All inclusive. Not really. Expensive, YES!

[Bo1953]

2 hours ago, mayleeman said:

 

Again, not a fair comparison unless they took away a previously available lower cost vegan menu, or (more on point) charged you and everyone else a new higher price to provide meat eaters extra meat they alone previously had to pay for. 

 

I will back away from the "subsidy" term since it now seems overwhelmingly to get caught up in government subsizing a business (tax exemptions, etc) or market sector (like milk price supports) or economic class (low-income welfare benefits, etc). We learned it in a more general way back in the early 1970s, when IIRC there was a lot more attention to private pricing practices. Cost shifting? Price shifting? The point is some people are now having to pay for something the cruiseline didn't charge them for and which they do not receive, in order to provide a level of profit. That service, or those goods, get consumed by some but are paid for by all, and that is a lamentable change. 

Understood, yet there are things included in our fares (pre C-19) that everyone paid and not everyone used, so the theory can be applied to most everything when purchasing a cruise from any line, except those which are truly 'bare-bones' or 'fully inclusive' in presentation and nature, IMO.

 

Yet, I will still posit that there has to be a value basis to the buyer for us to purchase or not.

 

There are some arguments that 'newly minted full fare paying passengers' will pay anything now for X's product and I can agree somewhat, yet I advance that they, too, will decide if the value basis is there for them to purchase the product, as yet untested.

 

Those of us who believe that the value is not there, well it is fine until X or other market forces decide otherwise.

 

For some of us, the value is there, to wit the clamor to get cabins when reservations were opened up, especially by those who do not have FCC's to burn...

 

I venture to say, it is the On Board Experience (strong #2) that bring many of us back to X and when some of us believe the value is not there, then we will move on (with the memories) to a place/line that provides it for us... at a price we wish to pay.

 

bon voyage

[HMR74]

The old adage "there is no such thing as a free lunch" applies here.

 

 The tell, as discussed before, is once the cruise lines get back to a fairly normal experience, what will "occupancy" be like?

 

 RCL the umbrella company reports 104% occupancy (3 or 4 to a cabin does that) before COVID--and they and we should know 6-10 months after all ships are going and getting things ironed out.

 

If all the people who have AI and did not really want it because they do not drink, then spots at bars and other venues should not be any busier than before.

 

Now, I saw a study a year ago about cruise line profitability and while I do not have it, I recall the most profitable customers were the suites and other classes (such as Aqua or Concierge) by dollar and %.  and that inside cabins were covering fixed costs if that, and provided the spiel that a high % of inside cabin-ers laid off drinking and spas, and ship shore excursions, photos  etc. So there was no big upsell to them. Interesting report, I wish I had downloaded it. May need to google  or "duck duck go" it later.

 

Here is something you might not be aware of. Costco, the membership club, has a profit before taxes of less than 1% of revenues. It means their profit center is the membership fees and overall most of their product prices are at profit cushion levels--eg to make sure they make a profit on products and not lose. Thats why gasoline is 30 cents/gallon  less there than at regular gas stations. Sam's Club too has gas prices 1 cent either way of Costco.

 

And another hint: Sams Pharmacy, if you have their full membership, has  a lot of prescription drugs that are no cost to full members or very minimal cost and a lot of those are tier 2 3 or 4 for those on medicare. Even if you are under 65, savings can be had, and I know with the average age dropping on Celebrity, pretty soon it will be 18 (sarc) this prescription cost  issue is not on the radar of many here, right?

 

Thinking about that. it appears that the medical center on board can become a profit center if there are problems, although covid has to be more than they bargained for.

 

 

[HMR74]

This is a link to profitability study, not the one I was looking for but interesting and its based on 2018

Per passenger, NCL makes the most profit, Carnival the least, RCL is in the middle.

 

https://thehustle.co/the-economics-of-cruise-ships/

 

RCL  earns about 2 billion before taxes. With about 40 ships thats about 137,000 a day per ship on average, but as we know averages vary for different reasons.

but its not the 200k plus per day that the article reports , and I do not know why.

 

Anyway good read. and it shows that RCL is making a nice profit but not raking it in.

 

I want a good deal but I do not want to see their pricing so low we customers drive them out of business.

 

If RCL makes 300 per passenger on a 7 day cruise, that's 42 a day, and imo not a lot of room for error such as food prices inflating suddenly or fuel.

[tfred]

51 minutes ago, HMR74 said:

The old adage "there is no such thing as a free lunch" applies here.

 

 The tell, as discussed before, is once the cruise lines get back to a fairly normal experience, what will "occupancy" be like?

 

 RCL the umbrella company reports 104% occupancy (3 or 4 to a cabin does that) before COVID--and they and we should know 6-10 months after all ships are going and getting things ironed out.

 

If all the people who have AI and did not really want it because they do not drink, then spots at bars and other venues should not be any busier than before.

 

Now, I saw a study a year ago about cruise line profitability and while I do not have it, I recall the most profitable customers were the suites and other classes (such as Aqua or Concierge) by dollar and %.  and that inside cabins were covering fixed costs if that, and provided the spiel that a high % of inside cabin-ers laid off drinking and spas, and ship shore excursions, photos  etc. So there was no big upsell to them. Interesting report, I wish I had downloaded it. May need to google  or "duck duck go" it later.

 

Here is something you might not be aware of. Costco, the membership club, has a profit before taxes of less than 1% of revenues. It means their profit center is the membership fees and overall most of their product prices are at profit cushion levels--eg to make sure they make a profit on products and not lose. Thats why gasoline is 30 cents/gallon  less there than at regular gas stations. Sam's Club too has gas prices 1 cent either way of Costco.

 

And another hint: Sams Pharmacy, if you have their full membership, has  a lot of prescription drugs that are no cost to full members or very minimal cost and a lot of those are tier 2 3 or 4 for those on medicare. Even if you are under 65, savings can be had, and I know with the average age dropping on Celebrity, pretty soon it will be 18 (sarc) this prescription cost  issue is not on the radar of many here, right?

 

Thinking about that. it appears that the medical center on board can become a profit center if there are problems, although covid has to be more than they bargained for.

 

 

I saw an article that American Airlines is a marketing company that has airplanes.

 

40% of its profit comes from its Frequent Flyer Program Advantage.  That is from tie ins with other companies, credit card fees etc.  The profitability of the program itself is 50%

 

You know that X is looking hard at this 

[tfred]

3 hours ago, mayleeman said:

I wonder how many people will end up finding they do want to use the internet far more than they did before being connected so much in lockdown?

Thats the biggest complaint at every hotel I ever stayed at - the cost (and speed) of the internet

 

X has profiles of pax that they want to attract - as a group.  Internet savvy is high on that list.  "We don't drink or use the internet" is not a phrase that warms the heart of any company looking for customers

[jelayne]

I’m reading this while at a All Inclusive (adults only)  resort.  The average age appears to be late 30’s -early 40’s. Check-in, All menu’s, room service ordering, a d activity schedules are on-line.    Everywhere you go the guests are on their phone or tablet, except when in the water. Sitting by a  pool,  on the balcony, in a bar or restaurant and if not in the act of eating or drinking  most are on their on-line   This is the demographic Celebrity is targeting and they expect internet.

[davekathy]

4 hours ago, mayleeman said:

I wonder how many people will end up finding they do want to use the internet far more than they did before being connected so much in lockdown?

I'll be the first to raise my hand. 🖐️

[HMR74]

1 hour ago, tfred said:

I saw an article that American Airlines is a marketing company that has airplanes.

 

40% of its profit comes from its Frequent Flyer Program Advantage.  That is from tie ins with other companies, credit card fees etc.  The profitability of the program itself is 50%

 

You know that X is looking hard at this 

American used its frequent flyer program as collateral for loans during covid.

Several years ago when US Air merged with American , the US Air Management took over. I noticed immediate decline in attention to its frequent flyers.  for example in the old days when I traveled with my wife and we both had a total of 102 pounds of suitcase, they did not care. Then for a while when I had 51 pounds and my wife had 49, they made me, in the concourse, open my bags to move a little from one suitcase to another. Totally crazy.

 

By end of 2019, it reverted back to old school. Customer service-let the customer get away with a little buys a lot of goodwill.

 

Now What will "X"'s loyalty program garner in Its value if sold or used as collateral. Right now it is part of the goodwill inside RCL. But its not like American or United where the business travelers used to rack up big miles every year mostly on high priced tickets. That business travel is out the window for now and perhaps a long time.

as discussed here you get some amount of drinks, now negated by AI

Laundry is nice but its not a deal maker of breaker.

Upgrades within category can be nice but not a deal breaker or maker.

early embarkation/disembarkation  is real nice, esp at a port where a tender is used.

For myself the Airline flyer programs were always about making travel easier--early boarding, comp upgrades without using points, (except out of or into SNA which was a very frequently used business location) and basically guaranteeing that if I had an aisle seat in coach, the center seat was blocked out for as long as possible. Which is why when traveling with wife, I book coach window and aisle for us  and it works well, except sometimes they upgrade us both.

 

X needs to find more of the "little things" , perhaps early access to stateroom on first day and getting luggage up there consistently fast even if you arrive an hour or two after the start of check in.

The other thing we will see soon is loyalty and high level bookings will get early check in and they will not let the rest of the ship customers board upon early arrival as they have in past years.

 

 

[FlyerTalker]

2 hours ago, tfred said:

I saw an article that American Airlines is a marketing company that has airplanes.

 

40% of its profit comes from its Frequent Flyer Program Advantage.  That is from tie ins with other companies, credit card fees etc.  The profitability of the program itself is 50%

 

Actually, the Advantage program generated all of the profit for AA.  From Gary Leff:

 

The airline acknowledged that ‘net cash from operations’ of the frequent flyer program exceeded the airline’s pre-tax income for all of American in 2019.

 

https://viewfromthewing.com/14-things-american-airlines-told-the-sec-about-the-aadvantage-frequent-flyer-program/

[HMR74]

1 hour ago, FlyerTalker said:

 

Actually, the Advantage program generated all of the profit for AA.  From Gary Leff:

 

The airline acknowledged that ‘net cash from operations’ of the frequent flyer program exceeded the airline’s pre-tax income for all of American in 2019.

 

https://viewfromthewing.com/14-things-american-airlines-told-the-sec-about-the-aadvantage-frequent-flyer-program/

the issue raised is if AA goes BK, our miles go bye bye as they go to the senior creditors. However, if those go, whats the real value of mileage.

Here is my take. AA was making a case that its flyer program is real value to borrow on. They all have credit cards, partnerships with things like booking.com.

A lot of what was said to CDC sounds like double talk.

 

Now, we know Celebrity has its credit card giving $2 of credit for each 100 spent with celebrity. 1% for everything else is is not so great.

We know the high elite get free cruises on certain parameters.

Celebrity and RCL need to work a better deal with BAC or go elsewhere to keep the customers using it  coming back.

 

What if Amazon got involved. Use their credit card to pay for a cruise and you get a 5% credit, plus refundable OBC and perks.

 

 

[Host Jazzbeau]

3 hours ago, HMR74 said:

What if Amazon got involved. Use their credit card to pay for a cruise and you get a 5% credit, plus refundable OBC and perks.

And your cruise is delivered to your front door in 2 days!  🤣

[4774Papa]

11 hours ago, jelayne said:

I’m reading this while at a All Inclusive (adults only)  resort.  The average age appears to be late 30’s -early 40’s. Check-in, All menu’s, room service ordering, a d activity schedules are on-line.    Everywhere you go the guests are on their phone or tablet, except when in the water. Sitting by a  pool,  on the balcony, in a bar or restaurant and if not in the act of eating or drinking  most are on their on-line   This is the demographic Celebrity is targeting and they expect internet.

Agree, and I have allways said that you can usually divide cruise passengers into to general categories:

1) Cruise for tour itineraries

2) Cruise for being on the ship

 

Sure, most cruisers have elements of both, but we are clearly in the first category.  Yes, we enjoy the social network of people we meet, dine and drink with on cruises, also just watching the sea go by.   We would never book a vacation to sit on the beach at the same place for the entire vacation, we want to see the World and have already done much of it already, but there is more to see.

[HMR74]

7 hours ago, Host Jazzbeau said:

And your cruise is delivered to your front door in 2 days!  🤣

actually I like the idea, but cruise lines and  non full service agents might not like it.

The main differentiation would  be the amazon/JP Morgan Chase credit card, which gets a 5% rebate when you buy on Amazon, 3% points more than the BAC Celebrity card.

 

I wonder what would happen if Amazon became an agent (are they already?).  Go back to that financial analysis I posted and see how much Amazon process/strategy  could lower costs.  Not so crazy.

 

[Ride-The-Waves]

Pyramid schemes, all.  The last person in gets all the crap!