Predictions for the Next Twenty Years

[cruiseapril]

There are so many departure ports now-including Panama.

 

 

Many fly to Europe to embark a ship. (That is not inexpensive.)

 

Various ports of embarkation won't keep people from cruising.

 

People just choose the ports which are most convenient for them and in their price range.

Edited February 19, 2014 by cruiseapril

[Tarpeian Rock]

I agree there will have to be some transition back to those who pay so much more getting so much more. Many who pay full fare for those suites are becoming dissatisified the experience is being diminished and amentities attached to the extra square footage are fading away. For those who get inexpensive upgrades fine but for those who pay many times the fare, it is not fine. We see the suite experience as less than it was not so long ago but the fares for some itineraries are over $500 pp per day.

 

For some on the ship, it is a very moderately priced vacation and their expectations are commensurate. For those paying a great deal more, their expectations are higher. Something has to give. They cannot keep consistently taking more away and expect we will continue to pay.

 

I realize there are many out there reading this who have a negative reaction to what I have written.

That's okay. If you wish to, before you sputter and resent what I've said, think about it a bit and see if there isn't a little in the comment with which you can agree.

 

 

 

 

I think you're right. Even Disney in effect has a "class system" in the form of multiple levels of hotels (Budget, Moderate, Deluxe, Villas) and a multitude of dining options at different price points and levels of service. The re-introduction of something like a "class system" (using, of course, far more politically correct and market-tested terminology) would address the desires of those who book upper-level accommodations and expect, having paid for, better food, service, and amenities. Won't necessarily work on all ships or all lines, and I would think that ships would need to reflect such divisions in their initial design of certain spaces.

[Aussiepair]

If there are still cruise ships sailing in 20 years time it will be much different than it is today. There are way too many cruise ships today, that is why they are not profitable. We are paying a fraction of what we should be paying (and are still complaining) because of the over supply of ships but the honeymoon period can't last forever. I would expect in 20 years time it would have reverted back to the old days when only the rich could afford to cruise.

[cruiseapril]

Agree that there may be fewer cruise ships in the future, but don't think they will be only for the wealthy.

 

The age of elitism has passed. The wealthy will probably cruise the luxury lines more often and stay in suites on HAL and other lines as they do now. The class system is going by the boards with the Internet becoming an equalizer. Everyone gets an opinion online with no $$ involved. ( Our personal opinion from years of observation.)

 

The general populace is cruising and they will save for good vacations.

 

There may be elegant cruises designed for some- retro cruises to imitate the old days, but the general public will continue to cruise.

[sppunk]

The class system already exists - Crystal, Regent, Seaborne, Oceania, etc. The ships will have facilities for those in suites but it'd be much better and profitable for them to get those pax to its upscale sister. A mass market ship can't cater to all exclusively, when it tries it disservices all.

[iancal]

I predict that if HAL will cease to exist if the company continues on the same speed and course that they have for the past few years, and with a management team that has the same philosophy as the current one.

[cruisinbulldog]

I have to agree with the comments on the demise of the middle class. I see a "privileged class" and a "lower/poorer class" in the future.

 

That being said how does a cruise line survive if this happens? To me you would have to downsize the ship to accommodate a lower number of passengers that will be able to afford to cruise. Also bringing the higher standards back to cruising.

 

A comment on "ala carte" cruising. For me cruising is the preferred vacation because it is very easy up front to see and budget the cost of a vacation. I understand and always do plan for that unseen or impulse purchase. If they start wanting to swipe my card every time I move or do something on a cruise ship,,, well it will be a sad day but I will give up cruising.

[sail7seas]

 

 

<snip>

 

A comment on "ala carte" cruising. For me cruising is the preferred vacation because it is very easy up front to see and budget the cost of a vacation. I understand and always do plan for that unseen or impulse purchase. If they start wanting to swipe my card every time I move or do something on a cruise ship,,, well it will be a sad day but I will give up cruising.

 

 

That is the point I tried to make earlier. I agree with you many who cruise today will no longer cruise when they do not know in advance their basic needs are included in the fare they have paid. Many who cruise can just eek out the funds to do so now and have to carefully plan exactly what they can spend. If they will have too many variable costs they won't know in advance, they will likely exceed their budgets and cruising will not be possible for them. Many leave the ships today with a bill of $25 or even less....... and they remove hotel service charge as they simply cannot afford it.

 

This is NOT a criticism of anyone or anyone's budget. There was a day we could not afford any vacation and I well remember it. This is merely an observation and statement of fact.

 

[cruisinbulldog]

Many leave the ships today with a bill of $25 or even less....... and they remove hotel service charge as they simply cannot afford it.

 

 

 

 

 

 

Well IMO that is just wrong. I am not trying to judge people but a cruise line is in business for a reason, to make a profit while giving back hopefully a pleasant experience to the costumer. If too many people take advantage of the system set up for both parties to be happy than we all suffer. The cruise line is forced to make the change or else. I am in business for myself and understand the importance of costumer satisfaction, but also have seen people take advantage of this and just keep wanting more. It is a fine line you walk, especially in the economy at this time. You can only bend so much.

 

I wish there was a way for the cruise lines to weed out the "offenders", the people that feel they are always owed more. :rolleyes:

[sackman]

There are way too many cruise ships today, that is why they are not profitable. We are paying a fraction of what we should be paying (and are still complaining) because of the over supply of ships but the honeymoon period can't last forever. I would expect in 20 years time it would have reverted back to the old days when only the rich could afford to cruise.

 

Are you on drugs?

 

At first, when I read this, I was like "no way can that be right". So I checked, and sure enough, it's utter hogwash.

 

I only checked Carnival Corp's Q3 statements for 2012 and 2013, which is available on their website.

 

For nine months ending 8/31/12, Carnival Corp had a NET PROFIT of $1.209 Billion. That decreased slightly for the first nine months of 2013, falling to a paltry $1.013 Billion. That's net profit. That's after all expenses are paid and depreciation charged. Net cash flow is probably considerably higher than that, given the nature of the assets held on their books. They're sitting on close to a billion in cash, to boot.

 

The cruise industry is doing just fine, and will likely continue to do just fine. I would expect additional consolidation, though. Like what we've seen with Carnival Corp, I would expect lines like RCCI, NCL, Celebrity, and others to consolidate in some fashion. Some already have, others are probably not long for the world.

 

I expect future ships to maximize revenue potential while minimizing expense. To this end, I don't necessarily see a lot of charges for things like meals and shows, but I expect the automatic tips to go up considerably. I expect future ships to maximize fuel efficiency.

[sail7seas]

Well IMO that is just wrong. I am not trying to judge people but a cruise line is in business for a reason, to make a profit while giving back hopefully a pleasant experience to the costumer. If too many people take advantage of the system set up for both parties to be happy than we all suffer. The cruise line is forced to make the change or else. I am in business for myself and understand the importance of costumer satisfaction, but also have seen people take advantage of this and just keep wanting more. It is a fine line you walk, especially in the economy at this time. You can only bend so much.

 

I wish there was a way for the cruise lines to weed out the "offenders", the people that feel they are always owed more. :rolleyes:

 

 

 

IF there is to be a 'weeding out' as you put it, it will happen directly or indirectly by the course many of us think cruise ships are heading. When cruising becomes less of a bargain with some ridiculously low prices, those who depend upon the lowest prices in order to cruise will not be able to be on the ships. It will be a 'weeding out' because of their lack of funds.

 

Again, I am not expressing any opinion whether that is good or bad or right or wrong but I see it as the only way the cruise lines can start to charge prices they need to in order to provide a satisfactory (at the least) product and still make a profit.

 

[iancal]

There is no secret to this. The cruise business has transformed and matured from serving only the elite to becoming a mass market business.

 

It is based on supply and demand. Too much supply, and the prices decrease. Too little demand, and the prices decrease. Don't blame the customers. It is a function of how many ships are on the water and/or how well the economy is doing.

 

The other two parts to the equation are critical. The first is cost. Cruise lines that operate older, less efficient ships that cost more to operate and maintain will be driven out of the business unless they modernize the fleet. No different that what the airline industry went through. And customers want verandah cabins, lots of them. No surprise that newer cruise ships have as high as 70-80 percent veranda cabins.

 

Second part is add on revenue opportunities. They no doubt have become a key driver not only to incremental profit but to overall profitability. So the cruise lines that attract, appeal, and offer programs to the demographic that potentially spend the most on board will be the most successful. Cruise lines today need customers to stay on board as much as possible and spend money on board. Cruise lines are adapting the resort model in order to attract customers and stay in business. Cruise lines are no longer competing against other cruise lines-they are also competing against other vacation alternatives.

Edited February 19, 2014 by iancal

[buckirj1]

sp- It seems possible to have a night or two in some ports- even a night would be good. Everyone has their favored ports-...

 

Yes, this is what I meant, and gave an example of where I'd like to stay overnight, and what port city I'd be willing to give up in order to make that happen. I realize my favorite places might not match somebody else's, but I'm sure sufficient data exists that cruise lines could determine where an overnight might be feasible. FWIW, Bar Harbor is very much like what my hometown has become, only with a bunch of water around it. Visiting there hardly feels like a vacation at all:p

[chrispb]

Agree that there may be fewer cruise ships in the future, but don't think they will be only for the wealthy.

 

The age of elitism has passed. The wealthy will probably cruise the luxury lines more often and stay in suites on HAL and other lines as they do now. The class system is going by the boards with the Internet becoming an equalizer. Everyone gets an opinion online with no $$ involved. ( Our personal opinion from years of observation.)

 

The general populace is cruising and they will save for good vacations.

 

There may be elegant cruises designed for some- retro cruises to imitate the old days, but the general public will continue to cruise.

 

The wealthy will be on their own yachts just as they are now. Everyone else will use cruiselines:D

[sail7seas]

The ones with the luxury yachts are the super wealthy. :D

There are those who are 'moderately wealthy' who are looking for luxury on cruise ships.

[nana51]

I agree there will have to be some transition back to those who pay so much more getting so much more. Many who pay full fare for those suites are becoming dissatisified the experience is being diminished and amentities attached to the extra square footage are fading away. For those who get inexpensive upgrades fine but for those who pay many times the fare, it is not fine. We see the suite experience as less than it was not so long ago but the fares for some itineraries are over $500 pp per day.

 

For some on the ship, it is a very moderately priced vacation and their expectations are commensurate. For those paying a great deal more, their expectations are higher. Something has to give. They cannot keep consistently taking more away and expect we will continue to pay.

 

I realize there are many out there reading this who have a negative reaction to what I have written.

That's okay. If you wish to, before you sputter and resent what I've said, think about it a bit and see if there isn't a little in the comment with which you can agree.

 

 

No, I agree with you. I'm in the cheap seats, (oceanview) but I get your point. If I paid what some of the suite people pay, I would want more amenities then just a larger room. I can always hope one day to get a suite.

[cbr663]

No, I agree with you. I'm in the cheap seats, (oceanview) but I get your point. If I paid what some of the suite people pay, I would want more amenities then just a larger room. I can always hope one day to get a suite.

 

Please don't confuse the higher the price that you pay as being equal to more profit for the cruise line. In actual practice, Neptune passengers on HAL ships tend to pay less on a square foot than any other passenger on the ship. I have just looked at the 10 day southern Caribbean sailing of the Noordam on Feb 6th and using the current advertised prices the results are very interesting.

 

The Ocean View cabin has about 178 square feet and an average cost on this sailing of $1620, or $9.10 a square foot. The Neptune suite has about 712 square feet and has an average cost of $3875 or $5.44 a square foot.

 

Putting it another way - in the same amount of space, HAL can sale 4 OV cabins for a total revenue of $1620 x 4 = $6480 versus 1 Neptune suite for $3875. Assuming double occupancy for all cabins, this also means that the 4 OV can potentially fetch $11.50 x 8 = $92 a day in Hotel Service Charge vs $12 x 2 = $24 and you have 4 times as many people spending money on the ship than in the Neptune Suite.

 

Even more interesting that those passengers selecting the Interior, Verandas and Superior Verandas also, on average, pay more per square foot than those in the Neptune Suites. HAL continues to reduce the amenities that it provides for its suites for the simple fact that the suites are not as profitable.

[cruiseapril]

sp- Was referring to "class system" in society- not the cruise lines.

The notion of upper, middle, and lower classes is passe, IMO.

 

Those with good jobs will be cruising the mass market lines, as will the savers who earn less. There are cabins out there for most.

 

The demand will be high as long as cruise problems (noro etc.) don't increase.

 

As someone said- the very wealthy will be on their own yachts.

[sail7seas]

Please don't confuse the higher the price that you pay as being equal to more profit for the cruise line. In actual practice, Neptune passengers on HAL ships tend to pay less on a square foot than any other passenger on the ship. I have just looked at the 10 day southern Caribbean sailing of the Noordam on Feb 6th and using the current advertised prices the results are very interesting.

 

The Ocean View cabin has about 178 square feet and an average cost on this sailing of $1620, or $9.10 a square foot. The Neptune suite has about 712 square feet and has an average cost of $3875 or $5.44 a square foot.

 

Putting it another way - in the same amount of space, HAL can sale 4 OV cabins for a total revenue of $1620 x 4 = $6480 versus 1 Neptune suite for $3875. Assuming double occupancy for all cabins, this also means that the 4 OV can potentially fetch $11.50 x 8 = $92 a day in Hotel Service Charge vs $12 x 2 = $24 and you have 4 times as many people spending money on the ship than in the Neptune Suite.

 

Even more interesting that those passengers selecting the Interior, Verandas and Superior Verandas also, on average, pay more per square foot than those in the Neptune Suites. HAL continues to reduce the amenities that it provides for its suites for the simple fact that the suites are not as profitable.

 

 

While those numbers may be accurate for a specific or a few specific cruises, they are not accurate for all cruises.

 

When we sail Maasdam, Boston to Montreal to Boston, fourteen days, our per diem in the "S" cabin is over $500 pp per day. We pay roughly $7,500 per person for the two weeks for a total of approx. $15,000.

 

It was the same for Veendam last August, Boston to Boston.

The "S" Class ships are pricier in Neptune Suites than Vistas/Signature most of the time and Prinsendam is higher still.

 

Edited February 19, 2014 by sail7seas

[kazu]

While those numbers may be accurate for a specific or a few specific cruises, they are not accurate for all cruises.

 

When we sail Maasdam, Boston to Montreal to Boston, fourteen days, our per diem in the "S" cabin is over $500 pp per day. We pay roughly $7,500 per person for the two weeks for a total of approx. $15,000.

 

It was the same for Veendam last August, Boston to Boston.

The "S" Class ships are pricier in Neptune Suites than Vistas/Signature most of the time and Prinsendam is higher still.

 

 

Indeed, Prinsendam is much pricier. Right now for our 30 day cruise the ocean view cabin is selling for $4949 (C category, highest level for OV) and and SB Neptune suite is selling for $20,199 (the SA which is sold out was $22,199. That is per person not total. So, nearly 4 times the cost + depending on the category.

 

the fewer the Neptune suites are on a ship, the pricier they are.

[cbr663]

Indeed, Prinsendam is much pricier. Right now for our 30 day cruise the ocean view cabin is selling for $4949 (C category, highest level for OV) and and SB Neptune suite is selling for $20,199 (the SA which is sold out was $22,199. That is per person not total. So, nearly 4 times the cost + depending on the category.

 

the fewer the Neptune suites are on a ship, the pricier they are.

 

Yes, the Neptune would need to be at least 4 times the price relative to the OV cabin. In the example I used above, the price for the OV cabin was $9.10 a square foot. Using this as the measuring stick to price the Neptune Suite, the Neptune should cost at least 712 sq. ft x $9.10 = $6479.20, and this figure does not take into account the costs of the extra amenities provided for the Neptune.

 

From the original example, the OV cabin is $1620. $1620 x 4 = $6480, which is less than a dollar of the $6479.20 I quoted above, and we haven't included the costs of the Neptune perks.

 

So even paying $647 pier diem for this cruise, a Neptune passenger would be paying the same relative to the OV passenger.

Edited February 19, 2014 by cbr663

[cruisin'girl]

You all are comparing apples (per day costs) and oranges (per cabin square foot costs).

[hattack]

More female Captains and flag officers

[POA1]

Please don't confuse the higher the price that you pay as being equal to more profit for the cruise line. In actual practice, Neptune passengers on HAL ships tend to pay less on a square foot than any other passenger on the ship. I have just looked at the 10 day southern Caribbean sailing of the Noordam on Feb 6th and using the current advertised prices the results are very interesting.

 

The Ocean View cabin has about 178 square feet and an average cost on this sailing of $1620, or $9.10 a square foot. The Neptune suite has about 712 square feet and has an average cost of $3875 or $5.44 a square foot.

 

Putting it another way - in the same amount of space, HAL can sale 4 OV cabins for a total revenue of $1620 x 4 = $6480 versus 1 Neptune suite for $3875. Assuming double occupancy for all cabins, this also means that the 4 OV can potentially fetch $11.50 x 8 = $92 a day in Hotel Service Charge vs $12 x 2 = $24 and you have 4 times as many people spending money on the ship than in the Neptune Suite.

 

Even more interesting that those passengers selecting the Interior, Verandas and Superior Verandas also, on average, pay more per square foot than those in the Neptune Suites. HAL continues to reduce the amenities that it provides for its suites for the simple fact that the suites are not as profitable.

 

You're forgetting to factor in food costs. Suite pax don't eat more just because they have a greater square footage. They also don't have proportionately more showers, toilets and beds. While the servicing cost is higher because there are more square feet of carpet to vacuum, etc, it's not a 1:1 trade off based solely on square footage.

 

Suites carry a higher profit margin than do veranda cabins. Outside cabins are next, followed by inside cabins. Discounts can impact the numbers, but the general rule holds true.

 

Does this make sense yet, or do we need to look at entertainment costs, public space costs, and so on?

 

There's a whole lot more to the cost calculation that square feet. Now if you were discussing vacant lots or warehouse space...

Edited February 19, 2014 by POA1