Cruise Lines and oil prices

[bobbygee]

Since the price of oil has dropped about 40%, when are we going to see a reduction in the price of cruises? The cruise Companies were quick enough to levy us with fuel surcharges when oil prices rose !!!

[YubaSutter]

Since the price of oil has dropped about 40%, when are we going to see a reduction in the price of cruises? The cruise Companies were quick enough to levy us with fuel surcharges when oil prices rose !!!

 

Quick enough when? Back in 2009?

[runner15km]

As a stockholder I'm all for maximizing profits. :D

[CruiserBruce]

There have been several discussions about this. Like airlines, I would expect to see some price reductions upcoming, as prices stabilize for periods of time at the lower prices. The price drop, while significant, is pretty recent. The price drop doesn't get credited that fast.

 

It will give the cruise lines some additional boost to their bottom line, and some flexibility in sale pricing.

 

Not sure what cruise line you are referring to with fuel surcharges, but the Carnival family, whose small print says they can charge a fuel surcharge when oil is over $70, only did that briefly in 2008-09, then dropped it, and hasn't applied it again, even when oil was at $110 last summer.

Edited December 16, 2014 by CruiserBruce

[RickT]

Many companies also Hedge against increasing fuel costs by locking into pricing which in the current scenario may not be allowing them to take full advantage of the unexpected drop in fuel prices.

 

-----------------------------------------------------------------------

What is hedging?

Hedging is a financial strategy that lets airlines or other investors protect themselves against rising prices for commodities such as oil by locking in a price for fuel. It has been described as everything from gambling to buying insurance.

[sail7seas]

Since the price of oil has dropped about 40%, when are we going to see a reduction in the price of cruises? The cruise Companies were quick enough to levy us with fuel surcharges when oil prices rose !!!

 

I haven't see fuel surcharges on HAL.

As noted above, Carnival Family sailing from U.S. ports did not impose fuel surcharge in recent years when they certainly could have.

 

Which cruise line have you seen institute such a charge?

 

 

Edited December 16, 2014 by sail7seas

[paul929207]

I haven't see fuel surcharges on HAL.

As noted above, Carnival Family sailing from U.S. ports did not impose fuel surcharge in recent years when they certainly could have.

 

Which cruise line have you seen institute such a charge?

 

 

None on Princess either. I dont think any of the major lines have had them for several years. They had time to raise the fares to take the higher oil into account.

[DonnasMom&Dad]

None on Princess either. I dont think any of the major lines have had them for several years. They had time to raise the fares to take the higher oil into account.

 

In 2008, when we took our first cruise on the Coral. there was a threat of a fuel surcharge, by Princess, but it never materialized. :D

 

Cato. :)

[swedish weave]

A couple of cruise lines started to assess the surcharge, but quickly rescinded it because of the outcry and not all of them did it. We were charged on NCL, but it was refunded before the cruise was over.

 

It is really hard to tell if they absorbed the extra fuel cost or folded it into the rates. I know they have made some operational changes to conserve fuel.

Edited December 17, 2014 by swedish weave

[fortinweb]

None on Princess either. I dont think any of the major lines have had them for several years. They had time to raise the fares to take the higher oil into account.

 

Nor on Royal Caribbean or Celebrity either. Not sure where the OP got the idea that they had imposed them. They certainly could have, but none that I am aware of actually did.

Edited December 17, 2014 by fortinweb

[sail7seas]

A couple of cruise lines started to assess the surcharge, but quickly rescinded it because of the outcry and not all of them did it. We were charged on NCL, but it was refunded before the cruise was over.

 

It is really hard to tell if they absorbed the extra fuel cost or folded it into the rates. I know they have made some operational changes to conserve fuel.

 

Some (many ?) cruise lines have shortened the time spent in many ports so they can sail slower and burn less fuel getting to the next port. Some of the port calls have been shortened significantly.

 

Edited December 17, 2014 by sail7seas

[fishywood]

In August 2011 I was charged the fuel supplement on a Queen Mary 2 transatlantic. Earlier that year on Star Princess, and later that year on Queen Victoria there was no charge but I remember the threat of it looming ominously.

 

As RickT mentioned above, the price the cruiselines are actually paying today are determined by hedging--often as much as two years in advance. This offers a cushion against short-term spikes in the price (which should prevent charging the supplement) but also negates any savings from any price drops.

[sparks1093]

I believe that the OP was referring to days gone by when fuel surcharges were instituted by some lines and was not referring to recent history. I would be willing to bet that the cruise lines have either pre-bought fuel to last them a certain period of time or have signed contracts with suppliers locking in a price for a certain period of time. Until that time passes the cruise lines will be paying the old price for fuel and we will not see any price reductions as a result. Once that time passes one would hope that we would see a reduction due to the significantly lower fuel costs.

[swedish weave]

It is pretty apparent that the big users are buying their oil futures now. The prices went back up significantly yesterday on the stock market.

[SantaFeFan]

I believe that the OP was referring to days gone by when fuel surcharges were instituted by some lines and was not referring to recent history. I would be willing to bet that the cruise lines have either pre-bought fuel to last them a certain period of time or have signed contracts with suppliers locking in a price for a certain period of time. Until that time passes the cruise lines will be paying the old price for fuel and we will not see any price reductions as a result. Once that time passes one would hope that we would see a reduction due to the significantly lower fuel costs.

 

Based on his original post, I am convinced that the OP has believed all along that the cruise lines have been assessing a fuel charge all this time. Otherwise, why the implication that we were being taken advantage of?

[sparks1093]

Based on his original post, I am convinced that the OP has believed all along that the cruise lines have been assessing a fuel charge all this time. Otherwise, why the implication that we were being taken advantage of?

 

It could be read either way I guess.

[fortinweb]

It could be read either way I guess.

 

How? The OP seems to think that fuel surcharges are now in effect, claiming that they went up immediately when oil prices rose but are not going down with the same sense of urgency now that the price of oil has gone down. How can that be read any other way than an implication that they are quick to take our money but slow to give it back? :confused::confused:

Edited December 17, 2014 by fortinweb

[CruiserBruce]

It is pretty apparent that the big users are buying their oil futures now. The prices went back up significantly yesterday on the stock market.

 

What prices went up "significantly" yesterday. Not oil.

[sparks1093]

when oil prices rose !!!

 

How? The OP seems to think that fuel surcharges are now in effect, claiming that they went up immediately when oil prices rose but are not going down with the same sense of urgency now that the price of oil has gone down. How can that be read any other way than an implication that they are quick to take our money but slow to give it back? :confused::confused:

 

"when oil prices rose" can refer to yesterday or 5 years ago. Since the fuel surcharges were assessed 5 years ago (or whenever it was) that is how I read the sentence. When oil spiked 5 years ago they were quick to raise prices. That they may be a little slower in lowering prices is probably more to do with the way that they buy fuel now than a reluctence on their part to lower prices.

 

(And while surcharges were not in effect recently does anyone doubt that the price we were paying was affected by the higher cost of oil?)

[sloopsailor]

"when oil prices rose" can refer to yesterday or 5 years ago. Since the fuel surcharges were assessed 5 years ago (or whenever it was) that is how I read the sentence. When oil spiked 5 years ago they were quick to raise prices. That they may be a little slower in lowering prices is probably more to do with the way that they buy fuel now than a reluctence on their part to lower prices.

 

(And while surcharges were not in effect recently does anyone doubt that the price we were paying was affected by the higher cost of oil?)

 

Or the higher cost of food? Or the higher cost of maintenance? Or the higher cost of etc.? There is no way for us to know if and how much the base price of a cruise is related to the cost of running a ship, mush less for the cost of fuel. From my observations, cruise prices have gone down in the last several years. Only in the past year - when oil prices have been going down - have we seen cruise prices going up in general, most likely due to supply and demand. With the improving economy, not only here in the US but world wide, more people are able to cruise again, so demand has gone up, and prices have also gone up as a result.

 

That is capitalism at it's core.

[sail7seas]

I'd like to see them lengthen time in port and sail the ship a little faster getting to the next port. Okay with me if they continue to price predicated on the higher fuel prices but burn some of the fuel sailing the ships faster and letting us enjoy ports a bit longer.

 

[taglovestocruise]

Some of the mega ships like Oasis and Allure burn about 1200 tons of fuel a week. Prices for bunker fuel have dropped by about $150.00 per ton, that results in a savings of $120,000.00 per week. If the discount was applied to the cruise fair each of the 6000 paying guests would get about a $20.00 reduction in price. Oasis uses 325,000 gallons per week at $1.50 per gallon. That is roughly $500,000.00 to get less than a quarter tank fill up.. I just read that 15, yes 15, of the largest ships in the world pollute more than all 760 million cars on the planet .. happy cruising..

 

Says James Corbett, professor of marine policy at the University of Delaware: “Ship pollution affects the health of communities in coastal and inland regions around the world, yet pollution from ships remains one of the least regulated parts of our global transportation system.” It sounds serious, but how bad could it be? Staggeringly, if a report by the UK’s Guardian newspaper is to be believed. According to their story, just one of the world’s largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world’s 760 million cars

[SantaFeFan]

Some of the mega ships like Oasis and Allure burn about 1200 tons of fuel a week. Prices for bunker fuel have dropped by about $150.00 per ton, that results in a savings of $120,000.00 per week. If the discount was applied to the cruise fair each of the 6000 paying guests would get about a $20.00 reduction in price. Oasis uses 325,000 gallons per week at $1.50 per gallon. That is roughly $500,000.00 to get less than a quarter tank fill up.. I just read that 15, yes 15, of the largest ships in the world pollute more than all 760 million cars on the planet .. happy cruising..

 

Says James Corbett, professor of marine policy at the University of Delaware: “Ship pollution affects the health of communities in coastal and inland regions around the world, yet pollution from ships remains one of the least regulated parts of our global transportation system.” It sounds serious, but how bad could it be? Staggeringly, if a report by the UK’s Guardian newspaper is to be believed. According to their story, just one of the world’s largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world’s 760 million cars

 

So what is your point? That we should all feel guilty for the pollution generated on our cruises? :confused::confused:

[SadieN]

Some of the mega ships like Oasis and Allure burn about 1200 tons of fuel a week. Prices for bunker fuel have dropped by about $150.00 per ton, that results in a savings of $120,000.00 per week. If the discount was applied to the cruise fair each of the 6000 paying guests would get about a $20.00 reduction in price. Oasis uses 325,000 gallons per week at $1.50 per gallon. That is roughly $500,000.00 to get less than a quarter tank fill up.. I just read that 15, yes 15, of the largest ships in the world pollute more than all 760 million cars on the planet .. happy cruising..

 

 

 

Says James Corbett, professor of marine policy at the University of Delaware: “Ship pollution affects the health of communities in coastal and inland regions around the world, yet pollution from ships remains one of the least regulated parts of our global transportation system.” It sounds serious, but how bad could it be? Staggeringly, if a report by the UK’s Guardian newspaper is to be believed. According to their story, just one of the world’s largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world’s 760 million cars

 

 

That's one reason why the Ports of Lis Angeles have Plug In Power at many of it's docks.

[marco]

If not lower base price, perhaps that's a factor for several lines offering more attractive perks? IE: higher OBC, prepaid gratuities, beverage packages, complimentary specialty dining, comp excursions etc. Seems like I get an e-blast daily from at least one line we've sailed on in the past offering some great incentives.