Onboard credit will not be accepted for pre-reservations

[RDC1]

If the OBC is refundably then why spend it on things that a person never i tended to. If that is what Princess is thinking I believe they will find out it is not going to be that much extra. I know I do not spend my OBC on many shipboard item as I think they are over priced or of poor quality. By wanting me to prepay ex ursions will not change that in any way shape or form.

 

Using my case as an example, I tend to get between $800 and $1200 per 14 day cruise (veteran, stock, FCC, sales, etc.). Of that only the Veteran OBC ($250) is refundable. I use my OBC on excursions, all pre-booked. Due to the change in policy that will nolonger happen. So either I take the risk on not getting an excursion, or I pay in cash. As I said earlier that reduces the value of the OBC, increases the cost of my cruise by the amount of OBC that I used to spend on excursions, leaving me with $550-950 in non-refundable OBC with nothing that I really want to spend it on. So with much reduced value.

Edited November 24, 2016 by RDC1

[dickinson]

I suspect that the issue of people booking just in case is not the reason. After all they still have to cancel 72 hours before the excursion and most get filled on the ship at higher cost. Even with prepayment you can cancel prior to the cruise and get the money returned.

 

This seems to be more aimed at reducing the amount of OBC spent on excursions (most of the money leaves Princess and goes to the excursion provider) and instead force it to be spent on other things on the ship, such as specialty dining, spa, jewelry, etc. all things where Princess has much higher margin and more of the money stays with Princess.

 

Some of those Departments are sublet and not owned by Princess

[RDC1]

Some of those Departments are sublet and not owned by Princess

 

They are sublet, but the money Princess receives makes it a better deal for them to have the money spent their than with excursions. Comparing the amount charged by Princess for excursions, to booking with the same companies for the same excursion, considering the cost of travel from the ship to the normal excursion meeting point, it is fairly clear that Princess gets a relatively low margin.

 

For those services, even those outsourced, Princess gets a higher margin, and the more revenue those firms get, the better contract terms the cruise line can negotiate. My understanding of those contracts is that Princess collects a fee, and also gets a percentage of the revenue from those providers.

 

If you spend it on specialty dining and drinks the money goes directly to the bottom line, very little incremental costs there. I would expect excursion margin to be less than 20%, probably more in the 10-15% range.

 

Also think of it this way. If the excursions are paid for when pre-booked. Then the revenue to the cruise line just increased by the amount of non-refundable OBC that would have been spent on excursions. The non-refundable OBC will get spent anyway or lost. So using my case as an example on 14 day cruise the $550-$950 in non-refundable OBC the amount of revenue they receive if I prebook is now increased by that amount. Coupled with a reduction in what the obc cost them due to improved margins. A not insignificant impact on the bottom line when you consider all of the OBC that they give out. This might be enough to impact their overall on ship/fare revenue split by a percentage point or two. Also an increase in overall profit margin by 250 basis points or more.

 

Would not be surprised if, over the next year or two, Princess also matches competition in not allowing OBC to be used for gratuities and casino.

Edited November 24, 2016 by RDC1

[pms4104]

Some random thoughts ...

 

Maybe Princess is too generous with OBC, or not restrictive enough by allowing it to be stacked or by making some, such as the military OBC, refundable.

 

In implementing the new policy of prepaying shore ex, Princess could get really creative ... Princess could assess the shore ex prices, increase them by X% and offer a discount of Y% only for those who prepay. So, for those using OBC (Princess Monopoly money) onboard, the cost would be considerably more. Hence, diluting the value of passenger OBC and/or increasing one's perceived net cost of the cruise.

 

All I'm saying is that these discussions, as well as calls and emails to/from Princess may well yield some unitended consequences

 

Princess is a money-making business and is making this change for a reason, not just to hack off its passengers.

Edited November 24, 2016 by pms4104

[RDC1]

Some random thoughts ...

 

Maybe Princess is too generous with OBC, or not restrictive enough by allowing it to be stacked or by making some, such as the military OBC, refundable.

 

In implementing the new policy of prepaying shore ex, Princess could get really creative ... Princess could assess the shore ex prices, increase them by X% and offer a discount of Y% only for those who prepay. So, for those using OBC (Princess Monopoly money) onboard, the cost would be considerably more. Hence, diluting the value of passenger OBC and/or increasing one's perceived net cost of the cruise.

 

All I'm saying is that these discussions, as well as calls and emails to/from Princess may well yield some unitended consequences

 

Princess is a money-making business and is making this change for a reason, not just to hack off its passengers.

 

Princess, as a business, can make whatever changes they want. Their customers can look at the impact on those changes on the price/value of the cruise and make their own decision rather or not to book.

 

The bottom line is that by having the OBC and allowing people to prebook with out payment Princess had a substantial competitive advantage over their competition that did impact peoples choice. That advantage vanishes with the change. Thus some people will chose differently.

 

They still retain some competitive advantage by allowing OBC stacking.

[pms4104]

Indeed, we all have choices.

 

Sent from my SAMSUNG-SM-J320A using Forums mobile app

[caribill]

They are sublet, but the money Princess receives makes it a better deal for them to have the money spent their than with excursions. Comparing the amount charged by Princess for excursions, to booking with the same companies for the same excursion, considering the cost of travel from the ship to the normal excursion meeting point, it is fairly clear that Princess gets a relatively low margin.

 

 

That assumes Princess pays the same amount as you would if you booked that same excursion privately.

 

Princess probably pays between 50%-60% of what the retain price is for the excursion, so there is a high margin.

 

Of course the expenses of running a shore excursion operation must come out of that margin, both the employyes on the ship and those back at HQ.

 

There has been several times that a Princess excursion did not come close to delivering what was promised. Princess refunded about half the cost of the excursion to us after dealing with the vendor. I assume what they returned to us was taken out of what they would have paid to the vendor and that Princess kept 100% of their share of the price of the excursion.

[Cruiser411]

I do find if funny that some folks are saying they'll go to a different cruise line when most, if not all, mainstream lines have the same policy.

[Potstech]

Not funny at all. When the value for the different programms on a Cruise line changes to where it no longer is a difference from its competition then consumers find other providers of similiar trips. With the decline sefvices of Princes resulting in less value for the cost it is natural for consumers to look elsewhere.

[jagoffee]

The issue is not the prepayment itself. The issue is that the change reduces the value of OBC. That value used to give Princess a significant value advantage compared to the competition. On a cruise of 14 days I usually get OBC (Veteran, Stock, FCC, Sale Offers) between $800 and $1200. In the past I have used that OBC to pay for excursions. The OBC would cover between 40% and 70% of those costs. On the cruises I have been doing (South America, Norway/Iceland TA, Asia, south Pacific, etc) many of the excursions book up well in advance of the cruise. So to use my OBC as I have I would need to take the risk that the tours I want would not fill. Something that I am not willing to do. If I prepay then there is nothing else that I would spend anywhere close to that amount on board.

 

As a result except for the military OBC, which is refundable, the value of the OBC has dropped from about 90% cash equivalent to 50-60% cash equivalent (since I would basically be spending on things that I otherwise would not purchase) and the cruise cost has gone up by the 40%-70% of the excursion costs that I used to pay by OBC. At that rate the economic advantage Princess has had over their competition is no longer there. Have canceled a B2B in November 2017 starting in Hong Kong, and switched to a Celebrity cruise doing the same route with better pricing and dates. In 2016 I spent 70 days on Princess. In 2017 the planned days on Princess is now down to 10.

 

I do find if funny that some folks are saying they'll go to a different cruise line when most, if not all, mainstream lines have the same policy.

 

RDCI explained the impact from their perspective which makes sense.

I was surprised that cruisers have so much Non refundable OBC which I believe is a result of Princess's generous policy of allowing the stacking of OBC offers.

 

I do believe the assumption that many shore excursions will not be available on board is not correct, but it is a risk.

 

IMO one cannot argue that the change is not a take away for people who book cruises and shore excursion (even if the booking is "just in case").

[Pierlesscruisers]

Not funny at all. When the value for the different programms on a Cruise line changes to where it no longer is a difference from its competition then consumers find other providers of similiar trips. With the decline sefvices of Princes resulting in less value for the cost it is natural for consumers to look elsewhere.

 

But, if the person is unhappy because Princess is changing their policy to what everybody else is doing, and the person doesn't like that policy, what do they gain by going to another line where they are going to have to comply with that same policy there? That makes no sense unless that old policy is the only (or most important) reason they were sailing on Princess. To me, that seems like a pretty minor reason to change lines, but if that person feels that strongly about that particular thing, then I guess that's reason enough. After all, it's their time and money that's involved and that's the important thing.

 

Tom

Edited November 25, 2016 by Pierlesscruisers

[RDC1]

That assumes Princess pays the same amount as you would if you booked that same excursion privately.

 

Princess probably pays between 50%-60% of what the retain price is for the excursion, so there is a high margin.

 

Of course the expenses of running a shore excursion operation must come out of that margin, both the employyes on the ship and those back at HQ.

 

There has been several times that a Princess excursion did not come close to delivering what was promised. Princess refunded about half the cost of the excursion to us after dealing with the vendor. I assume what they returned to us was taken out of what they would have paid to the vendor and that Princess kept 100% of their share of the price of the excursion.

 

Having some friends that run excursion companies in Alaska I can comfortably say that the negotiated discount is not nearly as high as you say. The discount given is more a matter of the cruise line being able to provide a full tour. As such the operator can cut their profit per customer, to maintain their average profit for a tour. That amount varies considerably between tours on small boats, waking tours, and those that use commercial carriers like trains (not much discount given there). Also some of the difference is that Princess usually provides transport (buses) to the tour departure location. The direct price often requires the customer to get to the departure point on their own.

 

The 50% discount is not driven by cruise ship cost/profit, as it is a standard for refunds for a tour that was conducted, but with issues of some kind.

 

Even if you take margin variance out of the consideration, you still have increase in total revenue as pre booked tours are prepaid and OBC is used for other things on board.

[RDC1]

But, if the person is unhappy because Princess is changing their policy to what everybody else is doing, and the person doesn't like that policy, what do they gain by going to another line where they are going to have to comply with that same policy there? That makes no sense unless that old policy is the only (or most important) reason they were sailing on Princess. To me, that seems like a pretty minor reason to change lines, but if that person feels that strongly about that particular thing, then I guess that's reason enough. After all, it's their time and money that's involved and that's the important thing.

 

Tom

 

The gain is the over all price of the cruise. I will give you an example. I had a 14 day cruise booked on Princess. The following are for similar balcony rooms.

 

Prior to change. Princess cost $5748, Amount of OBC $1150. Cost of excursions $1785. Gratuities covered in sale offer. Total net cost $6383. OBC used to directly reduce cost of excursions.

 

Celebrity cost $4448, Cost of excursions $1925, gratuities $378

Total cost $6751

 

Celebrity OBC $300 used to offset small level of onboard spending (soft drinks, coffee, etc.) some of which covered by elite benefits on Princess (coffee cards in exchange for Minibar on Princess for example)

 

After Change. Princess

Princess cost $5748, Cost of excursions $1785. Gratuities covered in sale offer. Total cash cost with prebooked excursions $7533

Adjustment for $250 refundable $7283

 

Remainder of nonrefundable OBC $900 far in excess of normal onboard spend. While the $900 will be spent it will be spent mostly on things that would normally not be purchased. No longer a reduction in total cost of cruise and excursions.

 

Basically for the same cruise Princess just went from $375 cheaper to $500 more expensive than their competition on this Asian cruise with excursions prebooked.

 

We will now be doing the cruise on Celebrity.

Edited November 25, 2016 by RDC1

[Pierlesscruisers]

The gain is the over all price of the cruise. I will give you an example. I had a 14 day cruise booked on Princess. The following are for similar balcony rooms.

 

Prior to change. Princess cost $5748, Amount of OBC $1150. Cost of excursions $1785. Gratuities covered in sale offer. Total net cost $6383. OBC used to directly reduce cost of excursions.

 

Celebrity cost $4448, Cost of excursions $1925, gratuities $378

Total cost $6751

 

Celebrity OBC $300 used to offset small level of onboard spending (soft drinks, coffee, etc.) some of which covered by elite benefits on Princess (coffee cards in exchange for Minibar on Princess for example)

 

After Change. Princess

Princess cost $5748, Cost of excursions $1785. Gratuities covered in sale offer. Total cash cost with prebooked excursions $7533

Adjustment for $250 refundable $7283

 

Remainder of nonrefundable OBC $900 far in excess of normal onboard spend. While the $900 will be spent it will be spent mostly on things that would normally not be purchased. No longer a reduction in total cost of cruise and excursions.

 

Basically for the same cruise Princess just went from $375 cheaper to $500 more expensive than their competition on this Asian cruise with excursions prebooked.

 

We will now be doing the cruise on Celebrity.

 

Okay, I see your point. Good example, and thanks for providing it!

 

Have a great cruise, no matter what line you're on. :D

 

Tom

[Potstech]

But, if the person is unhappy because Princess is changing their policy to what everybody else is doing, and the person doesn't like that policy, what do they gain by going to another line where they are going to have to comply with that same policy there? That makes no sense unless that old policy is the only (or most important) reason they were sailing on Princess. To me, that seems like a pretty minor reason to change lines, but if that person feels that strongly about that particular thing, then I guess that's reason enough. After all, it's their time and money that's involved and that's the important thing.

 

Tom

 

 

So what if the old policy is used to determine the overall price of the cruise and when to pay for it? If other lines are doing exactly what the original line is doing but for an overall less cost then with all things being basically the same why choose the higher priced item. Especially if it is only a first or second cruise. It boils down to what you are getting for your money.

 

Princess has made it a policy of not paying for your excursions until after they have been taken and now they want these same customers to tie up money as much as 180 days prior to embarkation. That means the customers do not have use or those funds for that period of time and if they cancel it could mean someone else getting the refund. Basically providing less service for a greater cost and expenditure of funds prior to getting any service.

[Pierlesscruisers]

So what if the old policy is used to determine the overall price of the cruise and when to pay for it? If other lines are doing exactly what the original line is doing but for an overall less cost then with all things being basically the same why choose the higher priced item. Especially if it is only a first or second cruise. It boils down to what you are getting for your money.

 

This discussion, to the best of my knowledge, which certainly may be wrong, has not been about the amount of the price, only about when the price was paid and about the ability/inability to pay with OBC.

 

Princess has made it a policy of not paying for your excursions until after they have been taken and now they want these same customers to tie up money as much as 180 days prior to embarkation. That means the customers do not have use or those funds for that period of time and if they cancel it could mean someone else getting the refund. Basically providing less service for a greater cost and expenditure of funds prior to getting any service.

 

I again go back to my original statement about what is the sense of going to another cruise line because Princess is changing to the same method the others are already using. Changing to another cruise line doesn't let you do anything that you can't do by staying with Princess. In either case you are going to have to pay in advance rather than waiting to pay on board. If you're talking about the use/non-use of OBC, then that's a different subject also as it appears from what I've read here that Princess is more generous than other lines with OBC, so that seems to mean that at best, the use of OBC to pay for excursions would be on a case-by-case business.

 

As to your comment "...if they cancel it could mean someone else getting the refund...", unless I'm missing something or you mis-stated what you meant, that's a non-starter because if you pay for something that you cancel, neither Princess nor any other line is going to keep any prepayment you've made and the let someone else use it. That seems ludicrous to me and I don't think any cruise line, or any other business is going to do anything like that. But, again, perhaps I've misunderstood what was meant.

 

Tom

[RDC1]

This discussion, to the best of my knowledge, which certainly may be wrong, has not been about the amount of the price, only about when the price was paid and about the ability/inability to pay with OBC.

 

 

 

I again go back to my original statement about what is the sense of going to another cruise line because Princess is changing to the same method the others are already using. Changing to another cruise line doesn't let you do anything that you can't do by staying with Princess. In either case you are going to have to pay in advance rather than waiting to pay on board. If you're talking about the use/non-use of OBC, then that's a different subject also as it appears from what I've read here that Princess is more generous than other lines with OBC, so that seems to mean that at best, the use of OBC to pay for excursions would be on a case-by-case business.

 

As to your comment "...if they cancel it could mean someone else getting the refund...", unless I'm missing something or you mis-stated what you meant, that's a non-starter because if you pay for something that you cancel, neither Princess nor any other line is going to keep any prepayment you've made and the let someone else use it. That seems ludicrous to me and I don't think any cruise line, or any other business is going to do anything like that. But, again, perhaps I've misunderstood what was meant.

 

Tom

 

The refund process is at best problematic. If you cancel a pre booked reservation on board the refund (in the form of refundable OBC) goes to the person whose name is on the reservation, not to the source of payment. In most cases that is probably not an issue, but in some cases could be. The policy assumes that the people traveling together have shared finances or at least can work out the transfer themselves if the person getting the refund is not the same one that purchased it. In most cases probably a valid assessment, but there are cases where it might not be true.

[Potstech]

This discussion, to the best of my knowledge, which certainly may be wrong, has not been about the amount of the price, only about when the price was paid and about the ability/inability to pay with OBC.

 

 

 

I again go back to my original statement about what is the sense of going to another cruise line because Princess is changing to the same method the others are already using. Changing to another cruise line doesn't let you do anything that you can't do by staying with Princess. In either case you are going to have to pay in advance rather than waiting to pay on board. If you're talking about the use/non-use of OBC, then that's a different subject also as it appears from what I've read here that Princess is more generous than other lines with OBC, so that seems to mean that at best, the use of OBC to pay for excursions would be on a case-by-case business.

 

As to your comment "...if they cancel it could mean someone else getting the refund...", unless I'm missing something or you mis-stated what you meant, that's a non-starter because if you pay for something that you cancel, neither Princess nor any other line is going to keep any prepayment you've made and the let someone else use it. That seems ludicrous to me and I don't think any cruise line, or any other business is going to do anything like that. But, again, perhaps I've misunderstood what was meant.

 

Tom

 

Princes has said the refund will go to the person whose name is on the excursion not the one who paid for it. Read my last postings from customer services. So the person who paid for the excursion for some one else may not get the refund. So yrs you have missed a few things.

[caribill]

 

 

I again go back to my original statement about what is the sense of going to another cruise line because Princess is changing to the same method the others are already using. Changing to another cruise line doesn't let you do anything that you can't do by staying with Princess. In either case you are going to have to pay in advance rather than waiting to pay on board.

 

With the old policy (book now, pay later), if I had to choose between two similar cruises, one from Princess and one from another cruise line, being able to avoid pre-payment would swing my decision to Princess.

 

But with the new policy, Princess would no longer have that advantage and I would pick which cruise for other reasons. Chances are, Princess would not be the choice as often as it has been in the past.

[cactusrose]

That changes as of this summer. As of summer 2017 all pre-reserved excursions must be prepaid.

 

Can you provide a link to where you found this information? All I can find on this subject under FAQs is

 

 

 

Onboard credit will not be accepted for pre-reservations, however, it can be used once onboard to off-set payment for additional excursions purchased onboard.

[cruzrbachoua]

Look back through this thread. ..it was either posted or a link to another thread was posted. There was a letter that went out to TAs that someone posted stating the summer 2017

 

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[Princess Cruises Fann]

Under the new policy, Princess will have a hard time to get anyone to take a move over offer.

[jagoffee]

Under the new policy, Princess will have a hard time to get anyone to take a move over offer.

Why not since you would get a full refund? If not it would need to part of the move over deal.

[Cruise Junky]

Under the new policy, Princess will have a hard time to get anyone to take a move over offer.

 

Please explain why?

[Potstech]

Can you provide a link to where you found this information? All I can find on this subject under FAQs is

 

 

 

Onboard credit will not be accepted for pre-reservations, however, it can be used once onboard to off-set payment for additional excursions purchased onboard.

 

I have posted 2 emails from Princess that explains that in their own words. Please be so kind to read the whole thread as it will answer those type of questions.