NCL is assessing a Fuel Surcharge on Pride of America 2016 sailings

[InTheWASide]

Has this been previously addressed or does anyone have more info on it?

 

My agency just discovered it when offering quotes to some clients today.

 

NOTE: This is pricing direct from NCL - not something assessed by a 3rd party.

Edited November 23, 2015 by InTheWASide

[punkincc]

We are booked for March 2016. First I've heard of it. What is the $ amount they are assessing? I assume it would apply to all bookings regardless of booking date?

[FranknBeans]

Just checked our booking and the price has gone up $57 pp plus increase in fees and taxes of $15 pp from when I checked a couple weeks ago.

 

They have already covered fuel surcharge in my opinion by shortening the port time in Kauai by 2 hours.

Edited November 23, 2015 by FranknBeans

[InTheWASide]

We are booked for March 2016. First I've heard of it. What is the $ amount they are assessing? I assume it would apply to all bookings regardless of booking date?

 

We checked a few sporadic dates in 2016 and they all had it.

 

The one we looked at was 3/26 for the 7 day.

Our booking engine (travelport - part of Apollo) shows taxes of $112.93 per person and fuel surcharge of $123.61 per person (this was a party of 2 in lowest inside)

 

Going to NCL's website it shows taxes and fees combined for 2 of $473.08. The prices come out exactly the same. However the fuel surcharge amount on a different date - 11/26/16 - is about half what it is on this March cruise.

 

Oh, and there's also the fact that the fuel supplement is being added but it doesn't meet NCL's posted explanation of when and why they might add it:

https://www.ncl.com/faq#fuel-supplement

What is the Fuel Supplement?Norwegian reserves the right to charge a fuel supplement without prior notice should the closing price of West Texas Intermediate Fuel increase above $65 per barrel on the NYMEX (New York Mercantile Exchange Index). In the event a fuel supplement is charged, Norwegian will have sole discretion to apply the supplementary charge to both existing and new bookings, regardless of whether such bookings have been paid in full. Such supplementary charges are not included in the cruise fare. The fuel supplement charge will not exceed $10.00 per passenger per day.

Oil is in the low $40's

[fshagan]

That has to be a mistake. I was thinking the price had to be above $65 even before I read InTheWASide's post where he quotes that from the NCL site.

 

West Texas Intermediate Fuel is around $40 as of Friday.

[eroller]

How they could get away with a fuel surcharge now is beyond me, but this is NCL we are talking about. If anyone would do it they would.

 

Currently POA is the highest performing ship in the NCL fleet. No doubt NCL would like to squeeze even more revenue out of it, and a way to do it might be to impose a so-called fuel surcharge. I would like to think even NCL wouldn't stoop so low when fuel prices are actually at all time lows, but I wouldn't put it past them. Del Rio looks at customers as just entities to squeeze more cash out of.

[mking8288]

For those booked on POA and now catching this fuel surcharge, has anyone called into NCL directly to ask them - not that you would necessary get a definitive answer. Maybe ask them if you can "prepaid" it and lock in any further upward adjustment :D - other changes excluded.

 

The near term forecast for fuel prices is for them to go lower, gas prices going below $2 a gallon in many part of the USA - and we do know that gas prices are always higher in the middle of the Pacific, but :eek:

 

How about a special security surcharge instead - folks would probably pay for it, no questions asked.

Edited November 23, 2015 by mking8288

[eroller]

"Charge it and they will pay". NCL corporate philosophy.

[pizzalady1]

When does it end? Does it go into 2017? I am booked for 12/9/2017 and I can't tell by doing a mock booking if it is included.

 

I emailed Public Relations. Now I can't wait for the "NCL speak" on this topic

Edited November 23, 2015 by pizzalady1

[InTheWASide]

"Charge it and they will pay". NCL corporate philosophy during the FDR administration.

 

Made a slight adjustment there ;)

[Crusin6]

Ncl IT Dept at its finest!'

 

Doesn't everyone realize by now that the inmates are running the asylum at ncl and this is probably just another error on their part

 

 

I'm still laughing from when they were taking bookings for the 12 day ba when they fully knew weeks before that it had turned into a 14 day

 

 

Sent from my iPad using Forums

[InTheWASide]

When does it end? Does it go into 2017? I am booked for 12/9/2017 and I can't tell on MyNCL if it is included.

 

I emailed Public Relations. Now I can't wait for the "NCL speak" on this topic

 

Please make sure to share the reply when you get one! Thanks! :)

[InTheWASide]

Looked at additional dates and found something even more disturbing...

 

For an inside room on same sailings it's in the $55-70 range per person.

 

Same sailing in a haven suite it's over $220 per person.

 

So whatever this is, and however it's programmed it seems that it is dependent on the base price of the cruise.

[eroller]

I just made a mock booking for POA in May. There was no mention of any fuel surcharge. This being said, the port fees and government taxes were $197.52 per person so somewhat high, but it's a very port intensive itinerary. Also the starting price for an inside cabin is $1849 per person, more than double what you would see in the Caribbean so it's easy to see why this is NCL best revenue performing ship. Obviously Hawaii cruises are in high demand, and NCL pretty much has a monopoly on the market. Interesting that a few years ago it was a very different story when NCL had three ships in the market. They couldn't fill them and had a lot of trouble staffing them with US citizens. NCL America was somewhat of a flop and putting NCL into bankruptcy.

 

The market might be ripe for a second NCL ship in Hawaii. I wonder if NORWEGIAN JADE would be granted the exemption needed to sail intra-Hawaii cruises as PRIDE OF HAWAII again?

[eroller]

Made a slight adjustment there ;)

 

 

Absolutely! I stand corrected!! ;)

[mugtech]

Looked at additional dates and found something even more disturbing...

 

For an inside room on same sailings it's in the $55-70 range per person.

 

Same sailing in a haven suite it's over $220 per person.

 

So whatever this is, and however it's programmed it seems that it is dependent on the base price of the cruise.

 

NCL claims the max is $10/day/person, so the max for a 7 day should be $70/person. Wonder how many other cruises are being charged the fuel surcharge . Why wouldn't the surcharge apply fleet wide?

[AtlantaCruiser72]

I just priced several random 2016 sailing on POA - no fuel supplements, but there are two separate tax breakdowns - government taxes and fees and GET tax. The GET tax is the Hawaii "general excise tax" and is akin to a sales tax. NCL have always been required to charge this and their res system has always shown it separate, however most travel agencies lump both sums together on their invoices.

 

Again - I saw NO EVIDENCE of a fuel supplement, just the above mentioned taxes, and checked about a dozen random 2016 sailings starting in June through December.

Edited November 23, 2015 by AtlantaCruiser72

[AnonomissX]

Please make sure to share the reply when you get one! Thanks! :)

 

The Pride of America is sailing in ONLY US waters, the only ship to do so. She has a second tax rate or line, based on Hawaii State taxes, best way I can describe it. Only ship that is affected by this.

 

NOT a "fuel surcharge"

 

EDIT: OP your travel agent needs up-training! :p

Edited November 23, 2015 by AnonomissX

[eroller]

I just priced several random 2016 sailing on POA - no fuel supplements, but there are two separate tax breakdowns - government taxes and fees and GET tax. The GET tax is the Hawaii "general excise tax" and is akin to a sales tax. NCL have always been required to charge this and their res system has always shown it separate, however most travel agencies lump both sums together on their invoices.

 

Again - I saw NO EVIDENCE of a fuel supplement, just the above mentioned taxes, and checked about a dozen random 2016 sailings starting in June through December.

 

 

My mock booking on the NCL website did not break down taxes and made no mention of a GET tax. I'm not questioning that it exists, just that the NCL website doesn't break it down. Attached is a pic of my pricing breakdown July 2016. All taxes are grouped together under "Govt Taxes, fees, and port expenses".

 

[chengkp75]

While I hadn't heard about this before, and it doesn't fit the terms of the old fuel surcharge, I've looked at a few facts and will present some information that may explain why the POA is being singled out for this.

 

Both refineries on Hawaii are struggling, and even at the best of times, they only produce enough residual fuel oil to supply the power plants on Oahu, with very little left over for ships. When I was with NCL, 2004-2008, only one refinery had any residual fuel for sale to ships. This is why very few ships buy fuel in Hawaii, the limited supply drives the price up. Since POA only sails around the islands, she is a captive customer.

 

The POA was the first NCL ship to install scrubbers to allow continued burning of residual fuel after Jan 1, 2015, since she spends 100% of her time within the US ECA, whereas all other NCL, and every other cruise lines' ships leave the ECA and can switch to burning residual fuel without a scrubber whenever outside the ECA.

 

With the refineries struggling, and demand for residual fuel increasing at the power plants, I have the feeling that not only is the price of residual fuel rising in Hawaii, but also it is becoming less available, so the cost of the scrubbers no longer has any payback, as the ship will need to burn diesel fuel when residual fuel is not available.

 

Diesel fuel is twice the price of residual fuel, and I believe that the prices for cruises starting after Jan 1, 2015, were based on the ability of the ship to continue burning residual fuel with their scrubbers. So, if fuel price doubles, regardless of what the price of crude is, if the ship is limited to diesel fuel there will be a serious change in profitability.

 

eroller has quoted the article about FDR wanting to spruce up the ships (can't remember where the article was from) that called the POA the "highest performing ship" in the fleet. I think that statement is somewhat skewed. I believe that the POA is the highest revenue center in the fleet, but it has its own unique operational costs that make it anything but the profit leader of the fleet. This additional fuel cost is just one aspect of those higher operating costs.

 

I know I won't change the opinion of the FDR haters, or the "corporate nickel and diming" haters, but this is just my take on why this ship in particular would have a fuel surcharge.

 

I've just seen eroller's new post while I was typing this one, and I don't think that Jade will return to Hawaii, at least not in the near future. The problems in the old days was overcapacity with three ships added in quick succession. I don't think that there is sufficient demographic to support two ships, what with the foreign flag ships being able to offer twice as long a cruise from the West Coast for the same or less.

 

The problems with the US crew availability continue, and is another of the cost factors that lowers the profitability of the ship.

[punkincc]

My mock booking on the NCL website did not break down taxes and made no mention of a GET tax. I'm not questioning that it exists, just that the NCL website doesn't break it down. Attached is a pic of my pricing breakdown July 2016. All taxes are grouped together under "Govt Taxes, fees, and port expenses".

 

[ATTACH]369419[/ATTACH]

 

 

We booked the POA direct with NCL back in July. The NCL invoice does show a breakdown of a total of $202.72 GET AND $340.76 Gov tax/Port Exp/Fees. We transferred the booking to a TA not long after so I don't know if it has gone up.

 

One poster said his invoice is showing an increase in the taxes over what was originally shown. Can port charges/and or GET taxes increase pre cruise?

[eroller]

We booked the POA direct with NCL back in July. The NCL invoice does show a breakdown of a total of $202.72 GET AND $340.76 Gov tax/Port Exp/Fees. We transferred the booking to a TA not long after so I don't know if it has gone up.

 

 

 

 

Perhaps the invoice NCL emails to you provides the breakdown, but online there is no breakdown of the taxes.

[AtlantaCruiser72]

My mock booking on the NCL website did not break down taxes and made no mention of a GET tax. I'm not questioning that it exists, just that the NCL website doesn't break it down. Attached is a pic of my pricing breakdown July 2016. All taxes are grouped together under "Govt Taxes, fees, and port expenses".

 

[ATTACH]369419[/ATTACH]

 

I was pricing using the travel agent portal which shows more detail. It is the same res system ncl agents use. The consumer website does not itemize the taxes in the same manner, so you are also correct.

[eroller]

While I hadn't heard about this before, and it doesn't fit the terms of the old fuel surcharge, I've looked at a few facts and will present some information that may explain why the POA is being singled out for this.

 

Both refineries on Hawaii are struggling, and even at the best of times, they only produce enough residual fuel oil to supply the power plants on Oahu, with very little left over for ships. When I was with NCL, 2004-2008, only one refinery had any residual fuel for sale to ships. This is why very few ships buy fuel in Hawaii, the limited supply drives the price up. Since POA only sails around the islands, she is a captive customer.

 

The POA was the first NCL ship to install scrubbers to allow continued burning of residual fuel after Jan 1, 2015, since she spends 100% of her time within the US ECA, whereas all other NCL, and every other cruise lines' ships leave the ECA and can switch to burning residual fuel without a scrubber whenever outside the ECA.

 

With the refineries struggling, and demand for residual fuel increasing at the power plants, I have the feeling that not only is the price of residual fuel rising in Hawaii, but also it is becoming less available, so the cost of the scrubbers no longer has any payback, as the ship will need to burn diesel fuel when residual fuel is not available.

 

Diesel fuel is twice the price of residual fuel, and I believe that the prices for cruises starting after Jan 1, 2015, were based on the ability of the ship to continue burning residual fuel with their scrubbers. So, if fuel price doubles, regardless of what the price of crude is, if the ship is limited to diesel fuel there will be a serious change in profitability.

 

eroller has quoted the article about FDR wanting to spruce up the ships (can't remember where the article was from) that called the POA the "highest performing ship" in the fleet. I think that statement is somewhat skewed. I believe that the POA is the highest revenue center in the fleet, but it has its own unique operational costs that make it anything but the profit leader of the fleet. This additional fuel cost is just one aspect of those higher operating costs.

 

I know I won't change the opinion of the FDR haters, or the "corporate nickel and diming" haters, but this is just my take on why this ship in particular would have a fuel surcharge.

 

I've just seen eroller's new post while I was typing this one, and I don't think that Jade will return to Hawaii, at least not in the near future. The problems in the old days was overcapacity with three ships added in quick succession. I don't think that there is sufficient demographic to support two ships, what with the foreign flag ships being able to offer twice as long a cruise from the West Coast for the same or less.

 

The problems with the US crew availability continue, and is another of the cost factors that lowers the profitability of the ship.

 

 

 

Good luck to NCL explaining this one if it is actually the case. It sounds like an ongoing problem and nothing new, so you would think NCL would build it into the operating costs of the ship? Fuel surcharges turn consumers off, especially during a time when fuel costs are historically low. I'm not sure they would be interested in exceptions that exist for Hawaii only. The per diem for POA is already substantially more than other ships in the fleet, and an added fuel surcharge might be just what is needed to push consumers to other vacation options. I'm not an expert but as a consumer there comes a point when I feel something is just priced too high and I look for something else. I've sailed POA twice and I love Hawaii, but I don't think I would pay what NCL is charging now. I looked at the ship as a pretty nice ferry to take me from one island to the next, but the actual cruise experience fell short of what you would expect from NCL's international flagged fleet.

 

Sounds like we read the same article about POA being the best performing ship. When I read that I think in terms of revenue. Sure operating costs may be higher but I'm guessing NCL has found the right price point, along with optimal supply and demand to make POA the best revenue producing ship in the fleet. I don't work in finance for NCL so I don't know that for sure, but that is what Del Rio's comment alluded to.

 

I appreciate your detailed explanation of all this. It's interesting to me and I certainly understand it, but I'm not sure how well the average consumer will accept a fuel surcharge for this one product if indeed there is one. Based on my mock bookings there isn't one at the moment, so perhaps just speculation?

[eroller]

I was pricing using the travel agent portal which shows more detail. It is the same res system ncl agents use. The consumer website does not itemize the taxes in the same manner, so you are also correct.

 

Got it. Thanks.