Increased costs

[esp13]

Price increases due to inflation are one thing. Del Rio increased the cost of soda not because it cost NCL more for them but because he wants to get more from the customer and they will pay the price since they are in the middle of the ocean and are a captive audience.

 

That's probably why he's the CEO of a major corporation. He wants to maximize profits and maximize the inherent advantages of a ship at sea full of people.

[gilladj]

I just sent an e-mail to NCL customer relations explaining why the new rule on food taken back to the cabin is troubling.

 

We have been cruising for over three decades and so have seen a lot of changes. Increasing and adding fees I can understand but rules that seem to force a new fee upon guests and limits their freedom to use their cabin in a way that is such a part of cruising without incurring a fee is bad business. It would be like a hotel saying you can only have food in your room that you get from their room service. No taco bell in your room. No Subway sandwiches on your room balcony. Really what hotel would do that? In some ways its worse because the food you would bring back to your cabin you already bought from NCL with your cruise fare. There is no added cost only the loss of forcing you to pay a new fee to use your cabin and balcony as you wish.

 

The buffets areas are always crowed already and this new rule will only make that situation worse. :eek:

 

We pay for a balcony for the express purpose of enjoying that space often with snacks, a light lunch or a drink. Add or raise fees, fine. But restricting guest's ordinary and customary behavior is out of sync with the concept of Freestyle cruising. To add insult to it NCL uses language that makes it sound like it for everyone's benefit rings hollow and is just plain disingenuous. :(

 

Our next cruise is a 31 day cruise with NCL this fall and the thought of being on a ship for a month with this restriction is just not sitting well. Perhaps they will come to their senses before we sail. :confused:

 

We shall see. Just glad the next cruise after this fall cruise is not with NCL.

 

Peace,

Doug

Edited May 11, 2015 by gilladj

[Buford T Justiice]

Good post by the OP;

 

I figured my additional expense at $37, still under FDR's goal of $50

Edited May 11, 2015 by Buford T Justiice

[abe3]

I know I am going to have fun on my cruise. I will enjoy it more without all the complainers on board switching lines. Soon they will run out of cruise lines to go to because they will be upset what the other cruise line are doing too.

Edited May 11, 2015 by abe3

[Nola26]

Business rule of thumb....get rid of your 10% bottom feeders....and concentrate on your top 10%.

 

That's the goal...dump those that complain about a few dollars more for room service etc....and concentrate on those who enjoy spending.

 

Not sure where you get this rule. Businesses don't survive or flourish by focusing on the top 10%. NCL isn't doing that with the current promotions, they are trying to pull in new customers. They need new customers and they need their existing customers sailing more frequently. Hence they are offering incentives to draw in anyone but the top 10% because those are likely coming anyway.

 

Walmart and Southwest are prime examples of how focusing on a wide market allows for growth.

 

I will pay for value and recommend those that provide value. Happily paying more for less service isn't my idea of value. Disney isn't an inexpensive vacation and they raise prices and change plans yearly. However, they communicate well, are not condescending to their customers and provide enough choice to plan a vacation that suits your family. Disney isn't for everyone, but they really do treat guests as guests and I have less concerns about handing the Mouse my cash.

 

All that said I'm excited for my cruise. It will be the first week long vacation I've been able to take with them in years. There really isn't anything that NCL will do to diminish that time. It is a great ship, a wonderful itinerary and plenty of options, we will have a blast.

[jaja]

TO the OP...I appreciate your post and agree with you.:) For me...I always calculate my "bottom line" for my cruise..and decide if it is a value.

 

MY big problem is how NCL management has handled the changes and increases.

NCL has not communicated with its customers (booked or not ) in a timely manner (or mostly not at all). Also..using recent unsuspecting passengers as guinea pigs for changes was really a bad business practice.

NCL needs to show some respect for current and future customers.

[WildcatRock]

Not sure where you get this rule. Businesses don't survive or flourish by focusing on the top 10%. NCL isn't doing that with the current promotions, they are trying to pull in new customers. They need new customers and they need their existing customers sailing more frequently. Hence they are offering incentives to draw in anyone but the top 10% because those are likely coming anyway.

 

Walmart and Southwest are prime examples of how focusing on a wide market allows for growth.

 

I will pay for value and recommend those that provide value. Happily paying more for less service isn't my idea of value. Disney isn't an inexpensive vacation and they raise prices and change plans yearly. However, they communicate well, are not condescending to their customers and provide enough choice to plan a vacation that suits your family. Disney isn't for everyone, but they really do treat guests as guests and I have less concerns about handing the Mouse my cash.

 

All that said I'm excited for my cruise. It will be the first week long vacation I've been able to take with them in years. There really isn't anything that NCL will do to diminish that time. It is a great ship, a wonderful itinerary and plenty of options, we will have a blast.

 

They probably got this rule from business school. It's called the "Pareto Principle" that states that 80% of your sales come from the top 20% of your customers. Depending on the industry the top customers are usually defined anywhere from 10% - 30%. Not sure how this would be defined in the cruising industry. What FDR is doing makes perfect sense as he believes the top 10% - 20% won't have an issue paying an extra $50 a cruise, and most probably won't. It's the bottom 10% who do the most complaining, and frankly, businesses don't care.

[Cuizer2]

TO the OP...I appreciate your post and agree with you.:) For me...I always calculate my "bottom line" for my cruise..and decide if it is a value.

 

MY big problem is how NCL management has handled the changes and increases.

NCL has not communicated with its customers (booked or not ) in a timely manner (or mostly not at all). Also..using recent unsuspecting passengers as guinea pigs for changes was really a bad business practice.

NCL needs to show some respect for current and future customers.

 

You've brought up an important point. Telling someone ahead of time that a new fee it being introduced is one thing. Surprising them when they have no alternative is something else.

 

I'll relate my recent experience at Staples. The price on the product was $80 (okay, it was really $79.99). The price in the computer at check out was $130 ($129.99). So the price went up $50 during the time it took me to walk from the software aisle to the checkout. I said the price on the shelf was $79. A manager walked back with me, confirm what I said, asked someone else to verify which was right and gave me a $50 discount at the register.

 

Had I been told originally the price was $130 I would have gone somewhere else. I bought the product expecting to pay $80 plus tax, not $130 plus tax. Staples did the right thing (as required by law) and gave me the shelf price.

 

NCL is basically telling people that even after they paid for their cruise, the price has gone up. How would NCL react if after the fuel supplier put 300,000 gallons of fuel into the belly of the ship and then says, oh, by the way, it is now $3.25 per gallon, not $3.20 (okay, I know, the ships buy their fuel by the ton, not by the gallon). Of course the vendor's cheerleaders point out that it is only an additional 5¢ per gallon. And since the ship sailed two hours prior to NCL receiving the invoice at the home office, NCL would have no choice to pay it.

 

How do you think NCL would react? How would FDR react? How would the NCL cheerleaders react?

 

My last cruise (and next cruise) are on Royal Caribbean (my next NCL cruise is in 2017). I was at lunch at one of the extra cost restaurants on my Royal Caribbean cruise. The meal cost exactly what I was told - $15 (no added 15% or 18%). The drink I ordered I was expecting to be about $8. It was $12. That is 80% of the price for lunch. Fine, I'll not be ordering any more drinks (I am at a level where I can get three free drinks in the evening if I want).

 

What some people do not realize is, raising prices does not always result in increased revenue. A couple of examples:

 

Instead of costing $7.95 for room service, what if it cost $795.00. Do you think that would increase room service revenue by a factor of 100? Or would less than 1% of the people that ordered room service now not order room service at the inflated price and revenue actually go down?

 

8 x 10 photographs cost $23 on Royal Caribbean. In November 2014 I intended to buy one or two. However, I was told about a discount that I was eligible for (this discount has not been made public as far as I know - I asked about it on my April 2015 cruise and confirmed it existed, but again, I never saw it in writing). The discount was five photographs for $50. I ended up buying 10 for $100. These photographs cost Royal Caribbean less than $5.00 to print, so Royal Caribbean made more than a $50 profit off of me, which is more than had I bought only one or two photographs. On my April cruise I paid less than $50 for the two photographs I bought at full price, so they lost nothing with the hidden discount, since I paid full price.

 

My point is, charging more does not always lead to greater profits.

 

But taking away my ability to take a full meal back to eat on my balcony reduces the value of the balcony, perhaps to the point where I decide to just get an ocean view cabin. If others feel the same way (and based on the posts I have read, others do feel the same way) demand for the balconies may go down while supple remains stable and thus prices will drop, reducing income and profits because people can't take food back to their cabins. Or, worse for NCL, people will change cruise lines because they, like me, enjoy having breakfast and lunch on their balconies and other cruise lines don't have this restriction.

 

Now I have not abandoned Royal Caribbean, or just started with NCL. I have cruised 27 times, twice with NCL, twelve times with Royal Caribbean and thirteen times with three other lines, and there are still three more lines I would like to try (four if you count Disney - anyone got a kid I can borrow for a week, 'cause I'm not going on Disney kidless).

 

None of the above changes will affect my next NCL cruise (I'll be in a suite), so I'm not going to cancel the cruise. However, that does not mean I like the changes, and I don't always book a suite. These changes very well might have an affect on my future cruise choices.

 

In addition, I do write reviews. I do share my thoughts and opinions in my reviews. My last three cruise reviews have been viewed more than 28,000 times. Even my last NCL review, in 2008, has over 2,300 views, and I've gotten a lot better at producing reviews that people want to read since then (my last three reviews average over 9,000 views each). So cheapening the cruise experience for experience cruisers may not be in NCL's best interest.

 

NCL can say that it doesn't care about social media. That is fine. However, first time cruisers do. And, many of the reviews without comments are likely coming from non-members doing research and finding my review via Google and other search engines. A well written review with negative comments can turn off a new cruiser. How many adults, looking to take their first cruise, want to find out that they are back in school. That they have to eat all of their food in the cafeteria before they are allowed to go outside and play? Especially when other cruise lines don't have these restrictions?

 

Perhaps NCL should do a little market testing of its ideas before making these ideas new policy. It is possible that they are turning off the very people they hope to attract. When is the next time you think Coke will change its formula and market it as "New Coke"?

[Cuizer2]

They probably got this rule from business school. It's called the "Pareto Principle" that states that 80% of your sales come from the top 20% of your customers. Depending on the industry the top customers are usually defined anywhere from 10% - 30%. Not sure how this would be defined in the cruising industry. What FDR is doing makes perfect sense as he believes the top 10% - 20% won't have an issue paying an extra $50 a cruise, and most probably won't. It's the bottom 10% who do the most complaining, and frankly, businesses don't care.

 

Is the Pareto Principle the one Coke was following in 1985?

 

Business may not care about the bottom 10% who complain, but they do care if the bottom 80% complain.

[NLH Arizona]

I think the DSC is a choice too...can't people remove them?

 

What they are looking for isn't necessarily "more upscale"...but not bargain hunters.

 

Of all these changes....the only one that I have issue with is taking food back to the cabin. Kids, not feeling well etc....then again, if you really need room service a few dollars isn't such a big deal.

I don't consider it a choice, unless there is a service issue, but yes if someone so chooses, they can remove the DSC.

[NLH Arizona]

I've seen staff working at the free dinning options during the day and specialty restaurants at night so does the staff not get tipped for serving lunch or just dinner? Or will they take the servers who worked both and only have them in one place?

I don't know for sure, but would surmise that NCL might have a system in place to pay them for their complimentary time, but I wouldn't think it would be the same amount as someone who works 100 percent of the time in the complementary restaurants. Just a guess.

[umpy10]

cheers...the Ump...:D

[NLH Arizona]

I don't mind paying more onboard but there must be a value added for me to spend that money. Simply increasing the cost or instituting fees where none existed before doesn't add value for me and I will either avoid the fees where possible or spend less.

We all have our own opinion as to what is value to us or not and have to make our decisions based on that. Everyone's opinion and/or decision will probably not be the same.

[TrumpyNor]

I don't know for sure, but would surmise that NCL might have a system in place to pay them for their complimentary time, but I wouldn't think it would be the same amount as someone who works 100 percent of the time in the complementary restaurants. Just a guess.

 

That is more or less the same thing I said in my previous post (#9 in this thread), you were just better at explaining it with fewer words than I did.... ;)

[sparks1093]

We all have our own opinion as to what is value to us or not and have to make our decisions based on that. Everyone's opinion and/or decision will probably not be the same.

 

This is true, just as it is true that some don't like the direction Del Rio is taking NCL and some don't mind.

[Nola26]

They probably got this rule from business school. It's called the "Pareto Principle" that states that 80% of your sales come from the top 20% of your customers. Depending on the industry the top customers are usually defined anywhere from 10% - 30%. Not sure how this would be defined in the cruising industry. What FDR is doing makes perfect sense as he believes the top 10% - 20% won't have an issue paying an extra $50 a cruise, and most probably won't. It's the bottom 10% who do the most complaining, and frankly, businesses don't care.

 

Exactly, I've been to b-school, it isn't a 10% rule. NCL is trying to grow, the top 10% isn't the sweet spot for that. That's why the deep promotions to bring in new blood or get some customers to come in for an extra cruise. The comment suggests the top 10% is all that matters and bottom 10% is disposable. That isn't NCL's current position. It isn't what grew Southwest or Walmart. NCL is making a play for the masses. They're happy to transition the top 10% to their upgrade lines. The price hikes absent the heavy promotions might lean otherwise but they're revenue hogs and he'll take it from whomever today.

Edited May 11, 2015 by Nola26

[WildcatRock]

Is the Pareto Principle the one Coke was following in 1985?

 

Business may not care about the bottom 10% who complain, but they do care if the bottom 80% complain.

 

You're in the 30,000 club? That's awesome - the most I've seen so far. You're right, they would care if the bottom 80% complained. As a stockholder in NCL I'd care!!

[spotfish]

OP....Thank you!

[MsTabbyKats]

They probably got this rule from business school. It's called the "Pareto Principle" that states that 80% of your sales come from the top 20% of your customers. Depending on the industry the top customers are usually defined anywhere from 10% - 30%. Not sure how this would be defined in the cruising industry. What FDR is doing makes perfect sense as he believes the top 10% - 20% won't have an issue paying an extra $50 a cruise, and most probably won't. It's the bottom 10% who do the most complaining, and frankly, businesses don't care.

 

Although I have an MBA...I didn't get it at B School. I got it (maybe he said 20%...it was a few years ago) at a seminar on how to increase your revenue.

 

I really meant it as a general statement...meaning the bottom 10% (or 20%) don't matter. Focus on those who can increase your earnings.

 

For the record....I'm probably one of those bottom feeders. :)

[NLH Arizona]

This is true, just as it is true that some don't like the direction Del Rio is taking NCL and some don't mind.

It is everyone's individual opinion. Some like, some don't like and some like Mr. Del Rio and some don't. I have no issues, but understand some do and I respect their opinion, but it doesn't mean that I won't post mine. As I've said, many of the changes affect me, but I still feel, even with the changes, that I get the value from my cruises that I expect. If something every changes that, I won't book another cruise. Edited May 11, 2015 by NLH Arizona

[maywell]

I just thumbed through all the recent stuff about these price increases and service changes. Judging from much of the heated discussion, I was about to panic, figuring our cruising days were about over. I sat down and figured it all out for my cruising situation.

 

For a 7 day cruise, DSC increase for two guests, $14. The now current 18% service charge for speciality restaurant, assuming we ate at one twice during a cruise, averaging $20 per guest per meal, $14.40. Drink service charge increase by 3%, assuming 3 drinks for each of us per day, average $10 per drink, $1.80. Room service we seldom use. However, nothing has changed from when we do use it. Still have the morning coffee and pastries, and those type food items are still available and for free. Not interested in ordering a full meal. Reference the food restriction now from buffet to rooms, no plates of hot food. Not an issue for us because all that we do usually take, pastries, fruit, etc, all still just fine to take. Not affected otherwise. So, if I've figured this right, on a 7 day cruise for us, which with basic cruise price of around $2500 average maybe, plus an end of cruise statement which for us usually runs $500 or so, or $3000 cruise package price total, these recent increases are going to increase my cost by $30.20. Or another way for me to look at it, one bucket of beer extra cost per cruise.

 

So, while cruise price monitoring and shopping, all I need to do is realize that the price I end up with, will actually cost me about $30 more than it shows. But...then again....those cruise prices are continually going up and down by several hundred dollars, usually up. The next two we've booked (one was like stealing during the promotions last month), have already gone up a total of $700 since booked. I guess I'll just continue to be a smart shopper, look at the complete picture, and not worry too much about that extra $30.

 

Glad I actually sat down and figured this out. I feel better. That's how it affects me. Your mileage may vary.

 

I wish I could 'Like' this because its similar to what I did to figure out my costs, wants, needs and what truly affected me 'badly' - which was the DSC increase of $1 per day (my subway/bus fare going one-way is more expensive than that). Since I prepay my service charges before the trip, it doesn't blow up my minimum of $300 per week drinking budget.

 

I'm not a heavy eater so UDP is a waste to me (maybe once a trip I'll probably go in a specialty restaurant). I drink alcohol /soda 0-4 times a day, so no point in buying the UBP and even the drinks I buy a la carte, its $1-2 increase on both price and tip - still under the $30 minimum per day set up for myself. I solve my room service /illness issue with a 18ox travel mug -the original reason why I used room service last time (ship's cups are tiny and I didn't want to walk back forth so much since I needed to rest). Even the food policy doesn't affect/apply to me neither- I like dining at tables and since my current room is studio(interior), more reason to dine outside seeing the ocean /ports[emoji2] . Plus, no mini-fridge, so storing food is a moot point.

 

My trip this year costs $1870 plus $144 in service charges for 12 days (I got grandfathered in for booking it last year and fare has gone up by $300) and sailing close to my homeport. Next year's trip fare is $2027 plus $273 service charges for 21 days (3 b2b 7 day trips) and cruising from Miami, so paying less than $1000 for airfare, 2 hotels and car/van transfers - I honestly can't complain for getting away with so much murder with NCL. Heck , I went from a studio room to a mini-suite last year because of a price drop - that's just blatant murder right there![emoji15]

 

Yes, its a situation of mileage, not a 'me, me, me' case - if one is buying both the UDP & UBP and likes to order room service all time; then, yes, that will hurt alot and make one upset. But if you're not using any of the services heavily but the complimentary only, it's non-issue, really. (Yes, there people out there that don't need much to be fed /drink and entertain much, on a cruise trip)[emoji52]

[Cuizer2]

You're in the 30,000 club? That's awesome - the most I've seen so far. You're right, they would care if the bottom 80% complained. As a stockholder in NCL I'd care!!

 

There are people with twice as many posts as I have.

[Nola26]

Although I have an MBA...I didn't get it at B School. I got it (maybe he said 20%...it was a few years ago) at a seminar on how to increase your revenue.

 

I really meant it as a general statement...meaning the bottom 10% (or 20%) don't matter. Focus on those who can increase your earnings.

 

For the record....I'm probably one of those bottom feeders. :)

 

For the record...Our cruise is utilizing a CAS discount. NCL will get $1000-1500 over and above our discounted price due to an upgrade, casino play and other onboard expenses. Without the offer I wouldn't have even considered this trip so NCL is getting a nice cash infusion from someone way below the 10-20% line.

[WildcatRock]

Exactly, I've been to b-school, it isn't a 10% rule. NCL is trying to grow, the top 10% isn't the sweet spot for that. That's why the deep promotions to bring in new blood or get some customers to come in for an extra cruise. The comment suggests the top 10% is all that matters and bottom 10% is disposable. That isn't NCL's current position. It isn't what grew Southwest or Walmart. NCL is making a play for the masses. They're happy to transition the top 10% to their upgrade lines. The price hikes absent the heavy promotions might lean otherwise but they're revenue hogs and he'll take it from whomever today.

 

I agree! FDR's strategy to go after the masses is obviously currently working with booked revenue up nearly 40% for next year as compared to last year and with the Escape currently 10x better sold than the Getaway prior to its delivery.

 

I appreciate the OP's post as it shows what the financial impact of FDR's 'new deal' strategy (http://www.seatrade-insider.com/news/news-headlines/fdr-outlines-his-new-deal-for-nclh-earnings-growth.html) is to the OP - $30. We eat at the specialty restaurants more than the OP, and drink a heck of a lot more than the OP, so the financial impact to us will be higher, but I'm good with that as I like the NCL product. And obviously, the 'masses' currently don't have an issue with it either.

[cruzsnooze]

The Op used the bare minimum which isn't realistic. With the raised DSC (which I will decrease to compensate for room service) and room service fees the cost on a Mexican cruise in a Balcony is more like 10% of the cruise cost.