Can HAL be far behind?

[lipoppop]

I post this with no comment- lipoppop

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November 24, 2004

 

NCL Rolls Out New Pricing Policies

Following in the footsteps of Carnival, Royal Caribbean and Celebrity, Norwegian Cruise Line announced this week their plans to roll out both a new "price advertising policy" and an "open access pricing policy". Both go into effect January 17, 2005.

 

In a nutshell, NCL's "open access pricing policy" states that all NCL prices and promotions will be available to all travel agents. This is basically the same strategy Carnival introduced last summer, meant to level the playing field so that agencies -- whether small, medium or large -- all have access to the same fares.

 

The policy that has a bigger impact on travelers, meanwhile, is the "price advertising policy." This prohibits agents from advertising non-NCL-approved prices in public mediums (like the Web). This is similar to the policy Royal Caribbean and Celebrity initiated a few months ago, which fueled the pricing brouhaha Carnival had already started. (For more information, click here.)

 

What this means, ultimately, is limited competition between agencies -- and fewer bargains for the savvy cruise consumer. In the past, many agencies offered a portion of their commissions to consumers in the form of discounts, cabin upgrades, etc., awarding travelers with fares lower than the cruise line's lowest price. Now, travel agencies selling cruises on Royal Caribbean and Celebrity -- and as of January 17, NCL -- cannot do so for lower than the respective cruise line's minimum retail selling price.

 

NCL is the latest cruise line to try to even out the fare system; those majors that haven't yet joined in -- at least for now -- include Holland America and Princess.

[Tatka]

Holland and Princess belong to Carnival so they probably have the same pricing scheme.

[xpcdoojk]

This debate has been going on in the RCI forum for months now, since this policy is in effect for RCI and X. I, personally, feel this is a policy that has zero long term effect on the pricing of cruises. It does have a significance for travel agents, and could be a blow against the low service high volume internet providers. Why this is not that big of a deal to me is that the cost of a cruise is determined by the market. IE the price is a factor of demand and supply. Shocking. The fact that TAs can no longer give their commission away is not a factor in the price you as a consumer are willing to pay. IE the cruise line was paying one travel agent to take the sale away from another travel agent. If you don't get a price that is a good value for you the consumer you won't buy the cruise. If the universe of cruise buyers thinks the cruise is over priced, guess what, the equilibrium price of a cruise will fall. The only case where the prices might actually be higher would be if people buy cruises because they think they are getting a deal, ie they don't make rational decisions when they buy cruises. I discussed this with a particular poster in the RCI forum who didn't care how much the cruise actually costs as long as he bought it cheaper than other people. That is not a rational way to make purchasing decisions. The cruiselines are currently subsidizing large volume agents to take orders from smaller brick and mortar agents by allowing them to rebate their commission to buyers. If the cruiseline can capture these orders by people booking thru the cruiseline and not using a travel agent and then they don't have to pay a commission, they could actually make more money by selling cruises for less money. In other words the high volume travel agents are cutting their own throats by proving that they provide no value. In other words if a travel agent only cuts the price in order to get sales, if they have that ability removed they then go out of business what was their actual value in the market. I am not a travel agent, and I am sure many posters here have a dog in this fight, and will fight this issue out in great detail depending on which dog they are! :D Also, despite the fact that with RCI agencies are not allowed to give items with monetary value to differentiate their pricing. I am get emails every day with some monetary offer. In other words this is a tempest in a teapot, and in the long run will have no effect!

 

 

jc

[Giorgi-one]

Many posters on these boards have been reporting very large price increases over what they booked for or paid last year. I am not talking about a few hundred dollars from the commission. Increases between $500 and $2000 per person have been reported. I believe there is more to this than giving back part of the commission!

[xpcdoojk]

It is called demand! People are finally travelling at pre 911 levels. Remember the record number of people flying last weekend for thanksgiving?:D It is not because of RCI not allowing commissions to be rebated since that could not account for more than 10%. Plus, you should probably take things people say with a grain of salt! :p Remember back in 2000 when RCI had an amazing schedule of new ships to be launched over the next couple of years. Other than the super voyager, they don't seem to have any significant contracts with the shipyards for more ships. IE with demand for cruises up, and the number of additional cabins somewhat frozen, what is going to happen to price?:D

 

jc