Does RCI WANT to sail with empty cabins?

[DragonOfTheSeas]

Pricing on our Brilliance of the Seas TA that leave on August 30 from Harwich has been all over the place in the last few months. Pricing has gone way down and way up over just a few hours. I took advantage of 4 price drops and missed the big one.

 

There was a price drop for about 6 hrs that made a JS less than the balcony we bought. The drop was across the board and VERY low with about 3 months to go. We discussed this on our roll call and many of us assumed it was a computer glitch. Because prices went back to the exact same prices they had been for a couple of months. [i ran some errands that day and missed it. :(]

 

We later took a balcony GTY for a nice drop near the final payment date. [got a hump balcony for it--very excited]

Edited August 21, 2014 by DragonOfTheSeas

[Hoopster95]

This all makes no sense to me; am I missing something?:confused:

 

Thom

 

Hello Thom. I don't think you're missing anything. Cruising friends I met on the Constellation 3 yrs ago in Turkey/Greece cruise were given on OV GTY at the very back of the ship on deck 3. They hated it! I 'm not clear on the exact story, but they went to guest services and created quite a fuss, they were upgraded (they paid I believe) to a balcony. They told me they had a choice of several cabins. The sign at the guest services desk clearly said "We are sailing full".

 

I think this could be normal, probably not every single cruise. Being involved with pro sports sales in years gone by, I also know for a fact that a "sold out" stadium is never really sold out... there's always a few seats available for many different reasons, held back for last minute VIPs, booking errors/discrepancies, etc etc.

[Aquahound]

You're not missing anything. RCCL and their pricing seems all over the place with no rhyme nor reason.

 

Agreed. Trying to figure out the reasoning would be nothing more than speculation. On one of my upcoming cruises, for a day or two, suite GTY was priced at $799 while balconies were priced at $1049...and this is for only a 4 night cruise. :eek: I don't get it either.

[Biker19]

In addition, Royal has an entire team that uses complex models to determine overall revenue if price is X versus if price is Y. If overall revenue of price X is higher than Y even if Y would sell more rooms, they will price at X. Even with rooms available, they could be at or near 100% occupancy with triple and quad rooms.

This is a TA - there are probably few triple/quads.

The level of drop is what is puzzling. I've done enough research to know that when it comes to selling the remaining cabins after final payment the discount is in the 20 to maybe a high of 50% range using GTY rates. On this sailing the discount was around 75%!

[Starry Eyes]

It seems to me that this is not the standard TA cruise. It is earlier and hits different ports, so demand and pricing are apt to be different from more usual TA cruise.

 

I understand that some gty's have been assigned, but there certainly could be people waiting for assignments. They can show cabins to induce a few more bookings. Then after a certain number of new bookings are made, assign whatever leftover cabins to gty bookings.

[ehfl]

There is still plenty of time for them to fill the cabins. I don't think it's something to get all worked up over.

[grand isle joe]

....hmmmmm....I wonder if I can approach the auto dealer with the same logic.....since the material and labor is already paid for said vehicle the closer the next years' new autos come out than I suggest you give me the vehicle for almost nothing......then I can do it on a new house.....and my food and beverages.....where will it stop?......I think this will catch on....Thanks.....:D

[MADflyer]

This Legend sailing has one other factor that is interesting as they have a Norwegian Fjord sailing on the 26th of August that includes the first 2 nights of the TA from Hamburg on the 7th of Sept. These passengers disembark on the 9th of Sept. in Oslo.

 

They have all outsides and suites closed on that sailing and only insides available.

[setsail]

Unless you work for rci, yes, you are missing something

[PCWalton1]

I find it amusing the lamenting on the prices not being low enough on the T/As.

For those of us facing the west we have just two "T/A" (or should I call it T/P? [emoji14] ) on Radiance and Rhapsody. Those goes for thousands more. Supply and demand. Oh well. [emoji45]

[BamaGuy44]

Unless you work for rci, yes, you are missing something

 

Yep, something may seem simple and obvious to us passengers, but there are hundreds of details and data points that go into decisions in a multi-billion dollar business that we have no clue about.

[Bailey & Sophie]

Good points. RCI almost always makes much more on the Suite Bingo than they would actually selling the JS, but I THINK (don't know) that suite is "booked" by the Revenue Department and doesn't show on the inventory. The ten or so TAs I have been on have been virtually sold out, but whether intentional empty or not unoccupied cabins would be candidates for maintenance work. Empty cabins are surely easier to work in, but my sister went to lunch on Explorer of the Seas and returned to find new carpet installation being completed in her cabin:eek: (and she had not noted any significant defects in the old carpet).

 

Thom

Doesn't new carpeting stink? Or the adhesive?

[TravelerThom]

....hmmmmm....I wonder if I can approach the auto dealer with the same logic.....since the material and labor is already paid for said vehicle the closer the next years' new autos come out than I suggest you give me the vehicle for almost nothing......then I can do it on a new house.....and my food and beverages.....where will it stop?......I think this will catch on....Thanks.....:D

I think you are missing one BIG difference. The car dealer would still have the car to sell next week, and has substantial residual value. The cabin that sails empty has absolutely zero residual value.

[AdGuyMG]

Yep, something may seem simple and obvious to us passengers, but there are hundreds of details and data points that go into decisions in a multi-billion dollar business that we have no clue about.

 

That's correct. The armchair revenue management "experts" here on CC using the RCL website, a wall calendar and past personal booking experiences to 2nd guess Royal Caribbean on pricing strategy and yield, are in effect looking at a 5X7 or 8X10 photo of the ship and pricing. In comparison, Royal's view of the overall situation would be the size of a 70mm Imax movie screen.

 

Their motives and strategies take the entire fleet and company needs into account. It's called

 

The Big Picture

[TravelerThom]

The collective wisdom of groups should be, and usually is, superior to individual judgment but it is not infallible. The landscape is littered with fiascos of organizations much larger and with more highly acclaimed analytic capability than RCCL / RCI, as demonstrated by bankruptcies, multi-billion dollar settlements, non-existent WMDs, etc. Anyone who believes that RCI can do no wrong and that poor, ignorant little us can’t possibly be right needs to go back and re-read the Emperor has No Clothes.

 

Not being encumbered with Business School BS, I think that value is set by the free market when all relevant facts are known, NOT by shell games with phony price claims by a company. RCI demonstrated that they are willing to accept a value of $409pp for this Legend cruise by willingly setting that price. If anyone believes that same product (degraded by a quickly approaching vanishing date and an excess of supply) has a value of four or more times as much (a price at which they do not seem to be able to find buyers) merely because RCI claims it, is far more gullible than I am.

 

I continue to think that RCI has established that the distressed (supply exceeds demand and the ship is getting ready to sail) value of this cruise is $409, and is now walking away from a six figure addition to their bottom line and significantly more gratuities for their employees.

 

Thom

[Starry Eyes]

It seems overall the collective wisdom of this thread is that we do not have enough information to confidently second guess the company's pricing strategy. your personal hypothesis is that supply is still substantial and demand is low. But really, if you are seeing 60 cabins, that is not particularly excessive supply. And though you know some people who have gotten gty assignment, you do not know how many remain unassigned...if there are 50 unassigned gty's, supply really is low. Furthermore, you seem to assume that if the cabins do not sell at the price you see on the website, those cabins will sell empty. that may be true, or maybe they have an arrangement to sell cabins later (for example, an agreement with an agency in a specific city to market those cabins along with one way flight for a set price in the final 2 or 3 weeks).

 

Or maybe they are OK sailing with a few empty cabins. Some time ago, I typically was able to go standby on an earlier flight without fee or hassle. That made sence to me as the empty seat's value evaporated when the plane departed. By putting me in that seat they have a few hours potentially sell my old seat to a last minute flier or another airline with a cancelled flight. Now, airlines seem more inclined to charge a fee to take an earlier flight. maybe those airlines feel they make more money off people paying that fee for the earlier flight than the other model. more business school stuff, I suppose.

[The_Big_M]

Anyone who believes that RCI can do no wrong and that poor, ignorant little us can’t possibly be right needs to go back and re-read the Emperor has No Clothes.

 

I don't have a view that RCL as a corp must always be right, and we must always be wrong.

 

I just don't agree that the situation you described indicates a deficiency in their model.

[Grand PooBah]

Anyone know why I cannot access the web like in this thread?

 

http://www.creative.rccl.com/sales/r...ales_event.pdf

 

Says it does not exist.

thought it might be interesting reading.

[Kcruiser2014]

Anyone know why I cannot access the web like in this thread?

 

http://www.creative.rccl.com/sales/r...ales_event.pdf

 

Says it does not exist.

thought it might be interesting reading.

 

 

Link worked fine for me. I'm using safari.

[karmacats]

if you are seeing 60 cabins, that is not particularly excessive supply.

 

I agree with this, but I think you may be able to tell the popularity of a ship by the *type* of cabins that are available.

 

Case in point: My mom wants to try her first ever cruise, but is on dialysis so our choices are limited to Dialysis at Sea cruises. Last week Dialysis at Sea added some 5-night cruises to Bermuda out of NJ on LOTS. This would be ideal for us for numerous reasons, so we booked it for her, and booked a separate cabin for me and DH. These cruises have been available for months (maybe since early spring?), and I've been eyeing them just for me and DH, but the prices were so exorbitant that we didn't bite. When we booked for mom and us yesterday, we were able to get mom a handicapped accessible balcony room (of which there appear to be a total of 8, and we had our choice), and we got for ourselves a balcony on the hump on the same floor. Almost every hump balcony and JS are still available.

 

So, when the cruise has been offered for months, yet HA rooms and hump rooms are still readily available even though those are the type of rooms that generally sell out first, it's pretty obvious that the cruise is not selling.

 

Honestly, I'm baffled as to the pricing. I laughed when I saw the title of Thom's thread, because I was thinking the same thing. I recently did a 5-night on Liberty in an OS for less than I'm paying for the E balcony on this Bermuda cruise, and while I expect to pay more to sail out of NJ and go to Bermuda, I don't expect to pay *that much* more. If we weren't bound by the dialysis issue, there's no way we'd be on this ship, even though I love Liberty and have really been wanting to go to Bermuda.

 

I guess that's all to say, obviously we don't know what Royal (or its revenue algorithm) are thinking, and we don't really know how well certain cruises are selling, but we can venture a fair guess that some of them are barely selling yet the prices are not dropping, which i personally find frustrating.

 

[bTW, hello, Thom. I was on the Allure with you in Jan - after you talked us into the CLS, Kevin made me upgrade all our cruises to suites! :D (except the Liberty one next year, which hopefully we can upgrade when and if the prices drop...)]

[Clarea]

Anyone know why I cannot access the web like in this thread?

 

http://www.creative.rccl.com/sales/r...ales_event.pdf

 

Says it does not exist.

thought it might be interesting reading.

It's working for me too. Try a different browser. Or right click on it, save it to your desktop, and then try to open it.

[BamaGuy44]

I continue to think that RCI has established that the distressed (supply exceeds demand and the ship is getting ready to sail) value of this cruise is $409, and is now walking away from a six figure addition to their bottom line and significantly more gratuities for their employees.

 

Thom

 

You could be right, though we have no way to know since we have no idea about so many aspects of their strategy.

 

Also, there's a thing in that "business school BS" called perceived value. If they lower the price on the ships too much they can be viewed as "cheap" and it will diminish the brand. They could sell every stateroom tomorrow if they priced them at $199 and make a little more money on that individual sailing but doing that too much could make it harder to sell at normal prices in the future on hundreds of other sailings. Just one of many big picture things they have to look at.

 

Dismiss it as business school BS if you want but I assure you every major corporation takes it into account when they set their pricing.

[TravelerThom]

Four days until sailing and I am seeing 64 empty cabins. My "perceived value" for this cruise is no higher than the price that RCI already accepted. With excess inventory I'm mystified why anyone would be gullible enough to think the value higher than the price offered within the last month. RCI has left substantial revenue for both the company and the employees on the table.

 

Thom

[could travel all the time]

You could be right, though we have no way to know since we have no idea about so many aspects of their strategy.

 

Also, there's a thing in that "business school BS" called perceived value. If they lower the price on the ships too much they can be viewed as "cheap" and it will diminish the brand. They could sell every stateroom tomorrow if they priced them at $199 and make a little more money on that individual sailing but doing that too much could make it harder to sell at normal prices in the future on hundreds of other sailings. Just one of many big picture things they have to look at.

 

Dismiss it as business school BS if you want but I assure you every major corporation takes it into account when they set their pricing.

 

You remind me of a report I watched on tv on Marriott hotels. They have a policy where they prefer to let a room go unsold before booking it for a rock bottom rate. They for one are following exactly what you speak of.

 

And just personally, I would much prefer a ship to sail with empty stateroom, rather than booked to capacity!

[evitacruiser]

Keep watching the weekly sale:

 

http://www.creative.rccl.com/sales/royal/Multi_Dest/Special_Offers/rci_sales_event.pdf

 

Some good prices there, but where is that link taken from? What do you bookmark to check the sales?