Holland America Cruise Pricing

[TRLD]

20 minutes ago, Ipeeinthepools said:

 

I asked Meta Ai  😃 and that's what came back.   I have tried to redo the search and can't get the same results.  Maybe I should terminate my use of Meta Ai  🤔.   In any case even if I take your numbers, it's a lot of debt.  It's $18B in additional debt which maybe the cost 30-36 new cruise ships, except you don't have the ships.

Been there done that. I had a search come back with the Carnival UK filing instead of the US filing. Teaches me not to write responses at the gym.

 

I have found you can ask the various AI the same question multiple times and get different answers.

 

Sure there is 18 billion more in debt, but it is decreasing. The biggest change is that some new orders have been delayed and current ships being kept longer. Prior to Covid CCL brands tended to sell ships before 24 years because that kept margins highest. Other lines have used those ships for several years after that point so clearly they had more useable life.  Now for the next few years the criteria for keeping ships is going to be more if it is cash flow positive, not does it maximize margin. 

 

Also keep in mind that the countries where the major ship building takes place subsidizes building. Usually in the form of low interest rate loans. After all they want to keep those slips active and residents employed.

 

So as the debt comes down, there will be additional debt as some new ships are built, but that debt will be at lower rates than the debt taken on during the shutdown.

[TRLD]

45 minutes ago, TheMichael said:

 

Well, that's a half-truth, because that would be true even if Carnival priced their cruises $1 over total cost.

 

Nobody is going to price their ships beyond the means of their customers just because they carry debt, any more than they're going to price them so low that people refresh their browsers to book like it's a Taylor Swift concert.

 

They're going to price their cruises to fill their ships by the time the ships sail. The current prices would be what they are even if the cruise lines had zero debt, because people will pay them.

 

Supply. And. Demand. 

 

Period, end of sentence.

 

Yes. Any of the cruise lines will make use of pricing power when they have it, debt or no debt. RCL has demonstrated a bit more pricing power than CCL.  RCL prices have kept up with inflation since 2019, CCL has lagged a bit.

 

 

 

 

[TRLD]

21 minutes ago, BermudaBound2014 said:

I am aware they have a few unique ports and itineraries. I’m sailing on the 35 night round trip to Tahiti from San Diego for the 2nd year in a row because it’s a niche itinerary. We are also on the 22 night Antarctica which is somewhat unique. 
 

Putting more than 50% of their ships running 7 day bus runs doesn’t seem super niche concentrated to me but what do I know 😉 
 

Of course, HAL knows where it can operate best, id personally like less Alaska and Caribbean and more 30 day itineraries to places less populated. To me that’s playing to their strengths . 🙂

Considering that they have all of the data on pricing, demand, expenses, etc and that they and other cruise lines model to develop plans for ship itineraries.

 

To put it another way if the long itinterary market was underserved by HAL and there was a lot of demand, beyond current allocated capacity you would see other lines allocating ships to that niche. Instead those lines are pretty much allocating all of their capacity to the shorter, repetitive routes, with their average itinerary length getting shorter.

 

HAL appears to be satisfying that demand to the degree that the other mass market lines are not moving into that niche (HALs biggest competition in that niche is from the premium lines), while the rest of HALs capacity is playing in the same areas that the other lines find so profitable.

Edited August 14 by TRLD

[TRLD]

42 minutes ago, Ipeeinthepools said:

 

Not really.  People don't have to take cruise vacations.  Ultimately customers will compare the value of cruise vacations to other land-based vacations and if the cost of cruise vacations increase too much or the cruise lines cheapen the cruise experience, they will explore other options.  It is supply and demand, but the customer also has land-based vacations as an option.

Yes cruise lines are in competition with other travel options. It is one of the major factors that limits cruise line pricing power. Usually in the past cruise lines have been about 15% discount to land travel. Since Covid the increase in land travel options have given them more pricing power and they have taken advantage of it.

 

 

[Mary229]

25 minutes ago, TRLD said:

Yes cruise lines are in competition with other travel options. It is one of the major factors that limits cruise line pricing power. Usually in the past cruise lines have been about 15% discount to land travel. Since Covid the increase in land travel options have given them more pricing power and they have taken advantage of it.

 

 

I agree. I have been pricing out a couple of land trips in North America this week and the prices are sky high. Even when I compare driving my own vehicle and booking everything unpackaged it is still hard to get the value I get with cruising. Dang, McDonalds is now $20 per couple, the same as it costs me for the Pinnacle Grill lunch. 

[TRLD]

24 minutes ago, Mary229 said:

I agree. I have been pricing out a couple of land trips in North America this week and the prices are sky high. Even when I compare driving my own vehicle and booking everything unpackaged it is still hard to get the value I get with cruising. Dang, McDonalds is now $20 per couple, the same as it costs me for the Pinnacle Grill lunch. 

Order through the McDonalds app and collect points. 😁

[mcrcruiser]

4 hours ago, Mary229 said:

I agree. I have been pricing out a couple of land trips in North America this week and the prices are sky high. Even when I compare driving my own vehicle and booking everything unpackaged it is still hard to get the value I get with cruising. Dang, McDonalds is now $20 per couple, the same as it costs me for the Pinnacle Grill lunch. 

Mary we beat back the land prices with our Marriott & Hilton honor points for free hotel rooms whencwe do land trips . what we have seen is that the room rates in number of points needed has gone up a lot as has the hotel prices ,if we were to pay for the room . Eating out is also very expensive ,even fasy food  restaurants & who wants that all the time. Then add gas ,maintenance & insurance , all this vs cruise prices are still cheaper in the   long tun

[TheMichael]

10 hours ago, Ipeeinthepools said:

 

Not really.  People don't have to take cruise vacations.  Ultimately customers will compare the value of cruise vacations to other land-based vacations and if the cost of cruise vacations increase too much or the cruise lines cheapen the cruise experience, they will explore other options.  It is supply and demand, but the customer also has land-based vacations as an option.

 

The existence of other entertainment options doesn't negate supply and demand. It just modifies the demand side. It's still a simple equation.

[Ipeeinthepools]

3 hours ago, TheMichael said:

 

The existence of other entertainment options doesn't negate supply and demand. It just modifies the demand side. It's still a simple equation.

 

I understand how supply and demand works.  The vacation budget for many people has not increased as fast as cruise prices and this will price some people out of the market.  Although land-based vacations have also increased in price people have more control in the cost by choosing different modes of travel, types of accommodations, destinations, etc.  The customer simply has more variables to reduce costs for land-based vacations.  Even for people that have cruised a lot, perhaps cruising is becoming repetitive, and the price increases are an additional incentive to consider other options.  I'll suggest that a large part of the current surge in bookings is due to the pent-up demand from the pandemic and the tolerance for price increases is really nothing more than a sugar high for the cruise industry.

[terrydtx]

2 hours ago, Ipeeinthepools said:

 

I understand how supply and demand works.  The vacation budget for many people has not increased as fast as cruise prices and this will price some people out of the market.  Although land-based vacations have also increased in price people have more control in the cost by choosing different modes of travel, types of accommodations, destinations, etc.  The customer simply has more variables to reduce costs for land-based vacations.  Even for people that have cruised a lot, perhaps cruising is becoming repetitive, and the price increases are an additional incentive to consider other options.  I'll suggest that a large part of the current surge in bookings is due to the pent-up demand from the pandemic and the tolerance for price increases is really nothing more than a sugar high for the cruise industry.

We are getting to the point of cruising burn out. In the next two years we have 2 cruises booked and 2 land trips. The land trips are to Hawaii and a 14 day trip to Italy. Both of our cruises include extensive land trips before and after them. This past January we cruised for 22 nights in Australia and New Zealand and added 13 nights on land in Australia with hotels and a car rental. For us the land portions are much less in cost than cruising mainly because we choose to cruise in upper class veranda or suites cabins. Even adding in higher end hotels like Hilton, Marriotts and Hyatts, land is less cost for us.

[TRLD]

2 hours ago, Ipeeinthepools said:

 

I understand how supply and demand works.  The vacation budget for many people has not increased as fast as cruise prices and this will price some people out of the market.  Although land-based vacations have also increased in price people have more control in the cost by choosing different modes of travel, types of accommodations, destinations, etc.  The customer simply has more variables to reduce costs for land-based vacations.  Even for people that have cruised a lot, perhaps cruising is becoming repetitive, and the price increases are an additional incentive to consider other options.  I'll suggest that a large part of the current surge in bookings is due to the pent-up demand from the pandemic and the tolerance for price increases is really nothing more than a sugar high for the cruise industry.

Just as one can select cheaper options on a land vacation, there are also a wide range of price options on  cruises.  Customers come and go. At this time cruising seems to be attracting new cruisers (new to specific lines and to cruising in general) faster than losing old ones.

 

Cruise Critic is not exactly representative of the cruise market place. Even here you get a number of posts from people saying that they are stopping cruising oe leaving a line only to see a few months later they are posting about taking another cruise.

 

 

[TRLD]

39 minutes ago, terrydtx said:

We are getting to the point of cruising burn out. In the next two years we have 2 cruises booked and 2 land trips. The land trips are to Hawaii and a 14 day trip to Italy. Both of our cruises include extensive land trips before and after them. This past January we cruised for 22 nights in Australia and New Zealand and added 13 nights on land in Australia with hotels and a car rental. For us the land portions are much less in cost than cruising mainly because we choose to cruise in upper class veranda or suites cabins. Even adding in higher end hotels like Hilton, Marriotts and Hyatts, land is less cost for us.

Hilton, Marriott, Hyatt are not upper end hotels. While they are offten called premium, it is the same way that travel companies like to call HAL, Celebrity, and Princess premium. They are solid foundational brands, that before covid were know for consistent, good service. Since covid, prices up, service down. Imternationsl locations seem to have recovered better as far as being back to full service than many domestic locations.

https://jestafreak.com/hotel-brands-pyramid/

 

 

 

[VermeulT]

On 8/10/2024 at 1:15 PM, Mary229 said:

Airfare is becoming a major issue as @terrydtx said.  It in part explains the boom in Alaska and eastern Canada. 

 

A few months ago I considered a quickie Alaska cruise.  It weas like $349 plus port charges.  Airfare was over $600... so much for my "cheap" getaway.

[mcrcruiser]

7 hours ago, TRLD said:

Hilton, Marriott, Hyatt are not upper end hotels. While they are offten called premium, it is the same way that travel companies like to call HAL, Celebrity, and Princess premium. They are solid foundational brands, that before covid were know for consistent, good service. Since covid, prices up, service down. Imternationsl locations seem to have recovered better as far as being back to full service than many domestic locations.

https://jestafreak.com/hotel-brands-pyramid/

 

  If you think the Cavalery Hilton is not a premium hotel v,take a look at the price. when we stayed there  in 2008 it was 4800 Hilton honor points   for a 6 day stay . mow it is a Waldorf level hilton  & very very pricy .This is just one example of what Hilton is in Europe . Either you are the  yop loyalty level with Hilton or you book directly into the Exceutive floor to be able to get Access to the Exceutive lounge for meals & cocktails included 

 

 

[mcrcruiser]

Most good hotel properties  in the Capital Cities in Europe are quite expensive today .Thus ,if you were to compare pricing to a cruise then it be proper to compare to  a luxury cruise line & not A  Holland ship cruise