Missed the ship...$300 per person to get on at the first port. WHY?

[bUU]

I'm just not sure why the OP cares really, it wasn't his family. Acts like the 300.00 fine is outrageous.

The tenor of the expression of outrage perhaps is beyond the bounds, but I think we all should care about how such circumstances would affect us on our upcoming vacations.

[Maven3]

I think, though, that dd's point was that insurance covers specific situations, not a more generic "stuff happens" set of situations. There is special "cancel for any reason" riders, but even there it isn't "any cost for any reason" - it covers only the prepaid, non-refundable amounts declared prior to the date declared as the first day of coverage, and only if you don't go.

 

Read your policy very carefully to make sure you understand what insurance will cover, and rest assured that if the policy doesn't say that something is covered then it probably is not.

 

This would be great. I also paid with AmEx. Could you please indicate what part of the travel benefit says that it will cover fines?

 

Again, it would be great if AmEx would cover things that private insurance does not. Here's what my Nationwide cruise-specific insurance policy says with regard to when they will cover extra travel expenses in the case of interruption:

I suppose we could claim we "lost" our passports and then subsequently "found" them when we finally boarded the cruise ship, but that would feel like lying to me.

The docs were "lost" -- the porters/cruise line could not find the luggage. The docs were "found" after sailing, so they were lost at some point.

 

I have the AmEx Platinum card, if you have one call the Platinum services number on the back and they will explain your trip interruption benefits.

 

Sent from my SM-G900P using Forums mobile app

[Maven3]

The tenor of the expression of outrage perhaps is beyond the bounds, but I think we all should care about how such circumstances would affect us on our upcoming vacations.

The $300 pp adds up, it becomes an expensive mistake if you have a large party. It's a less than perfect way to start a vacation. It is a government "fee/fine", not some arbitrary number the cruise lines create. I am sure there are extra expenses involved for both the cruise line & customs. Trump is busy deregulating things, maybe the government could waive the regulation for paying cruise ship passengers & we could get hop on - hop off day passes for the ships! [emoji3]

 

Sent from my SM-G900P using Forums mobile app

[bUU]

The docs were "lost" -- the porters/cruise line could not find the luggage. The docs were "found" after sailing, so they were lost at some point.

Fair enough. Like I said above, that would feel like lying to me, but others may feel differently.

 

I have the AmEx Platinum card, if you have one call the Platinum services number on the back and they will explain your trip interruption benefits.

No Platinum AmEx here, unfortunately. Coverage for fines would be a fantastic benefit. Unfortunately, it seems Platinum AmEx limits "Travel inconvenience" benefits to $250 per person for food or "additional travel" plus $500 for clothing.

[AdGuyMG]

A restaurant gladly gives you another dish simply because you didn't like the one you ordered, even though it was made correctly. I expect them to eat it from a customer service perspective, even though they have no obligation to do so. Making people happy is so much more profitable in the long run, but they can run their business however they want.

 

Any dining room or specialty restaurant on a cruise ship would do the exact same thing. Bring you another dish to keep you happy.

 

But say at your land based restaurant you finished dinner and found your car towed away because you parked next door in a Tow Zone or got a hefty parking ticket for illegally parking outside next to a fire hydrant and you went back in to ask for a $$$ reimbursement, how willing do you think the restaurant would be to make you happy?

[gpb11]

Yikes. I would have ditched the cruise if I had to pay $900 to get back on. I do agree with one of the posters that they could have had some time in the Keys.

 

Looking at my credit card bill from my drive-to-KW trip in July with my wife, $900 doesn't get you very far... Even with port fees refunded, they possibly came out ahead by getting on the ship. :cool:

[bUU]

Making people happy is so much more profitable in the long run, but they can run their business however they want.

To a certain extent. Disney Resorts used to have an absolutely incredible system to "make people happy". Their Guest Recovery empowered their "cast members" to go to remarkable extremes to make people happy. It fostered a very profitable growth in their resort business, until it didn't. And things changed because of the power of the Internet. Large contingents of their "guests" band together online in various communities, communities that propagate the very best knowledge and insights into how to get the most out of their offerings (just like Cruise Critic does for cruise lines). Specifically, these communities shared information about how to exploit all manner of offerings, including Guest Recovery. Those communities also fostered propagation of knowledge and insights more broadly, as blogs, travel writers, and traditional news services picked up information shared online and broadcast that information even more widely.

 

The end-result was a broadly communicated expectation that Disney would respond to the squeaky wheel with more and more and more grease. The dismantling of Guest Recovery was painful - painful for the division and painful for its customers who had come to expect far more than Disney ever intended to promise. They're still generous, but no longer to a fault. They now make a much clearer distinction between making up for their mistakes and (not) making up for the guest's mistakes.

 

Even at the current (lower) level of Guest Recovery, Disney is still objectively more expensive than Carnival, projected into same-to-same comparisons (and luckily Disney has a cruise line that is comparable to their deluxe resorts, so the comparisons are very easy to make). That incremental amount is partially attributable to Disney's exclusive use of certain properties (but is Donald Duck really worth that much more money than the Cat in the Hat?) However, a good part of that incremental amount is due to the lingering remnants of Disney's Guest Recovery.

 

I watched a travel agent's video of the Carnival Magic yesterday. He quickly zoomed by Guest Services, clearly because he didn't want to show that there was a very long queue of people waiting for assistance. Some posters here on CC say that front-of-line access to Guest Services is one of the most important benefits for FTTF. There's nothing like that on DCL; there's no need. There were no long lines as Guest Services on the Disney Dream when we cruised on her. Both ways, Carnival's "excellent value" way and Disney's "superlative service" way, are perfectly legitimate ways to run a business, but they are different ways to run a business.

 

Bringing this back to the OP, I wouldn't be surprised if a cruise line that charged more - one that charged so much that people say, "I'm not cruising on that cruise line because it isn't worth the extra money," (like people say about DCL) actually happily absorbed the fine in a scenario such as the OP. It is reasonable to expect a difference in customer service between a less expensive and a more expensive cruise line.

[BNBR]

Any dining room or specialty restaurant on a cruise ship would do the exact same thing. Bring you another dish to keep you happy.

 

But say at your land based restaurant you finished dinner and found your car towed away because you parked next door in a Tow Zone or got a hefty parking ticket for illegally parking outside next to a fire hydrant and you went back in to ask for a $$$ reimbursement, how willing do you think the restaurant would be to make you happy?

 

A land based restaurant doesn't bring in millions of revenue during a single sailing. Paying a $300 parking ticket when a guest spent $50 on a meal is much different than just eating the cost of a $300 fine on a $900 cruise fare - and assuming the cruise guest doesn't spend quite a bit more on excursions, casino, upcharge restaurants, alcohol, etc. I would think guests missing the ship in Miami and getting on in Key West is small enough that it's something Carnival would gladly eat to keep their guests happy and returning. As the guest, you could also argue that Carnival's sloppy baggage handling also contributed to you missing the ship. In what was most likely several hours, Carnival could not locate this persons bags? While the guest is ultimately responsible for the issue, it's not unfair to suggest Carnival shares some of the blame.

 

As you can see by this thread, even if the charge is legitimate and sensible based on US law, many don't understand it. And as I said, it's simply my OPINION that Carnival shouldn't pass these rare charges on to guests, but they can certainly do whatever they want. At least in my own experience with my businesses, you don't really "win" when the customer is wrong and it's always better to look long term.

[BNBR]

To a certain extent. Disney Resorts used to have an absolutely incredible system to "make people happy". Their Guest Recovery empowered their "cast members" to go to remarkable extremes to make people happy. It fostered a very profitable growth in their resort business, until it didn't. And things changed because of the power of the Internet. Large contingents of their "guests" band together online in various communities, communities that propagate the very best knowledge and insights into how to get the most out of their offerings (just like Cruise Critic does for cruise lines). Specifically, these communities shared information about how to exploit all manner of offerings, including Guest Recovery. Those communities also fostered propagation of knowledge and insights more broadly, as blogs, travel writers, and traditional news services picked up information shared online and broadcast that information even more widely.

 

The end-result was a broadly communicated expectation that Disney would respond to the squeaky wheel with more and more and more grease. The dismantling of Guest Recovery was painful - painful for the division and painful for its customers who had come to expect far more than Disney ever intended to promise. They're still generous, but no longer to a fault. They now make a much clearer distinction between making up for their mistakes and (not) making up for the guest's mistakes.

 

Even at the current (lower) level of Guest Recovery, Disney is still objectively more expensive than Carnival, projected into same-to-same comparisons (and luckily Disney has a cruise line that is comparable to their deluxe resorts, so the comparisons are very easy to make). That incremental amount is partially attributable to Disney's exclusive use of certain properties (but is Donald Duck really worth that much more money than the Cat in the Hat?) However, a good part of that incremental amount is due to the lingering remnants of Disney's Guest Recovery.

 

I watched a travel agent's video of the Carnival Magic yesterday. He quickly zoomed by Guest Services, clearly because he didn't want to show that there was a very long queue of people waiting for assistance. Some posters here on CC say that front-of-line access to Guest Services is one of the most important benefits for FTTF. There's nothing like that on DCL; there's no need. There were no long lines as Guest Services on the Disney Dream when we cruised on her. Both ways, Carnival's "excellent value" way and Disney's "superlative service" way, are perfectly legitimate ways to run a business, but they are different ways to run a business.

 

Bringing this back to the OP, I wouldn't be surprised if a cruise line that charged more - one that charged so much that people say, "I'm not cruising on that cruise line because it isn't worth the extra money," (like people say about DCL) actually happily absorbed the fine in a scenario such as the OP. It is reasonable to expect a difference in customer service between a less expensive and a more expensive cruise line.

 

Interesting perspective. Appreciate the insight. Kind of like when everyone knew you could just call Sirius and threaten to cancel, thus getting a huge discount.

[chengkp75]

A land based restaurant doesn't bring in millions of revenue during a single sailing. Paying a $300 parking ticket when a guest spent $50 on a meal is much different than just eating the cost of a $300 fine on a $900 cruise fare - and assuming the cruise guest doesn't spend quite a bit more on excursions, casino, upcharge restaurants, alcohol, etc. I would think guests missing the ship in Miami and getting on in Key West is small enough that it's something Carnival would gladly eat to keep their guests happy and returning. As the guest, you could also argue that Carnival's sloppy baggage handling also contributed to you missing the ship. In what was most likely several hours, Carnival could not locate this persons bags? While the guest is ultimately responsible for the issue, it's not unfair to suggest Carnival shares some of the blame.

 

As you can see by this thread, even if the charge is legitimate and sensible based on US law, many don't understand it. And as I said, it's simply my OPINION that Carnival shouldn't pass these rare charges on to guests, but they can certainly do whatever they want. At least in my own experience with my businesses, you don't really "win" when the customer is wrong and it's always better to look long term.

 

And the land based restaurant does not spend millions in costs every week, like the ship does. You have to look at profit, not revenue. Whose profit margin is tighter, the restaurant or the cruise ship.

 

And who is to say that there was any "sloppy baggage handling"? On Victory, you have 2500+ passengers, so figure 3000+ bags. These bags during embarkation are either at the drop off point, at the security screening, or packed 12 high on a baggage cart. How long would it take you to search 3000 bags to find one particular luggage tag? And given that the more people you take away from normal baggage handling to search for this bag, along with having to unstack all the carts to look at tags and then restacking them, will cause delays in not only getting the bags onboard, but also in getting them to the other 2498 passengers, and possibly even delaying sailing. I can tell that you've never been behind the scenes either on the pier or onboard the ship during turn-around, that's for sure. I saw this exact same scenario on a show about RCI's turn-arounds in Miami (or another FL port), and it took several hours to locate one particular bag that had the documents in it. I don't see how Carnival has any of the blame here.

 

What people don't understand is that the fine is not the passenger's, but Carnival's and if they want to be angry at someone, don't blame the PVSA, blame the Carnival ticket contract that they signed giving Carnival the right to pass the charge to them. And since it is in the terms of the ticket contract, allowing one to get away with not paying, would again open it to having Carnival swallow major fines if multiple people did this on each cruise.

 

And frankly, the people in the OP's post got off lucky, in that Carnival was within their rights to simply deny boarding and keep the entire cruise fare because the passengers did not produce the correct documentation, which is also spelled out in the ticket contract. So, paying $300 additional and getting a partial cruise is still better than losing the full fare and getting nothing. And this would be the case even if there wasn't a PVSA violation. If the people wanted to board in Mexico, which would not have engendered the fine, Carnival would still have been within their rights to deny boarding completely.

[BNBR]

And who is to say that there was any "sloppy baggage handling"? On Victory, you have 2500+ passengers, so figure 3000+ bags. These bags during embarkation are either at the drop off point, at the security screening, or packed 12 high on a baggage cart. How long would it take you to search 3000 bags to find one particular luggage tag?

 

I would hope that they would have some idea of which baggage cart goes where on a cruise ship... Pulling an extra person to search for the correct cart/bag is called outstanding customer service. Not going out of your way, sending the guest to Key West, and charging $300 is not outstanding customer service. It's fine, they are obviously allowed to do this, but I don't think it's wrong to suggest failing to locate a bag after it's in their possession then charging a customer $300 and making them drive to Key West is outstanding in any way. They sell vacations, fun ships, experiences. I think they should do a better job of shielding guests in unfortunate circumstances from these costs and headaches as much as possible.

 

There is 2 ways people seem to view situations like this. It's the guests fault, too bad, so sad, I don't care what happens to them and all I care about is MY cruise. And others who view situations like this as an honest mistake - almost tragic, and a great opportunity for a company like Carnival to "wow" the guest with exceptional hospitality. For me, while I understand why Carnival does what it does, I am also not left with a positive impression of a company that does whatever it takes to make sure guests are taken care of. It's all opinion.

[Allofus12345]

....... Sorry but this makes no sense. Get an officer or security person, and retrieve the luggage.

 

Very interesting read and appreciate those that have taken the time to explain the reasonings of the laws/acts. I suspect less than a few percent of cruisers knows this.

 

After reading the quote above I couldn't help but wonder if anyone else had the same vision I had:

 

Porter 1: What was the name on the bag we're looking for?

Porter 2: (looking out at thousands of bags) What difference does it make?

Porter 1: Yea, you're right, what size is the bag we're looking for?

Porter 2: (looking out at thousands of bags) They said it was big.

Porter 1: Hmmmm, okay, what color is the bag?

Porter 2: (looking out at thousands of bags) Dark blue

Porter 1:So we're looking for a big dark blue bag correct?

Porter 2: (looking out at thousands of bags) That sounds about right.

Porter 1: And they want it when?

Porter 2: Before the ship departs in an hour.

Porter 1: BWAAAAHAHAHAHAHAHAHA

Porter 2: OK, I'll tell them we couldn't find it.

[chengkp75]

I would hope that they would have some idea of which baggage cart goes where on a cruise ship... Pulling an extra person to search for the correct cart/bag is called outstanding customer service. Not going out of your way, sending the guest to Key West, and charging $300 is not outstanding customer service. It's fine, they are obviously allowed to do this, but I don't think it's wrong to suggest failing to locate a bag after it's in their possession then charging a customer $300 and making them drive to Key West is outstanding in any way. They sell vacations, fun ships, experiences. I think they should do a better job of shielding guests in unfortunate circumstances from these costs and headaches as much as possible.

 

There is 2 ways people seem to view situations like this. It's the guests fault, too bad, so sad, I don't care what happens to them and all I care about is MY cruise. And others who view situations like this as an honest mistake - almost tragic, and a great opportunity for a company like Carnival to "wow" the guest with exceptional hospitality. For me, while I understand why Carnival does what it does, I am also not left with a positive impression of a company that does whatever it takes to make sure guests are taken care of. It's all opinion.

 

Do you know for a fact that Carnival didn't pull extra people to search for the bag? And if they pull enough people to find it "in a timely fashion" (and I would still challenge you to find one bag in thousands in less than a few hours), if that had inconvenienced the other 2500 passengers, is this still "great customer service"? Do you strive to have one customer made happy over their mistake, or do you have several hundred unhappy due to someone else's mistake?

[BNBR]

Do you know for a fact that Carnival didn't pull extra people to search for the bag? And if they pull enough people to find it "in a timely fashion" (and I would still challenge you to find one bag in thousands in less than a few hours), if that had inconvenienced the other 2500 passengers, is this still "great customer service"? Do you strive to have one customer made happy over their mistake, or do you have several hundred unhappy due to someone else's mistake?

 

I would not suggest delaying the vessel.

 

We don't know what Carnival did or did not do to locate this bag. I still find the idea that they are "searching thousands of bags" a little hard to believe. It could be my ignorance as to how bags are handled, but are they not sorted and organized by deck and sections within the deck? Could they not use the guests deck number, a simple description of the bag, and relatively quickly check bags in that holding section?

[LH25]

And others who view situations like this as an honest mistake - almost tragic, and a great opportunity for a company like Carnival to "wow" the guest with exceptional hospitality. For me, while I understand why Carnival does what it does, I am also not left with a positive impression of a company that does whatever it takes to make sure guests are taken care of. It's all opinion.

 

The problem for me is that I don't believe companies in cases like that just eat the cost. I think they will pass it along to everyone else. Now granted, that's not much money even if they spread it out among just everyone else on the ship, but I don't want to pay more for other people's problems.

[chengkp75]

I would not suggest delaying the vessel.

 

We don't know what Carnival did or did not do to locate this bag. I still find the idea that they are "searching thousands of bags" a little hard to believe. It could be my ignorance as to how bags are handled, but are they not sorted and organized by deck and sections within the deck? Could they not use the guests deck number, a simple description of the bag, and relatively quickly check bags in that holding section?

 

While bags are sorted by deck and, typically, forward, midship, aft, during the initial baggage handling and security screening, once they go on a cart (all to the same deck/section), the carts are loaded on the ship as fast as possible, typically through one side port on the ship (the others are busy loading food and drink), and racked wheel to wheel along I-95, trying to maximize storage while still maintaining clear access for emergencies as I-95 is typically lined by crew quarters. Even on the pier, the carts are racked together tightly so the forklifts can get two at a time. So, you have to pull each cart out, check whether it is the right deck/section, and if it isn't it gets pushed back, or if it is, then it has to be taken to a clear space to allow it to be checked for the correct bag. Some bags are just not visible from the outside of the carts, and you need to unstack them to find all the bags. Then restack that cart, and push it back to its storage location, and on to the next cart. And then, while you're searching the carts on I-95, the crew are taking them, determining which elevator they go to, sending them to the right deck, and then start to distribute them. So, the bag in question could be not in I-95, but in an elevator foyer on the right deck, or be placed at a cabin, yet the decks aren't open to guests yet, so they can't find the bag. Do you make a shipwide announcement for all crew handling luggage on deck so and so to be looking for this bag with this tag number? How much chaos would that cause. And then we come to the misplaced bags, put in the wrong cart either by accident, or because it was the last bag for a zone, there were no more carts, so they put it in with other bags. Ever have an airline lose a bag? Ever have someone pick up your bag by mistake at an airport? Spotting one bag in thousands of possibly identical bags isn't the easiest thing in the world.

 

Even without delaying the vessel, if you delay baggage delivery sufficiently, either the crew delivering the bags don't get to their "normal" work assignment, causing disruption of restaurant/bar service (those who typically handle the luggage), or you get a whole bunch of folks complaining that their bags didn't get to their cabin before them, or in time for them to change for dinner, or whatever.

[BNBR]

The problem for me is that I don't believe companies in cases like that just eat the cost. I think they will pass it along to everyone else. Now granted, that's not much money even if they spread it out among just everyone else on the ship, but I don't want to pay more for other people's problems.

 

That's not a very rational way to view business. You pay more all the time for any and all decisions companies make. No business is 100% efficient. And what if comping this fee results in a net positive to Carnival? The person spends more onboard, comes back and sails Carnival more often, etc. Of course, companies that have happier guests are often able to charge more for their products and services. Maybe it benefits you if more guests are not satisfied and Carnival has to fill their ships with deep discounts.

[bUU]

Pulling an extra person to search for the correct cart/bag is called outstanding customer service.

If that's your expectations for Carnival Cruise Line, what is your expectation for Princess in that situation? What is your expectation for Seabourn in that situation? Do you have similarly grade-differentiation-blind perspectives on other aspects of cruise line service, as well?

 

CCL doesn't have different cruise lines so that they compete against each other. They have different cruise lines to offer different grades of service to the marketplace.

 

It is the supplier's responsibility to deliver what they promised. It is to their benefit to deliver a bit more than that, but not to undersell themselves by failing to charge a price commensurate with the level of service they offer.

 

It is the purchaser's responsibility to expect what they've been promised, or take personal responsibility for their own disappointment. It is also the purchaser's responsibility to fulfill the commitments they've made as part of the agreement. When the fail to do so, they're honor-bound to, again, take personal responsibility for how that adversely affects themselves.

[chengkp75]

The problem for me is that I don't believe companies in cases like that just eat the cost. I think they will pass it along to everyone else. Now granted, that's not much money even if they spread it out among just everyone else on the ship, but I don't want to pay more for other people's problems.

 

Of course you are right. Even if they say they are writing it off as "good will", they will include that cost in their total cost for the year, and adjust the cruise fare for next year to accommodate the "good will" cost. As I said, its all about profit margin. While their margin may take a hit this year, if they write off a few PVSA fines, then next year, and all following years, their margin will actually increase if they don't have to write off as many, or any, fines.

[BNBR]

While bags are sorted by deck and, typically, forward, midship, aft, during the initial baggage handling and security screening, once they go on a cart (all to the same deck/section), the carts are loaded on the ship as fast as possible, typically through one side port on the ship (the others are busy loading food and drink), and racked wheel to wheel along I-95, trying to maximize storage while still maintaining clear access for emergencies as I-95 is typically lined by crew quarters. Even on the pier, the carts are racked together tightly so the forklifts can get two at a time. So, you have to pull each cart out, check whether it is the right deck/section, and if it isn't it gets pushed back, or if it is, then it has to be taken to a clear space to allow it to be checked for the correct bag. Some bags are just not visible from the outside of the carts, and you need to unstack them to find all the bags. Then restack that cart, and push it back to its storage location, and on to the next cart. And then, while you're searching the carts on I-95, the crew are taking them, determining which elevator they go to, sending them to the right deck, and then start to distribute them. So, the bag in question could be not in I-95, but in an elevator foyer on the right deck, or be placed at a cabin, yet the decks aren't open to guests yet, so they can't find the bag. Do you make a shipwide announcement for all crew handling luggage on deck so and so to be looking for this bag with this tag number? How much chaos would that cause. And then we come to the misplaced bags, put in the wrong cart either by accident, or because it was the last bag for a zone, there were no more carts, so they put it in with other bags. Ever have an airline lose a bag? Ever have someone pick up your bag by mistake at an airport? Spotting one bag in thousands of possibly identical bags isn't the easiest thing in the world.

 

Even without delaying the vessel, if you delay baggage delivery sufficiently, either the crew delivering the bags don't get to their "normal" work assignment, causing disruption of restaurant/bar service (those who typically handle the luggage), or you get a whole bunch of folks complaining that their bags didn't get to their cabin before them, or in time for them to change for dinner, or whatever.

 

What I'm reading is that the racks are sorted by deck, then forward/aft/mid. This doesn't seem like it's entirely difficult to locate a bag if you put some effort in to do it. Check the few racks for that section, if not there, check the section itself. While in practice it may be more difficult than it seems, it's one of those things I'd love to see personally out of curiosity but obviously that will never happen! My opinion still remains that guests should be shielded as much as possible from the headaches involved, including fees in a case like this. I'd have shuttled the guests to Key West and got them on board. What an awesome moment for Carnival to win people over for life, build a better reputation, and for what is a very minor cost to Carnival when you consider advertising, media, marketing and social budgets. But again, that's just my opinion (as a person who owns several very successful businesses). It's all good, we all have our own opinions. This started because a question was posed if Carnival should really eat the fee, and my opinion was that they should :)

[BNBR]

Of course you are right. Even if they say they are writing it off as "good will", they will include that cost in their total cost for the year, and adjust the cruise fare for next year to accommodate the "good will" cost. As I said, its all about profit margin. While their margin may take a hit this year, if they write off a few PVSA fines, then next year, and all following years, their margin will actually increase if they don't have to write off as many, or any, fines.

 

That's not how it works. The fares are not adjusted this way. Fares have to do with occupancy and competition. They will charge as much as people are willing to pay. In which case, a few $300 fines could be very profitable. There is a reason why Disney can charge so much more and still fill their ships.

[dd likes to cruise]

Since this question came from a stranger of the fined passengers we still don't know the whole story. We don't know if they checked in at 11:00 am for a 4:00 departure or if they checked it at 2:00 for a 4:00 departure. (Times as for an example). So we don't know if there was many hours available for the bags to show up, or just a few hours or less.

[chengkp75]

That's not how it works. The fares are not adjusted this way. Fares have to do with occupancy and competition. They will charge as much as people are willing to pay. In which case, a few $300 fines could be very profitable. There is a reason why Disney can charge so much more and still fill their ships.

 

So, cost has nothing to do with setting fares? If its just about occupancy and competition, you get the situation that NCL was in back in 2006-2008 when they were losing $174 million a year on the Hawaii operations, because they were setting cabin fares to meet the competition, and keep occupancy up. How each individual cabin sells is indeed set by occupancy (which is driven by competition), but the "book price" is set based on costs, and statistical profit margins, and is only then modified by low occupancy, if needed.

[BNBR]

So, cost has nothing to do with setting fares? If its just about occupancy and competition, you get the situation that NCL was in back in 2006-2008 when they were losing $174 million a year on the Hawaii operations, because they were setting cabin fares to meet the competition, and keep occupancy up. How each individual cabin sells is indeed set by occupancy (which is driven by competition), but the "book price" is set based on costs, and statistical profit margins, and is only then modified by low occupancy, if needed.

 

Again, that's not at all how it works. NCL in Hawaii proves my point, not yours.

[bUU]

So, cost has nothing to do with setting fares?

I have to agree with BNBR there: Only suckers base price on cost, and truly if you have to be thinking about cost when you're setting your price, you probably shouldn't be in business. Every dollar invested always competes with every other way that dollar can be invested, and so if you're down to the point of trying to recoup cost, then there are better places to invest your money. That's not to say that there aren't occasions within a business when you'll make little or no profit (or even take a loss). However, even in those situations, you price based on the customer's perception of value, nothing less. Cost is evident in the financials, though, but it is an after-the-fact measurement of performance, not a basis for setting price.

 

For completeness, it should be noted that regulated utilities obviously do not work this way.