How are cruises priced ?

[horseymike]

Some cruises with similar itineraries on the same cruise line show considerable differences with regard to pricing.

Beside the “ Newer Ship “ factor can anyone tell how the cruise lines figure pricing ?
Thanks

[mom says]

Not dissimilar to how hotels or airlines price their products. Prices fluctuate by date/demand.

Edited December 21, 2022 by mom says

[navybankerteacher]

43 minutes ago, horseymike said:

Some cruises with similar itineraries on the same cruise line show considerable differences with regard to pricing.

Beside the “ Newer Ship “ factor can anyone tell how the cruise lines figure pricing ?
Thanks

I really doubt that "similar itineraries" (which mean same length,  same ports, same time of year on the same line) would cost more or less for similar accommodations.  I am inclined to think you are overlooking a factor or two.

 

They are essentially priced to get what the market will bear.  Cruise lines expend a lot of effort in developing pricing models -- they are sensitive to "tipping points": when itineraries either sell at faster rates than anticipated or fail to sell -- and they make pricing adjustments accordingly.

 

Aside from the obvious quality-based differentiations (Oceania cruises will likely cost more per day than NCL's offerings) market reactions are responded to.  But two NCL 7 day cruises to the same ports, from the same home port at the same time of year are almost certain to charge very similar fares.

 

Of course, if you are comparing very similar, same-line itineraries' pricing a year before sailing with pricing two weeks before sailing, you must consider the availability factor along with everything else.

Edited December 21, 2022 by navybankerteacher

[Hlitner]

Like many businesses, cruise lines use a combination of sophisticated yield managment algorithms along with normal management decisions.  So, for example, HAL knows it can get more money per passenger day for its annual Voyage of the Vikings cruise because it has traditionally been a popular itinerary and best seller.  On the other hand, a routine Caribbean cruise in early January might be sold at a big discount because there is usually a soft market right after New Years.  

 

I should add that those of us who are able and willing to take advantage of last-minute bargains (generally not shown on cruise line web sites) can do quite well when the cruise lines get it wrong :).  An empy berth is opportunity lost revenue, so all the cruise lines try to find ways to sell the unsold berths without impacting the existing bookings.

 

Hank

[jsn55]

1 hour ago, horseymike said:

Some cruises with similar itineraries on the same cruise line show considerable differences with regard to pricing.

Beside the “ Newer Ship “ factor can anyone tell how the cruise lines figure pricing ?
Thanks

A great many factors go into what a cruiseline can charge for a specific cruise on a specific ship.  The average cabin size, the quality of the food, the expertise/demeanor of the crew, especially the cabin and dining stewards, tender vs pier ports, quality of the entertainment/enrichment and, most importantly, the level of personal service ... but that's just the minor stuff.  Ships have 'reputations', pax love to review them, there's a plethora of opinions and information available.  Economies of scale are a factor, reflected in the size of the ship and the number of pax she carries.  The dynamics of the market, as has been explained above  by people far wiser than I, the algorithms, dynamic pricing ... but basically a cruiseline charges what they calculate the market will bear.  A great many pax book their cruises a year or more in advance.  Technology allows cruiseline management to monitor sales constantly.  Cruiselines adjust their pricing along the way, hoping for that perfect moment where all cabins will sell out before the day of departure.  

Edited December 21, 2022 by jsn55
clarity

[wowzz]

5 hours ago, jsn55 said:

Cruiselines adjust their pricing along the way, hoping for that perfect moment where all cabins will sell out before the day of departure.  

Selling out cabins is easy. 

What is difficult is selling out cabins at the maximum possible price per cabin - that is the perfect moment, from a cruise line perspective. 

Edited December 21, 2022 by wowzz

[horseymike]

Thank You all for your responses. I find this information very helpful when shopping for a cruise.

Safe travels and Happy Cruising 😎

[Zach1213]

[BruceMuzz]

Economics 101

Supply and Demand

[navybankerteacher]

23 minutes ago, BruceMuzz said:

Economics 101

Supply and Demand

Exactly — and the cruise line has a much better concept of “supply” than the wannabe cruiser, because they can keep track of bookings;  and the cruise line can fine tune “demand” by offering incentives while the wannabe cruiser simply “demands” what he thinks will be a deal.

 

The one edge the wannabe cruiser has is the power to decide that the offer  currently in front of him is something he wants enough to press the buy button.  
 

Of course, on every cruise there will be at least one passenger who has gotten the “best deal” — but more than 99% of those who wants to find out will discover that someone else got a better deal.

 

The intelligent cruiser will be happy  with what he has - and not sweat trying to beat the expert at figuring the best price point. 

[horseymike]

Well said. I still like trying to think like the cruise line with regard to pricing to hopefully anticipate 

a bargain coming so as to snag it.

Thanks again for your comments, they are all quite interesting as well as helpful.