Puzzled as to how X actually makes money....

[2calgarycruisers]

We paid just over $1500 CDN each for a balcony cabin for a 14 night med cruise including grats and a drink package. That is just over $100 per day each for accommodation, all meals, drinks, gratuities, entertainment etc etc - plus I get a ride from port to port! And, we could have had all of this at a cheaper price should we chosen oceanview or inside. While we could spend a lot of money onboard, we also could leave after 14 days with no onboard charges at all. There is just no way in my experience that we could this on land for anywhere near the price.

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?), casino (we never visit) and shore excursions (up to 50% of the cost as commission from the tour operator, but we book directly).

 

Although this does explain all the pushy upselling people have been complaining aboutt.

 

So... I guess we are not the demographic they are targeting - so I'll just enjoy the savings! Although I do think we will splurge and upgrade our alcohol package ;)

[If only]

We paid just over $1500 CDN each for a balcony cabin for a 14 night med cruise including grats and a drink package. That is just over $100 per day each for accommodation, all meals, drinks, gratuities, entertainment etc etc - plus I get a ride from port to port! And, we could have had all of this at a cheaper price should we chosen oceanview or inside. While we could spend a lot of money onboard, we also could leave after 14 days with no onboard charges at all. There is just no way in my experience that we could this on land for anywhere near the price.

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?), casino (we never visit) and shore excursions (up to 50% of the cost as commission from the tour operator, but we book directly).

 

Although this does explain all the pushy upselling people have been complaining aboutt.

 

So... I guess we are not the demographic they are targeting - so I'll just enjoy the savings! Although I do think we will splurge and upgrade our alcohol package ;)

 

Can you let me know which cruise you are talking about! Would love to check it out.

[Orator]

There are all sorts of income streams. For example there are leased areas such as SPA and shops and Celebrity gets a percentage of their take. Celebrity also gets a piece of all Shore Excursion and Art sales. The Casino is a big cash generator. Believe it or not, people do buy photos at those high prices. Beverage sales are a large generator of profit. Some perks, like beverage packages and internet are now embedded in the price of the cruise so Celebrity makes more as people use less. They also make money by controlling cost. They now make more on board by requiring that all Non refundable OBC be spent on board or lost. At one time it could be cashed in at the Casino for a 5% charge. The trick is to get those cabins filled and let the passengers spend. Some don't, but most do and some a great deal.

You might want to read the Annual Report for more details on revenue streams.

Edited September 12, 2016 by Orator

[ClaudiaB]

Don't feel bad for Celebrity Cruises. They will shut their ships down the moment they quit making money. All that food you're eating is bought in great quantity and you'd be amazed how little your actual food costs.

 

Enjoy your cruise. X is enjoying your $$.

[2calgarycruisers]

Can you let me know which cruise you are talking about! Would love to check it out.

 

October 22, Silhouette - deals are all gone though... you can get an inside guarantee with no perks for the same price we paid... sorry...

[2calgarycruisers]

Don't feel bad for Celebrity Cruises. They will shut their ships down the moment they quit making money. All that food you're eating is bought in great quantity and you'd be amazed how little your actual food costs.

 

Enjoy your cruise. X is enjoying your $$.

 

Lol, not feeling bad - licking my lips in anticipation! I live for deals :) managed to get this one and our business class flights paid for with airline and credit card points so it can't get much better!

[2calgarycruisers]

There are all sorts of income streams. For example there are leased areas such as SPA and shops and Celebrity gets a percentage of their take. Celebrity also gets a piece of all Shore Excursion and Art sales. The Casino is a big cash generator. Believe it or not, people do buy photos at those high prices. Beverage sales are a large generator of profit. Some perks, like beverage packages and internet are now embedded in the price of the cruise so Celebrity makes more as people use less. They also make money by controlling cost. They now make more on board by requiring that all Non refundable OBC be spent on board or lost. At one time it could be cashed in at the Casino for a 5% charge. The trick is to get those cabins filled and let the passengers spend. Some don't, but most do and some a great deal.

You might want to read the Annual Report for more details on revenue streams.

 

Yes, I think it's very interesting to review - lure them in on a good deal and upsell.... while we are new to cruising, this is number three and first one on Celebrity they sure haven't made much on us onboard.

[villauk]

You're visiting at the end of the season for the Med - a little like 'shut up shop' season and that's why the sailings are generally cheaper (plus the fact that Europe has been a 'soft' market this year). Suites were selling for ridiculously low rates this summer, even in the peak months of July & August :eek:. I'm hoping not, but next year may be a little different now they have one less ship to fill.

 

Enjoy your cruise :).

[wallie5446]

October 22, Silhouette - deals are all gone though... you can get an inside guarantee with no perks for the same price we paid... sorry...

 

And this is how they really effect the bottom line. ^^^^^^^^^^^^^^^^^^^^^^

 

Last Nov the couple in the Aqua 2 next to us booked after final, paid $480 pp more and didn't get a single perk. We had 3 with double OBC for booking on board the yr before.

 

Land locked this yr, but for Nov 2017 our 1A with a choice of 2 perks is now $980 pp :eek: more, and people are booking and joining the RC and book of faces group.

Edited September 12, 2016 by wallie5446

[grandgeezer]

I would be surprised if their biggest moneymaker isn't the drinks. They jacked up the individual drink prices so high, it made the drink package attractive. For example, I can buy domestic beer, on sale for about $.60 per bottle, on ship that same beer cost $7.08. I'm sure wine and other alcohol products are similar. So if I get my money's worth out of the drink package, the 8 beers cost them probably $8 as they buy in such great quantities.

We spend $0 on the ship now and it didn't subtract any enjoyment from the cruise. We survive nicely on the free drinks in Sky every night and drinks we can find on shore that are comparably priced to the places we frequent back home, in the $3-$4 range including tip.

[techwatcher]

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?),

 

The drinks packages aren't so much "free" as "included". Celebrity are playing the percentages here - there will be some who gain from the packages and some who will cost Celebrity almost nothing; overall it will be profitable, otherwise they wouldn't do it.

 

As others have said there are lots of revenue streams, spa (there's a reason it's twice the cost as on land), photographs, casino, art auctions (learned on a recent cruise Celebrity only have to make two sales per auction to profit), shorex. Alcohol is still a revenue stream as people buy bottles of wine. Specialty restaurants (cover charge helps, alcohol purchased there helps more).

 

A few years ago a new member of Activity Staff was a little indiscreet and let slip that Celebrity aim to get guests to spend the same onboard as they paid for the fare...

[Taylor D]

We did a Med cruise in July even the high season we felt it's was a good deal and already booked one more. I'm sticking with them as long as the value is there.

[dkjretired]

Don't forget that many of these things they are giving away are being written off on their taxes.

[capecodmercury]

We paid just over $1500 CDN each for a balcony cabin for a 14 night med cruise including grats and a drink package. That is just over $100 per day each for accommodation, all meals, drinks, gratuities, entertainment etc etc - plus I get a ride from port to port! And, we could have had all of this at a cheaper price should we chosen oceanview or inside. While we could spend a lot of money onboard, we also could leave after 14 days with no onboard charges at all. There is just no way in my experience that we could this on land for anywhere near the price.

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?), casino (we never visit) and shore excursions (up to 50% of the cost as commission from the tour operator, but we book directly).

 

Although this does explain all the pushy upselling people have been complaining aboutt.

 

So... I guess we are not the demographic they are targeting - so I'll just enjoy the savings! Although I do think we will splurge and upgrade our alcohol package ;)

 

One simple reason I have heard from a travel agent is that the Mediterranean market has been real slow this year and there are a lot of great deals to be had. There are a lot of people in this political climate not willing to risk travel to certain ports or parts of the world resulting in some amazing deals.

 

I don't know if they are making money, but filling the cabin is better than leaving port with it empty.

 

Tim

[teecee60]

 

Don't forget that many of these things they are giving away are being written off on their taxes.

 

May I suggest you do some research on basic business accounting and taxes. ;)

 

 

Don't feel bad for Celebrity Cruises. They will shut their ships down the moment they quit making money.

 

Enjoy your cruise. X is enjoying your $$.

 

How do you suppose Celebrity will continue to make payments on their five "Solstice Class" ships that cost 3.7 BILLION dollars???

 

Or their two new "EDGE Class" ships?

 

Or do you suppose they paid the total... up front out of their petty cash fund? :rolleyes:

 

I DID watch a guy drop well over $10,000 in less than 5 minutes at the casino on Celebrity Century.

 

Celebrity isn't making all that much on me, because I only cruise if the price is under $50pp/day... which is why I absolutely LOVE all those "shrewd investors" paying thousands of dollars each for posters... excuse me... "Works of Art" at the auctions on board.

Edited September 12, 2016 by teecee60

[neverbeenhere]

Don't forget that many of these things they are giving away are being written off on their taxes.

 

 

Answered.

Edited September 12, 2016 by neverbeenhere
Too Slow

[excitedofharpenden]

I think the fact is that Celebrity want to fill their ships so it gives them a better chance at earning revenue from guests when they are onboard. Empty cabins = 0 revenue. If you happen across an itinerary in area where the perception is not so popular (thinking of Turkey) they are struggling this year. That's why many cruises have changed focus to Western Mediterranean and those that are left, whilst avoiding Istanbul are bargain priced and Celebrity are moving one of their ships from the Med in the summer to the Caribbean year round. How times change! Put that with the number of cabins to sell in the whole market and it's clear that it's a buyers market. For now at least.

[dkjretired]

May I suggest you do some research on basic business accounting and taxes. ;)

 

.

 

I have and stand behind my statement completely...

[SeagoingMom]

We paid just over $1500 CDN each for a balcony cabin for a 14 night med cruise including grats and a drink package. That is just over $100 per day each for accommodation, all meals, drinks, gratuities, entertainment etc etc - plus I get a ride from port to port! And, we could have had all of this at a cheaper price should we chosen oceanview or inside. While we could spend a lot of money onboard, we also could leave after 14 days with no onboard charges at all. There is just no way in my experience that we could this on land for anywhere near the price.

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?), casino (we never visit) and shore excursions (up to 50% of the cost as commission from the tour operator, but we book directly).

 

Although this does explain all the pushy upselling people have been complaining aboutt.

 

So... I guess we are not the demographic they are targeting - so I'll just enjoy the savings! Although I do think we will splurge and upgrade our alcohol package ;)

There's your answer!

 

(See, Celebrity is cagey like a fox -- they've already got you!) :rolleyes:

[grandgeezer]

Don't forget that many of these things they are giving away are being written off on their taxes.

 

Sounds like my dad. It's a deduction, which lowers your taxable income, which could lower the tax percentile you're in. It's never anywhere near dollar for dollar.

[DYKWIA]

Some stuff they make money on

 

• 18% service charge added to drinks etc purchased on board
  
• Daily Service charge per cabin to pay staff wages
  
• jacking prices up to include free drinks and then selling you the premium drinks package which still doesn't include the real premium stuff.. unless you pay even more
  
• switching from 4 courses to 3 courses in the MDR which over time will mean most people will eat less
  
• gradual reduction of services offered / included
  
• significantly increasing Speciality restaurant fees
  
• making people believe there's a sale on when there isn't really
  
• getting people to pay extra for promotions which include on board credit and then encouraging you to pay for the stuff before you board.
  
• bingo
  
• did i read somewhere that on a recent cruise they ran a workshop (with a fee) on coca cola? if so, this!
  

Edited September 12, 2016 by DYKWIA

[fshagan]

Sounds like my dad. It's a deduction' date=' which lowers your taxable income, which could lower the tax percentile you're in. It's never anywhere near dollar for dollar.[/quote']

 

Well, Celebrity doesn't pay corporate income tax on ship-related revenue due to a nice loophole, Section 883 of the Internal Revenue Code. From the RCL annual report under "risks":

 

We believe that most of our income and the income of our ship-owning subsidiaries is derived from or incidental to the international operation of a ship or ships and, therefore, is exempt from taxation under Section 883.

 

Here's a link to the annual reports just in case you want to double check: http://phx.corporate-ir.net/phoenix.zhtml?c=103045&p=irol-reportsannual

 

The annual report further explains that the only income that is subject to US corporate income tax is revenue not incidental to owning the ships "including the sale of air and land transportation, shore excursions and pre- and post-cruise tours."

 

So, since they do not pay tax on those things, they cannot "write them off" of their taxes.

[Cruizen Susan]

We paid just over $1500 CDN each for a balcony cabin for a 14 night med cruise including grats and a drink package. That is just over $100 per day each for accommodation, all meals, drinks, gratuities, entertainment etc etc - plus I get a ride from port to port! And, we could have had all of this at a cheaper price should we chosen oceanview or inside. While we could spend a lot of money onboard, we also could leave after 14 days with no onboard charges at all. There is just no way in my experience that we could this on land for anywhere near the price.

 

So I did a little digging - it appears alcohol is a huge money maker (so why give it away for free though?), casino (we never visit) and shore excursions (up to 50% of the cost as commission from the tour operator, but we book directly).

 

Although this does explain all the pushy upselling people have been complaining aboutt.

 

So... I guess we are not the demographic they are targeting - so I'll just enjoy the savings! Although I do think we will splurge and upgrade our alcohol package ;)

 

Besides all those with their calculators always going, talking percentages, nickels and dimes, I agree with you OP. As a couple who have traveled extensively globally "by land," cruises give the best bang for your buck. Particularly with all the perks, which most of the time we are able to get.

 

We went out for dinner just the other night and the bill was $140 plus 20% tip. Just for one dinner!!

 

Cruising 20 years ago cost more in some cases than it does today, and there was no such thing as a beverage package. You had a good time, but you had a $1500 or more bill at the end of the sailing.

 

That being said, I am certain the cruise lines make plenty, but like you, I am very content with the value.

[wallie5446]

Some stuff they make money on

 

• 18% service charge added to drinks etc purchased on board
  
• Daily Service charge per cabin to pay staff wages
  
• jacking prices up to include free drinks and then selling you the premium drinks package which still doesn't include the real premium stuff.. unless you pay even more
  
• switching from 4 courses to 3 courses in the MDR which over time will mean most people will eat less
  
• gradual reduction of services offered / included
  
• significantly increasing Speciality restaurant fees
  
• making people believe there's a sale on when there isn't really
  
• getting people to pay extra for promotions which include on board credit and then encouraging you to pay for the stuff before you board.
  
• bingo
  
• did i read somewhere that on a recent cruise they ran a workshop (with a fee) on coca cola? if so, this!
  

 

 

We went out for dinner just the other night and the bill was $140 plus 20% tip. Just for one dinner!!

 

Cruising 20 years ago cost more in some cases than it does today' date=' and there was no such thing as a beverage package. You had a good time, but you had a $1500 or more bill at the end of the sailing.[/quote']

 

DYKWIA, this list is so far from reality, the 18% goes to the staff for starters.

 

Have you shopped and cooked a meal lately that compares to one served in one of the speciality venues? Forget the time and effort it takes to prep then cook. In the US the food itself cost more than the $50 pp fee.

 

That's just 2 items. Your comments are mostly really on spot good, but this one is way out there.

[insidecabin]

Look at the financial results to get an idea of how much running ships costs the cruise lines.

 

X will be mixed in the the other 5 RCCL brand like RCI and Azamara

 

looking at the 214 results.

 

revenue is spit 73% ticket 27% on board

 

the revenue is around $230pppd

the costs are around $180pppd

 

They make about $50pppd after running the ships including the costs of sale like commissions.

 

For all those cheap cabins there are a lot selling for much more.

 

from that $50 there is a load of other stuff to pay for.

 

about $13.50pppd pays for all the food including the crews.