Time To For A Reality Check For Mr. Fain

[Paulette3028]

Auto correct is the devil

 

Isn't it....LOL.

[Maraprince]

First sentence makes no sense, however the second one does. The challenge is to figure out what level of increase causes sales to suffer. I doubt you or I are qualified to determine that.

 

 

Any increase in on-board prices will cause a decrease in profit.

 

Basic economics...as prices increase, demand decreases. As prices increase, buyers tend to be more "selective" in their purchases and less open with their wallets.

 

MARAPRINCE

[John&LaLa]

Any increase in on-board prices will cause a decrease in profit.

 

Basic economics...as prices increase, demand decreases. As prices increase, buyers tend to be more "selective" in their purchases and less open with their wallets.

 

MARAPRINCE

 

Still disagree, it is not basic economics. You can raise prices at a sustainable level and increase profits. The trick is at what point does the increase decrease sales enough to impact profit. Royal may have gone to far, to early to tell yet.

[TWELVEOHONE]

The original OP is wrong in many places.

1) A ship does NOT need 95% occupancy to make money. Many years ago a VP stated that all they need is 50% of the cabins paid for and give away the other 50% and they will make money. It the spending on the ship where the money is made i.e gambling, shore excursions, bingo, shops, etc., etc., The first 50% pays for overhead.

 

2) A few years ago RCCL stopped all discounting and had something called breakthru rtaes. Early booker always got the lowest price if price went down after booking your price went down but if price went up you were safe if booked and deposited early.

 

3) Also statically those that paid the lowest spend the least on board.

Edited May 21, 2015 by TWELVEOHONE

[RocketMan275]

Any increase in on-board prices will cause a decrease in profit.

 

Basic economics...as prices increase, demand decreases. As prices increase, buyers tend to be more "selective" in their purchases and less open with their wallets.

 

MARAPRINCE

 

If increases in on-board prices always cause a decrease in profit, then decreases in prices would always result in increased profits. Maximum profit would result when everything on-board is free.

[John&LaLa]

If increases in on-board prices always cause a decrease in profit, then decreases in prices would always result in increased profits. Maximum profit would result when everything on-board is free.

 

You can't make this stuff up. ;)

[tapemann]

The Why did I get a Going Going Gone Sale E-mail Today pushing cut rate pricing on Cabins on close in Sailings????

[Paulette3028]

Any increase in on-board prices will cause a decrease in profit.

 

Basic economics...as prices increase, demand decreases. As prices increase, buyers tend to be more "selective" in their purchases and less open with their wallets.

 

MARAPRINCE

 

Still disagree, it is not basic economics. You can raise prices at a sustainable level and increase profits. The trick is at what point does the increase decrease sales enough to impact profit. Royal may have gone to far, to early to tell yet.

 

If increases in on-board prices always cause a decrease in profit, then decreases in prices would always result in increased profits. Maximum profit would result when everything on-board is free.

 

You can't make this stuff up. ;)

 

I have lived my entire professional life on the side of sales (not marketing) -- hard core sales. Closing tough sales and opening the door to the next new opportunity, through the vehicle that most people hate -- making cold calls....and I have always been successful. I have always felt that marketing (even though marketing and sales are lumped together) isn't in the sales business, but the product promotion business.

 

The last few posts in this thread have made my head spin.

 

The sales department will quickly know when they have erred with pricing....but often times the marketing department doesn't like to admit their mistakes....they tell the sales people, "oh just go and keep selling'.

[John&LaLa]

I have lived my entire professional life on the side of sales (not marketing) -- hard core sales. Closing tough sales and opening the door to the next new opportunity, through the vehicle that most people hate -- making cold calls....and I have always been successful. I have always felt that marketing (even though marketing and sales are lumped together) isn't in the sales business, but the product promotion business.

 

The last few posts in this thread have made my head spin.

 

The sales department will quickly know when they have erred with pricing....but often times the marketing department doesn't like to admit their mistakes....they tell the sales people, "oh just go and keep selling'.

 

Sorry, I don't follow your point.

[Cruisin-Family]

True, the financials is for the entire corporation and do not dis-aggregate by brand.

[Paulette3028]

Sorry, I don't follow your point.

 

It won't matter what we say or think, they (whatever department has more to say about pricing) will ultimately never 'admit' that their pricing strategy was wrong. To their marketing/sales partners it will be 'just book more and you will earn more commission'.

[Ourusualbeach]

This is not a last minute discount but I was just able to get a huge drop on a cruise I was watching for my mom. The Serenade 12 night sailing Quebec City to Bayonne in September just had a z guarantee available tonight for less than 6 hours at a 45% discount. Luckily I put a 24 hour hold on a cabin. She will end up saving even more as she was booked in an Oceanview cabin at over $1200pp and was able to get the inside for $610pp.

[insidecabin]

Excellent topic.

 

I am interested in the impact of the low Canadian $ on cruise lines.

 

Canadians travel significantly and often are 25% or more on a sailing.

 

My household as cancelled all travel as we are not prepared to pay significantly more for air and cruises; we are grounded for the foreseeable future unless the Can $ rises substantively.

 

Wondering if the cruiselines will enhance resident specials to entice Canadians to travel despite the low $.

 

Happy and safe cruising to all.

 

ABoatNerd

 

It will be a call between how big a discount they need to get you to sail against discounts to get another to sail(American,European etc.)

 

Flight costs can make it better to reduce the price a bit for a local over loads for someone that has to fly.

[monctonguy]

Between the CAD doing so poorly and RCI stating they are getting rid of last minute deals and then I see the latest BOGO sale is now only going to be 30% and not 50% off the 2nd person(not that even the 50% off was a great deal) I have had to start looking at other cruise lines for options if I wish to continue cruising.

 

Sure they haven't made much off me with only 6 cruises in 2 years , but overtime they will see that they are going to price themselves back out of a lot of tourist's budgets.

[palmlife]

Well, I can tell you this statement by Richard Fain is not true. We just booked & paid in full for the Oasis of the Seas July 11th sailing & in exactly one week the price for the 2 cabins has dropped a total of 1894.00. If only I had waited a week to book I would have saved a ton of money- very upsetting!

[Paulette3028]

This is not a last minute discount but I was just able to get a huge drop on a cruise I was watching for my mom. The Serenade 12 night sailing Quebec City to Bayonne in September just had a z guarantee available tonight for less than 6 hours at a 45% discount. Luckily I put a 24 hour hold on a cabin. She will end up saving even more as she was booked in an Oceanview cabin at over $1200pp and was able to get the inside for $610pp.

 

But you cannot compare an inside cabin to an ocean view cabin....the experience of what you are paying for is different. I understand that some people say (NOT ME) that they don't spend a lot of time in the cabin, so it doesn't matter if it is an inside cabin or balcony to them.

 

For me, it would not matter how low the price was, I would not be in an inside cabin. But that is just me, and maybe other people.

[The_Big_M]

Well, I can tell you this statement by Richard Fain is not true. We just booked & paid in full for the Oasis of the Seas July 11th sailing & in exactly one week the price for the 2 cabins has dropped a total of 1894.00. If only I had waited a week to book I would have saved a ton of money- very upsetting!

 

Actually, the statement is true. Your cruise is still 3-4 weeks out, and he said there could be reductions in that time frame.

[marci22]

Well, I can tell you this statement by Richard Fain is not true. We just booked & paid in full for the Oasis of the Seas July 11th sailing & in exactly one week the price for the 2 cabins has dropped a total of 1894.00. If only I had waited a week to book I would have saved a ton of money- very upsetting!

 

Can you upgrade to a better cabin for little to no money?

 

A price drop like that hurts.

[Big_G]

Actually, the statement is true. Your cruise is still 3-4 weeks out, and he said there could be reductions in that time frame.

 

If I remember right, Mr. Fain was speaking in general terms anyway. People could probably cherry pick any number of cruises that might have a price drop within the quoted time frames.

[CynicDC]

Sorry Mr. Fain,

 

I've got choices, you know. Good luck replacing my revenue with those "Donald Trump's" you now expect on board. Economic data I'm reading indicates that most people are living paycheck to paycheck and have to save & save even to afford the discount prices.

 

As a single traveler, I'll shop harder for a deal and just go with the bargain. Remember, you already gouge me by charging me twice the fare as couples pay. Loyal to Royal? Why?

 

I've been vacationing with your company 2 - 3 times every year, but I doubt we'll be seeing one another nearly as much -- thanks to your new declaration.

 

OK, bye!

[John&LaLa]

Can you upgrade to a better cabin for little to no money?

 

A price drop like that hurts.

 

Why does it hurt :what:

Palmlife researched the voyage, found a price that was acceptable and booked

If the price to Palmlife increased after booking, that would hurt

If Royal applied a fuel surcharge, that would hurt

 

Booking after final payment always had the potential to have prices decrease and increase. It's like gambling. It might be better to toss your money on Red and see what happens

 

As always, YMMV

[monctonguy]

I think with all the new mega ships and mega expensive costs to go on them, we will see some of the older ships pricing come down over the next little while or at least I hope so.

 

When they are adding thousands of extra rooms per week available with these new ships coming online, something has to give!

 

Either lower the cost overall across the fleet, or they will need last min deals and sales to fill all those rooms.

 

I would rather pay a little less for each cruise and go a couple times a year, then pay more and only be able to go once a year. And from hotels to airlines to the cruise ships, the more often you travel the better it is for them I am sure!!

[CynicDC]

Data shows that half of this country earns less than $50,000 per year (median income). On the high end, about 3% of Americans earn so much damn money that they wouldn't board a Royal Caribbean vessel -- even if it came as a rescue ship! So that leaves about 47% of the population. Many of those have no interest in cruising. And, we who are actually interested in cruising have more than RCI to choose from.

 

 

As Chairman & Chief Executive Officer of RCI, Richard D. Fain made $6,583,074 in total compensation. Of this total $1,000,000 was received as a salary, $2,083,629 was received as a bonus, $3,371,587 was awarded as stock and $127,858 came from other types of compensation.

 

 

 

I guess Fain's salary has allowed him to falsely imagine that there is more than a teeny, tiny percentage of people would be willing to pay FULL FARE for RCI cruises. Many folks will turn to his competitors. Others will turn to land-based vacations. Some won't go at all.

[CynicDC]

I just bought Allure's Barcelona-to-Florida transatlantic cruise for $399 per person (inside cabin). After the final payment date, prices plummeted! My condolences to all who believed Fain when he declared those days were over.

 

They ain't.

[setsail]

I just bought Allure's Barcelona-to-Florida transatlantic cruise for $399 per person (inside cabin). After the final payment date, prices plummeted! My condolences to all who believed Fain when he declared those days were over.

 

They ain't.

 

Congrats, sounds like a great price.

 

What they declared was that if they dropped the price at 40,30,20,or 10 days out it would not drop anymore. All inside of FP. Which means the price could drop anytime up to 40,30,20, or 10 days out

Edited August 18, 2015 by setsail