Cruise lines thinking of Fuel Surcharges

[dkjretired]

We had a couple of recent threads on fuel surcharges and now it is being reported that the cruise lines are now considering them.   In the past as soon as one line does them, the others fall in line. Besides below link I found several other reports.

 

https://www.thestreet.com/investing/royal-caribbean-carnival-norwegian-fuel-surcharge-oil

[TeeRick]

1 hour ago, dkjretired said:

We had a couple of recent threads on fuel surcharges and now it is being reported that the cruise lines are now considering them.   In the past as soon as one line does them, the others fall in line. Besides below link I found several other reports.

 

https://www.thestreet.com/investing/royal-caribbean-carnival-norwegian-fuel-surcharge-oil

IMO this is a speculative article by the financial press.  The CFO of RCG in the article said they hedged over half of their fuel costs at below market prices through at least 2022.  

 

Bottom line of the article (last paragraph):

"At the moment, Royal Caribbean, Carnival, and Norwegian have not added a fuel surcharge nor have any of them said they will. Should oil prices remain elevated, however, it's likely that all three will eventually have to pass these costs on to consumers."

 

The question is when?  Maybe by 2023??  And how?  By a surcharge or by just raising cruise per diem prices?

Edited March 10, 2022 by TeeRick

[grandgeezer]

The decision makers job is to make as much money as they can for the company, it’s shareholders, and more importantly themselves, as they get bonuses based on company profitability.  They have a the right to add the fuel charge per the passenger contract. $10 per passenger per day for every ship they have is megabucks and if they don’t do it, like now, they should all be out on the street. If they haven’t scared away people now with the all around pricing in effect now, the measly $10 per day won’t make a difference.

We don’t own any RCL stock but we do have a couple of mutual funds that do so we do have some skin in the game.

[graphicguy]

Here's the trick for the cruise lines. They are starting to come back online.  Prices are still sensitive to diminished demand.  Most, if not all ships are sailing at merely a percentage of stated capacity.  Raising prices, for any reason, would negatively affect that.

 

Plus, if 3-4, or more, cruise lines add surcharges, regardless of reason, they may be considered in price collusion. 

 

Not saying they won't do it.  I am saying it's a sensitive economic burden they may have to bare for the time being.  Wouldn't be a good idea from a business perspective for any cruise company trying to reestablish their customer base.

[cbfb]

2 hours ago, graphicguy said:

Here's the trick for the cruise lines. They are starting to come back online.  Prices are still sensitive to diminished demand.  Most, if not all ships are sailing at merely a percentage of stated capacity.  Raising prices, for any reason, would negatively affect that.

 

Plus, if 3-4, or more, cruise lines add surcharges, regardless of reason, they may be considered in price collusion. 

 

Not saying they won't do it.  I am saying it's a sensitive economic burden they may have to bare for the time being.  Wouldn't be a good idea from a business perspective for any cruise company trying to reestablish their customer base.

I agree especially with CWC program. It’s a difficult decision for the cruise lines. 

[zitsky]

They can't add a surcharge to existing bookings, can they?  Once you book the price should stay the same.

[5waldos]

10 minutes ago, zitsky said:

They can't add a surcharge to existing bookings, can they?  Once you book the price should stay the same.

I think that someplace in the very small print it says that they can. I think I have to go on a search through and will post if I can find it. 

 

From Ticket Contract:

 

20. SUPPLEMENT CHARGES:
Operator reserves the right to impose a supplemental charge relating to unanticipated occurrences including, but notlimited to, increases in the price of fuel. Any such supplement charges may apply, at Operator’s sole discretion, to both existing and new bookings (regardless of whether such bookings have been paid in full). Such supplements are not included in the Cruise or CruiseTour Fare."

Edited March 10, 2022 by 5waldos

[dkjretired]

13 minutes ago, zitsky said:

They can't add a surcharge to existing bookings, can they?  Once you book the price should stay the same.

Yes they can, previously there was an agreement with Florida AG that if they post it in the contract they can impose them on existing bookings. 

[zitsky]

Well I have no problem paying more for filling up my tank.  I decided to go to the gas station.

 

The cruise is a little different.  What stops them from imposing surcharges 10 times for the same cruise?  Or one before I cruise and one after?

[5waldos]

I suppose that nothing stops them from doing this other than a desire to stay in business. I did a search and find nothing that prohibits them from charging whatever they want. But it would be a really really bad business move to do something very out of line with their competition. 

[LadySpoilt]

6 minutes ago, 5waldos said:

But it would be a really really bad business move to do something very out of line with their competition. 

I don't think it would be out of line for very long.  Because once one does it then the others will most likely jump on the bandwagon.

[5waldos]

1 hour ago, LadySpoilt said:

I don't think it would be out of line for very long.  Because once one does it then the others will most likely jump on the bandwagon.

Except many lines include a max charge which means that at least some would be in the $6.50-$10.00 range. Any lines going much beyond that would be noted- on CC if not elsewhere. 

[Baron Barracuda]

Avid cruisers may not be resistant to fuel surcharges but there is a limit to what a casual cruiser will pay, especially with fuel raising the cost of flying or driving to their embarkation port.

[NutsAboutGolf]

I don't see it happening at this time...They're currently offering a 25% off sale, makes far more sense to reduce the offer to a 20% off sale than charge a fuel surcharge because:

1)  Competition, US cruising was shutdown for about a year and half, many went to AI based land vacations since they were open.

2)  Continues to keep guests who haven't returned away, some still won't cruise until all protocols go away or are waiting until they let the unvaxed on, the surcharge may keep them away even longer.

3)  Negative media, charging the fee would immediately put them in a negative light with the media.

4)  Customer Service nightmare, we're already reporting hours long waits, imagine the "blitz" of customers who would call in if they charge the surcharge?

5)  Have to advertise the surcharge, part of the reason they got in trouble in the late 2000s was they're weren't disclosing them when they were advertising; for example "sail this summer, rates as low as $69/night" they'd now need to advertise "plus fuel surcharge".

[baldilocks]

The cruise lines are in a pickle. They do not want to lose passengers due to cost, but the costs are rising. Their fuel costs (along with airlines, truckers and your own vehicle) have gone way up. If people say they won't cruise because of the extra cost...so be it. Don't blame the cruise lines for this. Remember the USA was energy independent two years ago.

[NutsAboutGolf]

5 minutes ago, baldilocks said:

The cruise lines are in a pickle. They do not want to lose passengers due to cost, but the costs are rising. Their fuel costs (along with airlines, truckers and your own vehicle) have gone way up. If people say they won't cruise because of the extra cost...so be it. Don't blame the cruise lines for this. Remember the USA was energy independent two years ago.

 

I do think it would scare many away, not permanently but they'll simply wait it out.

 

X right now is offering a 25% off sale, if for their next sale they offer 20% hardly anyone will notice, if they charge a fee, everyone will notice and many will call in to attempt to get it waived by claiming they booked before the fee (even though they didn't read their contract).  That's just the reality if they decide to charge.

[zitsky]

1 hour ago, NutsAboutGolf said:

 

I do think it would scare many away, not permanently but they'll simply wait it out.

 

X right now is offering a 25% off sale, if for their next sale they offer 20% hardly anyone will notice, if they charge a fee, everyone will notice and many will call in to attempt to get it waived by claiming they booked before the fee (even though they didn't read their contract).  That's just the reality if they decide to charge.

I would pay it but I’d prefer they include it in the base cost of future cruises.  Yes maybe it’s in the contract but it seems deceptive to throw it in after deposits are made.  Yes I studied contract law in grad school so they are within their rights.

 

Would a $10 or $20 charge kill me?  Not when I spend $8000 on a cruise.

[LGW59]

4 hours ago, 5waldos said:

Except many lines include a max charge which means that at least some would be in the $6.50-$10.00 range. Any lines going much beyond that would be noted- on CC if not elsewhere. 

Sure it would be noted but less than 5% of cruisers are on CC, they and non CC aficionados will pay it. 

[LGW59]

1 hour ago, NutsAboutGolf said:

I don't see it happening at this time...They're currently offering a 25% off sale, makes far more sense to reduce the offer to a 20% off sale than charge a fuel surcharge because:

1)  Competition, US cruising was shutdown for about a year and half, many went to AI based land vacations since they were open.

2)  Continues to keep guests who haven't returned away, some still won't cruise until all protocols go away or are waiting until they let the unvaxed on, the surcharge may keep them away even longer.

3)  Negative media, charging the fee would immediately put them in a negative light with the media.

4)  Customer Service nightmare, we're already reporting hours long waits, imagine the "blitz" of customers who would call in if they charge the surcharge?

5)  Have to advertise the surcharge, part of the reason they got in trouble in the late 2000s was they're weren't disclosing them when they were advertising; for example "sail this summer, rates as low as $69/night" they'd now need to advertise "plus fuel surcharge".

IMO nonsense on all you say here.  Say it was a $10/day surcharge, 7 or 10 day cruise, someone already paying 8 grand or so gonna flip out about another 70 or 100 bucks?!?!   And the people who “blitz” customer support over it, need to find a real problem independent of their luxury cruise.

[Arizona Wildcat]

4 hours ago, 5waldos said:

Except many lines include a max charge which means that at least some would be in the $6.50-$10.00 range. Any lines going much beyond that would be noted- on CC if not elsewhere. 

Have cruised with 4 different companies.  They all have similar wording for customers from North America allowing up to $10pp per day with a maximum that varies slightly.

Surcharges were put in place when bunker fuel skyrocketed in 2008-9.

[zitsky]

10 minutes ago, LGW59 said:

IMO nonsense on all you say here.  Say it was a $10/day surcharge, 7 or 10 day cruise, someone already paying 8 grand or so gonna flip out about another 70 or 100 bucks?!?!   And the people who “blitz” customer support over it, need to find a real problem independent of their luxury cruise.

Why stop there?  How about a surcharge for everything?  What should already be in the base fare and what should be a surcharge?

[killsport]

24 minutes ago, LGW59 said:

IMO nonsense on all you say here.  Say it was a $10/day surcharge, 7 or 10 day cruise, someone already paying 8 grand or so gonna flip out about another 70 or 100 bucks?!?!   And the people who “blitz” customer support over it, need to find a real problem independent of their luxury cruise.

Who pays 8 grand for a cruise? I agree those folks don’t care about another 200. But those who pay 1k/pp DO care about a 10-20% increase

[NutsAboutGolf]

28 minutes ago, LGW59 said:

IMO nonsense on all you say here.  Say it was a $10/day surcharge, 7 or 10 day cruise, someone already paying 8 grand or so gonna flip out about another 70 or 100 bucks?!?!   And the people who “blitz” customer support over it, need to find a real problem independent of their luxury cruise.

 

If they're paying $8k, most aren't...Yet I do agree if you're sailing in a suite you probably won't care.  Most cruisers don't cruise solo, they sail with another.

[grandgeezer]

10 hours ago, graphicguy said:

Here's the trick for the cruise lines. They are starting to come back online.  Prices are still sensitive to diminished demand.  Most, if not all ships are sailing at merely a percentage of stated capacity.  Raising prices, for any reason, would negatively affect that.

 

Plus, if 3-4, or more, cruise lines add surcharges, regardless of reason, they may be considered in price collusion. 

 

Not saying they won't do it.  I am saying it's a sensitive economic burden they may have to bare for the time being.  Wouldn't be a good idea from a business perspective for any cruise company trying to reestablish their customer base.

Even though they are running at reduced capacity the pricing I’ve seen are much higher than what we paid pre Covid. Pretty simple, it supply and demand only they control the supply to a certain extent. I don’t think some of the real low percentages of 30% to 40% is what they had in mind.They are billions of dollars in debt and that money has to come from some where. The fuel surcharge would go a long way in getting back in the black.

For future reference, if you would have looked up the meaning of collusion, you wouldn’t have written the second paragraph. The fuel charge is perfectly legal, all kinds of businesses are raising the prices to compensate the rising cost of fuel.

[LGW59]

1 hour ago, killsport said:

Who pays 8 grand for a cruise? I agree those folks don’t care about another 200. But those who pay 1k/pp DO care about a 10-20% increase

We do and we would not book it if it did not meet our likes etc.  2 people for 11 days, AI, not bad in our opinion.  With due respect if a hundred bucks is not going to work, one has options.  I paid $4.75/gallon when I filled the tank this a.m. I could also choose to not drive