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

[chengkp75]

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?

 

I completely agree that a surcharge would not be the obvious way to address this possible fuel increase. It should be factored into the fare. And the problem is new. The new fuel requirements only came into effect this year, and while the refinery struggles are fairly long term, given the low crude prices, the ability to operate a refinery at the end of a long supply chain like Hawaii becomes a real question of financial viability, and this can change week to week in the petroleum market.

 

I think the greatest mistake made with the Hawaii fleet was to expect that they could get US crew to provide the service level that the international crews do. I think they should have investigated ways to create a unique US cruising experience, highlighting what is best about the US, not what is best about international crews. This would have required a tremendous amount of homework before the ships even arrived in Hawaii, and Veitch did not want to hear about it, trust me, I and every senior officer there preached this at the top of our lungs.

 

The price point NCL is charging is high enough to cover the higher expenses and provide a profit, but must be low enough to compete with the West Coast cruises. Again, revenue is of course important, but the real bottom line is profit. The lack of profit in 2004-2008 when there were three ships in Hawaii, the major driving force in the market was the 500% increase in capacity that the foreign flag ships added during that time in the Hawaii market, which drove cabin prices well below what was profitable for a US flag ship.

[eroller]

I completely agree that a surcharge would not be the obvious way to address this possible fuel increase. It should be factored into the fare. And the problem is new. The new fuel requirements only came into effect this year, and while the refinery struggles are fairly long term, given the low crude prices, the ability to operate a refinery at the end of a long supply chain like Hawaii becomes a real question of financial viability, and this can change week to week in the petroleum market.

 

I think the greatest mistake made with the Hawaii fleet was to expect that they could get US crew to provide the service level that the international crews do. I think they should have investigated ways to create a unique US cruising experience, highlighting what is best about the US, not what is best about international crews. This would have required a tremendous amount of homework before the ships even arrived in Hawaii, and Veitch did not want to hear about it, trust me, I and every senior officer there preached this at the top of our lungs.

 

The price point NCL is charging is high enough to cover the higher expenses and provide a profit, but must be low enough to compete with the West Coast cruises. Again, revenue is of course important, but the real bottom line is profit. The lack of profit in 2004-2008 when there were three ships in Hawaii, the major driving force in the market was the 500% increase in capacity that the foreign flag ships added during that time in the Hawaii market, which drove cabin prices well below what was profitable for a US flag ship.

 

 

 

I agree just raising the fare would be the way to go over a fuel surcharge. In general people don't like to see extra fees and surcharges over and above the base fare they are paying. Also it's so easy for cruise lines to raise and lower fares these days. It's not like the old days where they published brochures with fares that were actually relevant and what people expected to pay.

 

Those unprofitable days of NCL America is exactly the timeframe I cruised in Hawaii a couple times. The prices were reasonable but even with the lower prices I didn't think the product lived up to them. There were days when our cabin was never cleaned and service in the dining rooms was dismal. That wouldn't happen on the other ships and perhaps not now on POA either? I had to look at POA as a very comfortable mode of transportation to take me to these great islands, and not much more. The American crew was friendly and I enjoyed talking to them, but they were basically kids and this was like a summer job they really didn't care about. It was a way for them to see and enjoy Hawaii and the work seemed secondary. I knew NCL bit off more than they could chew trying to recruit an American crew for three ships. I'm sure there are challenges even today with just one ship. Probably much more turnover and far fewer repeat crew contracts compared with the International fleet.

 

I will say this in favor of Veitch. It was ambitious and a great concept. The problem was becoming too big too soon and the execution of pretty much everything. Things seem to have smoothed out a bit with just the one ship, and hopefully people are experiencing a product worthy of those high per diems.

 

Thanks for all your insight!

[chengkp75]

I agree just raising the fare would be the way to go over a fuel surcharge. In general people don't like to see extra fees and surcharges over and above the base fare they are paying. Also it's so easy for cruise lines to raise and lower fares these days. It's not like the old days where they published brochures with fares that were actually relevant and what people expected to pay.

 

Those unprofitable days of NCL America is exactly the timeframe I cruised in Hawaii a couple times. The prices were reasonable but even with the lower prices I didn't think the product lived up to them. There were days when our cabin was never cleaned and service in the dining rooms was dismal. That wouldn't happen on the other ships and perhaps not now on POA either? I had to look at POA as a very comfortable mode of transportation to take me to these great islands, and not much more. The American crew was friendly and I enjoyed talking to them, but they were basically kids and this was like a summer job they really didn't care about. It was a way for them to see and enjoy Hawaii and the work seemed secondary. I knew NCL bit off more than they could chew trying to recruit an American crew for three ships. I'm sure there are challenges even today with just one ship. Probably much more turnover and far fewer repeat crew contracts compared with the International fleet.

 

I will say this in favor of Veitch. It was ambitious and a great concept. The problem was becoming too big too soon and the execution of pretty much everything. Things seem to have smoothed out a bit with just the one ship, and hopefully people are experiencing a product worthy of those high per diems.

 

Thanks for all your insight!

 

Given the pay rates, the crew are still kids, and they can earn more at McD's than onboard. The biggest problem is that every crew on POA has to have a USCG mariner's credential, which includes a background check, and it costs about $8-10k just to train a new crewmember. International crew in the hotel are just hired by an agency in the home country, so if one quits, it only takes a phone call to get a new crew on the way, while in the US, there isn't a pool of mariner credentialed dishwashers waiting for the phone call, so when someone quits, they frequently work short handed for months.

[eroller]

Given the pay rates, the crew are still kids, and they can earn more at McD's than onboard. The biggest problem is that every crew on POA has to have a USCG mariner's credential, which includes a background check, and it costs about $8-10k just to train a new crewmember. International crew in the hotel are just hired by an agency in the home country, so if one quits, it only takes a phone call to get a new crew on the way, while in the US, there isn't a pool of mariner credentialed dishwashers waiting for the phone call, so when someone quits, they frequently work short handed for months.

 

 

Sounds like crew retention should be a priority. Entice the crew with incentives to return for a few contracts to offset those USCG Mariner's costs. Make sure crew conditions onboard ship are excellent with plenty of support & training, great leaders to learn from and look up to, and a clear career path for those that want to go the distance. Perhaps even pay more than McDonalds! It may be less expensive for NCL in the long run.

[InTheWASide]

Here's a couple screen shots. I have never seen the separately itemized taxes although being taxed two different ways doesn't shock me. My agency regularly features Hawaii on POA and this has never shown before.

 

I would love to be wrong about this and maybe it's just a matter of them needing to re-name a header. As you can (hopefully) see from these images it does label as fuel surcharge. And this is via Apollo, a web based booking engine for the travel industry that NCL directly dumps their category, promo, pricing, etc info into.

 

 

[pizzalady1]

Here's a couple screen shots. I have never seen the separately itemized taxes although being taxed two different ways doesn't shock me. My agency regularly features Hawaii on POA and this has never shown before.

 

I would love to be wrong about this and maybe it's just a matter of them needing to re-name a header. As you can (hopefully) see from these images it does label as fuel surcharge. And this is via Apollo, a web based booking engine for the travel industry that NCL directly dumps their category, promo, pricing, etc info into.

 

[ATTACH]369434[/ATTACH]

 

[ATTACH]369435[/ATTACH]

 

The screen prints were hard to read--are they for the same date, 12/19/2015? What are the cabin category for each screen print.

Edited November 24, 2015 by pizzalady1

[InTheWASide]

The screen prints were hard to read--are they for the same date, 12/19/2015? What are the cabin category for each screen print.

 

 

Yes same 12/19 for both. IX and SC

 

Sorry they're hard to read. Uploading pics from my phone with the CC forums app they always end up random sizes

Edited November 24, 2015 by InTheWASide

[fshagan]

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.

 

I hadn't thought about that, but it makes sense. I wonder if somewhere in the terms is language specifically about this issue for POA.

[chengkp75]

Sounds like crew retention should be a priority. Entice the crew with incentives to return for a few contracts to offset those USCG Mariner's costs. Make sure crew conditions onboard ship are excellent with plenty of support & training, great leaders to learn from and look up to, and a clear career path for those that want to go the distance. Perhaps even pay more than McDonalds! It may be less expensive for NCL in the long run.

 

It's a huge challenge. Most young Americans have never been away from home for more than a weekend, let alone 4 months. Most have never shared a room with 3 other strangers, let alone a tiny crew cabin. Unfortunately, without designing a ship from the ground up for US crew, living conditions will be unable to change, and be "sub-standard" to today's youth. The other problem is that unlike international crew, this is a US citizen on a US ship in a US port, so there is nothing to prevent crew from just walking off the ship whenever something doesn't go their way.

[eroller]

It's a huge challenge. Most young Americans have never been away from home for more than a weekend, let alone 4 months. Most have never shared a room with 3 other strangers, let alone a tiny crew cabin. Unfortunately, without designing a ship from the ground up for US crew, living conditions will be unable to change, and be "sub-standard" to today's youth. The other problem is that unlike international crew, this is a US citizen on a US ship in a US port, so there is nothing to prevent crew from just walking off the ship whenever something doesn't go their way.

 

 

I'm sure other US registered lines face the same challenges. American Cruise Line, American Queen Steamboat Company, etc. There are a handful of them but they share one thing in common. They are expensive. It's obviously not inexpensive to operate cruise ships and boats registered in the US. No doubt these companies know the challenges going in and prepare accordingly. At least you would think so.

 

The crew situation is an interesting one. Many years ago I worked onboard Princess Cruises as a purser. I did several contracts. There were only a handful of Americans working in the Hotel Department in the entire fleet. Interestingly enough, I could still break my contract and walk off at any time and Princess was required to provide a plane ticket home. I think it worked the same way for any crew member as I don't think Princess or any cruise line could just dump someone in a foreign country. None the less it was rarely done. A bet that is not the case in Hawaii. Quitting a low paying and demanding job and being stuck in Hawaii for a US college kid is not such a bad thing! I could think of worse.

[4774Papa]

It's a huge challenge. Most young Americans have never been away from home for more than a weekend, let alone 4 months. Most have never shared a room with 3 other strangers, let alone a tiny crew cabin. Unfortunately, without designing a ship from the ground up for US crew, living conditions will be unable to change, and be "sub-standard" to today's youth. The other problem is that unlike international crew, this is a US citizen on a US ship in a US port, so there is nothing to prevent crew from just walking off the ship whenever something doesn't go their way.

You may be right. In my day more young served in the military were living conditions were likely similar to or worse than the POAs.

 

Still, comparing Celebrity's cruises from the mainland, which are longer and run about the same price (only need to pay one-way airfare to Hawaii also), I would likely go with them over POA.

[chengkp75]

I'm sure other US registered lines face the same challenges. American Cruise Line, American Queen Steamboat Company, etc. There are a handful of them but they share one thing in common. They are expensive. It's obviously not inexpensive to operate cruise ships and boats registered in the US. No doubt these companies know the challenges going in and prepare accordingly. At least you would think so.

 

The crew situation is an interesting one. Many years ago I worked onboard Princess Cruises as a purser. I did several contracts. There were only a handful of Americans working in the Hotel Department in the entire fleet. Interestingly enough, I could still break my contract and walk off at any time and Princess was required to provide a plane ticket home. I think it worked the same way for any crew member as I don't think Princess or any cruise line could just dump someone in a foreign country. None the less it was rarely done. A bet that is not the case in Hawaii. Quitting a low paying and demanding job and being stuck in Hawaii for a US college kid is not such a bad thing! I could think of worse.

 

For international crew, I believe the contract states that unless the contract is completed, the crew member pays for the flight home. The cruise lines would also make it difficult to leave without a few week's notice, since they need to make an airline reservation within 12-18 hours of leaving the ship, and the crewmember must be escorted by a bonded agent to the flight, since they are travelling on a crew visa. Some of this changed when the 2006 Maritime Labor Convention (MLC 2006) was entered into force in 2013, giving mariners a lot more protection and rights, but the US immigration requirements for timely repatriation and bonded escort remain.

[alwalaska]

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?

 

I would assume that if the Hawaii state legislature changes the tax percentage, then the GET tax would increase pre-cruise.

 

For the port charges, I have seen it change when a port was added or dropped. It seems odd to change other-wise since the cruise line usually signs multi-year contracts that control those things.

[Wavesprite]

For international crew, I believe the contract states that unless the contract is completed, the crew member pays for the flight home.

 

I had told that when a crew starts their contract that their first paychecks go into a "bank" for that plane ticket home, so the money is sitting there "just in case" they want to fly home at any time and break the contract.

[punkincc]

I would assume that if the Hawaii state legislature changes the tax percentage, then the GET tax would increase pre-cruise.

 

For the port charges, I have seen it change when a port was added or dropped. It seems odd to change other-wise since the cruise line usually signs multi-year contracts that control those things.

 

Thanks for the info. Had never heard of someone having to pay a higher port charge/tax than originally stated at booking, but wasn't sure how this worked. Someone had thought perhaps the agent was seeing increases to these items and was jumping to the conclusion that this was a fuel surcharge being added, but it seems pretty clear this is not the case.

[punkincc]

I had told that when a crew starts their contract that their first paychecks go into a "bank" for that plane ticket home, so the money is sitting there "just in case" they want to fly home at any time and break the contract.

 

If I had to guess, I would imagine that the "bank" is not individual, but the portion of our Daily Service Charges that NCL refers to as being for the benefit of the crew's 'Health and Welfare' which goes into a pool, one of the uses for may be to purchase plane tickets for crew members who have emergencies at home, but not for those who just decide to quit mid contract.

[RiotAct]

Yikes.....

[Wavesprite]

If I had to guess, I would imagine that the "bank" is not individual, but the portion of our Daily Service Charges that NCL refers to as being for the benefit of the crew's 'Health and Welfare' which goes into a pool, one of the uses for may be to purchase plane tickets for crew members who have emergencies at home, but not for those who just decide to quit mid contract.

 

Well this was on HAL, and the crewmember told me that they usually receive no money the first 4 months of their contract (when they first start) because it goes for paying for uniforms, the flight home, and an emergency fund for medical. After the four months, they start earning their salary. That's why a lot of them keep signing contracts one after the other to ensure that their bank is already paid off.

[chengkp75]

If I had to guess, I would imagine that the "bank" is not individual, but the portion of our Daily Service Charges that NCL refers to as being for the benefit of the crew's 'Health and Welfare' which goes into a pool, one of the uses for may be to purchase plane tickets for crew members who have emergencies at home, but not for those who just decide to quit mid contract.

 

No. Without getting this started as a tipping/DSC thread, that is not correct.

 

Well this was on HAL, and the crewmember told me that they usually receive no money the first 4 months of their contract (when they first start) because it goes for paying for uniforms, the flight home, and an emergency fund for medical. After the four months, they start earning their salary. That's why a lot of them keep signing contracts one after the other to ensure that their bank is already paid off.

 

Sort of. Part of the contract that the crew sign with their employment agency back home is that 80% of earnings must go home to the family, if there is one, or to a bank in the home country. The agency earns a commission on this money, and it ensures the home country gets a tax bite. The remaining 10% is payable to the crew member as they wish, usually into an account that they can then use like your sign and sail card at the crew store, crew bar, and for internet minutes/phone cards. There will be a hold on a portion of this money until there is enough in the account to cover the return airline ticket. I can't speak for HAL, but I'm not aware of the cruise line charging for uniforms, except for damaged uniforms at the end of contract. And medical is taken care of onboard, and if the crew needs hospitalization, that is covered by IMO regulations by the cruise line. This all applies to international crew, the POA US crew have a whole different contract and set of regulations.

[Freckles_51]

Had never heard of someone having to pay a higher port charge/tax than originally stated at booking, but wasn't sure how this worked.

 

Now you have! :p;)

 

Not sure how NCL would handle it now, but I booked POA cruise in Oct 2011 for Oct 2012. The GET, taxes and fees changed 4 more times after booking and each time they sent us a new invoice even when it was only a difference of less than $1. I still have them on my computer! :o

 

The GET tax went down 3 times and then up on the final invoice.

The Govt taxes and fees went down 3 times, the 4th time it was the same.

 

Each invoice was slightly lower except the final one which was an increase over the 3rd by just over $3 :mad: ;) ;)

[barnacle_boy]

I'll add on to chengkp75's synopsis by adding that Pride of America received a scrubber system that can only function as an "open loop," which means that the seawater used to "scrub" the emissions can only be discharged back out to sea. Pride of America lacks the necessary holding tanks to allow for "closed loop" operation in port, where such discharge is not allowed. This renders the whole scrubber system nearly completely useless on her port-intensive itinerary, so Pride of America currently runs on MGO most of the time. One of the top technical priorities of the upcoming drydock is to make space for the creation of holding tanks for closed loop scrubber operation.

[Freckles_51]

....... One of the top technical priorities of the upcoming drydock is to make space for the creation of holding tanks for closed loop scrubber operation.

 

Do you have any insight as to what else they are doing during dry dock?

[chengkp75]

Do you have any insight as to what else they are doing during dry dock?

 

Aside from technical maintenance, my source says that the ship will be getting "spruced up" as per FDR's comments in various articles. Basically lots of public spaces will be getting new décor. I don't think there will be any changes to venues, or things like that, because she just had a major refurbishment in 2013. That drydocking was not a "drydocking for record", in other words it was done too early to consider it a regulatory drydocking, so her docking is actually past due, but her slot at the Pearl Harbor drydock was pre-empted by the US Navy (San Francisco Drydock has a contract to use the Navy's dock whenever the Navy doesn't need it), so NCL had to scramble to find a slot either at San Francisco or Vigor in Portland.

[Freckles_51]

Aside from technical maintenance, my source says that the ship will be getting "spruced up" as per FDR's comments in various articles. Basically lots of public spaces will be getting new décor. I don't think there will be any changes to venues, or things like that, because she just had a major refurbishment in 2013. That drydocking was not a "drydocking for record", in other words it was done too early to consider it a regulatory drydocking, so her docking is actually past due, but her slot at the Pearl Harbor drydock was pre-empted by the US Navy (San Francisco Drydock has a contract to use the Navy's dock whenever the Navy doesn't need it), so NCL had to scramble to find a slot either at San Francisco or Vigor in Portland.

 

Thanks for this info....was hoping O'Sheehan's would be added, it was one of our "go-to" places on the Epic when we wanted a change from MDR

[dexddd]

Thanks for this info....was hoping O'Sheehan's would be added, it was one of our "go-to" places on the Epic when we wanted a change from MDR

 

You probably already know this, but they do have the Cadillac Diner. Someone posted a menu not too long ago and it looked pretty much like the normal Blue Lagoon/O'Sheehans menu. Not sure if they have the dinner specials like O'Sheehans has on the other ships though. Maybe that is what you are asking about?