Oceania Decline

[QuestionEverything]

5 minutes ago, EJL2023 said:

And while SM is an insult to you, I enjoy it. 

Glad it works for you, carry on carrying on!

Enjoy.

[daydreamer62]

8 minutes ago, EJL2023 said:

And while SM is an insult to you, I enjoy it. 

And me.. it was one of the reasons I chose Oceania for our upcoming cruise over other lines.  From what I've read and understood regardless of a so called decline in quality and services of most if not all cruise lines they are almost without exception more fully forward booked than at any time in the past so it seems they aren't being harmed in the short term anyway, by those who are leaving to try other methods of travel ( personally a land tour where you are constantly packing and unpacking doesn't fill me with excitement). We aren't big cruisers, only having done 2 in the last 9 years . We are usually independent driving holiday people but cruising is so much more relaxing . I'm looking for the best bang for buck at a certain level of comfort. Oceania may or may not be perfect for us . It remains to be seen but at face value the cruise we have booked seems excellent value for us given the inclusions including Simply More which suits our needs perfectly 

Edited March 10 by daydreamer62

[TRLD]

1 hour ago, Hanoj said:

Decline seems widespread in the travel and hospitality industries, though it appears more acute with cruising since this form of travel/vacationing is more expensive compared to other modes, and the supply logistics are more problematic, thus affecting food quality (and quantities) in particular.

 

It feels like cruise patrons (across different lines and luxury categories) must expect less (to match expectations with present realities) but pay more. Not a great recipe for business success for what most consumers consider as discretionary consumption. This discretionary spending will manifest differently as some will cruise less frequently, some not all, and others will select lower cabin categories, shorter cruise durations, and or sail with different lines. It appears the present challenges will be met by more crossovers (between cruise lines and between vacation modes - land based vs cruise, etc) and thus less brand loyalty. Hopefully this will temper fare increases. We are definitely in this camp, and will probably be favoring more resort destinations, travelled to by plane or automobile. We plan to do more “tours” on such trips, especially when visiting a new locale. 
 

The timing of Oceania’s new Simply More campaign, regarded by some as a thinly veiled price increase initiative, in the current cruise “decline” climate may not have been the most astute. But, then, there seem to be many company executives, both with publicly owned and privately held companies of all sizes, making inexplicably poor and myopic decisions. 

 

Who is John Galt?

Except cruising is actually cheaper on a per day basis than equivalent land based travel (when one includes items that are part of cruise fare in resorts with equivalent features, such as all inclusives).  Land resorts increased considerably faster and by more than did cruises after Covid during the revenge travel boom.  They did those increases while many of those land based hotels were short staffed, some facilities, some services reduced.

 

Prior to Covid cruising at each of its levels (mass market, premium and luxury) ran about 15% less than an equivalent land based vacation.  During the restart as hotel prices boomed that difference increased to 35 to 45% while the lines were trying to attract customers back and getting occupancy back to pre covid levels.  The first thing the cruise line did in the case of the mass market lines was to increase onboard revenue with price increases and the pushing of packages.  As a result you now have around 35% of the revenue of the cruise lines holding companies now running about 35% compared to 25% pre-covid. Much of this was with the increased pushing of drink packages.

 

Oceania did something similar with its move to make on board spending mandatory rather than option with its simply more pricing.  I suspect that another element of the Simply more approach is to makes its inclusions more in line with Vikings fare structure, at a price point that is still mostly lower than Viking.

 

Now as occupancy is starting to get back to pre-covid levels (still a bit lower for example CCL lines ran about 105-107% pre Covid compared to just over 100% in the most recent filing).  You are starting to see more aggressive push on fares.  Will be interesting to see if that continues as revenge travel is in general decreasing and some hotel rates have started to soften.

 

 

Edited March 10 by TRLD

[Harters]

9 minutes ago, TRLD said:

Except cruising is actually cheaper on a per day basis than equivalent land based travel (when one includes items that are part of cruise fare in resorts with equivalent features, such as all inclusives). 

My own recent research wouldnt support that claim.

 

I've been looking at a high end all-inclusive resort in Cyprus. It's priced at about 50% of an Oceania cruise (Concierge cabin). It's a good comparison, with included speciality restaurants and all day booze. So I have to ask myself is the actual cruising between ports worth the other 50%. I'll let you know in the autumn when I've been to Cyprus. 

[mamaclark]

1 hour ago, QuestionEverything said:

Hanoji, excellent analysis and you are very perceptive.

I agree 100% with your conclusions and changes in consumer behavior.

Your "cross over" element is spot on - all my cruise friends are now booking high end land trips, not a cruise booked by any of them, including me.

There will continue to be the very dedicated cruise junkies but like in everything these days $, consumers are changing their decisions.

The Simply More is simply an insult to me and is a turnoff. I totally enjoyed the al a cart product offering and it was unique in the premium category.

Thanks so much.

Thank you, spot on observations. We have been blessed to travel a lot over the years. We spent over 2 weeks in China on an excellent Smithsonian tour. Tokyo, Kyoto and Hiroshima were cities we wanted to see. This will achieve that for us and then we will probably go back to land trips, some tours, but probably just exploring on our own, getting wet, being lost and loving life. 

[TRLD]

14 minutes ago, Harters said:

My own recent research wouldnt support that claim.

 

I've been looking at a high end all-inclusive resort in Cyprus. It's priced at about 50% of an Oceania cruise (Concierge cabin). It's a good comparison, with included speciality restaurants and all day booze. So I have to ask myself is the actual cruising between ports worth the other 50%. I'll let you know in the autumn when I've been to Cyprus. 

Can one find lower resorts certainly. Cyprus, Spain, Greece certainly have fairly in expensive all inclusive resorts. One can also find more expensive resorts (have you checked resorts in Caribbean such Aruba, Hawaii and a number of other places recently.) 

 

The data comparing the costs in general have shown up in several places over the past few years. including in analyst meetings from each of the big three cruise holding companies.

 

The first two articles are from 2022 when the Hotel prices were increasing dramatically and cruise lines had not started to narrow the gap

 

https://www.travelweekly.com/Cruise-Travel/Price-gap-resorts-versus-cruises

 

https://www.wfla.com/news/national/cruises-easier-on-wallets-than-land-vacations-data-shows/

 

This article is more recent showing that cruise lines, as a result on onboard spending strategies and other increases have narrowed the gap to some degree.  Basically the cruise lines are trying to return to the pre Covid level of 15% less expensive compared to equivalent land based comparisons.  

 

https://thepointsguy.com/news/cruise-ship-travel-value-2024/

Edited March 10 by TRLD

[Hlitner]

I am not so sure it is an either/or situation.  We do both cruising and lots of independent land travel.  They each have their pros/cons.  On land we can choose to spend less then on many cruise lines (such as O) or more.  But one huge difference is that most of our land travel are to places one cannot access on a cruise or a port day.   Folks that rely on cruising in places like Europe, Asia, and South America are only getting a glance at these continents.  Even in island countries like New Zealand, there are many magical places that can never be accessed by a cruiser.   Consider that one of the nicest cities in Europe, Prague, is not going to ever be seen by folks that rely on cruise ships.  And we have never known any kind of ship to get up into the Alps to see places like Jungfrau.

 

DW and I love to cruise and have been doing it for about 50 years.  But much of the world is not accessible during a port day.  We still think the perfect trip involves both cruising and independent land travel although we have no problem with decent small group land tours.

 

Hank

[TRLD]

Just now, Hlitner said:

I am not so sure it is an either/or situation.  We do both cruising and lots of independent land travel.  They each have their pros/cons.  On land we can choose to spend less then on many cruise lines (such as O) or more.  But one huge difference is that most of our land travel are to places one cannot access on a cruise or a port day.   Folks that rely on cruising in places like Europe, Asia, and South America are only getting a glance at these continents.  Even in island countries like New Zealand, there are many magical places that can never be accessed by a cruiser.   Consider that one of the nicest cities in Europe, Prague, is not going to ever be seen by folks that rely on cruise ships.  And we have never known any kind of ship to get up into the Alps to see places like Jungfrau.

 

DW and I love to cruise and have been doing it for about 50 years.  But much of the world is not accessible during a port day.  We still think the perfect trip involves both cruising and independent land travel although we have no problem with decent small group land tours.

 

Hank

Unless they go by River Cruise ships.  Even Jungfrau can be reached from the ending location of a Rhine River cruise.

 

We also do a mix of land and ocean cruising.  Often use ocean cruises to cut down on the number  of long flights.

[Hlitner]

5 minutes ago, TRLD said:

Unless they go by River Cruise ships.  Even Jungfrau can be reached from the ending location of a Rhine River cruise.

 

We also do a mix of land and ocean cruising.  Often use ocean cruises to cut down on the number  of long flights.

No argument on that point.  We have done a few river cruises (Europe, Egypt and China) and enjoyed the experience.  But as long as I am able to drive, it is my preferable way to travel in Europe.  When we did a Viking River cruise from Amsterdam to Budapest (a fantastic itinerary) DW and I were not happy with only having 3 hours to explore an entire city/country (i.e. Bratislava).  When we do our driving trips we can stay where we want, when we want, as long as we want.  

 

Getting back to river cruises, see if that works to get to our favorite city in New Zealand which is Queenstown :).

 

Hank

[Snaefell3]

2 hours ago, Hanoj said:

It feels like cruise patrons (across different lines and luxury categories) must expect less (to match expectations with present realities) but pay more. Not a great recipe for business success for what most consumers consider as discretionary consumption.

Econ 101:  With inelastic supply (takes years to build new ships),  "Demand" up → "Prices" up and/or "Value" down.

 

If you look at reported occupancy rates, demand is *way* up on all cruise lines, bringing them joy as they desperately capture cash to pay down COVID loans.

[Hanoj]

Revenge travel spending impacted hotel/resort demand sooner than it did for cruising, no doubt in large part due to earlier relaxing of various COVID restrictions.

 

Also, there’s a much broader range of options available, from low end to high end, among hotels/resorts and their amenities and inclusions than there is with cruises - Marriott alone has over 30 brands. Because of this I can tailor my land based travel more readily to suit my preferences and budget. 
 

We’ve cruised primarily to get an overview of the different regions we’ve sailed and have yet to do any repeats to a previously visited region. Cruising is more expensive for us since there are things we pay for that we don’t use (included alcohol and excursions are prime examples) and dining is the primary one. We are very utilitarian when it comes to eating and it is difficult to get cruise cuisine of the quality we are accustomed to at home (organic, locally sourced, pasture raised, grass fed beef, wild caught fish, etc.). That’s okay and we accept this when cruising. But I also have food allergies which are not easily avoided, which we deal with by preparing our own meals during land trips. We also lack culture because we would prefer to have a meal at ship’s buffet instead of a multi course meal at the MDR or a specialty restaurant - we may have set a least amount of time spent record in Red Ginger during our Vista cruise in August. We were very satisfied with the food, but it’s not a big deal for us. We also prefer to eat earlier than most, and than the time dining venues open.

 

Prior to our May 2020 Viking cruise was cancelled (and we cancelled a July 2021cruise) we expected to cruise each year and were considering more than one a year. Through the shutdowns and after we became more independent in our travel experiences. We went nearly 4 1/2 years between cruises before sailing Vista in August 2023. While there were many things we enjoyed about the ship and the cruise, we realize we don’t particularly like being beholden to someone else’s schedule, whether it’s dealing with getting a tender ticket for independent exploration or when we can dine. Add this to the aforementioned “decline,” we undoubtedly cruise less frequently.

Edited March 10 by Hanoj

[TRLD]

15 minutes ago, Snaefell3 said:

Econ 101:  With inelastic supply (takes years to build new ships),  "Demand" up → "Prices" up and/or "Value" down.

 

If you look at reported occupancy rates, demand is *way* up on all cruise lines, bringing them joy as they desperately capture cash to pay down COVID loans.

Occupancy rates still not back to pre Covid level.  Look good compared to earlier in the restart but still lagging compared to pre covid. For example NCLH reported occupancy of 102.9% for fy 23 across its lines compared to 107.3% for fy 19.

 

Occupancy is improving, but not quite back to 2019 levels. As it continues to improve one can expect even more fare increases

[clo]

1 hour ago, Hlitner said:

I were not happy with only having 3 hours to explore an entire city/country (i.e. Bratislava)

We had the exact same experience. As usual we did extra days at the beginning (Prague) and end (Budapest) --- oh, yeah, where we had the best dinner of our lives.

[daydreamer62]

2 hours ago, Hlitner said:

No argument on that point.  We have done a few river cruises (Europe, Egypt and China) and enjoyed the experience.  But as long as I am able to drive, it is my preferable way to travel in Europe.  When we did a Viking River cruise from Amsterdam to Budapest (a fantastic itinerary) DW and I were not happy with only having 3 hours to explore an entire city/country (i.e. Bratislava).  When we do our driving trips we can stay where we want, when we want, as long as we want.  

 

Getting back to river cruises, see if that works to get to our favorite city in New Zealand which is Queenstown :).

 

Hank

But then cruises of all types and independent travel are different beasts. You know that going in so a decline or fare increase for one or the other doesn't mean the alternative will be a replacement. I  love independent travel and I'm sure it will be my go to method until we no longer feel capable of self driving in strange countries but that won't stop us from trying other travel  methods , cruising being one. I'll never want to do an organised bus tour though, that would be like taking the worst parts of all travel methods as bundling them all together 

[Vineyard View]

3 hours ago, TRLD said:

Except cruising is actually cheaper on a per day basis than equivalent land based travel (when one includes items that are part of cruise fare in resorts with equivalent features, such as all inclusives).  Land resorts increased considerably faster and by more than did cruises after Covid during the revenge travel boom.  They did those increases while many of those land based hotels were short staffed, some facilities, some services reduced.

 

Prior to Covid cruising at each of its levels (mass market, premium and luxury) ran about 15% less than an equivalent land based vacation.  During the restart as hotel prices boomed that difference increased to 35 to 45% while the lines were trying to attract customers back and getting occupancy back to pre covid levels.  The first thing the cruise line did in the case of the mass market lines was to increase onboard revenue with price increases and the pushing of packages.  As a result you now have around 35% of the revenue of the cruise lines holding companies now running about 35% compared to 25% pre-covid. Much of this was with the increased pushing of drink packages.

 

Oceania did something similar with its move to make on board spending mandatory rather than option with its simply more pricing.  I suspect that another element of the Simply more approach is to makes its inclusions more in line with Vikings fare structure, at a price point that is still mostly lower than Viking.

 

Now as occupancy is starting to get back to pre-covid levels (still a bit lower for example CCL lines ran about 105-107% pre Covid compared to just over 100% in the most recent filing).  You are starting to see more aggressive push on fares.  Will be interesting to see if that continues as revenge travel is in general decreasing and some hotel rates have started to soften.

 

 

I would be curious where these stats came from. I would think that there are a lot of variables to consider….where in the world you are traveling being a big one. I can see higher end travel being less pp/pd than some cruises….

Edited March 11 by Vineyard View

[Vineyard View]

11 minutes ago, daydreamer62 said:

 I'll never want to do an organised bus tour though, that would be like taking the worst parts of all travel methods as bundling them all together 

100% with you on this one!   Actually on your whole post though! 

Edited March 11 by Vineyard View

[Hlitner]

5 minutes ago, daydreamer62 said:

But then cruises of all types and independent travel are different beasts. You know that going in so a decline or fare increase for one or the other doesn't mean the alternative will be a replacement. I  love independent travel and I'm sure it will be my go to method until we no longer feel capable of self driving in strange countries but that won't stop us from trying other travel  methods , cruising being one. I'll never want to do an organised bus tour though, that would be like taking the worst parts of all travel methods as bundling them all together 

We do agree.  Those large bus tours might be the kind of thing we will do when they have to carry me on an off the bus because I am too old and sick to walk.  Even then, I would not be a happy traveler.  As to self-driving, we have finally run into our first roadblock which is Montenegro where they do not allow folks 75 to drive (they will likely need to change that before they become part of the EU).  In fact, we will again be in Kotor, in a few weeks, and it bugs me that I can no longer rent a car and drive in that country.  To me, an organized bus tour ranks up there with a visit to the dentist.  Driving in Europe is no more difficult than driving at home and GPS has been very helpful in saving my marriage (no longer need to rely on DW's map reading).  

 

River cruises can be fun although it is not my favorite way in Europe.  But our river cruises in Egypt and China were fantastic and got us places that would have been difficult to accomplish on land.  We are also very open to the idea of taking small group tours from companies such as Tauck.

[ak1004]

I checked land tours and/or independent tours few times, and every single time the prices were significantly higher than cruises. But you need to compare apples to apples. For example, when comparing a line like Silversea or Seabourn, you need to compared to hotels like Four Seasons or Ritz Carlton. You also need to compare comparable rooms. Does your hotel room have a veranda? If not, then the correct category on a cruise would be OV, not veranda and definitely not concierge. What about food? Are you comparing to eating 3 times a day in a high end restaurant? Do you include drinks with meals at those restaurants? Do you consider all other inclusions, like free room service? What about transportation cost?

 

And I'm not even mentioning all the convenience that comes with cruising.

[clo]

36 minutes ago, daydreamer62 said:

but that won't stop us from trying other travel  methods ,

We're thinking about European trains.

[clo]

23 minutes ago, Hlitner said:

taking small group tours from companies such as Tauck.

Some friends of our recently traveled with OAT in Italy. One of their 'excursions' was going out with the truffle hounds and their humans. Dinner was scrambled eggs with truffles and prosecco.

[Hlitner]

1 minute ago, clo said:

Some friends of our recently traveled with OAT in Italy. One of their 'excursions' was going out with the truffle hounds and their humans. Dinner was scrambled eggs with truffles and prosecco.

Yum :).  Love truffles (white and black).  We sometimes have dinner at a restaurant in Florence where nearly every item uses truffles.  It is called Osteria della tre Panche....in case you are ever in Florence at dinner time :)/

 

Hank

[daydreamer62]

7 minutes ago, clo said:

We're thinking about European trains.

Have done that and will be doing it again at the conclusion of our next cruise however it definitely has its  downsides. Luggage being the worst IMO. You really don't want to be lugging big heavy suitcases on and off trains (so that limits my shopping and wardrobe choices ). Then you need transport from the train station to your hotel . It's not a great issue if you are young and fit and travel light.. Then in Europe there are the (not infrequent) strikes to contend with

[clo]

1 minute ago, Hlitner said:

Yum :).  Love truffles (white and black).  We sometimes have dinner at a restaurant in Florence where nearly every item uses truffles.  It is called Osteria della tre Panche....in case you are ever in Florence at dinner time :)/

 

Hank

Sounds like our fave in Budapest. We had a course of seared foie gras that was so incredible that we had it again for dessert - with little dollops of pureed fruits. Returning the favor: 

Borkonyha Winekitchen (Borkonyha)

 

[clo]

1 minute ago, daydreamer62 said:

Have done that and will be doing it again at the conclusion of our next cruise however it definitely has its  downsides. Luggage being the worst IMO. You really don't want to be lugging big heavy suitcases on and off trains (so that limits my shopping and wardrobe choices ). Then you need transport from the train station to your hotel . It's not a great issue if you are young and fit and travel light.. Then in Europe there are the (not infrequent) strikes to contend with

My "wardrobe choices" are simple. Everything goes with everything. Rarely do any shopping any more. And do to the early comments, our luggage are two 22" soft-sided ones on four wheels. Transportation from planes and cruise ships is taxis. will do the same on trains, I'm sure. Oh, and I'm 76!

[TRLD]

43 minutes ago, Vineyard View said:

I would be curious where these stats came from. I would think that there are a lot of variables to consider….where in the world you are traveling being a big one. I can see higher end travel being less pp/pd than some cruises….

Number of articles including Forbes and Wall Street journal, as well as cruiseline companies analyst calls.

 

I posted a couple of links of a couple of examples.

 

The percentage of revenue from onboard spend is from  calculations from data in 10q and 10k filings of the various holding companies. Filings available on line in the SEC edgar database.