Standby for Higher Cruise Prices

[CNSJ]

In the first few seasons following COVID-19, the cruise industry worked hard to get people back on ship.  There were those afraid to sail without masks and those who didn't want to wear one.  Somehow we made it through, but the cruise lines kept losing money as we found our way back aboard.  Now people want to cruise again!  The cruise lines all have big debt loads and need to generate cash.  Bottom line:  HAL needs to make money to pay its debt and return a dividend to its shareholders. 

 

Right now Carnival Corp is boasting very full ships for 2023 and very strong demand in 2024.  Demand is up, supply is pretty much steady (less Carnival recycling Costa ships and the crazy MSC buildout) so the simple facts is prices go up.  Throw in inflation and other things impacting operating costs....and we will see higher prices.  If they reduce the number of ships (get rid of less efficient money makers) - prices have to go up as there is less supply of cabin days. 

 

I would be curious to see the revenue models for the CCL Cruise line family.  Carnival ships may charge less (than HAL) per passenger day at sea for a comparable cabin (Oceanview to Oceanview / Balcony to Balcony) but they likely have a higher number of average passengers per cabin, and my guess is the non fare revenue (booze/speciality/spa etc.) is higher than on HAL.  The most basic formula is revenue minus the cost of goods & services = profit.  I imagine that HAL non-fare revenue per adult passenger per day is 50% lower than Carnival fleet wide.  Throw in more people and the non-fare revenue per square foot of cabin might be in the 65% lower range.  

 

HAL needs to earn a profit.  It's a business, and the forecast is up for the cruise industry.  Prices will rise on everything.  

 

Standby for Higher Cruise Prices.  Deals will be fewer and farther than between.  Cruise less or spend more.  Maybe a bit of both. 

 

 

[OlsSalt]

What do you think would make HAL immune to the predictable market forces unleashed post-"Covid"?

 

This was a huge global dislocation, and reverberates in ways both big and small everywhere even today. May we  look forward with better modeling the next time the world demands we drive into a cul-de-sac with our eyes closed, 

[Destiny0315]

17 minutes ago, CNSJ said:

In the first few seasons following COVID-19, the cruise industry worked hard to get people back on ship.  There were those afraid to sail without masks and those who didn't want to wear one.  Somehow we made it through, but the cruise lines kept losing money as we found our way back aboard.  Now people want to cruise again!  The cruise lines all have big debt loads and need to generate cash.  Bottom line:  HAL needs to make money to pay its debt and return a dividend to its shareholders. 

 

Right now Carnival Corp is boasting very full ships for 2023 and very strong demand in 2024.  Demand is up, supply is pretty much steady (less Carnival recycling Costa ships and the crazy MSC buildout) so the simple facts is prices go up.  Throw in inflation and other things impacting operating costs....and we will see higher prices.  If they reduce the number of ships (get rid of less efficient money makers) - prices have to go up as there is less supply of cabin days. 

 

I would be curious to see the revenue models for the CCL Cruise line family.  Carnival ships may charge less (than HAL) per passenger day at sea for a comparable cabin (Oceanview to Oceanview / Balcony to Balcony) but they likely have a higher number of average passengers per cabin, and my guess is the non fare revenue (booze/speciality/spa etc.) is higher than on HAL.  The most basic formula is revenue minus the cost of goods & services = profit.  I imagine that HAL non-fare revenue per adult passenger per day is 50% lower than Carnival fleet wide.  Throw in more people and the non-fare revenue per square foot of cabin might be in the 65% lower range.  

 

HAL needs to earn a profit.  It's a business, and the forecast is up for the cruise industry.  Prices will rise on everything.  

 

Standby for Higher Cruise Prices.  Deals will be fewer and farther than between.  Cruise less or spend more.  Maybe a bit of both. 

 

 

😉

Edited July 29, 2023 by Destiny0315

[YourWorldWithBill]

1 hour ago, Destiny0315 said:

😉

That's pretty much the way my cat sleeps, without the sunglasses.

[HappyInVan]

5 hours ago, CNSJ said:

Standby for Higher Cruise Prices.  Deals will be fewer and farther than between.  Cruise less or spend more.  Maybe a bit of both. 

 

 

 

I am not sure if HAL can attain higher cruise prices. In two weeks, I am embarking on a cruise that is discounted 40%. Last minute deal 5 weeks before departure. No doubt that HAL hopes for higher prices in 2025.

 

I do expect the price of many services and products to rise. For example, the Pinnacle Grill is still a steal. 

 

Should HAL cruise fare rise significantly, that tips the balance for me towards the premium ships like Ponant (100 staterooms per ship) and MSC Yacht Club (Let them eat cake).

 

The problem for HAL is that the CCL CEO wants full ships. So, HAL has to sell everything they have. Don not expect any price support strategy.

[crystalspin]

5 hours ago, YourWorldWithBill said:

That's pretty much the way my cat sleeps, without the sunglasses.

You are heartless Bill! Get your cat sunglasses!!!

 

What was the point of this thread? Prices are always what the market will stand. Bargains such as they are, will continue to be early after launching, or late if you can drop and go.

[ski ww]

For the people that want to cruise they will pay what ever in order to get on a cruise ship. Maybe get a cheaper cabin, a shorter cruise.

[CNSJ]

6 hours ago, HappyInVan said:

 

I am not sure if HAL can attain higher cruise prices. In two weeks, I am embarking on a cruise that is discounted 40%. Last minute deal 5 weeks before departure. No doubt that HAL hopes for higher prices in 2025.

 

I do expect the price of many services and products to rise. For example, the Pinnacle Grill is still a steal. 

 

Should HAL cruise fare rise significantly, that tips the balance for me towards the premium ships like Ponant (100 staterooms per ship) and MSC Yacht Club (Let them eat cake).

 

The problem for HAL is that the CCL CEO wants full ships. So, HAL has to sell everything they have. Don not expect any price support strategy.

I have poked around on some of the discounts in the weeks prior to crusing. It seems there are very few cabins to select from , so perhaps they are just filling up the remaining few or late cancellations (HAL would love to sell you insurance, keep 10% plus insurance costs, then resell the same cabin). 

 

MSC Yacht club looks ok from a distance, but you are still on a mega ship as far as ports and congestion ashore.  Plus all the cabins seem to be high up in the bow.  Much prefer amidships on deck 6 or so.  

 

I too am looking at Oceania and Seabourn.  But, cost always seems to be much higher.

 

[mcrcruiser]

Cruise lines always keep in mind   the all inclusive land packages .At some point prices may out strip the  demand .Thus ,the cruise lines can not keep aimlessly raise prices .They must know their market & how much they can raise prices with out loosing volume.

 

 If cruising costs too much then the reverse can happen ,Realistically , these are more Americans living pay check to pay check these days because of  16 % past inflation .Salaries in general have not kept up . so that means cruise lines have to take all these facts into consideration when pricing their products  

 

 

 

 

[Gail & Marty sailing away]

What has not gone up in price? Even the dollar store. Is know $ 1.25 

[mcrcruiser]

16 minutes ago, Gail & Marty sailing away said:

What has not gone up in price? Even the dollar store. Is know $ 1.25 

Yes & that is a  25%  hike .No way will wages keep up & the American public knows this for sure . so there is also the price pressure from  any wage increases  .All out savings is getting hit hard for future buying power . Older people forced back into the work force ,if they can find work  ,Sad what has happened in our country

[mcrcruiser]

6 hours ago, ski ww said:

For the people that want to cruise they will pay what ever in order to get on a cruise ship. Maybe get a cheaper cabin, a shorter cruise.

Yes that is definitely probable

[mcrcruiser]

We booked out to Jan 2025 on todays dollars because we do not know  what the prices will be iin 2024 for any thing .  when retired can't take too much risk  either  to add cash . Yes there is always hope for the future . Yet cruising is  a  luxury  we all have & hope to enjoy in the future

[Roz]

Thank you for the uplifting news. 🙄

[OlsSalt]

WSJ "Off Duty" today highlights taking a cruise:

7-day  HALAlaska - $329

7-day Celebrity Mediterranean - $1,099

6-day Virgin Caribbean - $1,820

7-day AquaBlu - Indonesia - $8,960

4- day MSC - Bahamas - $239

 

Leading the value cruise world yet again, Holland America

[Mary229]

4 minutes ago, OlsSalt said:

WSJ "Off Duty" today highlights taking a cruise:

7-day  HALAlaska - $329

7-day Celebrity Mediterranean - $1,099

6-day Virgin Caribbean - $1,820

7-day AquaBlu - Indonesia - $8,960

4- day MSC - Bahamas - $239

 

Leading the value cruise world yet again, Holland America

I think Princess and HAL bet too big on Alaska.  I imagine that will have to reverse and those ships be deployed elsewhere in 2025 and forward. This was in reaction to people not wanting to travel far post Covid. 

[YourWorldWithBill]

9 hours ago, crystalspin said:

You are heartless Bill! Get your cat sunglasses!!!

 

I told him if he wants sunglasses, he has to get a job. I think he could sing in a boy band.

[POA1]

2 hours ago, Mary229 said:

I think Princess and HAL bet too big on Alaska.  I imagine that will have to reverse and those ships be deployed elsewhere in 2025 and forward. This was in reaction to people not wanting to travel far post Covid. 

I will take that bet. HAL has been in Alaska for more than 75 years. It's a truly spectacular place to cruise.

 

Where would you send your ships during the summer season?

[kazu]

2 minutes ago, POA1 said:

I will take that bet. HAL has been in Alaska for more than 75 years. It's a truly spectacular place to cruise.

 

Where would you send your ships during the summer season?

 

Some of them do Europe.  Med is as hot as Hades but Northern Europe (like Norway) is quite popular.  The Norwegian Fjords are truly wonderful.

I rarely travel in summer - they are too short here - but the one time we made the exception for was to the Baltics and St Petersburg.   

[Mary229]

8 minutes ago, POA1 said:

I will take that bet. HAL has been in Alaska for more than 75 years. It's a truly spectacular place to cruise.

 

Where would you send your ships during the summer season?

I simply think they went in big at the same time all other competitors showed up too.   I am not stating they will abandon Alaska, I simply speculated they went in bigger than normal and now they are discounting cruises.  There are plenty of summer locations throughout Canada and the other northern climes.  The pacific is not the only ocean😉

[POA1]

1 minute ago, kazu said:

 

Some of them do Europe.  Med is as hot as Hades but Northern Europe (like Norway) is quite popular.  The Norwegian Fjords are truly wonderful.

I rarely travel in summer - they are too short here - but the one time we made the exception for was to the Baltics and St Petersburg.   

True, but HAL already has a bunch of ships in Europe.

 

BTW - I'm very excited for you and "summer." Summer was the best 5 days of the year in Maine. We would change the oil in the snow blower and be free to frolic for the next 72-48 hours.

[Destiny0315]

21 minutes ago, POA1 said:

Where would you send your ships during the summer season?

Bring a third ship up to Boston for the summer and run a few 10-14 day r/t itineraries to the Caribbean which is currently a totally untapped market from here. Gear it towards the adult market and maybe even develop a 14 day r/t cruise to the Azores. 

[Mary229]

6 minutes ago, Destiny0315 said:

Bring a third ship up to Boston for the summer and run a few 10-14 day r/t itineraries to the Caribbean which is currently a totally untapped market from here. Gear it towards the adult market and maybe even develop a 14 day r/t cruise to the Azores. 

I agree with more trips out of Boston and unexplored territory particularly north and perhaps down to the mid-Atlantic .  HAL has had a long standing policy of not cruising the Caribbean during hurricane season.  I personally would not book a Caribbean cruise during the season. 

[Destiny0315]

11 minutes ago, Mary229 said:

 HAL has had a long standing policy of not cruising the Caribbean during hurricane season.

I'm talking June, July, and August, maybe early Sept. Right now anybody in New England and the Maritime provinces has to travel at a minimum to NYC/NJ or Baltimore to jump on a ship to the Caribbean. The new cruises being offered by HAL for next Oct/Nov '24 from Boston to the Caribbean/Panama Canal are at least an indication of some new thinking.

Edited July 29, 2023 by Destiny0315

[Mary229]

16 minutes ago, Destiny0315 said:

I'm talking June, July, and August, maybe early Sept. Right now anybody in New England and the Maritime provinces has to travel at a minimum to NYC/NJ or Baltimore to jump on a ship to the Caribbean. The new cruises being offered by HAL for next Oct/Nov '24 from Boston to the Caribbean/Panama Canal are at least an indication of some new thinking.

That is hurricane season.  As recently as 2021 I was chased off of the offshore island for not one, but two hurricane evacuations.  One in June and one in July.  The season is June 1 to November 1