . The impression that you are just a piñata to be smacked does not seem so overt . This is the case but less overt . :D

[mscdivina2016]

I think you are focusing a bit too much on the room service thing.

 

I'm not saying you're incorrect. There is a good chance they analyzed room service usage and realized that it wasn't a good utilization of their resources -- at least not for free. There is also a good chance that the customers using room service the most were ones they'd prefer not to have anyway.

 

However, the room service charge (as well as the ill-fated "no bringing food back to your room" rule) are all part of a bigger plan by Del Rio to drive away "value cruisers" and fill each room with customers who spend the targeted amount of money for each room category.

 

Del Rio is trying very hard to transform NCL into an experience where no customer gets away cheap.... and if they do, it will be unpleasant enough of an experience to where they probably won't want to come back.

 

You are probably correct that NCL is slowly pushing toward a pay-per-use model with food onboard, which contradicts the traditional "all you can eat for your base fare" model that has long been associated with cruising. He may very well be successful at some point in achieving this, too.

 

But again, it's all about pushing out the value cruiser. The value cruiser has forever been the enemy of cruise lines. Sure, they almost always sail full, but does that mean a profit? Not necessarily.

 

The whole "Free At Sea" long-running promo exists to punish value cruisers. Now you are virtually forced to pay for premium services. You get these "free" perks, but at the same time, the base fare is higher to pay for them. This way, people who would use these perks anyway are happy with it overall, and those who want to cruise at bargain rates and spend nothing onboard hate them. Mission accomplished! Also, the refusal to provide Free At Sea to last-minute discounted rooms is another way to ensure that value cruisers don't get that good of a deal.

 

Taking the latest water/soda fiasco... NCL is very aware that their water prices on board are horrendous, and people will hate it. But which people will hate it? Del Rio thinks the loudest angry voices will be from those who bring water/soda onboard as part of a general pattern of thriftiness -- something he doesn't want on his ship.

 

Regarding Carnival vs NCL, the biggest difference between the two is actually clientele. Carnival tends to cater to both a younger/party crowd and a working class crowd, while NCL's clientele tends to skew older and more middle class. NCL is by no means a premium line (and never will be), but many people (myself included) don't like cruising with the typical rowdy Carnival passenger. Princess, also owned by Carnival, is much more comparable to NCL.

 

I am impressed by your post. I think you hit the nail on the head. The thrifty cruiser is not NCLs target customer. I am one of those spend nothing on board people. I even bring my own beverages;)

Except for DSC, I only spend $6 or so a day.

[FLSteve11]

Actually I was lumping RCCL and NCL as both being lower than Celebrity, HAL and Princess. Not RCCL below NCL

 

That's true. Celebrity, Hal, Princess are clear competitors. Princess & Celebrity in particular as they cater to the same clientelle (older, but still active, even if they both try to bring in families where they can). And a step up from the mainstream lines of NCL, RCCL, Carnival (who fills a good spot for themselves at the bottom as the low cost line). MSC, Costa are in that category as well generally (even though they, like NCL, try to claim they're more premium).

 

Oceania/Azamara, Cunard a step up on them, in the smaller, bit more luxury niche.

 

Then the true luxury lines (Crystal, Regent, Seabourne)

[FLSteve11]

I am impressed by your post. I think you hit the nail on the head. The thrifty cruiser is not NCLs target customer. I am one of those spend nothing on board people. I even bring my own beverages;)

Except for DSC, I only spend $6 or so a day.

 

No cruise line, outside of arguably Carnival, wants a thrifty customer. Why would a business want to cater to people who don't want to spend money? The goal of a business is maximum profit at minimum cost. After that it's a balancing act of how to actively do that.

 

Cruise lines were forced to cut prices a lot in 2008/2009 during the recession, they're now where they can raise them again if they can. Some have, some like NCL go the route of trying to recoup more of the expenses onboard. If they can get people to sail at as high a price they can, and spend more money on board, they'll do that. They'll keep raising that bar until people respond (particularly if they have trouble filling ships). I think what irks some people is they change the game when you're already in it. People book cruises, and the rules change right before they board (take away water, flip entertainment around constantly, etc).

 

The flip side is cutting costs where you can. All lines are in that act. You lower costs to where people object enough. Then you add the missing cuts in somewhere and raise the price to cover it (look, we give you free XXX but our base price is a little higher)

[sweetride]

I don't think we'll even know the extent of damage Del Rio has done until the end of 2017. There are still a lot of people sailing that booked well over a year ago when prices were still cheap. I do know that there are many people, who are not cheap customers and spend at least $1k ea, have said they will never sail NCL again because they're sick of the constant increases, nickle and diming and taking away things that used to be free in order to put a la carte restaurants in that serve the same thing (burgers at Mville by the pools). Personally, the straw that broke the camels back was the $18 martini. We have cancelled a couple of other cruises we had booked and only kept one because we were going with a large group of friends. We will definitely not be spending as much on board for that cruise. Drink prices are up 50%, so we will be drinking less. When we drink less, there will be less impulse buying and less "just one more round". If they can make it work, good for them, I just won't be a part of it. I know I am not alone, just how many others feel the same way is a question we won't know the answer to until at least next year

[swedish weave]

I had the opportunity early this year to sail NCL, Carnival, and Princess, and the difference was very obvious. Carnival and Princess both have items that are included while NCL has eliminated the same items from being included and added them back with extra charges.

 

The cruises I booked were lower priced on both Carnival and Princess than similar cruises on NCL.

 

That painted a very clear picture to me and I have diverted much of my cruising budget away from NCL for those reasons.

 

Another factor that is not in NCL favor is their restriction of Latitudes benefits for those of us who have been loyal to NCL in the past.

 

I am not saying I won't cruise NCL, but the attraction will have to be prices and amenities that offset the negatives.

[tartan cruiser]

I agree we'll have to wait until the end of 2017 before a true picture of where NCL stands. I have an upcoming Getaway family cruise 1/2017 that was booked about 18 months ago before Del Rio's changes started. I don't like the changes and will spend as little as possible onboard. We have the drink package so don't need to pay $18 for that Martini. If I didn't feel the overpriced nickel and diming I'd be more willing to opening my wallet. I don't see us as cheap cruiser but will not be taken advantage of as a captive audience either. I will not spend $70 for water. ($6/ 12 bottles on Princess which I ordered). I will not go to Margaritaville which was formerly free. I will not order room service.(generally free on most other lines) I will not buy lunch on Harvest Caye. We'll bring snacks. I will not buy their overpriced excursions. (Kon Tiki in St. Thomas $75 vs $49 on Princess) just to name a few. I know we'll still have a good time, just not giving them that extra $50 pp Del Rio wants. We also booked 2 other Carribean cruises for early 2017 and you guessed it neither are on NCL. Princess and Celebrity won our business. Future bookings will tell the story.

Edited August 31, 2016 by tartan cruiser

[Sizzlechest]

NCLH is still a buy according to: http://seekingalpha.com/article/4003348-norwegian-cruise-line-holdings-buy

 

The buy rating is on the assumption that NCL can turn it's business model around by moving full force into the Chinese cruise market. NCL has moved out of the Asia-Pacific 15 years ago and is now looking to move back.

 

What does that mean for the rest of us? US cruisers can continue to look forward to further cutbacks and price increases to help finance this move. Apparently the Chinese market is potentially so big, it "alone could eventually grow to be as big as the entire cruise market is today." This explains the steady increase in fees and decrease in perks to maximize profits over the last few years. NCL doesn't care if they lose customers over the long term. Increased market share in Asia-Pacific is the long-term prize, not US and Europe. Even if their strategy guts their existing markets, they'll be ahead of the game. Congratulations NCL loyalists. You're funding your own destruction. You can always move to China if you want a decent cruise.

 

Meanwhile, NCLD is down today 0.39% while RCCL and CCL stock prices are both up. ¯\_(ツ)_/¯

[pokerpro5]

No cruise line, outside of arguably Carnival, wants a thrifty customer. Why would a business want to cater to people who don't want to spend money? The goal of a business is maximum profit at minimum cost. After that it's a balancing act of how to actively do that.

 

Cruise lines were forced to cut prices a lot in 2008/2009 during the recession, they're now where they can raise them again if they can. Some have, some like NCL go the route of trying to recoup more of the expenses onboard. If they can get people to sail at as high a price they can, and spend more money on board, they'll do that. They'll keep raising that bar until people respond (particularly if they have trouble filling ships). I think what irks some people is they change the game when you're already in it. People book cruises, and the rules change right before they board (take away water, flip entertainment around constantly, etc).

 

The flip side is cutting costs where you can. All lines are in that act. You lower costs to where people object enough. Then you add the missing cuts in somewhere and raise the price to cover it (look, we give you free XXX but our base price is a little higher)

 

The above is generally correct, but I think you might be missing the fact that the thrifty cruiser has not been actively thwarted by any line up until recently. The cruise industry has long hated the value cruiser, but accepted them as an unavoidable expense, similar to how a land-based buffet accepts the fact that small percentage of their clientele will be huge eaters and actually cost them money.

 

Del Rio is leading the charge toward squeezing out the value cruiser, both via new policies and higher base fares.

 

The old way of thinking was, "Yeah, value cruisers cost the cruise line money, but there's really no way to force EVERYONE to spend money onboard, so we just have to deal with the small percentage of passengers of whom we don't make a profit."

 

The new way of thinking is, "Let's find ways to both raise the minimum amount we will make from each passenger AND gently nudge the value cruiser away from our line by making their lives unpleasant."

 

NCL has long been an innovator in the cruise industry. Some of these innovations (freestyle cruising) were a pleasant change for most passengers, but a lot of the more recent ones are not so pleasant, and are aimed solely at increasing the company's bottom line.

 

The question is whether there will be a backlash. At some point, the nickel-and-diming atmosphere will be off-putting to most passengers, not just the frugal ones, and they might either switch cruise lines or give up cruising altogether.

 

Keep in mind that two of the most cited positive things about cruising in the past were, "I loved the food, and I could have as much as I wanted" and "I loved how everything except drinks and excursions was included!"

 

Now neither are true. The MDR food is unappetizing slop (this is true across most major cruise lines), and the add-on charges are now numerous, especially on NCL.

 

If cruising becomes too much like visiting a land-based resort, some people will simply give it up and start going to land-based resorts instead.

 

There's a fine line, and Del Rio is seeing how far he can push it.

 

I don't necessarily blame him. His responsibility is to the shareholders, but he has to be careful not to ruin the brand while squeezing out these extra profits.