Goodbye last minute fare drops

[MisterBill99]

I wonder how well Celebrity financials will look when the ships sail with empty cabins? Presumably, Celebrity will raise their prices by 10% or so to cover the "fixed expenses" from those empty cabins and of course they'll have to raise the prices on board to cover the lost revenue from those empty cabins....so maybe those will go up 10% as well.

How will their employees who rely on tips feel about some of their tables or cabins not being full? Or would they hire less dining room and cabin staff? They'd need to add or subtract employes on a weekly basis.

 

I've been watching Summit prices to Bermuda and they are definitely following the past pattern of dropping as the cruise gets closer. I'm looking for a cruise in August, so I expect to have to wait until July. A site that tracks prices showed that the big drop came mid-July last summer. I guess I'll know before then if earlier dates are also dropping to bargain levels.

Edited April 24, 2015 by MisterBill99

[MisterBill99]

Did he say anything about it applying to Celebrity? Everything I've read said RCL which you don't seem to cruise.

Richard Fain is CEO of the combined company.

[BEAV]

Next week's Exciting Deals sale lasts a full 6 days (Apr 28-May 3) for May/June sailings. I remember when they started out as "Happy Hour" sales and that only lasted for 4-5 hours in the afternoon (hence the term "happy hour"). Now they last up to six days. So much for an end to distress sales!

 

http://www.creative.rccl.com/Sales/Exciting_Deals/XcitingDeals_cel_tues.pdf

[ghstudio]

This makes sense if you look at things purely from a financial perspective, but there are other intangibles in play such as customer good will. I think what Fain is saying is that the current model of generating incremental additional passenger revenue using heavily-discounted stateroom bargains for last-minute bookers (like me) may not be worth the negative feelings to loyal, early-booking customers. The implication is that either loyal early bookers might no longer patronize your line (or at least as much) or that early bookers will stop booking early and wait for discounts before booking -- thereby perpetuating the current problem. IOW, chasing maximum occupancy may not be optimal to the bottom line. Only time will tell...

 

For some companies, your suggestion of management worrying about negative feelings would perhaps be valid....most companies really focus on repeat customers. Celebrity's only focus at this time appears to be profit and the bottom line.....examples: the drink package radical changes (ultimately pulled back); the increase in price of upgrading from classic to premium drink packages (ultimately pulled back), the music volume issue (ultimately, hopefully, pulled back) and so on. CC is littered with comments from various well traveled, select/elite/elite + passengers talking about the apparently lack of concern for loyalty...and looking at other cruise lines...there's a thread right now on that...interesting reading about loyal customers. Actually, I don't think last minute price cuts has even been mentioned in that thread.

 

RCL (holding company) reports quarterly. If this policy is implemented across the board and the ships sail with empty cabins so on-board revenue drops (suite passengers no longer pay for specialty meals and those who aren't in the empty cabins obviously aren't spending money on-board...or Celebrity raises prices even further like they just did with the drink package, etc)....you might want to sell the stock now. If revenue to expense ratio drops....that's not so good either ...but if they reduce staffing (expense) on the assumption there will be some empty cabins, that's a potential disaster given the current staffing which by most accounts is already thin. Of course they can cut food costs...or implement new fees...but that doesn't build much loyalty...those are already dissatisfiers among the loyal repeat customers..

 

I just don't think they will sail with empty cabins....and I think the "last minute bargain cruisers" will be easily enticed to sail on rival cruise lines. I expect no change...

 

As always, I could well be wrong....but those are the tea leaves I read.

Edited April 24, 2015 by ghstudio

[TomTN]

xxx

Edited April 24, 2015 by TomBeckCruise

[varoo]

It really is going to come down to the question of will those that book at the last minute still book if those discounts do not occur. Are they committed to a given trip? or are they flexible and just looking to take a cruise if the price is right and willing to forego the trip if they don't get the price they are looking for?

I think we may be typical of those who often book at the last minute.

 

If it is a unique cruise that we really, really want, then we will book early.

But when it is a "take it or leave it" cruise, especially in an area where there is a lot of competition, we are willing to sit back, watch and wait.

 

When it comes to an area like the Caribbean, there is no need to "forego the trip" as it is no big deal if we miss out on one cruise because there are so many other similar cruises from which to choose.

 

As much as we like Celebrity, we are not willing to lock ourselves in to any one cruise line exclusively.

We see it rather like having a favorite "go to" store, (such as Costco, for example) but being very willing to shop elsewhere when another store has something appealing that your favorite store doesn't offer.

 

We have never felt any need to limit ourselves to only one specific cabin, other than a time when we needed an accessible cabin.

Other than that, I think we are quite flexible as every cruise ship we have ever been on has had any number of cabins in which we could be quite happy.

 

(Maybe we would feel differently if we only booked penthouse suites. ;))

 

We are on a lot of travel mailing lists, and every so often a very attractive offer shows up that we had not even been considering previously.

 

[ghstudio]

xxx

 

X rated comments are not permitted on CC :)

[ghstudio]

Celebrity boards about 800,000 passengers a year. I wonder what the luggage tags cost for those that request them. They are leaving no crumb unswept.

 

Just waiting for the day I get one wine glass when I board that I have to take with me if I want a drink on the cruise (save money on washing/drying/etc) and my biggest fear is that they implement pay public toilets that you can swipe with your room key...and offer a classic toilet package of some sort (hey, that could be 4...as in 1-2-3-4)

[Iamcruzin]

All I can say is Royal Caribbean has the largest ships. I would hate to see the fall out if one of their 5000 passenger ships sailed half full. So with that said I believe he is talking through his A$$.

[Cruise Junky]

Richard Fain is CEO of the combined company.

 

I know who he is. But he keeps saying RCL with no mention to sister brands and seeing as the last minute sales keep coming out on X it would seem he is only talking about RC

[MisterBill99]

Celebrity boards about 800,000 passengers a year. I wonder what the luggage tags cost for those that request them. They are leaving no crumb unswept.

Why, have they stopped sending them out on request on Celebrity? Royal Caribbean already only sends them if you have a suite.

[Stateroom_Sailor]

...Yet TODAY, my upcoming June 12 Millennium Alaska cruise saw its prices plummet to an unbelievable "starting at" $469 per person...

 

Well it seems that the promise to raise fares AND end last minute deals can't both be done at the same time. I understand that many OV+ see overpriced at the moment, but most were sold at discount through the 123GO! promo, opposite of higher fares.

 

If we end up getting slightly better deals in advance (through rotating promos or straight forward), and the ship sails out 90% full, fine. But between the rotating Celebrity pricing structure, RCL's changing their newer ships here and there, and dynamic dining red light/green light, it feels like everything is being ran by someone with ADD. :confused:

Edited April 25, 2015 by Stateroom_Sailor

[Stateroom_Sailor]

I couldn't agree more. I have been tracking Bermuda 2015 and have been comparing it to what I have booked in 2016. I am appalled at the last minute prices for 3 weeks out. It makes my all inclusive in CC look like a real bargain. A basic veranda for May 10th is only $100 less than what I'm paying for a C2 with all of the perks for the same sailing next year. I did receive some exciting deals for Bermuda but in my opinion they weren't all that exciting. Now would I pay the price that I paid without the AI or a perk? No, I would just book an ocean view which we have always been happy with.

 

I agree. It seems to me we are getting a similar structure to hotel pricing, one where booking early can give the best discount instead of last minute, and unoccupied rooms are fine to have. The only difference is, we have to watch the promos and know when to strike. Maybe some of the early bookings are already getting the discount that the last minute cruisers would have. We got fanatic deals on C2, loyalists from Carnival are crossing over, I don't imagine there will be many cabins left close to sail date. That's good for me, bad for anyone who lives near port...

 

If I book a Hampton Inn for $120, maybe it will change in price a bit, but they aren't going to start selling rooms for $35 in the final hours just to have 100% occupancy. I'm a little cynical in the comment above, but I can understand this change.

Edited April 25, 2015 by Stateroom_Sailor

[Stateroom_Sailor]

All I can say is Royal Caribbean has the largest ships. I would hate to see the fall out if one of their 5000 passenger ships sailed half full. So with that said I believe he is talking through his A$$.

 

With 3 Oasis Ships in Port Canaveral (and is the 4th going there too?), your scenario may not be too far off.

[DirtyDawg]

All I can say is Royal Caribbean has the largest ships. I would hate to see the fall out if one of their 5000 passenger ships sailed half full. So with that said I believe he is talking through his A$$.

 

No he is just trying to blow smoke up ours.;)

[MisterBill99]

With 3 Oasis Ships in Port Canaveral (and is the 4th going there too?), your scenario may not be too far off.

 

You have confused your ports.

[Stateroom_Sailor]

You have confused your ports.

 

I see, mainly Fort Lauderdale.

[Charles4515]

Richard Fain again discusses the end of deep discount last minute fares to eliminate the last minute bookers and attempt to hold fares high during the earnings call.

 

http://www.cruisecritic.com/news/news.cfm?ID=6311

 

It was reported last fall as well, but didn't really cause much of a stir when it was announced then either.

 

Curious to see how it works out. I love how it's disguised as a way to make the ships more comfortable with less passengers... LOL.

 

I'm definitely one of those last minute bookers looking for great deals. Will absolutely affect how often I cruise I think. But on the other hand, they needed to do something, there was a cruise I was on last year that at final payment was only 37% sold out, by the time we sailed, we sailed full. So they booked over 60% of cabins within those last weeks, at great discount (caribbean).

 

I think the all-in 123 promotion definitely helped fill ships sooner, I've noticed many sailings with no suites or concierge cabins available almost a year and some more than a year out.

 

Of course they would like to end last minute discounts. I believe that is wishful thinking by Fain. I doubt they will succeed as long as they have competition. The competition is sending me last minute discount offers every week. Until RCL buys out Carnival, or Carnival buys out RCL, I don't think we will see the end of last minute discounting.

Edited April 25, 2015 by Charles4515

[cle-guy]

Of course they would like to end last minute discounts. I believe that is wishful thinking by Fain. I doubt they will succeed as long as they have competition. The competition is sending me last minute discount offers every week. Until RCL buys out Carnival, or Carnival buys out RCL, I don't think we will see the end of last minute discounting.

 

I think what Celebrity/RCL may be looking at is reducing capacity in caribbean (Connie for example not returning, and the big ships being moved elsewhere for a larger presence in Asia) that they may find the ability to push us into fewer ships and sailing in caribbean, thus they find less need to discount last minute to fill ships. They will have some people who no longer sail because we can't find the last minute deal, but the rest of those who would have booked connie, will take those spots on the rest of the itineraries in the Caribbean.

[CruisingChick]

I think what Celebrity/RCL may be looking at is reducing capacity in caribbean (Connie for example not returning, and the big ships being moved elsewhere for a larger presence in Asia) that they may find the ability to push us into fewer ships and sailing in caribbean, thus they find less need to discount last minute to fill ships. They will have some people who no longer sail because we can't find the last minute deal, but the rest of those who would have booked connie, will take those spots on the rest of the itineraries in the Caribbean.

 

I must be out of the loop where is Connie going?

[dabear]

I agree. It seems to me we are getting a similar structure to hotel pricing, one where booking early can give the best discount instead of last minute, and unoccupied rooms are fine to have. The only difference is, we have to watch the promos and know when to strike. Maybe some of the early bookings are already getting the discount that the last minute cruisers would have. We got fanatic deals on C2, loyalists from Carnival are crossing over, I don't imagine there will be many cabins left close to sail date. That's good for me, bad for anyone who lives near port...

 

If I book a Hampton Inn for $120, maybe it will change in price a bit, but they aren't going to start selling rooms for $35 in the final hours just to have 100% occupancy. I'm a little cynical in the comment above, but I can understand this change.

 

I'm not sure if anyone brought this up, but there is a big difference comparing last minute deals for ships vs hotel rooms. The ship's non officer crew's main source of income is tips so that a full ship gives them more income. Hotel maids are paid more than ships crew.

[cle-guy]

I must be out of the loop where is Connie going?

 

Relocating to Mideast and Asia, I can't recall if she is coming back for 2015-2016 winter or not, but for sure 2016-2017 is Mid East/Asia.

 

As Century left the fleet....something has to replace those areas.

 

When 2 new X ships come in in 2017-2018 ill be interesting to see where they end up. I'm betting Asia, and one in Caribbean, and an existing S class caribbean move to asis/australia full time.

[Earthworm Jim]

Mr. Fain's comments are very interesting. But having followed the industry for over forty years we remain somewhat skeptical. The bottom line is that an empty berth on a ship is what economists call "opportunity lost" revenue.

 

Not necessarily, at least in theory. With last minute discounts let's say they sell 3 cabins at $1000 per cabin. Under the new no discount policy, one cabin goes unsold but the other two sell at $1750 per cabin. In theory, they make more money with the unsold cabin.

 

I don't really buy it though. That's based on the assumption that 2 of the 3 bargain hunters are set on taking that ship and will pay whatever the last minute rate is. In reality, they might be inclined to go to another line that offers late discounts instead.

 

And the price paid for the cabin is only a portion of the revenue. Three full cabins would presumably generate more onboard spending than 2, enough so to offset the small theoretical gain in fare price paid with no discounts.

[CruisingChick]

I don't really buy it though. That's based on the assumption that 2 of the 3 bargain hunters are set on taking that ship and will pay whatever the last minute rate is. In reality, they might be inclined to go to another line that offers late discounts instead.

 

I can only speak from our point of view, if we are looking at a cruise and we are waiting to see what the drop dead low price is after final payment we will not book if it doesn't meet the price point we have set. So we will stay home or go elsewhere. It's not a big deal. Mostly these are cruises we can drive to the port and it's no big deal.

[KillerP]

Ditto that for Australians.

Only way we can access exciting deals is via the Captain's Club website on a Tuesday or Wednesday.

Unfortunately (for us) the majority of exciting deals (sometimes 100% of deals) are for USA/Canadians only.

Whilst I acknowledge that RCCL has the right to promote their product as they see fit it is frustrating that we Aussies are unable to take advantage of the weekly Exciting Deals advertised on the CC website.

As a Captain's Club member I had to meet the same criteria to reach my current points level.

I think that ALL Captain's Club members should be on a level playing field and if Exciting Deals are to be continued then perhaps the Captain's Club website is NOT the place to advertise them given they are mostly for USA/CAN members.