Carnival CEO plans to raise prices: "we are way too much of a value"

[havanadaydreaming]

I dont disagree that cruises have been on sale during the pandemic but ya kinda gotta sorta bribe me to be in an enclosed interior area for an extended period of time.  Especially with a few thousand strangers with possibly questionable sanitary standards.  (On a ship now, i know what i sayeth)

 

Next month we are going to Vegas.  5 nt comped, no resort fees. $150 resort credit.  $100 freeplay.  $150 pp direct flight. 

 

Sure im not going to a beach or island(s).  Wont have free food or entertainment. It will be chilly. But....room and shower will be top notch, which is nice. Land ho!!! 

[Pellaz]

19 hours ago, mz-s said:

 

The problem with this is they have strong competition that may not have to cut as much. For just a few things - there is no bacon crisis on RCL and you still get twice-daily room service despite paying the same (or similar) daily gratuity. RCL's prices really aren't much higher than CCL, in fact they're pretty much the same most of the time.

Well, twice-daily room service FOR NOW.  

RCCL will likely change that to once-a-day service.  Predictably, the outrage on the RCCL board has been...entertaining. 

 

18 hours ago, firefly333 said:

Rcl is following carnival and I think January they will cut to once a day housekeeping. Early or late, same like carnival, except they havent made the same cuts in food carnival has. It's also trial basis.

Royal has debuted a much-reduced "trial" menu in one of their ship's MDRs.   It will be interesting to see how they modify it -- assuming they do -- before deploying it fleetwide.  

 

[1kaper]

7 hours ago, mowogo said:

 

MSC is making a big run at the price sensitive traveler.  Why take a casino discount 3 day to Princess Cays on the Conquest when I can get a regular rate to Ocean Cay for the same price with drinks and internet included where the old ship is only 10 years old and doesn't look it. 

 

 

I literally made that choice in May. Going for a 4 night cruise with a girlfriend. I had a casino rate and we stopped at similar islands. Including HMC in Carnival and OC for MSC. 
 

Adding on Cheers which was a must for my friend and the MSC was the better option price wise even with my casino rate. Especially considering we’d have to buy drinks on HMC. 

[mowogo]

40 minutes ago, 1kaper said:

 

I literally made that choice in May. Going for a 4 night cruise with a girlfriend. I had a casino rate and we stopped at similar islands. Including HMC in Carnival and OC for MSC. 
 

Adding on Cheers which was a must for my friend and the MSC was the better option price wise even with my casino rate. Especially considering we’d have to buy drinks on HMC. 

I went through a similar evaluation, and with Carnival casino pricing I had no problems passing on a 4 day Radiance for $250 for a 7 day Meraviglia for $530 with the MSC rate including drinks and wifi.  And you bring up another aspect that makes MSC attractive, they actually let you use your drink package on the island so there is more justification if you have to pay the regular drink package prices.

[DirtyDawg]

17 hours ago, cruisingguy007 said:

 

Recession! Recession! Recession! Reminds me of Marsha! Marsha! Marsha! LOL. Some of these folks are wishing/hoping on a star for it. Makes you wonder what positions they have and if their tune will change come December 30th when tax-loss harvesting is over and December 31st when all the washes have been washed out. It will be interesting to see if the same rhetoric is around come Jan 2nd and Jan 30th. 

 

In the meantime, Disneyland/Disnyworld is packed, airports are full, buying a new car is still a challenge and high end cars are selling out before even being built, they can't build houses fast enough, Apple still selling more status phones than ever, people still taking expensive vacations, etc etc etc. All these doom and gloom predictions, yet the beat goes on!       

But Marsha, Marsha, Marsha was always a lot prettier than any Recession, Recession, Recession I ever met. 😉

 

The consumer is still flush with cash from the pandemic and is still in a spending mode. I wonder how much higher the FED will need to raise rates to finally push the economy into a soft landing or  tip it into a recession. I can understand completely why Carnival wants to increase cruise fares. They might as well strike while the iron's hot as they say. 

 

As an aside, we've been looking at buying a country home for the last few months. Mortgage rates have about doubled up there in the north and prices should be declining as a result. They have, but only about 10% from their peak earlier this year where we are looking. Hopefully for us prices will continue to decline as the higher mortgage rates take hold. 🙏 

 

One of my favorite lines from any movie ever was from Lieutenant Colonel Bill Kilgore in Apocalypse Now when he said;  "I like the smell of napalm in the morning. It smells like... victory." The FED and the Bank of Canada haven't really deployed the napalm ... yet. 

 

 

Edited December 17, 2022 by DirtyDawg

[Joebucks]

10 hours ago, PrincessArlena'sDad said:

Covid has really made the have's and have-nots divide a lot greater. Yes, the top 15%ers or so can still afford vacations, and that's enough to fill Disney, luxury cars, and luxury homes. They've done great since Covid. 

 

But, for many: loss of income, higher prices, etc.  These are the people who will be skipping a hoped for vacation.  And, these are the people Carnival needs to fill many of their ships (especially those that market to local areas).  For example: the Horizon vs. Glory cruises in my post above.  Horizon is priced towards the upper income families, and it's pretty full. Glory is priced towards the working class, and they can't sell cabins.

 

One of the biggest farces out there is "people lost income from COVID". Now don't get me wrong, a lot of small businesses got hit very hard. However, it seems to be a protective blanket for those who previously made poor financial decisions to continue to make those poor decisions. Yes, costs also did rise. People were using these excuses before the inflation. The inflation was also triggered by entry-level wages skyrocketing.

 

I've traveled nearly 10 times since the pandemic started. Looking around and saying people can't afford it from the pandemic has been laughable. Have you been anywhere lately?

 

8 hours ago, havanadaydreaming said:

I dont disagree that cruises have been on sale during the pandemic but ya kinda gotta sorta bribe me to be in an enclosed interior area for an extended period of time.  Especially with a few thousand strangers with possibly questionable sanitary standards.  (On a ship now, i know what i sayeth)

 

Next month we are going to Vegas.  5 nt comped, no resort fees. $150 resort credit.  $100 freeplay.  $150 pp direct flight. 

 

Sure im not going to a beach or island(s).  Wont have free food or entertainment. It will be chilly. But....room and shower will be top notch, which is nice. Land ho!!! 

 

Very smart. Avoid the thousands of people in a cruise ship instead, hang out with the thousands of people in a casino, mall, or restaurant. The cruise ship has poop and COVID everywhere while all of Vegas is sterilized. 

[Homosassa]

9 hours ago, mowogo said:

MSC is making a big run at the price sensitive traveler.  Why take a casino discount 3 day to Princess Cays on the Conquest when I can get a regular rate to Ocean Cay for the same price with drinks and internet included where the old ship is only 10 years old and doesn't look it. 

 

And thanks to the generous status match program that MSC offers I was able to get up to Diamond so I have the free thermal pass, free steakhouse dinner, and all the general elite benefits just adds to the value that MSC offers to a savvy traveler.  Although right now the competition is just Miami, Canaveral, and NYC there are already reports of MSC offering to build a new terminal in Galveston.  

 

MSC has many issues, but they have already grown to be a large player in Europe and are launching new ships comparable to the new ships of RCL, NCL, and CCL and are making a commitment to the US market.  With Carnival having the market of new cruisers who are more likely to be price sensitive over all else, the low fares of MSC make it harder to raise fares on 20 year old ships.

MSC is already changing their operations due to problems with the cliental  that their lower prices have been attracting.

 

Drink packages are no longer available on short cruises (three-four days) and may or not be available on any cruise itinerary date based upon the projected passenger composition.

 

The former no frills Bella category is now strictly a guarantee cabin rate.

 

Status matches are no longer as generous in matching with a higher MSC status.

 

As restrictions on traveling lift around the world, MSC will once again be able to fill their ships (including US sailings) with the international passenger mix that are are travel sophisticated and cosmopolitan.

 

IMO, MSC will soon the raising cruise fares to act as a gatekeeper of  passenger demographics and a return to  attracting the marketing demographic which has been their strong niche over the years.

[BlerkOne]

13 hours ago, mowogo said:

MSC is making a big run at the price sensitive traveler.  Why take a casino discount 3 day to Princess Cays on the Conquest when I can get a regular rate to Ocean Cay for the same price with drinks and internet included where the old ship is only 10 years old and doesn't look it. 

 

 

The MSC USA business model is to poach customers from other cruise lines losing money in the process. As a privately held company, they don't have to deal with annoying shareholders. Enjoy it while you can - it isn't sustainable, and they have already cutback on promised perks.

 

MSC in Europe is a different animal.

[cjknox]

Josh Weinstein is the CEO of Carnival Corporation (Christine Duffy's boss). I'm assuming that he's referring to a price increase across the board. In other words, price increases will be across all brands.

[DallasGuy75219]

1 hour ago, cjknox said:

Josh Weinstein is the CEO of Carnival Corporation (Christine Duffy's boss). I'm assuming that he's referring to a price increase across the board. In other words, price increases will be across all brands.

It seems multiple Carnival Corp brands are in this position. Costa must be even worse off to be sending ships to CCL, which already has a problem with overcapacity driving down prices.  During the shutdown CCL capacity went down with the 6 Fantasy class retired but is coming back quickly to even higher levels than pre-COVID with Celebration then Jubilee coming online plus the Costa ships.  It's hard to raise prices in a market that's flooded with overcapacity, particularly your own.

[Itried4498]

Carnival is the value leader. When it is able to raise prices, the rest of the industry will follow.  We aren’t going to live in a world where Royal, Norwegian, MSC, etc. are consistently cheaper (at least in this generation). 

[BlerkOne]

21 minutes ago, Itried4498 said:

Carnival is the value leader. When it is able to raise prices, the rest of the industry will follow.  We aren’t going to live in a world where Royal, Norwegian, MSC, etc. are consistently cheaper (at least in this generation). 

Perhaps it is Carnival following? Anyway, all of the cruise lines are trying to raise prices and are certainly cutting back on what you receive.

[sfaaa]

Yes, it's all the cruise lines (airlines too). My two bookings with MSC also went up since I booked. No one is holding back on price increase. 

[tidecat]

23 hours ago, PrincessArlena'sDad said:

For our two cruises this coming summer (first cones since covid):

Horizon cruise is a replacement of our cancelled 2020 cruise. We had purchased the discounted allstate gift cards, and had just about enough to pay for the cruise when Covid hit.  We've been sitting on the cards ever since (but, can't complain too much, the 11% return we get on the gift cards is better than anything I would have gotten with the money sitting in the bank).  Cruise fares for the two cruises are actually within $150. 

2020 cruise: 9 days on Radiance, a balcony and an interior

2023 cruise: 8 days on Horizon, family harbor suite for all of us. ($5800)

 

But, for our Glory cruise (7 days), that is dirt cheap.

1267/oceanview cabin.  

 

And, yet, the Horizon is filled, and the Glory seems like it'll be a ghost town

 

My point? They could have easily charged $100/person more on the Horizon, and made $300,000 more on cruise fare.  Probably double that, and still sail mostly full.

 

But, the Glory cruise. Well, if they can't sell it at that price, then they need to rethink their market for it.

 

 

Summer cruising out of primarily fly-in ports like Canaveral and Miami will sell tickets farther in advance, as families with children are heavily boxed in on when they can sail.

 

All sailings for Glory are sold out up until January 22. That sailing only has one category left, and the next one has sold out all interior cabins. I'd expect those to sell out early next month, especially with no ship in Mobile right now. For that matter, they might sell out next week when most of the Midwest and South experiences bitter cold temperatures. Fares for both sailings look healthy (around $100/pp/day for Ocean View), although the Suite fares look a bit optimistic at over $400/person/day. The only sailing where fares seemed weak was the August 27 sailing, but that is after school starts in most of the country.

 

Even the Valor, which has plenty of inventory for late January, is still sold out through the January 14 sailing.

[LatinaInTexas]

23 hours ago, havanadaydreaming said:

I dont disagree that cruises have been on sale during the pandemic but ya kinda gotta sorta bribe me to be in an enclosed interior area for an extended period of time.  Especially with a few thousand strangers with possibly questionable sanitary standards.  (On a ship now, i know what i sayeth)

 

Next month we are going to Vegas.  5 nt comped, no resort fees. $150 resort credit.  $100 freeplay.  $150 pp direct flight. 

 

Sure im not going to a beach or island(s).  Wont have free food or entertainment. It will be chilly. But....room and shower will be top notch, which is nice. Land ho!!! 

I now walk the fine line of balancing cruising and Vegas trips so as not to lose my similar, generous Vegas comps. For some reason I don't enjoy the casinos on the ship so don't get much bang for my buck there. Six day countdown until I will be at my second favorite property Mandalay Bay and hoping to get upgraded to my favorite property Delano lol.

[Joebucks]

The price increases are kind of even a silly topic. Literally, everything has raised in price, and significantly. While these cruises stayed very cheap. I paid significantly more to go to Florida and Vegas this year than I did previously. The difference is there was no "announcement" like there is here. I'd equate this to fear of fees. People generally accept fares are what they are. Anytime you introduce some type of measurable "increase," well they lose their minds. If it was all there in the first place, no harm, no foul.

[At Sea At Peace]

19 hours ago, BlerkOne said:

The MSC USA business model is to poach customers from other cruise lines losing money in the process. As a privately held company, they don't have to deal with annoying shareholders. Enjoy it while you can - it isn't sustainable, and they have already cutback on promised perks.

 

MSC in Europe is a different animal.

 

Yes, they are private. 

 

Yes, they have been poaching customers from other line primarily in US ports and markets and yes they were using pricing to accomplish such. We were lured away (and loved it) from the Haven and Royal/Celebrity Suites to MSC Yacht Club on all US port-based ships for years before 'the word got out' and they started to raise their prices (and at almost 60% less than the offers we are looking at for early next year). 

 

If need be, their approach is quite sustainable also.  It's nice to have a rich parent that is a behemoth in an industry that is nondiscretionary.

 

https://www.freightwaves.com/news/how-container-shippings-historic-boom-funded-a-2b-cruise-bailout

 

How container shipping’s historic boom funded a $2B cruise bailout

MSC’s shipping windfall allowed for lifeline to its cruise business

Greg Miller

·Friday, March 11, 2022

[zstell]

We have been sailing with CCL since 2000 and have booked 50+ cruises with them. We have tried a few other lines, and since we are getting older some of them appeal to us more and more. The price for Carnival, especially if we're bringing the grandkid, often determines the decision. But, if it's just the 2 of us, we prefer the other lines. It's a 100% better experience.  If CCL raises their rates too much, they won't be able to compete with the other lines that are simply better, in my opinion.

[Homosassa]

1 hour ago, At Sea At Peace said:

 

Yes, they are private. 

 

Yes, they have been poaching customers from other line primarily in US ports and markets and yes they were using pricing to accomplish such. We were lured away (and loved it) from the Haven and Royal/Celebrity Suites to MSC Yacht Club on all US port-based ships for years before 'the word got out' and they started to raise their prices (and at almost 60% less than the offers we are looking at for early next year). 

 

The "poaching" was part of the market strategy when MSC was expanding into the US markets.

 

On a MSC cruise before covid, we were in a conversation with a ship's officer who was walking around  the buffet at lunch and asking passengers how the cruise was going and were there any questions.

 

We commented we were repeat MSC cruisers and were enjoying the cruise. He asked what lines we cruised on other than MSC, and we told at that point, we cruised HAL, Princess, Celebrity, Viking, and Oceania. After experiencing Carnival (never again), the down marketing of Royal Caribbean, and the joke of NCL "Freestyle" cruising, we no longer cruised those lines .

 

We than asked why the emphasis in the US marketing seemed to be to pull from the big three bottom tier lines.  He told us that when MSC was developing the strategy for expanding into the US, the marketing people felt that people on the higher tier lines were happy with those lines and would not be as likely to try MSC.  The thrust of gaining a passenger base in the US was to offer cruises at a low competitive price to Carnival, Royal Caribbean and NCL and attract their passengers who may have become dissatisfied with cruise experience on those lines and, I quote, "Be looking to move up" to the cruise  experience of HAL, Princess, and Celebrity.

 

Essentially, the MSC cruise fares in the US have been subsidize by the company to build a passenger base.

 

Covid travel restrictions did mess up MSC cruising.

 

I am happy to see that MSC is now back on track and taking steps to once again offer the pre covid onboard cruise experience.  The deletion of the drink packages for shorter cruise itineraries  (3-4 day) and the decision that the type of drink package for any MSC cruise and itinerary  can vary for any cruise date and itinerary will help weed out the booze cruise crowd.

 

I have also recently read a review of someone off a MSC cruise who discovered, as has been standard on MSC cruises,  that alcohol availability can also be limited by the number of bars open at any time , the hours of operation, and the somewhat light pours. 

 

The reviewer did not mention if the restriction on carrying an alcoholic beverage into the MDR is still in place (can be ordered once at the table, however, by design , the bar service is slow and infrequent). Wine is easily available.

 

At some point, the MSC US fares will rise when the fares are no longer subsidized by MSC and will end the cruising of those that think MSC is another party booze cruise.

Edited December 18, 2022 by Homosassa

[DallasGuy75219]

One thing I've been meaning to post is that value is determined in the eyes of the consumer market.  If Carnival wants to raise prices they can take capacity out of the market (retire ships) or create a product people are willing to pay more for (reversing some of the recent cuts would be a good starting point).

 

But speeches to Wall Street, like this one that they're going raise prices because their product is too much of a value, are useless without some action to back them up.  And Carnival's continued cuts, which seem to be getting more drastically because they're running out of things to cut, are only decreasing value and the prices consumers are willing to pay, especially with competitors like MSC who are willing to use loss leader pricing to take market share. 

[BlerkOne]

4 hours ago, At Sea At Peace said:

 

If need be, their approach is quite sustainable also.  It's nice to have a rich parent that is a behemoth in an industry that is nondiscretionary.

 

 

MSC failed at their last attempt to enter the US market. Time will tell.

[Joebucks]

4 hours ago, At Sea At Peace said:

If need be, their approach is quite sustainable also.  It's nice to have a rich parent that is a behemoth in an industry that is nondiscretionary.

 

The rich parent isn't here to finance MSC's USA cruise business in perpetuity. That money is used as a marketing fund to establish a foothold in the USA market. If it doesn't pan out long-term, they absolutely will re-evaluate that business, regardless of what the shipping business earns.

[RD64]

2 hours ago, BlerkOne said:

MSC failed at their last attempt to enter the US market. Time will tell.

When was their last attempt? They started slowly -  very slowly with the Melody from Florida around 2002/2003. From the Melody they went to the Opera in 2004/2005. They have managed to maintain a presence in the US market ever since. 
 

Never underestimate the underdog. MSC has basically obliterated Costa in both Europe and South America where Costa was the market leader for decades.

Edited December 18, 2022 by RD64

[jsglow]

6 minutes ago, RD64 said:

 

Never underestimate the underdog. MSC has basically obliterated Costa in both Europe and South America where Costa was the market leader for decades.

And I'd argue that Costa looks more and more like a Carnival ship inventory mothball yard every day.

[BlerkOne]

14 minutes ago, RD64 said:

When was their last attempt? They started slowly -  very slowly with the Melody from Florida around 2002/2003. From the Melody they went to the Opera in 2004/2005. They have managed to maintain a presence in the US market ever since. 
 

Never underestimate the underdog. MSC has basically obliterated Costa in both Europe and South America where Costa was the market leader for decades.

Check again. MSC is once again gaining a reputation for the worst food at sea.