NCL: Big mistake with the Sun & Sky?

[DaCruiseBug]

NCL recently took away the "open bar" on the Sun & Sky. Well, it goes into effect in 2 weeks.

 

I've been following prices on the Sun from a few weeks before they announced the change until now and can't help but think that NCL made an epic mistake here. First off, one of the reasons the Sun & Sky were usually sold out was because they were the only ships with open bar. Even tho it was a limited selection "open bar" most people were just fine with it. I actually booked the cheapest Sun sailing this summer (5 day) and paid $299 per person for Oceanview sailaway with no perks (just open bar).

 

Looking at prices for September and October prices are insanely cheap. For example, next month you can get an Oceanview with 2 perks for $179 per night on a 5 day sailing. Inside with 1 perk is just $129 per person. This means I can get a beverage package (ok add $100 in service charge here) and get a beverage package which now includes much more and 1 additional perk. Some sailings even offer free airfare on top of the 2 perks and that is as low as $319 per person for oceanview.

I know that fall prices are generally lower than Summer prices but I remember looking last fall and nothing even came close to this. A 3 day sailing would cost at least $250-300 for inside. If you real luck you could score one for $199. This is a 5 day sailing we're talking about.

 

So as the title says: Did NCL screw up royally here? Are bookings on the Sun & Sky hurting so much that they have to basically give away these cruises for as much as my monthly electricity bill?

Edited August 22, 2019 by DaCruiseBug

[JustAPilot]

September and October is hurricane season in the Caribbean, always the cheapest time to go south.

 

Kids are back in school, summer vacation for a lot of work people is also finished, thus those 5 day cruises don’t work to well. 

[gadaboutgal]

Doing away with the free Open Bar just brought the Sun down to what it should really be priced at considering its age and size.  If you look further on the schedule in the Fall into December the pricing is still much much less.  I do agree that NCL has shot themselves in the foot by removing the Open Bar freeby and may have to take a second look at their benefits later in the season.

Wondering, also, whether Norwegian is just trying to keep the ship afloat (pun intended) until it can resume cruising to Cuba.

[smplybcause]

7 minutes ago, gadaboutgal said:

Doing away with the free Open Bar just brought the Sun down to what it should really be priced at considering its age and size.  If you look further on the schedule in the Fall into December the pricing is still much much less.  I do agree that NCL has shot themselves in the foot by removing the Open Bar freeby and may have to take a second look at their benefits later in the season.

Wondering, also, whether Norwegian is just trying to keep the ship afloat (pun intended) until it can resume cruising to Cuba.

 

Sun is moving to Alaska for the summer next year. I think sky is staying in Miami, but from the looks of it NCL is vacating Canaveral next summer. 

 

Could be part of the reason why the prices of royals cruises then out of Canaveral are a lot higher next year. 

[DaCruiseBug]

3 hours ago, JustAPilot said:

September and October is hurricane season in the Caribbean, always the cheapest time to go south.

 

Kids are back in school, summer vacation for a lot of work people is also finished, thus those 5 day cruises don’t work to well. 

 

Compared to the same period last year prices are down quite a bit...even with perks. The season has very little to do with it. They're also cheaper than Royal and Carnival on similar sailings.

[Son of a son of a ...]

NCL has a capacity problem.

[Georgia_Peaches]

2 hours ago, Son of a son of a ... said:

NCL has a capacity problem.

I usually get good information from your insights but would you mind expanding on this?  What do you mean?

[RedwingHockeyFan]

10 hours ago, smplybcause said:

 

but from the looks of it NCL is vacating Canaveral next summer. 

 

 

Interesting.  I just looked and NCL doesn't sail from Canaveral in either of the next two summers.  Cruises stop in April and start back in November.  I can understand that they move some ships back to Alaska for the summer but you would think they would still keep one ship sailing from Canaveral.

Edited August 22, 2019 by RedwingHockeyFan

[Son of a son of a ...]

1 hour ago, Georgia_Peaches said:

I usually get good information from your insights but would you mind expanding on this?  What do you mean?

 

NCL took the growth path because differentiation from competitors was failing as the competitors were able to copy what worked.  With the Cuba destination shut down and the Asian market tanking, it has too much capacity relative to its predicted demand.  Bad luck for NCL because its growth is charted years forward while destinations and markets are more unpredictable and change at a faster pace than NCL can react ... new ships require a long lead time and a lot of debt.  NCL is left with Alaska, Europe, and the Caribbean, but those markets are very competitive.  A 4,000 passenger ship sailing weekly is about 104,000 bookings a year - alone, that might not seem like a lot, but when the ship is dropped in an already competitive port/destination, that is a lot of supply that needs to be used.  

 

Per a recent article:  Royal Caribbean RCL and Carnival CCL account for 25% and 44% of global industry capacity, respectively. Meanwhile Norwegian Cruise only accounts for 9% of the global industry.

[RedwingHockeyFan]

I think 2019 is the last year NCL is sailing the Caribbean in September from what I can see.

[GA Dave]

30 minutes ago, Son of a son of a ... said:

 

NCL took the growth path because differentiation from competitors was failing as the competitors were able to copy what worked.  With the Cuba destination shut down and the Asian market tanking, it has too much capacity relative to its predicted demand.  Bad luck for NCL because its growth is charted years forward while destinations and markets are more unpredictable and change at a faster pace than NCL can react ... new ships require a long lead time and a lot of debt.  NCL is left with Alaska, Europe, and the Caribbean, but those markets are very competitive.  A 4,000 passenger ship sailing weekly is about 104,000 bookings a year - alone, that might not seem like a lot, but when the ship is dropped in an already competitive port/destination, that is a lot of supply that needs to be used.  

 

Per a recent article:  Royal Caribbean RCL and Carnival CCL account for 25% and 44% of global industry capacity, respectively. Meanwhile Norwegian Cruise only accounts for 9% of the global industry.

Add to that the quick growth of MSC, and the upcoming "new all-adult market" Virgin Cruise line, and NCL might be getting squeezed out.  If another recession comes, and it is anything beyond mild, I think many of these lines are in trouble.

[RedwingHockeyFan]

2 minutes ago, GA Dave said:

Add to that the quick growth of MSC, and the upcoming "new all-adult market" Virgin Cruise line, and NCL might be getting squeezed out.  If another recession comes, and it is anything beyond mild, I think many of these lines are in trouble.

 

34 minutes ago, Son of a son of a ... said:

 

NCL took the growth path because differentiation from competitors was failing as the competitors were able to copy what worked.  With the Cuba destination shut down and the Asian market tanking, it has too much capacity relative to its predicted demand.  Bad luck for NCL because its growth is charted years forward while destinations and markets are more unpredictable and change at a faster pace than NCL can react ... new ships require a long lead time and a lot of debt.  NCL is left with Alaska, Europe, and the Caribbean, but those markets are very competitive.  A 4,000 passenger ship sailing weekly is about 104,000 bookings a year - alone, that might not seem like a lot, but when the ship is dropped in an already competitive port/destination, that is a lot of supply that needs to be used.  

 

Per a recent article:  Royal Caribbean RCL and Carnival CCL account for 25% and 44% of global industry capacity, respectively. Meanwhile Norwegian Cruise only accounts for 9% of the global industry.

 

Two really good points.  It is quite possible that they sell off the smaller ships when the Leonardo fleet is complete. 

 

I also personally think that NCL doesn't have enough sailings in the Mexican Riviera and should look to expand in that area.  I hear that side of Mexico is very nice as well.  If it is an issue with not enough cruise ports then they should look at investing more in that area.

[smplybcause]

2 hours ago, RedwingHockeyFan said:

 

Interesting.  I just looked and NCL doesn't sail from Canaveral in either of the next two summers.  Cruises stop in April and start back in November.  I can understand that they move some ships back to Alaska for the summer but you would think they would still keep one ship sailing from Canaveral.

 

Yeah, I was rather surprised. Canaveral regularly commands a higher fare (at least for NCL and Royal, I don't follow Carnival or DCL) over their ships in Miami. NCL still has 6 ships unscheduled for 2021 summer so they might change it then. 

[Son of a son of a ...]

41 minutes ago, RedwingHockeyFan said:

 

 

Two really good points.  It is quite possible that they sell off the smaller ships when the Leonardo fleet is complete. 

 

 

It is an option, but I am not sure of the secondary market for used cruise ships.  NCL might be stuck with its fleet.  

[smplybcause]

1 hour ago, Son of a son of a ... said:

NCL took the growth path because differentiation from competitors was failing as the competitors were able to copy what worked.

 

I've often thought the cruise lines should consider longer cruises with some of their big ships. I know Carnival sometimes does alternating 6/8 with Vista/Horizon that allows them to hit further away islands than the normal western/eastern. Right now almost any away class over 7 that's not a repositioning cruise is just adding on a couple more of the regular western/eastern ports instead of going somewhere new. There's handful from NY (problematic for travel since they're in the winter) and a handful on the Joy this winter. However, the itineraries in 2021 are starting to hit new ports with Encore and Joy and maybe a few others. I'm actually pretty excited about those and hope to be able to hop on one. 

[bakersdozen12]

You do understand that alcohol was never free, right?  It's just that it was included.  Take away alcohol being included, and of course the cruise fare price is going to go down.

[Son of a son of a ...]

5 minutes ago, bakersdozen12 said:

You do understand that alcohol was never free, right?  It's just that it was included.  Take away alcohol being included, and of course the cruise fare price is going to go down.

 

The rates the OP displayed are $20 per day.  

[graphicguy]

Not sure about the life span of NCL’s ships, but the SUN has to be nearing the end of its cruising with NCL.  Could be Kevin O’Sheehan will buy it and add it to his Bahamas Paradise Cruise Line.

 

I think there is going to be a lot of shuffling of itineraries given the deletion of Cuba as a port.  The cruise lines spent a lot of time and money getting that itinerary over the last few years.  Poof! It was yanked quickly and that investment for the cruise lines is now gone.

 

I don’t know that VIRGIN will cut into any of the majors.  It seems it’s focused on the alternative lifestyle vertical market.  That’s not something the major players cater to.

 

I’m thinking the expansion of the cruise public may come as the industry becomes segmented more and more.....family cruises, Hawaii cruises....etc.  Royal and NCL are already cutting into the luxury cruise market by offering NCL’s HAVEN and Royal’s STAR.

 

My guess is that the upcoming ships NCL has scheduled to be built will be much more efficient and cost less to operate than something like the SUN is.

[david_sobe]

2 hours ago, bakersdozen12 said:

You do understand that alcohol was never free, right?  It's just that it was included.  Take away alcohol being included, and of course the cruise fare price is going to go down.

Exactly.