Cruising affordability

[navybankerteacher]

With the fares of new bookings apparently significantly higher, are people going to have to re-think some of their long term plans?  Inflation is already showing its head, and will not only impact cruise fares but all expenditures, likely reducing funds available for discretionary spending such as cruising.  Coupled with that is the virtual certainty that taxes will have to go up to fund the massive government outlays already incurred in fighting the pandemic - as well as the significant infrastructure programs now being enacted.

Are people going to have to be more careful with their discretionary spending - which would have to impact cruising.

[Flatbush Flyer]

15 minutes ago, navybankerteacher said:

With the fares of new bookings apparently significantly higher, are people going to have to re-think some of their long term plans?  Inflation is already showing its head, and will not only impact cruise fares but all expenditures, likely reducing funds available for discretionary spending such as cruising.  Coupled with that is the virtual certainty that taxes will have to go up to fund the massive government outlays already incurred in fighting the pandemic - as well as the significant infrastructure programs now being enacted.

Are people going to have to be more careful with their discretionary spending - which would have to impact cruising.

Though it appears to escape consideration by many people who will go “into the red” just to go on a cruise, budgeting is not rocket science. 
As far as I know, basic math is still 10(income)-8(basic and dedicated expenditures [including savings/investments])=2 (discretionary spending). 

So, whether it’s a cruise or land vacation or even a staycation, people should determine what’s available for annual discretionary spending and earmark a portion of that for travel. And, yes, we all may find ourselves traveling a bit less than previously due to the increased pricing.

[DirtyDawg]

Higher taxes??

I take it you are not a big believer in Modern Monetary Theory. 😉

 

You didn't mention what inflation could do to cruisers 401K's. 💥

[Mary229]

 No.  I am about to retire in 16 months and my plan has always been to do some bucket list cruises for about 5 years.  I am like an old Soviet bureaucrat - 5 years at a time regardless of the economic realities.  The only thing that would change my mind is global unrest or war. 

[iancal]

We anticipate doing the same amount of travel as we did pre covid.

 

We expect prices to increase.   Whether it be general inflation, demand, or currency fluctuations.

 

We view cruise like any other travel product and compare cruising values to other travel options.   If we feel that cruise prices increase at a much higher rate than other travel options with no increase in perceived value then we will be less inclined to buy.   

 

I think cruise prices may well increase in the short term but in the long term supply and demand, and competition, will help to regulate the market.  

 

When we retired nine years ago we thought that we would be doing more cruises.  We did for about three years.   Since that time  we are doing  less cruising and far more independent land travel.   Not only because of price or value but because it has become our preference.  We will still cruise, but only as an add on to a land trip.    It will be interesting to see how the industry changes over the next few years.

Edited June 14, 2021 by iancal

[donaldsc]

54 minutes ago, Flatbush Flyer said:

Though it appears to escape consideration by many people who will go “into the red” just to go on a cruise, budgeting is not rocket science. 
As far as I know, basic math is still 10(income)-8(basic and dedicated expenditures [including savings/investments])=2 (discretionary spending). 

So, whether it’s a cruise or land vacation or even a staycation, people should determine what’s available for annual discretionary spending and earmark a portion of that for travel. And, yes, we all may find ourselves traveling a bit less than previously due to the increased pricing.

 

A short term factor that you have to consider is that for the past year, most of us have spent nothing on anything that was fun so there is a backlog of unspent cash there.  Also and I hate to say this but many of us of done very well financially over the course of the epidemic.  I know that we have.

 

DON

[sverigecruiser]

 

We  spent very little money last summer and we will spend very little money this summer too. Overall we have spent very little money since the pandemi started.

 

That combined with a great stock market last year mean that we from next year will be willing to spend much more money on cruises than in the past.

[bonsai3s]

Based on our current bookings, we can clearly see that prices are up.

We continue to book because we have Future Cruise Credits to use, not to mention airline vouchers/certificates.

 

For the old folks who loves to travel,  most specially those who are retired and are in their Golden Years...we have lost at least 15 months of travel.  We are ready to go...cost, prices or value of our travel will always dictate our decisions...who doesn't want to save a buck?

 

That said, we've had friends who passed away during covid...some are now too old to travel...some are ill or not healthy enough..............a dear friend was recently diagnosed with cancer. The last thing on his mind is traveling.

[rkacruiser]

4 hours ago, donaldsc said:

 

A short term factor that you have to consider is that for the past year, most of us have spent nothing on anything that was fun so there is a backlog of unspent cash there.  Also and I hate to say this but many of us of done very well financially over the course of the epidemic.  I know that we have.

 

DON

 

I understand your point.  Being in a lockdown mode for so long and spending money only on true essentials and then doing my 2020 taxes and actually understanding what my investments had been doing during the year:  I was thankfully and appreciatively surprised.  Some of the charitable organizations that I have long supported have been the beneficiary of this 2020 surprise.  

 

5 hours ago, navybankerteacher said:

With the fares of new bookings apparently significantly higher, are people going to have to re-think some of their long term plans?

 

The frugality that I learned from my Grandparents and Parents is something that isn't going to suddenly disappear.  (Even if I win Ohio's Vax-a-Million Contest  😀.)  A large increase in the cruise cost/day (which is the standard that I use to compare cruise costs) will probably cause me not to immediately call my travel agent and say "Book it Mary"!  But, as with every cruise that I have ever taken, I will revert to my tried and true standard.  If I can afford it, if it is something I want to do, if it is something that I am able to do:  "Book it Mary!"  

[getting older slowly]

For the mean time... about cruising if the price increases too much... we'll reduced the number of cruises

 

Land travel here as gone up... went for a break down the coast   

accommodation was about 30% dearer.......

 

We will just wait and see before making plans ..

[navybankerteacher]

5 hours ago, sverigecruiser said:

 

We  spent very little money last summer and we will spend very little money this summer too. Overall we have spent very little money since the pandemi started.

 

That combined with a great stock market last year mean that we from next year will be willing to spend much more money on cruises than in the past.

Of course the stock market, having soared to levels previously unseen, will only continue to go up — in spite of the fact that, based upon historic experience, a correction is long overdue.  I certainly hope that there is no correction, and that taxes will not surge, and that price increases do not come.   

[iancal]

Our travel regime will not change.  We will still travel as much even if prices go up.  But we certainly not pay above the odd or above what we the think the value is for a cruise.  

 

It is more about our perception of value than it is about price.

[neverbeenhere]

We cruised often prior to Covid. We have discussed and plan to increase our cruises. No children, so we decided that the nieces and nephews can do with a bit less. 😀

[zekekelso]

I think some folks have the economics backwards. High prices aren’t going to drive demand lower. Huge demand is driving prices higher. People have stayed home, people want to get out and they have the money to do so. Prices are going up, but don’t expect empty ships and ports. 

[rkacruiser]

23 minutes ago, navybankerteacher said:

that taxes will not surge

 

No one wants this.  If you are of the same generation/age that I am, we have enjoyed the benefits of the taxes paid by those a few decades ago to provide for some of the benefits that we have, and now, enjoy.  An Interstate highway system, modern airports and ATC, scientific advances with funding by our tax dollars, .... and on and on.  It is OUR turn to step up to the plate and pay forward so that our children and grandchildren are able to experience the life that we have experienced.  

[Tapi]

9 hours ago, navybankerteacher said:

 

Are people going to have to be more careful with their discretionary spending - which would have to impact cruising.

Its my humble opinion that, unless someone’s income is at the top or bottom of the scale, most people won’t see significant changes that will force them to adjust their discretionary budget. On one end we have what news outlets and media personalities on far ends of the spectrum report. On the other end we have reality.

I’m not an analyst, but I believe that people who fall in the income bracket that allows them to cruise will continue to cruise without significant impact to their discretionary budget, or maybe with minor tweaks. On a personal level, it’s been my experience that every time that we change administrations, I read and hear about the financial gloom and doom upon us. Yet, over the last 25 years I still haven’t seen a significant, government driven impact that has forced me to tighten my travel habits. 

 

I’ll echo what someone said above. The unintended consequence of Covid for me is that it allowed me to save more money than usual. As of right now, I have all of my cruises paid for in full until 2023. In fact, I will probably end up cruising more in the next few years than in years past. I know that I’m just one person, but I’m part of the middle class which accounts for a significant chunk of the population that can afford to cruise. I have no bone to pick with either side. I make too much money to benefit from government programs, and I don’t make enough to be taxed in one of the highest tax brackets. But I digress.
 

As a side note, we returned from a road trip last night. One of the things that we noticed as we drove home is that gas prices over hundreds of miles have stabilized, and in some cases they have decreased. That made me feel like, once again, some far end news outlets aren’t quite reporting reality and are instead firing up their audience in the endless pursuit of ratings.

 

Edited June 15, 2021 by Tapi

[Sea Hag]

I don't think it's going to make any difference to us. We're careful spenders, and year-in-year-out we've usually only done one cruise. We've always done other types of vacations as well. Right now, we have two cruises booked for this year, two for next, and one for the year after. No idea if they'll all sail, but if they do, we'll be on them.

[navybankerteacher]

It’s good to see optimism - I hope things work out for everyone as they seem to believe will happen.  And that increased taxes, decreased investment portfolios, and soaring prices do not happen.

[Hlitner]

I think the OP raises a good point which is more so for folks who live in places like CT (the OP), NY and CA where they have never met a tax they do not like.  And make no mistake but here in the USA there are huge tax (and cost) differences between various States.  We have long looked for "value" in our travel/cruises which is different then low cost.  These days we think that paying more for some luxury lines is actually a better value then the prices being charged by some of the mass market lines (for decent cabin categories).  How can we justify a small suite on Celebrity when we can cruise on Seabourn or Oceania for nearly the same price?   And I think there is another factor which is that some of us are desperate to get back into our normal travel lifestyle and are willing to pay more (then in the past) for the privilege.  I will mention that the airlines are not making things easier with the constant changing of schedules, cancelations, and price changes.  For us we look at all this as a challenge but there is also frustration.  We had everything worked out for an October cruise out of Barbados until this morning when AA simply cancelled our flight!  I spent the next 6 hours looking at options, calling the cruise line, calling AA (which took 6 hours to get a call back and I was told I was lucky because the other day their queue was 11 hours).  The AA rep told me in the last few months there has been over 1.8 million reservations impacted by their schedule changes/cancelations.   

 

And it is in this world where those addicted to travel (that would be me) has to learn new tricks to deal with the absolute mess, constantly changing rules, dealing with regulations of multiple countries (with changing restrictions on a daily basis), etc.   Over 45 years of extensive cruising and international travel has not prepared me (or anyone else) for the current situation.  When we finally are on a ship and stand on deck as the vessel moves away from the pier....I will have earned several stiff drinks (and intend to enjoy every darn drop).

 

Hank

[Ashland]

We feel blessed to actually increase our travel...Not getting any younger and as long as we have our health...why not 

[SelectSys]

 

2 hours ago, zekekelso said:

I think some folks have the economics backwards. High prices aren’t going to drive demand lower. Huge demand is driving prices higher. People have stayed home, people want to get out and they have the money to do so. Prices are going up, but don’t expect empty ships and ports. 

Correct, all those trillions of stimulus dollars, euros, pounds, etc didn't create a thing except setting the stage for inflation.  Why are we shocked?   

 

1 hour ago, navybankerteacher said:

It’s good to see optimism - I hope things work out for everyone as they seem to believe will happen.  And that increased taxes, decreased investment portfolios, and soaring prices do not happen.

Lots of bridges to sell on CC.  Do you really think we aren't in for inflation, a market correction and tax increases at the federal level?  

 

1 hour ago, Hlitner said:

I think the OP raises a good point which is more so for folks who live in places like CT (the OP), NY and CA where they have never met a tax they do not like

Actually there was a time when CA was more of a libertarian state.  It really is only in the last 30 years that CA swung hard to the left and embraced progressivism.   The last attempt at tax control - prop 13 - is under continuous attack by the government unions.

 

1 hour ago, Hlitner said:

And I think there is another factor which is that some of us are desperate to get back into our normal travel lifestyle and are willing to pay more (then in the past) for the privilege.

This is very true regardless of destination.  My understanding is that the prices at the recently reopened Disneyland are significantly higher than they were before the parks closed last March. 

 

1 hour ago, Ashland said:

We feel blessed to actually increase our travel...Not getting any younger and as long as we have our health...why not 

I would expect you are not alone in this sentiment.  Sitting out the last 15 months for many people represents a big loss of opportunity.

[pris993]

11 hours ago, Mary229 said:

 No.  I am about to retire in 16 months and my plan has always been to do some bucket list cruises for about 5 years.  I am like an old Soviet bureaucrat - 5 years at a time regardless of the economic realities.  The only thing that would change my mind is global unrest or war. 

Been cruising/traveling for almost 40 years, retired and then worked part time for past 20 years.  Glad we did our bucket list trips while still working, now retired for the second time, we will not be traveling as much.  We always saved and paid off our travel expenses immediately after returning home, still do the same now.  Booked for Jan 2022.  

[sverigecruiser]

5 hours ago, navybankerteacher said:

Of course the stock market, having soared to levels previously unseen, will only continue to go up — in spite of the fact that, based upon historic experience, a correction is long overdue.  

 

I don't think that the stock market will only continue to go up. Because of that I have sold stocks to secure money I earned last year. So I can now pay for a few cruises with extra money I earned last year.

[Mary229]

7 hours ago, pris993 said:

Been cruising/traveling for almost 40 years, retired and then worked part time for past 20 years.  Glad we did our bucket list trips while still working, now retired for the second time, we will not be traveling as much.  We always saved and paid off our travel expenses immediately after returning home, still do the same now.  Booked for Jan 2022.  

We have been cruising also but there are a few very long cruises that we have held off on.  It is hard to fit a 50+ day cruise  while working.  I have a dedicated "cruise fund" and cruises are only booked as that provides.  As others have said last year certainly beefed up that fund.  So now, for the very first time, I have two cruises booked. In the past it was one at a time and never terribly far in advance.  

 

I would call myself an advanced road trip traveller, not blinking an eye at driving cross continent, east to west, north to south or on the diagonal.  I have hiked it, luxury stayed, toured in-depth, visited most of the continental national park, etc...  A one week jaunt for me is a long weekend from my perspective and I have done quite a few this past 14 months.  The prices on land are escalating rapidly and are not the bargain many think they will find.    Hotels and other travel industries including museums and amusements are going to have to raise prices for the same crisis reasons the cruise lines are - new guidelines, to make up for lost revenue and retraining old and new employees.  Many companies lost their core employees during this time 

Edited June 15, 2021 by Mary229

[BoozinCroozin]

RCL priced us out the more they canceled. We started off at ~$2,800 for 3 of us to cruise. When they finally canceled March, the cruises we could take were over $6,000. I am not paying 2x for a cruise that is going to have diminished services. We opted for more affordable cruise lines at that point. If those get out of line too, we will take other vacations. AI in the islands are very affordable.