Small Cutbacks Noticed

[USCcruisecrazy]

3 minutes ago, CarelessAndConfused said:

 

First off I don't understand your numbers.  If you don't do wifi and knock off the grats (assuming you pay them), then the drink package is $25 under Plus.  That's the most it can be assuming the gratuities are actually going to the crew, which we have to assume.  For those who want wifi (and there are PLENTY of those cruisers), the cost is either $20 or $15 for the drink package.

 

It's a personal calculation on an individual basis for sure (from our perspective).  But the fact that you love it so much says it all.  If you are buying 6-8 drinks (even if not alcohol), that's probably more than $25 right there.  If we are talking alcohol then I assume you'd be one of those that paid $60 per day for the drink package or even more without the package.  So you are giving them LESS than you would otherwise have given.  I think one of the main issues when people want to assume profitability for Princess Plus is that there is an unwitting quick to the gun assumption that it's all incremental new revenue, when in fact it is cannibalize revenue that already exists, and most of the time, for less than they were getting before.

 

 

I was giving an example from previous cruises.  We never have done the Wi-fi (obviously will be with the new package).  So I gave how the numbers would have related to our previous sailings. $40 minus the gratuities of $15 is $25.  The package gives us $5 a day on board credit, so now down to $20.  That would basically be 2 mixed drinks to break even.  No, we never did the drink package.  Port days we wouldn't drink much on board.  We always would bring a bottle of wine for each night's dinner.  Not saying it's right or wrong for anyone or saying it's more or less of a profit margin for Princess.  Saying that the way I see it, if it works for them then it's a Win/Win because it's certainly a win for us.

[billco]

8 minutes ago, GloriaF said:

I'm thinking the same thing and it makes me sad, too!

 

 

At least when you go to another cruise line you won't notice the small cutbacks as much, as long as you don't talk to the old timers who are thinking of going to another cruise line, because of the small cutbacks.

[WAvoyager]

8 hours ago, caribill said:

 

Actually there is more than a scintilla of fact.

 

From the CCL Corp stock analysts call last fall referencing programs such as the Plus pricing (the $40/day/person with Plus is for accounting purposes considered onboard revenue):

 

"Our Yield Managers price them appropriately to achieve occupancy targets very wholesome, and coupled them with bundled packages to drive exceptionally strong revenue onboard."

 

"Our onboard and other revenue per diems were up significantly in the Third quarter 2021 versus the third quarter of 2019, in part due to the bundled packages"

Just wanted to call out - that statement speaks to increasing revenue and occupancy only.  Doesn’t mention profitability at all.

 

it is a good thing (for CCL) that they’ve increased the revenue per passenger.  This means it’s likely that they are generating additional profit from passengers where they wouldn’t have seen that before.  It definitely does not guarantee though, that they’re making money on the package itself.  It could be that the Plus package is a “loss-leader” - it drives lots of other benefits, and profitability elsewhere, without being profitable in itself.

 

they practically give away razors - not because they make money on the razor, but because the loss on the razor is worth the profit from related activity.

 

personally I think the reality is somewhere between the two.  Princess probably makes money from the drinks part on a few of the Plus packages, and loses money on many.  A couple traveling together may have one person who drinks more, and one person who thinks they have to have internet access.  Without Plus, they might have gotten only one drink package, and only one WiFi package.  So now they both have to get it.  They might lose money on drinks for the drinker, but they gain revenue, and profit on the additional WiFi, and the non-drinker.

[USCcruisecrazy]

4 minutes ago, CarelessAndConfused said:

 

That is the first time I'm hearing about. So maybe this is where I was mixed up.  I don't believe that is a regular "thing" but are you saying that is the standard policy for everyone who purchases it?  I know I never got it.

 

 

That's my whole point, how do you or anyone know that it is a "win" for them.  They haven't been doing it for very long and under very abnormal circumstances and occupancy loads.  And once again, the fact that you consider it "certainly a win" as do so many who purchase it, implies that Princess can only "win" so much with these low dollar amounts involved.

 

 

I didn't say that....I said IF it works for them, then it's a Win/Win because it's certainly a win for me.

[greenie082756]

15 hours ago, MsSoCalCruiser said:

@caribillI agree with you 💯.  Princess has always been our favorite line but I’m thinking of trying another cruiseline if the prices are lower.  It actually makes me sad.  

We have done mostly Princess and we are going to try all the other big lines. Variety is the spice of life and we want to do a comparison with different lines.

[WAvoyager]

Just now, USCcruisecrazy said:

I didn't say that....I said IF it works for them, then it's a Win/Win because it's certainly a win for me.

I think they were talking about the $5 OBC - I’ve never heard of this being part of Plus either.

[dickinson]

1 hour ago, PescadoAmarillo said:

I seriously miss nightly turn down service. I didn’t realize how much coming back to an invitingly turned down bed and bedside light turned on meant to me until I lost it. I know it exists on the app, but on two out of three cruises, we were told it wasn’t available. Yet our steward was still in our cabin every night placing a Patter on the bed. 
 

But what I really want to know is how some of y’all get your towels to dry.  There is overlap of the towels when hanging on the towel bars, and I think they could hang there for days and not dry. And if I’m going to re-use damp towels, I might as well be camping. 

 

I agree about the towels.  They are not good quality and don't dry fast.  We always leave the towels on the bar (my dh is good at folding it back nicely, me not so much).  I assume they get changed all the time though. I thought when we became Elite we were supposed to get upgraded bathroom amenities that also included towels.  I know one cruise before turning elite we did get thicker fluffier towels... sometimes.  Just took a b2b (first since before pandemic) and we never got fluffy towels.

Edited March 17, 2022 by dickinson

[USCcruisecrazy]

1 minute ago, WAvoyager said:

I think they were talking about the $5 OBC - I’ve never heard of this being part of Plus either.

When we signed up for our 10 day cruise, it included $50 OBC, Wi-Fi, Grats, and Drinks (up to 15 a day).  Maybe that was something different, but I assumed it was standard.  Perhaps an add-on from our Princess Travel Agent, but I thought it was part of the standard package.

[dickinson]

4 minutes ago, USCcruisecrazy said:

When we signed up for our 10 day cruise, it included $50 OBC, Wi-Fi, Grats, and Drinks (up to 15 a day).  Maybe that was something different, but I assumed it was standard.  Perhaps an add-on from our Princess Travel Agent, but I thought it was part of the standard package.

It was either because of a Princess promotion or from your TA.

[USCcruisecrazy]

4 minutes ago, CarelessAndConfused said:

 

Can you please answer the $5 OBC thing.  I'm sure everyone would like to understand this.

 

As for "if", well then you're already agreeing with me that we don't know so I'm not sure why the questions.  But I agree, it is "if" because none of know.  And quite frankly Princess doesn't either at this point because it's too new and we are a ways away from them making a judgement call.  But for my part, I fully expect this program to be deleted, changed, compromised, expanded or whatever with the next few years if not much sooner.

 

 

Yes, I was agreeing with you.

[sonomaphil]

The day Princess does towel animals is the day I find another cruise line. 

[PescadoAmarillo]

1 hour ago, CarelessAndConfused said:

 

Can you please answer the $5 OBC thing.  I'm sure everyone would like to understand this.

 

As for "if", well then you're already agreeing with me that we don't know so I'm not sure why the questions.  But I agree, it is "if" because none of know.  And quite frankly Princess doesn't either at this point because it's too new and we are a ways away from them making a judgement call.  But for my part, I fully expect this program to be deleted, changed, compromised, expanded or whatever with the next few years if not much sooner.

 

 

Somehow I just don’t believe that Princess doesn’t already have a handle on exactly how profitable Princess Plus is for them. Or that they didn’t have a strong indication how profitable it was going to be before it was ever rolled out. i spent my entire career in corporate finance. We didn’t just throw darts at a board when making decisions to try something, and then sit back and see how that worked out. We generally knew, right down to EPS, the anticipated result of every promotion. 

[caribill]

1 hour ago, WAvoyager said:

Princess probably makes money from the drinks part on a few of the Plus packages, and loses money on many.  A couple traveling together may have one person who drinks more, and one person who thinks they have to have internet access.  Without Plus, they might have gotten only one drink package, and only one WiFi package.  So now they both have to get it.  They might lose money on drinks for the drinker, but they gain revenue, and profit on the additional WiFi, and the non-drinker.

 

CCL Corp and other cruise liners have found that if they have pre-sold on board packages such as Princess Plus, that psychologically passengers who have been used to large on-board bills at the end of a cruise know that they will not face such bills now and are willing to spend $$$ on other on board items, thus raising additional revenue and, I would assume, additional profits since what Princess sells while on the ship usually make $$$ for Princess.

 

And you are correct about needing to consider that both people in a cabin must have Plus when it is purchased.

 

As an example, the free internet minutes that used to exist for Platinum/Elite were sufficient for us. Going forward, a single Internet package would be sufficient for us, so if we both had Princess Plus, the value of the Internet package for the second person is $0.

 

If we do not have Princess Plus, then we will be purchasing a single Internet package. At $5/day for an upcoming 33 day cruise, that is $165 additional income to Princess that we did not have to spend before for the Internet access we need.

[caribill]

9 minutes ago, PescadoAmarillo said:

Somehow I just don’t believe that Princess doesn’t already have a handle on exactly how profitable Princess Plus is for them. Or that they didn’t have a strong indication how profitable it was going to be before it was ever rolled out. i spent my entire career in corporate finance. We didn’t just throw darts at a board when making decisions to try something, and then sit back and see how that worked out. We generally knew, right down to EPS, the anticipated result of every promotion. 

 

Since the additional $40/person/day with Plus is also commission-able for TAs, this encourages TAs to push the Plus option.

 

So even with less net income after the commissions, the bean counters have calculated Plus is profitable.

[WAvoyager]

14 minutes ago, PescadoAmarillo said:

We didn’t just throw darts at a board when making decisions to try something, and then sit back and see how that worked out. We generally knew, right down to EPS, the anticipated result of every promotion. 

somehow, I get the feeling you haven’t worked in a start up…. 🤣

 

(J/K)

[WAvoyager]

5 minutes ago, caribill said:

 

Since the additional $40/person/day with Plus is also commission-able for TAs, this encourages TAs to push the Plus option.

 

So even with less net income after the commissions, the bean counters have calculated Plus is profitable.

Profitable as a program, but may not be profitable at the individual level.  The poster saying they always make money because the drinks don’t cost much was (maybe inadvertently) indicating the the Plus option is always profitable.  
As a program, yes, it wouldn’t have been implemented if it wasn’t likely to drive a profit.  But the actual $40 vs. cost for that $40 may not be always profitable (someone who drinks 15 drinks per day), or may not ever be profitable directly.  But if it drives other behaviors (additional passengers, increased other spending, etc) that do generate profit, it’s still beneficial.

Edited March 17, 2022 by WAvoyager

[Baystate]

Personally, I wash our bath towels every single day and our hand towels either every other day or daily so I definitely want new towels daily.  As to the turn down service, I definitely like it and would like it to continue, but as to the pen and paper, my husband and I always have a pen a small notebook so it doesn't matter to us. 

 

It is the little things that add to the experience.

[WAvoyager]

18 minutes ago, caribill said:

 

CCL Corp and other cruise liners have found that if they have pre-sold on board packages such as Princess Plus, that psychologically passengers who have been used to large on-board bills at the end of a cruise know that they will not face such bills now and are willing to spend $$$ on other on board items, thus raising additional revenue and, I would assume, additional profits since what Princess sells while on the ship usually make $$$ for Princess.

 

And you are correct about needing to consider that both people in a cabin must have Plus when it is purchased.

 

As an example, the free internet minutes that used to exist for Platinum/Elite were sufficient for us. Going forward, a single Internet package would be sufficient for us, so if we both had Princess Plus, the value of the Internet package for the second person is $0.

 

If we do not have Princess Plus, then we will be purchasing a single Internet package. At $5/day for an upcoming 33 day cruise, that is $165 additional income to Princess that we did not have to spend before for the Internet access we need.

That’s a really good point.  If you’ve pre-paid for drinks, they become “free drinks” when you’re onboard, so spending $ on other things doesn’t seem as bad.  Or, splurging for that $18 glass of wine isn’t so bad, since you only have to “pay” $3.

 

 

[Lady Arwen]

6 minutes ago, Baystate said:

Personally, I wash our bath towels every single day and our hand towels either every other day or daily so I definitely want new towels daily.  As to the turn down service, I definitely like it and would like it to continue, but as to the pen and paper, my husband and I always have a pen a small notebook so it doesn't matter to us. 

 

It is the little things that add to the experience.

You manage to wash bath towels everyday?  Wow, good on you!  I’m retired, but not as motivated as you are….I wish!  I can understand why you would want fresh towels on your cruise.  For us every other day is just fine.

[Reina del Mar]

Times are changing and cutbacks are being made…but everyone’s priorities are different. I always carry a pen, if I were desperate for chocolate might take a box, unlikely to use shoe shine, can definitely do without waste paper advertising art auctions and effy jewellery. Changing towels twice daily is not something we require, but once a day is appreciated. Turn down service not a deal breaker.

 

~Each to their own.!

[1965]

11 minutes ago, Reina del Mar said:

Times are changing and cutbacks are being made…but everyone’s priorities are different. I always carry a pen, if I were desperate for chocolate might take a box, unlikely to use shoe shine, can definitely do without waste paper advertising art auctions and effy jewellery. Changing towels twice daily is not something we require, but once a day is appreciated. Turn down service not a deal breaker.

 

~Each to their own.!

Agree 100%.

[1965]

1 hour ago, sonomaphil said:

The day Princess does towel animals is the day I find another cruise line. 

I'll still cruise Princess, but I will ask Steward to PLEASE not make towel animals for us. I hate those things. They are in the way. The eyes fall off. And I feel guilty when I take them apart & use the actual towel. 

[brisalta]

13 hours ago, Kmkub said:

As a shareholder, I appreciate measures taken to reduce cost where there is not even profit enhancing.

 

As a shareholder I appreciate measures that ensure the cruise lines good reputation and a willingness of passengers willing to pay the fare. Making passengers pay for TP will drive the clientele away.

[brisalta]

3 hours ago, PescadoAmarillo said:

I seriously miss nightly turn down service. I didn’t realize how much coming back to an invitingly turned down bed and bedside light turned on meant to me until I lost it. I know it exists on the app, but on two out of three cruises, we were told it wasn’t available. Yet our steward was still in our cabin every night placing a Patter on the bed. 
 

But what I really want to know is how some of y’all get your towels to dry.  There is overlap of the towels when hanging on the towel bars, and I think they could hang there for days and not dry. And if I’m going to re-use damp towels, I might as well be camping. 

 

There is a clothes line in the shower that one can place a towel or two over.

[Kmkub]

16 minutes ago, brisalta said:

 

As a shareholder I appreciate measures that ensure the cruise lines good reputation and a willingness of passengers willing to pay the fare. Making passengers pay for TP will drive the clientele away.

Comparing towel animals to being charged for toilet paper?