incomes and fares

[meow!]

The average cruise line increased its fare by 5-6% per annum compounded, some (e.g. Oceania) by 11-12% per annum compounded, while Western governments want to keep inflation at 2% per annum. To envisage how potential customers' incomes changed through the last decade and how increased numbers of people can afford to occupy the ever increasing cruise ship berths, let us take the above poll:

 

P.S. Hopefully the economists among you can help explain how cruise lines are able to raise fares and fill their berths.

[kelmac]

The average cruise line increased its fare by 5-6% per annum compounded, some (e.g. Oceania) by 11-12% per annum compounded, while Western governments want to keep inflation at 2% per annum. To envisage how potential customers' incomes changed through the last decade and how increased numbers of people can afford to occupy the ever increasing cruise ship berths, let us take the above poll:

 

P.S. Hopefully the economists among you can help explain how cruise lines are able to raise fares and fill their berths.

 

Maybe it's just me, but the cruise fares of today seem about the same as six years ago? So the cost of cruising is coming down, I think? I paid $526 per person for a seven day cruise on NCL in 1977 and $1,100 per person in 1982 for a seven day cruise on Sitmar. Cruise fare inflation???

These are the best of times!

 

Enjoy!

Kel:)

[DaytonGirl]

Maybe it's just me, but the cruise fares of today seem about the same as six years ago? So the cost of cruising is coming down, I think? I paid $526 per person for a seven day cruise on NCL in 1977 and $1,100 per person in 1982 for a seven day cruise on Sitmar. Cruise fare inflation???

These are the best of times!

 

I agree! My first cruise almost 20 years ago was $1350 for the cheapest inside cabin. That did include airfare which was probably about $200 at the time.

 

My upcoming cruises on Journey are the same price almost twenty years later and I'm getting a heck of a lot more for the money. :)

[meow!]

From the rather few (only 38) respondents so far, we can make some preliminary observations. More than half either have about the same or declining incomes through the last decade, less than 30% have annual increases of over 10%, while less than 20% of the people have the medium range (2+ to 5+%, a shade above inflation) annual increases, the goal that presumably governments will like to see.

 

The "middle" people are supposedly the most stable in income in society, but over the past decade, they are dwindling in numbers. The majority don't benefit throughout the last decade, while a minority gets richer. That being the case, it points to obvious "economic polarization" in society, with some getting richer and richer while the majority gets left behind. Since this is a cruise and not a social forum, we will forego the societal de/merit of this trend and discuss on its implications on travel.

 

Remember how airlines introduced business class two decades ago, then for a Boeing 747 for example, economy sat ten across with a 32 inch pitch, business class sat eight across with a 45 inch pitch, so the space ratio was 1.75x for business class. First class was in the front of the plane, separate from everyone else. Now, some airlines abolished first class, while some improved their business class so much that they are the same as first class in those yesteryears. The typical business class now sits six across with 60 inch pitch (some eight across with 78 inch flat beds), while their economy class remains about the same as before. That makes business class 3.1x the economy class space. The fare ratios are in line with the space ratios.

 

So the gap between the fortunate and the majority has substantially increased. Some airlines try to introduce "economy plus" which remains a "specialty product", reflecting the decline in numbers of the "middle group". The same is true for cruise lines, as Oceania originally tried the "economy plus" route, but found that they might as well move closer to business class. Azamara appears to be following, albeit several years later than Oceania. Any comments? We hope a lot more readers will vote, as the larger the number of respondents, the more significant will be the results!

[kelmac]

From the rather few (only 38) respondents so far, we can make some preliminary observations. More than half either have about the same or declining incomes through the last decade, less than 30% have annual increases of over 10%, while less than 20% of the people have the medium range (2+ to 5+%, a shade above inflation) annual increases, the goal that presumably governments will like to see.

 

The "middle" people are supposedly the most stable in income in society, but over the past decade, they are dwindling in numbers. The majority don't benefit throughout the last decade, while a minority gets richer. That being the case, it points to obvious "economic polarization" in society, with some getting richer and richer while the majority gets left behind. Since this is a cruise and not a social forum, we will forego the societal de/merit of this trend and discuss on its implications on travel.

 

Remember how airlines introduced business class two decades ago, then for a Boeing 747 for example, economy sat ten across with a 32 inch pitch, business class sat eight across with a 45 inch pitch, so the space ratio was 1.75x for business class. First class was in the front of the plane, separate from everyone else. Now, some airlines abolished first class, while some improved their business class so much that they are the same as first class in those yesteryears. The typical business class now sits six across with 60 inch pitch (some eight across with 78 inch flat beds), while their economy class remains about the same as before. That makes business class 3.1x the economy class space. The fare ratios are in line with the space ratios.

 

So the gap between the fortunate and the majority has substantially increased. Some airlines try to introduce "economy plus" which remains a "specialty product", reflecting the decline in numbers of the "middle group". The same is true for cruise lines, as Oceania originally tried the "economy plus" route, but found that they might as well move closer to business class. Azamara appears to be following, albeit several years later than Oceania. Any comments? We hope a lot more readers will vote, as the larger the number of respondents, the more significant will be the results!

 

I agree!

The top percent are crying that their 36.5% tax may jump back to 39%. Remember, it was 50% under Regan and 90% under Eisenhower. Not to worry, as FOX will come to their rescue!:rolleyes::)

[Fredr]

hello,

 

If this helps...

 

In 1976 my DW and I went on our first cruise. The ship was the Island Princess 14 days from Los Angeles to San Juan. The fare was $1,100 per person for an Inside cabin including airfare from San Juan to Los Angeles.

[TravelingProf]

Just a thought--and not sure if this is true or bears out in any way. Perhaps the price of cruising has changed in more invisible ways, i.e. the way of cruising. For the mass market ships which can earn profits because of sheer quantity, I would argue that the price of cruising has even gone down if we are talking real dollars (seems like $1100 pp was an awful lot of money in 1976). But perhaps the service level of cruising (smaller ships, intimate service) that was a hallmark of the industry in the days before the mega ships now commands a higher price.

[LHT28]

In '74 we took a 2 week cruise Canada /Bermuda it was $794 pp in the cheap seats

We were earning less $100 wk back then

So it is all relative;)

[TravelingProf]

My Mom and Dad, two working class people, sailed on the Oceanic in 1972 (7 days, I think it went to the Bahamas). I remember that they saved for three years to go on that cruise and was one of the highlights of their lives. My mom wistfully spoke of how lovely it was and how it was the best vacation she ever had. I do not know what it cost, but I know whatever the price, and for them I'm sure it was quite high--clearly worth it!

 

I also remember the great Bon Voyage party they and their friends had on board and waving them off at the pier. Now that has truly changed!

[LHT28]

In '74 we took a 2 week cruise Canada /Bermuda it was $794 pp in the cheap seats

should have said less than $800. total for 2

[meow!]

Hope we will have more votes this weekend!

[Tricia724]

The average cruise line increased its fare by 5-6% per annum compounded, some (e.g. Oceania) by 11-12% per annum compounded, while Western governments want to keep inflation at 2% per annum. To envisage how potential customers' incomes changed through the last decade and how increased numbers of people can afford to occupy the ever increasing cruise ship berths, let us take the above poll:

 

P.S. Hopefully the economists among you can help explain how cruise lines are able to raise fares and fill their berths.

 

I'm not following this at all. I've had a few economics courses, but don't pretend to understand what's happend in our economy in the last decade, last year, or even last week, but using the criteria of 5% compounded annually for the last decade, a cruise that cost $1,000 in 1999 would cost in the neighborhood of $1,625 in 2009. I personally am not finding that to be true. The cruiselines may have raised their brochure rates, but the actual sale prices have been heavily discounted, and that has opened the door to cruising for people who otherwise couldn't or wouldn't have boarded a ship.

 

To go back even further....in 1984 a friend and I flew from PA to Vancouver, boarded Holland America's Rotterdam V, and did a 7-day inside passage cruise in Alaska in a basic oceanview cabin. Our total cost....including air, cruise, and insurance was a few dollars over $2,500 per person. This is not a vague memory....I still have the canceled checks.

 

In September 2010 another friend and I will board HAL's Statendam in Seward for a southbound cruise to Vancouver, and the only difference in the ports and glaciers is that this time we will stop in Haines, whereas my 1984 cruise stopped in Sitka. Once again we have a basic oceanview cabin. The current cost of the cruise is less than $900 pp, airfare right now is in the $600-650 pp range, and insurance is $134 pp. The trip is still 8-1/2 months away, so there is always the possibility that the cruise and airfare may go down, but if not, it's still a far cry from the price we paid in 1984.

 

I'm not going to try to reconstruct my income in 1984 vs. 2009 or discuss the pros and cons of cruising then vs. now, but I feel like we have had some very nice cruises the last couple of years for extremely good prices. Comparing cruising to other aspects of our economy, let me say that the car I purchased in 2007 was more than double the cost of the car I purchased in 1984....both middle of the road models. (pun intended)

 

It seems to me the cruiselines are trying to play catchup. I honestly don't think that the cost of an average cruise on the mass market lines has kept pace with the basic cost of living. Much of this is due to increased competition from within....by adding so many ships and berths, the cruiselines have made their own problems. They are certainly entitled to set their price wherever they choose....whether they get it or not remains to be seen.

[meow!]

The cruiselines may have raised their brochure rates, but the actual sale prices have been heavily discounted, and that has opened the door to cruising for people who otherwise couldn't or wouldn't have boarded a ship..

You have made good points. Occasionally (rather often these days), when voyages don't sell, there are huge discounts that make great deals.

 

If however, you look at the "noraml" pricing, without those special discounts, prices do go up. For example, we took a 14 day Barcelona to Venice on the Oceania Regatta in 2004, it was $3,200 including air fare, or say $193 sans air. Our 12 day Venice to Athens on the Oceania Nautica in 2008 in the same basic balconied cabin was $4,200 or perhaps $300 sans air (if you take their "air credit"). So it is $300/$193 or 55% in four years, or 12% per annum compounded! And Oceania is presumably in the same league as Azamara.

 

As for the "mass market" lines, their brochure rates trend indicate their intention if it were not for the economic tsunami. They build so many new and bigger ships, these ships are going to stay afloat for decades. Hopefully the economic tsunami is not going to stay that long. What do you think future prices will be? We don't know, and we are just worried about how are these two factors (fares and incomes, berth capacities and passenger numbers) going to resolve themselves in the longer run. Do you have any suggestions?

[kelmac]

In 1993 I pretty much exhausted my total savings account to take my new girlfriend on a nine day Celebrity cruise on the brand new Horizon. So after Lauren and I were married and it took a couple of years of saving to afford our next cruise. In those days, it was a "trip of a lifetime" kind of feeling.

 

Incomes improve and priorities are set, but ever since 9/11 the price of cruising and travel has become very affordable. We now say, "a trip of a lifetime, every three months":rolleyes::) We now travel 10 weeks out of the year, which is not bad for a couple of teachers (I'm retired now). Not that our incomes are that great, but we don't have any children and sans house/car payments, travel has become one of our passions. These are the best of times when it comes to cruising!

 

Enjoy!

Kel:)

[Tricia724]

Incomes improve and priorities are set, but ever since 9/11 the price of cruising and travel has become very affordable. We now say, "a trip of a lifetime, every three months":rolleyes::) We now travel 10 weeks out of the year, which is not bad for a couple of teachers (I'm retired now). Not that our incomes are that great, but we don't have any children and sans house/car payments, travel has become one of our passions. These are the best of times when it comes to cruising!

 

We're in the same place you are, kel.....only we're retired utility workers without children and bills and are using much of our disposable income for travel. We usually take two trips a year, but the last few years we have been doing longer vacations....both land and cruises. And, like you, we have been able to take advantage of some good prices.

 

I don't doubt that there have been increases on some of the cruise lines. Certain itineraries sell out fast, some times of the year sell better than others, and I'm sure each cruiseline has its core base of clients who will stick with them through thick and thin. On the other hand you have those cruises that they can't seem to give away with reduced rates, OBC, free airfare, and numerous incentives that would seem to offset some of the higher income sailings. I don't follow the cruiselines' financials, so I have no idea how profitable or unprofitable they have been in the last decade as far as gross revenues or net profits.

 

Let's face it....no matter how bleak the economy is for some, there are always people out there who have money and are willing to spend it. It's quite obvious that Azamara is going to be out there looking for them. Azamara has very nicely kissed off kelmac and me ;) and has set their sights on a more affluent demographic. It's a bold move....raising prices dramatically in a stressed economy....and it will be interesting to see how it plays out.

 

Dollars aside, I think Azamara's new campaign is interesting. In their quest to carve out a niche for themselves, they are sidestepping the word "luxury." I think it was their VP who used the word "boutique...." with it's connotation of a specialty experience. Or perhaps I'm giving them too much credit, and they just used that word because it's of French origin....like Le Club Voyage....a ludicrous, pretentious name that loses them a lot of points for credibility. Azamara should seriously look at the idiot who coined that name and send him/her to the unemployment office.

 

I really do hope Azamara succeeds in this new venture. Those are two lovely ships they have, and I hope they will be sailing for a long time.

[meow!]

We now travel 10 weeks out of the year, which is not bad for a couple of teachers (I'm retired now). Not that our incomes are that great, but we don't have any children and sans house/car payments, travel has become one of our passions.

 

 

We're in the same place you are, kel.....only we're retired utility workers without children and bills and are using much of our disposable income for travel. We usually take two trips a year, but the last few years we have been doing longer vacations....both land and cruises. And, like you, we have been able to take advantage of some good prices. .

 

We are glad that you are doing so well, good examples for those who are still young to follow. Best wishes.

[SunDapple]

....like Le Club Voyage....a ludicrous, pretentious name that loses them a lot of points for credibility. Azamara should seriously look at the idiot who coined that name and send him/her to the unemployment office.

 

I so totally agree!!

[cruiseyguy]

I don't think many of Azamara's French speaking passengers would find the loyalty club name either pretentious or ludicrous.

[cruisedudes]

....like Le Club Voyage....a ludicrous, pretentious name that loses them a lot of points for credibility. Azamara should seriously look at the idiot who coined that name and send him/her to the unemployment office.

 

 

To quote Shakespeare, "What's in a name? That which we call a rose by any other name would still smell as sweet."

[JennAngel9]

I am an American who speaks decent, but not native, French, and to me "Le Club Voyage" in english sounds ludicrious & pretentious and in french bizzare at best, something that translates literally as maybe "the business class trip" or "upper class trip"-- maybe someone who is better than me with french idioms can help out... Babel Fish switches it to "the club travels" :/

[wripro]

Is it just me or is there an inordinate amount of speculation about the name of a loyalty program? Who cares what they call it, it's the perks they give, not the name that matter.

[JennAngel9]

I think for most of us, it's not the name but the judgment behind the name. A line I'm loyal to could name it's past passenger club anything short of a racial slur and it wouldn't affect my decision to cruise, but for a line that is supposed to be cosmpolitan and sophisticated to name itself something just shy of jibberish in French (again, maybe a native speaker has an alternate opinion) makes me think they are actually targeting a less sophisticated crowd. It kind of reminds me how some people pronounce Target stores "tar-jay" and think it makes it sound classier (without irony).

[Tricia724]

I think for most of us, it's not the name but the judgment behind the name. A line I'm loyal to could name it's past passenger club anything short of a racial slur and it wouldn't affect my decision to cruise, but for a line that is supposed to be cosmpolitan and sophisticated to name itself something just shy of jibberish in French (again, maybe a native speaker has an alternate opinion) makes me think they are actually targeting a less sophisticated crowd. It kind of reminds me how some people pronounce Target stores "tar-jay" and think it makes it sound classier (without irony).

 

Exactly. The choice of such a convoluted name seems like such a stupid mistake that it makes me wonder about the other decisions they have made for the cruiseline....or as you have stated so well.....the judgment behind the name. Also the "club" concept doesn't strike me as particularly attractive either....more gimmicky than elegant to the point of being snobbish.

 

You know, when I think about my first cruise on Journey, the most impressive aspect of the cruise was the whole attitude of the staff and crew onboard. They were trying so hard to provide a good cruise. Everyone you talked to asked whether you were having a good time, what they could do to make things better, and actually listened to you. The captain walked around the ship engaging with passengers. We spoke to him at length one evening at dinner. When we left the ship, he stood at the exit and thanked us all for sailing Azamara and said he hoped we would return soon.

 

At the time Azamara was new and was trying to put it all together and it wasn't all working well, but when you knew that everyone was giving it their best, it was easy to overlook the imperfections. It seemed real and genuine. Now when I read about Azamara Club Cruises and their "Le Club Voyage," it's starting to sound really phony to me.

 

I'm looking forward to sailing Journey again in March and talking to the people onboard the ship. It will be interesting to see whether the crew are enthusiastic or disheartened by the changes.

[cruisedudes]

Is it just me or is there an inordinate amount of speculation about the name of a loyalty program? Who cares what they call it, it's the perks they give, not the name that matter.

 

Well said. My post above was meant to express this, exactly. The negative remarks were quoted from another poster's comments-however the quotes (" ") went missing. I appreciate the opportunity to clarify.;)

[wripro]

Well, I suppose that if the name of the loyalty club bothers someone that much they should just not sail Azamara. By the way, isn't Azamara a silly name too? They could have called it Blue Seas Line.