Shrinking Captain's Club Coupons

[caviargal]

Many here make some very valid observations. X is not the only established mass market line that is gutting it's frequent cruiser program.

 

Consider one possible reason:

Onboard Revenue has become a major element of a cruise line's profitibility. All of the computer analyses show us that frequent cruisers are - generally - the most frugal people onboard. They already have enough photos, they play the penny slots, they have already done most of the tours, they rarely bring children onboard, they don't purchase many drinks, they rarely patronize the spa, and already have enough refrigerator magnets from the shops. As a result, the per diem spending by these people is generally lower than first-timers. Since onboard spending is where all the profit happens today, the cruise lines are scrambling to increase revenues in that area.

Rather than encouraging discount cruisers to return again and again, they are learning that in today's seller's market, they can well afford to spend less time and money on the frugal cruisers and dedicate more effort to attracting first-timers who will spend more money onboard and increase profits.

 

If and when this supply/demand equation reverses (market research tells us that it probably will not for quite some time), the cruise lines may become a bit more aggressive and generous in trying to keep the customer base they have, rather than welcoming the masses of first-timers.

 

Jim, you make some good points.

 

I do not see, however, how bringing kids aboard adds much to the overall profit. It seems to me that the cost of maintaining a kid's program, for which they do not charge at the moment, would cost the line money as well as valuable space that could be utilized for revenue generating opportunities. Kids do not drink or gamble, nor do they shop. I know that on RCI ships they are often the ones in line at Ben and Jerrys and Johnny Rockets, but otherwise I question where the lines make money on families, except for the base fares of course. I would not be surprised to see the kids clubs go to a fee per day model one of these days and that would be fine for me, as it is something I feel that I subsidize and never use.

 

As a long time cruiser, I spend money on nice cabins, wine, drinks, specialty restaurants. It makes me personal experience a bit nicer and improves the cruise experience overall. I can imagine that is possibly not the norm and that many cruisers have figured out ways to save $$$ onboard in various ways (many discussed on these boards and some which amaze me:eek:). Since I often choose other options for personal vacations, when I do choose to cruise I like to enjoy a more inclusive and upscale choice. I see cruising continuing to move in those two directions as lines like Seabourn increase their fleets and likes like X adopt the RCI model of bigger ships that carry more and more pax.

 

I do see the trend to more and more ala carte options increasing as lines struggle to cope with competitive base fares.

[superjerryw]

Many here make some very valid observations. X is not the only established mass market line that is gutting it's frequent cruiser program.

 

Consider one possible reason:

Onboard Revenue has become a major element of a cruise line's profitibility. All of the computer analyses show us that frequent cruisers are - generally - the most frugal people onboard. They already have enough photos, they play the penny slots, they have already done most of the tours, they rarely bring children onboard, they don't purchase many drinks, they rarely patronize the spa, and already have enough refrigerator magnets from the shops. As a result, the per diem spending by these people is generally lower than first-timers. Since onboard spending is where all the profit happens today, the cruise lines are scrambling to increase revenues in that area.

Rather than encouraging discount cruisers to return again and again, they are learning that in today's seller's market, they can well afford to spend less time and money on the frugal cruisers and dedicate more effort to attracting first-timers who will spend more money onboard and increase profits.

 

If and when this supply/demand equation reverses (market research tells us that it probably will not for quite some time), the cruise lines may become a bit more aggressive and generous in trying to keep the customer base they have, rather than welcoming the masses of first-timers.

 

An interesting theory. An industry that thrives on new customers and has no real use for its old customers. The only flaw in the theory is that even with some of the bargain fares being currently offered, a large percentage of the passengers on any given sailing are repeaters. If those repeaters were not there, I think there would be a lot of empty cabins. Despite ridiculously low prices ($399 for a 7 day cruise), I don't think the cruise lines are attracting as many people as they would like to attract. While the people on these boards may love to cruise, that is not the sentiment of the general population. I know plenty of people that have never been on a cruise and have no desire to go on a cruise. I know other people that have been on a cruise and enjoyed it, but have no desire to cruise again. I think some of the cruise line executives think that their product is so great and everyone wants to try it when the reality is that many people have no interest in cruising at all. While newbie cruisers may spend more, the repeaters still make up a significant percentage of the passenger base that they cannot survive without.

[Andy]

An interesting theory. An industry that thrives on new customers and has no real use for its old customers. The only flaw in the theory is that even with some of the bargain fares being currently offered, a large percentage of the passengers on any given sailing are repeaters. If those repeaters were not there, I think there would be a lot of empty cabins. Despite ridiculously low prices ($399 for a 7 day cruise), I don't think the cruise lines are attracting as many people as they would like to attract. While the people on these boards may love to cruise, that is not the sentiment of the general population. I know plenty of people that have never been on a cruise and have no desire to go on a cruise. I know other people that have been on a cruise and enjoyed it, but have no desire to cruise again. I think some of the cruise line executives think that their product is so great and everyone wants to try it when the reality is that many people have no interest in cruising at all. While newbie cruisers may spend more, the repeaters still make up a significant percentage of the passenger base that they cannot survive without.

 

Hi Jerry !

 

I couldn't agree more. While I expect the Cruise lines to always go after new customers, and while the new Cruiser may spend more than the seasoned Cruiser (but I feel that's subjective).... I would hate to think that is all the Cruise lines care about. I feel the seasoned, loyal Cruiser SHOULD always be their bread and butter. If they do not realize this, then I feel it is safe to say they have their priorities totally screwed up.

[usha]

Danno said this would happen!:rolleyes:

:cool: He sure did...

[shoreless]

I do see the trend to more and more ala carte options increasing as lines struggle to cope with competitive base fares.

 

I think I'd be happy with that. I require a cabin with a balcony, and I like lots of choices for food (venues/hours/menus/table size), although they can all be casual, as far as I'm concerned. We have no children, and, in the two cruises I've taken so far, I've done very little onboard shopping, and have yet to see a show, or visit a bar, casino, or spa; I guess I wouldn't be one of the more profitable passengers. :)

 

I'm curious about the different expectations/desires of new cruisers as compared to longtime cruisers. One word I see VERY often on this board is "pamper". It seems to be an important concept here, and I'm not sure I've ever in my life used the word. My college had something they called "Gracious Living", or some such thing, for one or two dinners each week, where we were supposed to approximate civilized dining behavior. In my life since then, I've never had much interest in two or three hour meals with multiple servers. Now, if I spend that long at the table, it's because I'm reading a good book.:D

 

When I mention cruising to people I know that haven't cruised they all associate cruising with large amounts of food, and most of them are not interested in that. If they have any interest in cruising, it's more about the ports, and the only onboard amenities they care about are the pools, and maybe the casinos. I think they'd all be willing to give up the "fine dining" to save money.

 

I guess I've strayed from the original topic here.:o

[caviargal]

I think I'd be happy with that. I require a cabin with a balcony, and I like lots of choices for food (venues/hours/menus/table size), although they can all be casual, as far as I'm concerned. We have no children, and, in the two cruises I've taken so far, I've done very little onboard shopping, and have yet to see a show, or visit a bar, casino, or spa; I guess I wouldn't be one of the more profitable passengers. :)

 

I'm curious about the different expectations/desires of new cruisers as compared to longtime cruisers. One word I see VERY often on this board is "pamper". It seems to be an important concept here, and I'm not sure I've ever in my life used the word. My college had something they called "Gracious Living", or some such thing, for one or two dinners each week, where we were supposed to approximate civilized dining behavior. In my life since then, I've never had much interest in two or three hour meals with multiple servers. Now, if I spend that long at the table, it's because I'm reading a good book.:D

 

When I mention cruising to people I know that haven't cruised they all associate cruising with large amounts of food, and most of them are not interested in that. If they have any interest in cruising, it's more about the ports, and the only onboard amenities they care about are the pools, and maybe the casinos. I think they'd all be willing to give up the "fine dining" to save money.

 

I guess I've strayed from the original topic here.:o

 

Cruising and food has always been synonomous. IMO, it should be more about quality than quantity but, from what I see when cruising, I appear to be in the minority.

 

For me, I would not be willing to give up "fine dining" because I am not interested in buffets, fast food, etc. I prefer good food and service in nice surroundings, with fine china and good linens. I am not a fan of casual dress at dinner, though country club casual is a fine option. I prefer a dress code that is enforced. I often opt for specialty restaurants when on mass market lines as I prefer a smaller, more intimate dining room, that is adults only and service oriented.

 

I don't gamble, do not enjoy production shows, and do not participate in trivia, bingo or other shipboard activities. I care about the gym and associated fitness activities, live music for dancing, and an adult pool area.

 

I consider "pampering" to mean personal and attentive service, a well appointed cabin with nice amenities.

 

IMO, the new cruiser, as a general statement, is seeking lots of food options, a casual atmosphere and a wide variety of entertainment options, day and night. NCL is rolling out ships with bowling alleys, RCI has rock climbing and ice rinks. You can have all this stuff, as far as I am concerned. I want low key and elegant and enjoy the traditional aspects of cruising much more than the modern version of what mainstream cruising has become.

 

This is becoming more difficult to find and comes with a hihger price tag as well. In terms of X, Solstice class will be just more of the same as the other mass market lines are rolling out and will move X even further away from their Chandris roots, a real shame.

 

JMO.

[Jim Gallup]

Caviargal makes a very good point - using a very good example; NCL.

In 1999, NCL was struggling to stay alive. They had very little cash and a large number of very loyal frequent cruisers, called "Latitudes Members". NCL employees referred to them as "Attitudes Members".

Then Star Cruises came along and snapped them up.

 

NCL introduced their new concept "Freestyle Cruising". The great majority of the Latitudes Members hated it. They were pretty upset about what had happened to their beloved NCL.

Many were very vocal, demanding that NCL return to it's previous product. For a time, the management at NCL tried to appease these people, offering special cruises on the older ships; even keeping the Norway as a "non-Freestyle ship". But then the management at NCL took a new look at the situation and tried a very risky thing. They told anyone who complained about their new Freestyle Product that this was the New NCL - take it or leave it. Many formerly loyal NCL cruisers took them at their word and left. But the number of new cruisers, attracted to the new concept, was far greater than the number that left. Even better, these new cruisers spent more than double every day what the old Latitudes Members had been spending. NCL was on to something. I think it was just plain dumb luck that it worked, but this lesson was not lost on the other Cruise Line Presidents who were watching very closely.

Very expensive market research tells us that despite the 12.5 million (mostly) Americans who will take a cruise this year, there is an additional 10-15 million more who want to cruise, but who cannot yet find the cruise that exactly matches their needs. It's only a short matter of time before they do find that cruise. So long as this situation exists, the major cruise lines have little reason to cater to the repeat cruiser.

Carnival Cruise Line (by far the most financially successful cruise line on earth) has taken it a step further.They have realized that everyone's first cruise is very special. It is a magical experience that usually cannot be repeated - at least not quite so magically. We all know that most first time cruisers complain far less than repeaters and spend far more money. When the first timers take their second cruise, they are usually disappointed that it is not quite so exciting as the first one. They tend to complain more and spend less.

Carnival's Marketing Strategy calls for giving their first time cruisers every chance to go somewhere else for their second cruise. They can complain and save money on somebody else's cruise line. Carnival would prefer to thrill another first time cruiser (and take his money) instead.

A strange marketing concept - but it works. Carnival currently earns nearly double the profit of their nearest competitor. Every indicator tells us that this trend will continue.

[Host Kewlguy]

Many here make some very valid observations. X is not the only established mass market line that is gutting it's frequent cruiser program.

 

Consider one possible reason:

Onboard Revenue has become a major element of a cruise line's profitibility. All of the computer analyses show us that frequent cruisers are - generally - the most frugal people onboard. They already have enough photos, they play the penny slots, they have already done most of the tours, they rarely bring children onboard, they don't purchase many drinks, they rarely patronize the spa, and already have enough refrigerator magnets from the shops. As a result, the per diem spending by these people is generally lower than first-timers. Since onboard spending is where all the profit happens today, the cruise lines are scrambling to increase revenues in that area.

Rather than encouraging discount cruisers to return again and again, they are learning that in today's seller's market, they can well afford to spend less time and money on the frugal cruisers and dedicate more effort to attracting first-timers who will spend more money onboard and increase profits.

 

If and when this supply/demand equation reverses (market research tells us that it probably will not for quite some time), the cruise lines may become a bit more aggressive and generous in trying to keep the customer base they have, rather than welcoming the masses of first-timers.

 

I have to admit since we started cruising muliple times a year we have decreased our on board spending a great deal. I mean how many pictures can one buy of themselves? Since we don't gamble at all and are only social drinkers I guess the cruise lines could care less whether we sail with them or not. All we're doing is taking up valuable space. :) Maybe this theory holds some truth.

[CaribbeanBound]

I agree with caviargal's comment: "For me, I would not be willing to give up "fine dining" because I am not interested in buffets, fast food, etc. I prefer good food and service in nice surroundings, with fine china and good linens. I am not a fan of casual dress at dinner, though country club casual is a fine option. I prefer a dress code that is enforced. I often opt for specialty restaurants when on mass market lines as I prefer a smaller, more intimate dining room, that is adults only and service oriented."

 

kewlguy... We would buy a number of pictures at no more than $5 each (still a tidy profit). However, they charge $10+ for pictures and a majority are thrown away. Still haven't figured this one out.

[tuggers]

I am on X cruise #32 since October '02. I stay in inside cabins, outside cabins, CC and balcony even with the single supplement. I still buy every embarking photo as that's how I keep up with my cruises. I have my martini every night and at $10.93 there must be some profit there. I have an after dinner drink about every other day, buy wine by the bottle and usually make at least a couple of gift shop purchases. Oh, and let's not forget the donations in the casino that I make on a regular basis. And if there is a specialty restaurant I will partake. When going to new or unusual ports (not likely with X's itineraries) I will take a ship's excursion.

I think they still make a tidy profit off me and do think that they could loosen the purse strings just a little on the Elite perks plus come up with an Elite Plus for over 25 cruises. I don't want the moon but it sure put me in a better mood to have my first froo froo drink (in the souvenir glass) free with my Diamond coupon on RCI

[superjerryw]

Caviargal makes a very good point - using a very good example; NCL.

In 1999, NCL was struggling to stay alive. They had very little cash and a large number of very loyal frequent cruisers, called "Latitudes Members". NCL employees referred to them as "Attitudes Members".

Then Star Cruises came along and snapped them up.

 

NCL introduced their new concept "Freestyle Cruising". The great majority of the Latitudes Members hated it. They were pretty upset about what had happened to their beloved NCL.

Many were very vocal, demanding that NCL return to it's previous product. For a time, the management at NCL tried to appease these people, offering special cruises on the older ships; even keeping the Norway as a "non-Freestyle ship". But then the management at NCL took a new look at the situation and tried a very risky thing. They told anyone who complained about their new Freestyle Product that this was the New NCL - take it or leave it. Many formerly loyal NCL cruisers took them at their word and left. But the number of new cruisers, attracted to the new concept, was far greater than the number that left. Even better, these new cruisers spent more than double every day what the old Latitudes Members had been spending. NCL was on to something. I think it was just plain dumb luck that it worked, but this lesson was not lost on the other Cruise Line Presidents who were watching very closely.

Very expensive market research tells us that despite the 12.5 million (mostly) Americans who will take a cruise this year, there is an additional 10-15 million more who want to cruise, but who cannot yet find the cruise that exactly matches their needs. It's only a short matter of time before they do find that cruise. So long as this situation exists, the major cruise lines have little reason to cater to the repeat cruiser.

Carnival Cruise Line (by far the most financially successful cruise line on earth) has taken it a step further.They have realized that everyone's first cruise is very special. It is a magical experience that usually cannot be repeated - at least not quite so magically. We all know that most first time cruisers complain far less than repeaters and spend far more money. When the first timers take their second cruise, they are usually disappointed that it is not quite so exciting as the first one. They tend to complain more and spend less.

Carnival's Marketing Strategy calls for giving their first time cruisers every chance to go somewhere else for their second cruise. They can complain and save money on somebody else's cruise line. Carnival would prefer to thrill another first time cruiser (and take his money) instead.

A strange marketing concept - but it works. Carnival currently earns nearly double the profit of their nearest competitor. Every indicator tells us that this trend will continue.

 

As far as NCL being turned around, you have left out one important item. When they were taken over by Star cruises they got a new fleet of ships from Star. I really think the new ships is what saved them, not the free-style concept. NCL was going down the drain because their fleet of older, smaller ships could not compete with the other cruise lines new builds. RCCL introduced the Voyager class in 1999 and NCL had nothing comparable. Actually NCL did not even have anything comparable to RCCL's older Vision class or even the oldest Sovereign class of ship. The marketplace had already shifted to people wanting newer, larger ships and NCL had nothing to offer. The infusion of a new fleet of modern ships by Star is what saved them. The free-style idea I think was more of a gimmick to help differentiate them from the other cruise lines. My most recent cruise was on the Norwegian Dawn. We sailed on the Dawn because it left from New York and it was a realtively new ship. If all we had to choose from was one of their older ships we would not have sailed with them. Similarly, we sailed on the Zenith to Bermuda this past summer because it had the best itinerary to Bermuda and it was a much better ships than the Norwegian Crown or Norwegian Dream.

[Jim Gallup]

superjerryw,

As far as NCL being turned around, you have also left out one important item. The Norwegian Sky and Norwegian Sun were the only new ships originally planned to be built for NCL by Star Cruises. Actually the Sky was already under renovation/building when Star bought NCL. The Sky had originally been built for Costa Cruises, who could not afford to take delivery. NCL bought it for a song to prevent the Lloyd-Werft shipyard going bankrupt. That's why Norwegian Sky (Now Pride of Aloha) has the smallest cabins in the NCL Fleet, and doesn't really work for Freestyle Cruising. They are really Costa Cabins and Costa Restaurants. So the Sun was the only new-build planned by Star for NCL. But the Sky and Sun (which were both only partially designed and custom-built for Freestyle Cruising) did extremely well. They were both new, but weren't really so special as ships go. But the Sky had 3 alternative restaurants; the Sun had 6. Based on these 2 successes, Star Cruises decided to divert their other Star newbuilds to NCL. NCL Star was originally to be called Star Libra, sailing out of Singapore. The Dawn was to be called Star Aquarius, when the old Star Aquarius was sold back to Silja Line in Scandinavia. The Dawn / Aquarius was planned to sail out of the Star Cruise Home Terminal at Port Klang, Malaysia.

Yes, new ships almost always boost a company's fortunes. But for all those years I worked at NCL, we were convinced that introducing a new concept and chasing away all the old timers was the secret to our success.

[superjerryw]

Yes, new ships almost always boost a company's fortunes. But for all those years I worked at NCL, we were convinced that introducing a new concept and chasing away all the old timers was the secret to our success.

 

Sounds pretty sad to me when a companies plan to make money is to chase away all of its loyal customers.

[Jim Gallup]

superjerry,

 

Yes it is sad.

But is it sad because the passengers are so "frugal" or because the company is so desperate to stay in business?

[m steve]

Started on 2NCL, then 2X, 2Princess,1 HAL and back to X. We buy drinks on board daily, wine frequently, some excursions but also book privately, and buy a few items at onboard shops if well priced. Have bought duty free liquor if not stopping in STT or STM. Many islands are repeats and we don't do a lot since we have toured them. Dining is important in main room, love balconies for views, smoking and extra space. Like full scale shows but not commedians, good cabaret singers and piano recitals. We want good coffee, French service in dining room, sushi available, smoked salmon for bfst and yellow eggs in am,

not powdered type (had enough in the military). I like a cruise director that does more than hawk art auctions and bingo.

What could be better: morning news sheet with more stock reports, cheaper internet service, on board booking of cars in ports (cut a deal w/ Hertz or Budget) better shopping info (won't set foot in a something International) such as smaller shops, good buys for DFS, pharmacies to buy your RX at low prices and interesting in town museums or points of interest or even a good place to get lunch, a drink or local crafts. Also post the menus for the day on closed circuit tv to help decide on dining venue and even tape and reshow the previous nights entertainment.

We try to cruise 2X a year and have no special loyalty to any brand but will rebook w/them if no problems by 5th day and enjoy the credit for next cruise. Finally the price for a bottle of liquor for the room should be no more than 2X the price sold in DF shop on board.

AM I ASKING TOO MUCH?

[npb]

I don't eat fast food at home and don't expect it on cruise. We like to dress appropriately for fine dining. We appreciate good service and four course meals. Granted, the ship is preparing thousands of meals and we take that into account and don't expect too much. With a good attitude and table companions, it is way better than cooking. I don't do buffets, but always find plenty of other choices.

[CGTNORMANDIE]

After reading this thread I have come to the conclusion that someone or some corporate power could find a nice position in the cruise industry by offering a large ship...upscale experience with a lot of alternatives...at a reasonable price...but above the rest of the competition. (Sounds just like the original Celebrity mission statement...LOL.) It seems to me that the lines are just filling cabins at low rates and then fleecing the pax at every turn. What is all this talk about the lines struggling??? Have you seen their profit statements??? LOL!!!

[Jim Gallup]

CGTNORMANDIE,
Strange that you should ask about reading the profit statements of the struggling cruise lines. That's part of my job.
Seabourn, Crystal, Silver Seas, Oceania, and Regent (formerly Radisson) have not seen any profit in years. These are the upscale lines that you are proposing build large ships and offer an upscale experience with alternatives. Great idea, but they cannot even fill their small ships now. Only an idiot would gamble half a Billion Dollars on building and filling a large upscale ship.
The only lines that are NOT struggling are the ones that "fill the cabins at low rates and then fleece the pax at every turn". Carnival Cruise Line, currently enjoying double the profit of any other cruise line on earth, increases their profit margin every year doing exactly that.
If you wanted to invest $500,000,000 of your own money in a new ship, which model would you follow: a sure success by fleecing the public, or a near sure failure by offering upscale quality to the American Public?

[caviargal]

[quote name='Jim Gallup']CGTNORMANDIE,
Strange that you should ask about reading the profit statements of the struggling cruise lines. That's part of my job.
Seabourn, Crystal, Silver Seas, Oceania, and Regent (formerly Radisson) have not seen any profit in years. These are the upscale lines that you are proposing build large ships and offer an upscale experience with alternatives. Great idea, but they cannot even fill their small ships now. Only an idiot would gamble half a Billion Dollars on building and filling a large upscale ship.
The only lines that are NOT struggling are the ones that "fill the cabins at low rates and then fleece the pax at every turn". Carnival Cruise Line, currently enjoying double the profit of any other cruise line on earth, increases their profit margin every year doing exactly that.
If you wanted to invest $500,000,000 of your own money in a new ship, which model would you follow: a sure success by fleecing the public, or a near sure failure by offering upscale quality to the American Public?[/quote]

Jim, I have heard that about the Luxury lines. Correct me if I am wrong but it appears that they are pretty much carried by the parent companies (Crystal and Regent at least). I am surprised about Oceania.

Have to say that if Carnival, NCL, etc. were the only options I would not set foot on a cruise ship again. Perhaps my small but steady contributions to Regent will help them out a bit:).

[CGTNORMANDIE]

[quote name='Jim Gallup']CGTNORMANDIE,
Strange that you should ask about reading the profit statements of the struggling cruise lines. That's part of my job.
Seabourn, Crystal, Silver Seas, Oceania, and Regent (formerly Radisson) have not seen any profit in years. These are the upscale lines that you are proposing build large ships and offer an upscale experience with alternatives. Great idea, but they cannot even fill their small ships now. Only an idiot would gamble half a Billion Dollars on building and filling a large upscale ship.


MY POINT EXACTLY JIM, Seaborn, Crystal, et al are Luxury Lines. The Chandris philosophy was to charge a bit more for the product but deliver a superior product and give the pax a better deal...their moneys' worth...as a Premium Line. I believe that bigger is better for profits...but I feel that Celebrity has lost their vision under RCI management. I strongly believe that the Celebriy product can deliver profits as well as value for the pax. Carnivore and NCL are offering cheaper cabins and fleecing the pax. I believe there is another way...a better way. Celebrity has shown us that there is a strong demand for a classic product. X's problem has been that their ships have not been as profitable as the other RCI mega ships. RCI needs to find a better way to make it all work...while retaining the original Chandris vision...otherwise X will just end up being another Carnival...with low fare cabins and a continual fleecing of the pax as a Mass Market Line.

[pcur]

I haven't read this entire thread, so please excuse me if this is a duplicate post.

I had to laugh when I got the flyer and coupons last week in the mail. The week before I had noticed that the price of our Millie cruise next year had gone UP for our category. Strange, I thought, they usually start going down withing the six month timeframe.

Well, they INCREASED the price $50 pp, and then I get the coupon the next week that has a DISCOUNT of $75 per cabin.

So, for my DH and I, they would have made me pay an extra $25 for the privilege of using their coupon for my cruise!! It's laughable.