Cruise Line Cancellation Policies

[CroozBlooz]

At the suggestion of spongerob, I am starting a new thread with an issue that has plagued me for years.

 

Has anyone ever given any thought to why cruise lines treat reservations differently from those of other vendors in the travel/hospitality business (i.e., airlines, hotels, rental car companies)? All of them face the same opportunity loss if the reservation is cancelled at the last minute, but none require such a harsh penalty. Even when the airlines sell non-refundable tickets, they permit you to reuse the value, with a small penalty. And even then they make exceptions to that non-refundable policy. I don't think it's an issue of keeping cost down, because the cruise lines have had these policies for at least 25 years, and prices were much higher back then.

 

What do you think?

[Pam in CA]

I don't think it's corporate greed and I do think comparing ships (whether cruise or otherwise) with airlines, hotels, etc. is comparing apples and oranges. A ship is subject to international and maritime law which airlines, hotels, etc. aren't. I'm not a lawyer and I don't know anything about maritime law but I think we forget that a ship is a ship, whether a cruise ship, a tanker or a freighter, sailing in international waters and subject to international and maritime laws and regulations that we are not aware of.

[kryos]

Has anyone ever given any thought to why cruise lines treat reservations differently from those of other vendors in the travel/hospitality business (i.e., airlines, hotels, rental car companies)? All of them face the same opportunity loss if the reservation is cancelled at the last minute, but none require such a harsh penalty. Even when the airlines sell non-refundable tickets, they permit you to reuse the value, with a small penalty. And even then they make exceptions to that non-refundable policy. I don't think it's an issue of keeping cost down, because the cruise lines have had these policies for at least 25 years, and prices were much higher back then.

 

What do you think?

Cruiselines are subjected to probably what is an antiquated rule of providing the ship's manifest to federal authorities something like 72 to 48 hours prior to sailing. If you cancel at the last minute, they probably can't resell the cabin. Now, I think this is a stupid rule ... my lord, in this electronic age of email and fax, I can't believe they can't add a passenger say 10 hours before sailing. But, unfortunately, this is a rule that the cruiselines have to live with.

 

You are right about the airlines, though. Back in '99 I had a round-trip ticket to Orlando booked for a skydiving vacation. I flew down there, but ended up forfeiting the return trip. I went home by private Lear Jet instead ... a medical transport made necessary to get me home ten days later than planned after breaking both of my femurs in a landing accident. Thankfully, my medical insurance covered that little 10 grand flight.

 

My mom (always one looking to save a buck) contacted the airline that I had the return ticket on and explained the situation. She wanted a refund, but they actually sent me a voucher good for one year for the cost of the return ticket I didn't use. I never used the voucher ... I wasn't much into traveling anymore that year ... but I was surprised they gave it to her.

 

Somehow I don't think any cruiseline would give such a refund to a passenger unless it was through a claim made via their trip insurance.

 

Blue skies ...

 

--rita

[critterchick]

Airlines and hotels have to be more flexible - they have a huge number of business travellers as clients, and those people often book or cancel at the last minute,so if Joe Businessman cancels his flight and hotel on Thursday, Jane Entrepreneur may book on Friday. Cruises have almost exclusively vacationers onboard. People generally plan their vacations at least 3 months out, so if they cancel within that window, the odds of being able to resell the cabin diminish. By contrast, if you cancel your airline trip, even at the last minute, the airline may well have overbooked anyway, so you're saving them the trouble of having to pay somebody compensation for bumping. That's my best guess, anyway.

[bjboothman]

Have you ever booked a week at an oceanfront condo in say, Ocean City, MD, for the middle of July? In the first place, you have to book almost a year in advance, pay a hefty downpayment up front and make full payment well in advance of your vacation. If you cancel, you definitely lose your deposit and may or may not lose the rest of the amount, depending upon how late you cancel and if they can find someone else who wants that particular unit. It's not really so much different. Yes, I know the scenario I described doesn't apply to every situation, but it is representative of dealings I've had with a number of real estate companies.

[bdjam]

I do think comparing ships (whether cruise or otherwise) with airlines, hotels, etc. is comparing apples and oranges. A ship is subject to international and maritime law which airlines, hotels, etc. aren't.

Right...

Cruiselines are subjected to probably what is an antiquated rule of providing the ship's manifest to federal authorities something like 72 to 48 hours prior to sailing. If you cancel at the last minute, they probably can't resell the cabin. Now, I think this is a stupid rule ... my lord, in this electronic age of email and fax, I can't believe they can't add a passenger say 10 hours before sailing. But, unfortunately, this is a rule that the cruiselines have to live with.

Actually, the handing over of the manifest has to be done – I believe – 96 hours prior to sailing from or into a U.S. port. It used to be less, but since 9/11, Homeland Security apparently has more reason to want to know what ship you’re on. Cruise lines had the same cancellation policies before 9/11, but again, this is a ship, not a land based hotel. Once it leaves its point of embarkation, there’s no one who will be driving by in the middle of the night and see the vacancy sign.

People generally plan their vacations at least 3 months out, so if they cancel within that window, the odds of being able to resell the cabin diminish.

Right – the trend for cruise bookings also tends to be at least six months out. If the average passenger books six months out, selling a cabin even at a reduced rate immediately prior to a cruise is not likely. I would venture to say there are few passengers that can just pick up and go at the last minute.

[CroozBlooz]

I understand the responses, and while it may be easier for hotels to reutilize a hotel room that is cancelled, I think that airlines have a comparable problem, particularly because air travelers (being the rude folks that they are) frequently don't cancel but simply don't show up and this substantially reduces the chances that the airline will be able to use the space.

 

From time to time I book blocks of hotel rooms for meetings and conferences. The contracts universally provide for cancellation periods and forfeiture if the cancellation occurs less than a stated period of time prior to the reserved dates. However, in all cases the amount forfeited is reduced by the amount of revenue that the hotel receives from others for the rooms. In other words, if they are able to resell the rooms they can't double-dip and collect from us as well. I really don't understand why cruise lines won't do the same for their cancelling passengers. Even with their contractual provisions, we were let out of a contract for hotel rooms for a meeting about a month after 9/11, even though the cancellation period provided for no refund at that time. The hotel made an exception for us, even though it did not have to.

 

I don't know the specifics of the manifest requirements for cruise ships, but there must be a mechanism for modifying it at the time of sailing, because I believe that even since 9/11 passengers can be added after the initial manifest is furnished to the government.

 

While you can always differentiate one situation from another, booked cruises have more in common with air travel and conference bookings of hotels than the apples/oranges suggestion would dictate. My gut tells me that the real reason for the policy is that the cruise lines market an insurance product that generates revenue and if they liberalized their cancellation policies they would reduce the revenue that they receive from selling the product. But that's just my opinion.

[spongerob]

I think one reason cruise lines maintain the penalties for short-term cancellations is that cruises do not sell nearly as quickly or as easily as hotel rooms. Even an airline can sell a seat on a standby basis up to the time the gate closes. I agree that passengers who are forced to cancel should not be in full penalty if the cruise line is able to re-sell the cabin on short notice.

 

Since you've paid for the cruise, do you still get credit for it towards Captain's Circle reward levels?

 

I am also somewhat mystified by the need to have final payments in 75 days in advance of sailing. 30 or 45 days would seem fair, and time enough to sell excess cabins at a discount. If a cruise isn't selling, lower the price and give those who booked early a chance to self-upgrade or save a few dollars on their cabin.

[critterchick]

CroozBlooz, my impression is that most airline passengers, even the business travellers, buy nonrefundable tickets. If they don't show up, they forfeit the ticket if they haven't called an hour before the flight to cancel - that's a relatively new policy of the airlines, in the last year or so. Even if they cancel, the airline will keep their money, charge them a change fee of at least $25 and, if the price of the ticket has gone up, charge them the difference.

 

In addition, the airlines overbook all the time - it has been a long time since I was on a flight with more than a few empty seats or where the customer service agent wasn't offering free tickets for voluntary bumping. So the last-minute no-show is often doing them a favor by freeing up a seat.

 

Spongerob, it's a time value of money thing. The sooner they get your full payment, the more interest they earn on it. I would be willing to pay in full 90 in advance if I could avoid paying $1.50 for a Diet Coke, $4.00 for specialty coffee and $3.95 for a bottle of water! If I were in charge (I never am:( ), I might say pay in full when you make your reservation (many online TAs require that but I'm sure they don't sent the money on to the cruiseline), fully changable/upgradeable/refundable/eligible for price drops until 45 days out. I haven't run the numbers, but it would probably cost more in terms of lost interest, but that's "invisible" compared to a 3-page Seapass account that's all beverages (some alcoholic, even:D ).

[Pam in CA]

Even if they cancel, the airline will keep their money, charge them a change fee of at least $25 and, if the price of the ticket has gone up, charge them the difference.

Don't I wish it were just $25. I believe it's now $75 or $100 for most airlines.

[critterchick]

Jet Blue is only $25 and I think Air Canada is under $50 for some of their fare.:D

[Pam in CA]

Jet Blue is only $25 and I think Air Canada is under $50 for some of their fare.

Ahhh... Jet Blue just came to Boston less than a year ago and they're limited as to where they fly so I don't generally think of them. Jet Blue doesn't fly out of MHT, for instance. Gee, I'll have to go check out Air Canada.

[CroozBlooz]

Delta's change fee is $50. I don't know if I'm just unlucky when I cruise, but for the last several years every time I've sailed the ship has gone out full. That includes the large ships, such as the Diamond and the Sapphire.

 

Hmmmm....MAYBE the reason that cruise lines are making money and the airlines and hotels are not is because of the cancellation policy!

[donna5]

Have you ever booked a week at an oceanfront condo in say, Ocean City, MD, for the middle of July? In the first place, you have to book almost a year in advance, pay a hefty downpayment up front and make full payment well in advance of your vacation. If you cancel, you definitely lose your deposit and may or may not lose the rest of the amount, depending upon how late you cancel and if they can find someone else who wants that particular unit. It's not really so much different. Yes, I know the scenario I described doesn't apply to every situation, but it is representative of dealings I've had with a number of real estate companies.

Yes, my sister and her husband rent a place or two in Cape Hatteras each year. And unless they have insurance they don't even get any money back if they are evacuated because of a hurricane. At least the Cruiselines were quite generous during the hurricanes.

 

If the cabins go unused then the tip related staff will not get their expected pay.

 

The cruise lines are up front with us, that we won't get and help from them without insurance. So we are forewarned. I don't always purchase insurance but do sometimes.