Oversold Cruises.

[Pushka]

A poster on our roll call has just posted that they have received an offer which is rather significant, to move from their cruise that starts in Mumbai next week. Given we all have cabin numbers, and I never saw any Guarantee cabins up for sale, the cruise has pretty much been sold out for 12 months, then how does this happen? It's a PH in Australia today so nothing from our Aus office. And then, what happens if no one accepts. 😳

[arlowood]

There was a post on one of the Facebook groups last week reporting that somepone had been contacted by Viking to ask if they were prepared to forego their upcoming cruise (Empires of the Mediterranean) in return for a full refund plus a free future cruise (ocean or river) of up to 14 days. I think there were additional sweeteners but can't recall exactly what they were.

 

The inference was that Viking had oversold the cruise and had not had the expected number of drop-outs/cancellations.

 

I must confess that it puzzles me that they are employing the airline approach of over-selling with the expectation that some will cancel before the actual cruise date. 

[Selion]

2 hours ago, arlowood said:

I must confess that it puzzles me that they are employing the airline approach of over-selling with the expectation that some will cancel before the actual cruise date.

I think most, if not all, cruise lines utilize overbooking to offset cancellations.  In the Princess forum, people were actually hoping for the Move Over Fairies because the offers to move to a different cruise were very generous.  That was years before the pandemic.  Not sure what Princess are doing now and how their move over offers are currently.

 

If I used VIking air, and Viking is giving me a full refund including air and a free cruise, I'll take that move over offer in a heartbeat.

Edited April 25, 2023 by Selion

[longterm]

3 hours ago, arlowood said:

There was a post on one of the Facebook groups last week reporting that somepone had been contacted by Viking to ask if they were prepared to forego their upcoming cruise (Empires of the Mediterranean) in return for a full refund plus a free future cruise (ocean or river) of up to 14 days. I think there were additional sweeteners but can't recall exactly what they were.

 

The inference was that Viking had oversold the cruise and had not had the expected number of drop-outs/cancellations.

 

I must confess that it puzzles me that they are employing the airline approach of over-selling with the expectation that some will cancel before the actual cruise date. 

We took advantage of one of these offers a couple of years ago; we went from a 5-day cruise in a standard DV cabin to a penthouse junior suite, 11-day cruise, and $1500 in cash. A very sweet deal!

[Cienfuegos]

I guess the learning process, post pandemic, is still in the development phase. It used to be a well honed art to reach exactly the right point, with the right revenue mix.  But, with pent up demand, many vouchers still out there, and a fixed number of cabins, the predictability has diminished.

 

 

 

 

[Jim Avery]

I have never understood this business plan with cruises.  Pay in full is 6 months out.  Cancellation nearer than that is very punitive.  If they offer these buyouts at 30 days the cabins are all fully paid for.  Now I learned "old math" but paying someone a full refund then giving them a free cruise seems to be a minus two not even counting any other perks.  At the thirty day mark selling the unsold cabins at even half price is a plus half on already paid for cabins, assuming oversold and a need to offer the minus two.  So, in old math plus 1/2 beats minus two every time.  Overselling just seems to be a real dumb move

[Heidi13]

12 hours ago, Pushka said:

A poster on our roll call has just posted that they have received an offer which is rather significant, to move from their cruise that starts in Mumbai next week. Given we all have cabin numbers, and I never saw any Guarantee cabins up for sale, the cruise has pretty much been sold out for 12 months, then how does this happen? It's a PH in Australia today so nothing from our Aus office. And then, what happens if no one accepts. 😳

 

In addition to the potential for overselling cabins, these issues of late cancellation/offers to rebook can also be caused by cabin(s) being removed from operation for damage and/or maintenance issues.

 

If the issue is beyond the scope of the onboard engineers, they must hire outside contractors and deal with current supply chain and tradesman short supply issues.

[Heidi13]

27 minutes ago, Jim Avery said:

I have never understood this business plan with cruises.  Pay in full is 6 months out.  Cancellation nearer than that is very punitive.  If they offer these buyouts at 30 days the cabins are all fully paid for.  Now I learned "old math" but paying someone a full refund then giving them a free cruise seems to be a minus two not even counting any other perks.  At the thirty day mark selling the unsold cabins at even half price is a plus half on already paid for cabins, assuming oversold and a need to offer the minus two.  So, in old math plus 1/2 beats minus two every time.  Overselling just seems to be a real dumb move

 

Jim - I wish PIF was only 6 months out, our latest experience with the L/A Office was 18 months. Will fill you in with the details when you arrive.

[austinetc]

26 minutes ago, Heidi13 said:

 

Jim - I wish PIF was only 6 months out, our latest experience with the L/A Office was 18 months. Will fill you in with the details when you arrive.

In my experience the trick is to ask for six months out to PIF at the time of booking. I've never had the request refused. 

[Peregrina651]

4 hours ago, austinetc said:

In my experience the trick is to ask for six months out to PIF at the time of booking. I've never had the request refused. 

 

Could it be that every time you have asked, you already had an upcoming cruise booked? I was under the impression that was the requirement for a 6 month PIF (that or booking on board another cruise).

[austinetc]

1 minute ago, Peregrina651 said:

 

Could it be that every time you have asked, you already had an upcoming cruise booked? I was under the impression that was the requirement for a 6 month PIF (that or booking on board another cruise).

You are probably right. I hadn't made the connection. Viking reps never mentioned that as a precondition. They would put me on hold to ask a "supervisor", then come back with "good news". Duplicitous.

[Peregrina651]

2 minutes ago, austinetc said:

You are probably right. I hadn't made the connection. Viking reps never mentioned that as a precondition. They would put me on hold to ask a "supervisor", then come back with "good news". Duplicitous.

 

Perhaps not so much duplicitous as they simply aren't allowed to do it without asking a supervisor? -- which is maybe not a bad system.

[Azulann]

Well my cruise is sold out and none on the roll call have said anything about being offered to rebook. I look forward to a full ship. Last two cruises during COVID  we only had about 300 passengers. 

 I am getting so excited that my cruise is less than two months away!  🎉🥂

[CurlerRob]

9 hours ago, Jim Avery said:

I have never understood this business plan with cruises.  Pay in full is 6 months out.  Cancellation nearer than that is very punitive.  If they offer these buyouts at 30 days the cabins are all fully paid for.  Now I learned "old math" but paying someone a full refund then giving them a free cruise seems to be a minus two not even counting any other perks.  At the thirty day mark selling the unsold cabins at even half price is a plus half on already paid for cabins, assuming oversold and a need to offer the minus two.  So, in old math plus 1/2 beats minus two every time.  Overselling just seems to be a real dumb move

 

Jim, I too come from the "old math" school, but I'm going to quibble with yours a bit, and weigh in on the pros and cons of overbooking (from the sellers' side).

 

First, if two of us have both booked a cabin and paid up at PIF date, but the cruise line only has one cabin available, they are going to have to refund one of us without question. That means they only have one fare guaranteed - refunding the other is not a "minus one" in my view (especially if they have been able to kite the funds for 6 or 12 months). Deciding to offer a subsequent free cruise (plus whatever else) is clearly a "minus one", but a choice the line makes to avoid an irate pax (for whom there is ultimately no cabin.

 

The benefit of overselling is that the cruise line has better odds of filling all cabins at the list price - when someone drops out, there's another of us in line who is contracted at the original price - maximal revenue. The better the line is at predicting the dropout / oversell rate, the fewer potential irate pax they have to try and buy off. Most companies that use this strategy are rich in data about what happens and generally good at placing their bet - sometimes they do get it wrong and out come the "would you like to reschedule" offers. We've all seen the airlines do this at the gate - and may have seen the very painful result when they don't get enough takers!

 

Not overselling means the line will be exposed at PIF time (which for Viking occurs at least twice). There are always going to be multiple dropouts when it's time to pony up - that can leave the line with a sizable percentage of empty cabins to try and fill. Worse, potential pax who were interested would have seen that the cruise was sold out earlier and may never come back for another look post PIF dates, reducing the available market. As well, pax already signed up are unhappy that they can't get the new, great deal.

 

Consider that if 20% of pax dropped out at PIF time, the line has to take action (likely discounts) to fill those slots. Taking a hit on 20% of inventory is a lot more painful that giving away a couple of cabins when you guess poorly on oversells. Had they chosen to overbook by 20%, the equation would balance perfectly and the line would continue happily on with a full ship at the original prices.

 

Overselling is clearly a common business strategy in the transportation and hospitality business (ref. hotels) - rather than being dumb, I've always thought it was the organization's best choice between two tough alternatives.

 

All that said, I shudder at the thought of the cruise lines moving to dynamic pricing such as the airlines have. Just imagine the screaming on all the CC boards! Cheers. 🍺🥌

[oskidunker]

The problem with dynamic prices is there may be other cruise lines with better deals. People that pay last minute airfares usually have to fly on that date. Maybe business.

[CurlerRob]

18 minutes ago, oskidunker said:

The problem with dynamic prices is there may be other cruise lines with better deals. People that pay last minute airfares usually have to fly on that date. Maybe business.

Dynamic pricing is not simply about last minute fares. It is a system of constant changes based on level of bookings and perceived demand. You can find dramatic pricing differences from one day to the next - even many months before the trip.

 

Just see the number of posts on these boards from people who found a great airfare one day, only to see it change dramatically a day later - all way in advance of their cruse. 🍺🥌

[FlyerTalker]

Two words - Yield Management.

 

Lots of interesting reading on the subject.  Suffice to say that airlines, hotels and cruiselines pay some hefty salaries to the gnomes who toil away generating the right algorithms in dark, hidden basements.  Call it a combination of forecasting, game theory and lots of real time mathematics.

 

And yes, it works.  Remember, the goal is not to fill a ship, airplane or hotel.  The goal is to generate the maximum revenue from the available inventories and the vagaries of supply and demand on purchasing decisions.

 

 

 

[CurlerRob]

8 hours ago, FlyerTalker said:

Call it a combination of forecasting, game theory and lots of real time mathematics.

 

An excellent description - but I'd add "voodoo" as well 😈.   🍺🥌

[Cienfuegos]

17 hours ago, FlyerTalker said:

Two words - Yield Management.

 

Lots of interesting reading on the subject.  Suffice to say that airlines, hotels and cruiselines pay some hefty salaries to the gnomes who toil away generating the right algorithms in dark, hidden basements.  Call it a combination of forecasting, game theory and lots of real time mathematics.

 

And yes, it works.  Remember, the goal is not to fill a ship, airplane or hotel.  The goal is to generate the maximum revenue from the available inventories and the vagaries of supply and demand on purchasing decisions.

 

 

 

 

Yes.  There's also the matter of artificial intelligence and the various algorithms. I expect that Viking knows a great deal about us, even before they pick up the phone, etc.  Our history with them, plus purchased info about our cruising habits, financial situation, etc.

 

Viking displays ads on various Youtube programs on a TV which is logged into the same email address I use for Viking.  I see several each night.  But I haven't seen a single Viking ad on a large screen TV which is logged into a different email address. I don't think that's an accident.

[deec]

we are retired and usually quite flexible....I hope they oversell one of our cruises and contact us!

[bookbabe]

19 hours ago, deec said:

we are retired and usually quite flexible....I hope they oversell one of our cruises and contact us!

Us too.  I’d jump on that offer in a heartbeat.

[oskidunker]

If you buy your own air and it is non refundable would be difficult. 

[Up4Trvl]

When we booked our cruise with Viking, we were not able to get a cabin assigned but Viking ‘guaranteed’ that we would get a cabin on that cruise.  We got our cabin number about a week before the cruise.  Once aboard, we found that many people we talked to were offered a variety of sweet deals to give up their cabin for that cruise.  The best offer we heard was for a full refund and a free upgrade to a suite for the rebooked cruise.  The best deals seem to be a day or two before embarkation. 

[FlyerTalker]

On 4/28/2023 at 7:26 AM, oskidunker said:

If you buy your own air and it is non refundable would be difficult. 

 

Unless you are buying "basic economy" tickets, you aren't in a full non-refundable situation.  You probably would receive a flight credit for your purchase price - and then you can use that for a new and different trip.

 

Back in the days of hefty change fees, that might have been the case.  Rarely today.

 

 

[oskidunker]

Thanks. I would be booking business.