shareholder credit

[kente]

We just got off of the Grandeur and were told that on any bookings after December 31st the shareholder credit cannot be combined with any other credit. I think all of the shareholders should start a letter writing campaign. Doing this does not help their share price or instill loyalty to RCL.

 

If there already is a thread on this subject I apologize, but I couldn't fince it.

[Retired LEO]

http://boards.cruisecritic.com/showthread.php?t=870594

[Morecruisesplz]

We just got off of the Grandeur and were told that on any bookings after December 31st the shareholder credit cannot be combined with any other credit. I think all of the shareholders should start a letter writing campaign. Doing this does not help their share price or instill loyalty to RCL.

 

If there already is a thread on this subject I apologize, but I couldn't fince it.

 

We were on the same cruise. She also hinted at other reductions in combinability on coupons and credits. I specifially sought her out later to ask if there might be a management decison to go back to the previous policy if enough complain (just like it changed from Oct 15 to Dec 31 after many compained as suggested here on CC). She said that RCCL could no longer afford to do both because they were losing too much due to the poor economy.

 

I did not push her on it because it isn't her decision, but how does reducing our existing benefits making it that much harder for our to cruise mulitple times (during a slow economic period) help them improve sales? Wouldn't it seem easier to raise sales and improve profits by having loyal cruisers cruise more often than to create and launch new, expensive ad campaigns to attract new customers?

[Merion_Mom]

We were on the same cruise. She also hinted at other reductions in combinability on coupons and credits. I specifially sought her out later to ask if there might be a management decison to go back to the previous policy if enough complain (just like it changed from Oct 15 to Dec 31 after many compained as suggested here on CC). She said that RCCL could no longer afford to do both because they were losing too much due to the poor economy.

 

I did not push her on it because it isn't her decision, but how does reducing our existing benefits making it that much harder for our to cruise mulitple times (during a slow economic period) help them improve sales? Wouldn't it seem easier to raise sales and improve profits by having loyal cruisers cruise more often than to create and launch new, expensive ad campaigns to attract new customers?

 

Of course it's stupid and they are definitely shooting themselves in the corporate foot.

 

The generally accepted figure in sales is that it cost 5x to 6x more to find a new customer than to keep an existing one.

 

:rolleyes:

[hylasgirl]

The stockholder OBC is still combinable with a TA OBC correct?

[Cruisin-Family]

Leaning on my market research background, there are a lot of people on this board that suggest that the reduction in combinable benefits (EG shareholder benefit) will not affect their decision to cruise with RCI. We are not one of these families.

 

RCI is, of course, a public for profit company and if their market research indicates that removing certain benefits does not affect prospective customers to cruise with them, then they can confidently remove them without affecting their bottom (income statement) line.

 

So as they receive more market research (feedback) indicating certain benefits will not impact your decision to cruise with them, plan on saying goodbye to them as well as they continue to lower their costs of service while increasing revenue. It is just business.

[cruisinisforme]

It is not going to stop me from cruising with them, but it will almost certainly make me cruise a little less. A lot of my choices in the last year or so to cruise has been because of the value and credits and without those I will probalby start doing a few land vacations, something I have wanted to do, but have always talked myself out of because the cruise value was the better choice. Thankfully I have all my cruises booked with them for the next two years so i dont have to worry about it for a while.

 

The one decision though I think was the worst is to not allow anything to be combined with the Future Cruise bookings while onboard. With no incentive to do it (since the diamond discount will always be greater) I will not be doing anymore. I can totally understand from a business perspective that too many things were combinable and they had to stop them, but they need to give some incentive for still going to the Loyalty Ambassador.

[Gonzo70]

The stockholder OBC is still combinable with a TA OBC correct?

 

 

Yes, I believe it still can be combined with TA OBC as well as OBC from Royal Caribbean credit card points.

[BopRN]

Since there will be no incentive to be "loyal", I guess they will have no need for a Loyalty Ambassador position anymore...that will save them thousands in salaries!

[Gonzo70]

We just got off of the Grandeur and were told that on any bookings after December 31st the shareholder credit cannot be combined with any other credit. I think all of the shareholders should start a letter writing campaign. Doing this does not help their share price or instill loyalty to RCL.

 

IMHO they are doing the right thing. Very few companies allow people to combine multiple coupons/discouts or use coupons on sale items. It was nice being able to take advantage of RCL's very generous previous policy of combining discounts when the economy was doing well, but now that they are hurting financially this in an area where them reverting to a normal/common business practice (allowing one coupon/discount) makes sense. While some people are reacting angry to this (as they had grown accustomed to combining all sorts of discounts) I am quite confident that their profits will increase as they will save far more money by not freely handing out so many multiple discounts than they will lose from the small number of people this policy change may drive away. This in turn should help the stock price - although people should not expect it to go up anytime soon as this is a terrible time to be owning stock in most travel/leisure related companies.

[Ladylouwho]

Well, considering that bookings are down for resorts and all-inclusive resorts all over the Caribbean by 30% or more it is odd that RCL is cutting incentives to its most Loyal and Repeat customers. The choice between a cruise and a nice all-inclusive can be made quickly if the prices of the all-inclusive come down sharply. I mean we stayed at a couple of all-inclusive resorts recently in Cancun and the Playa del Carmen area and had a great time! An all-inclusive is still just that, all-inclusive and no booze smuggling needed! Royal Caribbean better watch itself. Keep biting the hand(s) that feed you and those hands just may go feed someone else. JMO

[hmsdos]

Leaning on my market research background, there are a lot of people on this board that suggest that the reduction in combinable benefits (EG shareholder benefit) will not affect their decision to cruise with RCI. We are not one of these families.

 

RCI is, of course, a public for profit company and if their market research indicates that removing certain benefits does not affect prospective customers to cruise with them, then they can confidently remove them without affecting their bottom (income statement) line.

 

So as they receive more market research (feedback) indicating certain benefits will not impact your decision to cruise with them, plan on saying goodbye to them as well as they continue to lower their costs of service while increasing revenue. It is just business.

 

 

Right on...the money!

[Gonzo70]

Since there will be no incentive to be "loyal", I guess they will have no need for a Loyalty Ambassador position anymore...that will save them thousands in salaries!

 

Somebody who was simply cruising with Royal Caribbean because they allowed them to combine multiple discounts/OBC's and now is not cruising with them because they are allowed one discount/OBC per cruise was never "loyal" to begin with. People who are/were "loyal" to the cruise line were loyal because they like the overall product Royal Caribbean provides. Them restricting the combination of discounts is being done in part so that they do not have to make cuts in areas that would take away aspects of cruising that most of their loyal base enjoy.

[jst]

Like Cruiseinforme, we have ours all booked until mid-2010, we couldn't go any further out so didn't bother to get a cruise to no where, or another booking while we were on AOS 2 weeks ago. It was great while it lasted,:) and lets face it no one can afford to sell their stock right now with the price where it is:(

[Morecruisesplz]

Somebody who was simply cruising with Royal Caribbean because they allowed them to combine multiple discounts/OBC's and now is not cruising with them because they are allowed one discount/OBC per cruise was never "loyal" to begin with. People who are/were "loyal" to the cruise line were loyal because they like the overall product Royal Caribbean provides. Them restricting the combination of discounts is being done in part so that they do not have to make cuts in areas that would take away aspects of cruising that most of their loyal base enjoy.

 

But you are missing the entire discussion. It isn't about who is more "loyal." It is about how the combinable OBC's made it possible for many of us to cruise multiple times per year rather than just once. It is about affordability. And in a tough economy how does dumping a $100 or $200 OBC benefit for owning stock which allows customers to cruise more often improve their profits and/or their their stock value? Do you really think in hard times it is easier to go out and find new customers rather than to encourage those who are already sold on your product to come back more often? The answer to that was taught in Marketing 101.

 

Empty cabins don't: pay server tips; take excurisons; buy fancy coffee drinks; gamble; buy drinks at the bars; etc.

[Gonzo70]

But you are missing the entire discussion. It isn't about who is more "loyal." It is about how the combinable OBC's made it possible for many of us to cruise multiple times per year rather than just once. It is about affordability. And in a tough economy how does dumping a $100 or $200 OBC benefit for owning stock which allows customers to cruise more often improve their profits and/or their their stock value? Do you really think in hard times it is easier to go out and find new customers rather than to encourage those who are already sold on your product to come back more often? The answer to that was taught in Marketing 101.

 

Empty cabins don't: pay server tips; take excurisons; buy fancy coffee drinks; gamble; buy drinks at the bars; etc.

 

I was responding to a post of someone who said that the policy change was going to cause people who are "loyal" to Royal Caribbean to not cruise with them. That is not true.

 

The way it improves profits/enhances their stock value is that (despite losing some customers and some people cruising less frequently) they will end up making more money by stopping the common practice of discounts/OBC's being combined. Very few people are going to cruise less with them over a $200 perk not being combined with another $200 perk (the overall cost of a cruise is so much more than that). But they will be saving millions and millions of dollars by not issuing so many discounts/OBC's to so many people. By your logic stores could greatly increase their profits by allowing people to bring in three coupons and combine them all. Most stores only permit one coupon per item and/or one coupon per transaction. Royal Caribbean is finally putting into place what is common in the business world and will save them money.

[traveler/]

The loss of combinability after 12/31/2008 will not have an effect on the number of cruises we take.

We have changed 1 expensive cruise to another, less expensive shorter one however, for one of our cruises in 2009.

Combining discounts was great while it lasted.

Hopefully, the benefits combinability may be restored when the economy improves.

[Morecruisesplz]

The way it improves profits/enhances their stock value is that (despite losing some customers and some people cruising less frequently) they will end up making more money by stopping the common practice of discounts/OBC's being combined. Very few people are going to cruise less with them over a $200 perk not being combined with another $200 perk (the overall cost of a cruise is so much more than that). But they will be saving millions and millions of dollars by not issuing so many discounts/OBC's to so many people. By your logic stores could greatly increase their profits by allowing people to bring in three coupons and combine them all. Most stores only permit one coupon per item and/or one coupon per transaction. Royal Caribbean is finally putting into place what is common in the business world and will save them money.

 

Some stores do increase sales this way with loyal customers very successfully. Does your wife shop at Bed, Bath & Beyond? But I'm not arguing your basic premise. And, as someone pointed out on another thread, it costs a company the same to bring in 5 to 6 new customers as it does to bring back existing customers more often.

 

I'm saying that they could have saved the same millions and millions by continuing to encourage P, D and D+ members to cruise more often by saving all those dollars on a new marketing campaign that they hope will bring them all these new, full-fare cruisers when it is a proven fact that most people are cutting back and vactioning less if at all.

 

I also think the lack of combinability of OBC's will stop more than just a few from not cruising as often. It's probably more like half the stock holders who won't book multiple cruises now judging from responses on the boards. And it all could have been solved by simply enforcing what the offer actually is: an Onboard Credit. Use it or lose it. Stop passing out cash at the purser's desk to anyone who wants to take home their OBC's and guess who gets back all of those OBC's all of a sudden?

[Morecruisesplz]

The loss of combinability after 12/31/2008 will not have an effect on the number of cruises we take.

We have changed 1 expensive cruise to another, less expensive shorter one however, for one of our cruises in 2009.

Combining discounts was great while it lasted.

Hopefully, the benefits combinability may be restored when the economy improves.

 

Cruising less or taking a less expensive/shorter cruise is the same to RCL's bottom line. They end up with less money and will probably have to sell the space you gave up on the more expensive cruise at a deep discount now, judging by how prices have been going lately. They would have been much better off letting you keep the additional OBC but requiring it be spent or lost.

[cruisenfever]

Here is a great thread that will tell you exactly what you can and can not combine after December 31, 2008

 

http://boards.cruisecritic.com/showthread.php?t=870594

[Gonzo70]

And it all could have been solved by simply enforcing what the offer actually is: an Onboard Credit. Use it or lose it. Stop passing out cash at the purser's desk to anyone who wants to take home their OBC's and guess who gets back all of those OBC's all of a sudden?

 

People make way too much of this; this is not the problem. If someone uses all their OBC it still is costing the cruise line as much as if they do not use it and get cash for it. Let's say someone has $200 in OBC and spends it all. The crusie line is still out $200. Instead of the person using their own money to pay for the $200 worth of items, they are using their OBC for those items. Most people do not receive OBC and opt to spend an extra $200 that they would not have otherwise spent. They use the $200 so that they have to use less of their own money when it comes time to settle their on board account.

[Gonzo70]

Some stores do increase sales this way with loyal customers very successfully. Does your wife shop at Bed, Bath & Beyond? But I'm not arguing your basic premise. And, as someone pointed out on another thread, it costs a company the same to bring in 5 to 6 new customers as it does to bring back existing customers more often.

 

I would say it is the exception, not the norm, for stores to allow the combining of coupons. Bed Bath & Beyond commonly sends us 20% off coupons, but they say they may not be combined with other coupons. Also hardly any retailer provides discounts to shareholders. This was just a very nice extra perk RCL gave us and it was fun while it lasted, but I think people need to be understanding that they are tightening these discounts up at a time where they are expecting a significant drop in their profitibility.

[Moondawgie]

Gonzo, I understand what you are saying, but several cruisers book BECAUSE they get the perks like OBC. They buy stock, open credit card accounts, book on-line - all incentives to keep booking. As a marketing tool, I think it's smart for RCI to try and keep those bookings coming.

 

With the new gigunda pier in Jamaica to finance and the Oasis of the Seas to build, I think RCI needs all the bookings they can get, even if it DOES mean giving a little OBC in the process.

 

Cruisers spend plenty on board - those gold by the inch sales must make up for some of the OBC! (joke but true) The spa is so overpriced, that there must be some left over to help as well.

[Morecruisesplz]

The crusie line is still out $200. Instead of the person using their own money to pay for the $200 worth of items, they are using their OBC for those items.

 

Accounting isn't your strong suite I see. Look at this way: If the cruise line gives you a discount of $200 in the form of an OBC and you spend it on the ship, the items you buy did not cost them $200. It's called "cost of goods sold." All it cost them is their cost of the coffee, booze, tour, etc that you might purchase. A $2.50 can of coke doesn't cost them $2.50. So if you use an OBC to buy a can of coke they are out the nickel or so it cost them but not the rest of the of the $2.50 you gave up from your $200 OBC. So if their overall cost of goods sold is 30%, for instance, it might cost them $60 to give you that $200 OBC.

 

It will only cost them $200 (or some portion of it) if you don't spend it and you go down and ask for cash instead. That is why I have suggested a "use it or lose it" policy rather than abolishing the OBC combinability. The was the original policy and why it is referred to as an Onboard Credit. It was never meant to be taken off the ship as cash. Can you take a coupon or discount offer into any other retailer and trade it for cash?

 

And tell your wife next time she goes to B, B & B to take a stack of those coupons. They will take one for each and every item you buy. They are a very smart retailer with a very loyal customer base.

[daytona]

Excellent post fred. I was thinking about thier "costs" of OBC a while back.

 

Got a stack of BBB coupons and youre right thay always have taken as many as you want to use.