RSSC versus Oceania -- pricing

[Jana]

My daughter, a very practical sort, wanted to buy a Prius. Of course none were available, but if there were, the cost was about $3,000 over MSRP before any add-ons. If you go on a waiting list your overage is actually by bid: the higher the bid, the higher on the list.

 

I'm sure that Prada makes a very nice handbag, very nice indeed. And I am pretty sure I can buy one of equal or near-equal quality for about 90% less from another manufacturer.

 

Neither of these scenarios has anything to do with cruising. I'm just sayin'...

 

Jana

[meow!]

Yes, but in the posting immediately above, I have been comparing Oceania (2004) with Oceania (2008)!

[DaveFr]

Yes, but in the posting immediately above, I have been comparing Oceania (2004) with Oceania (2008)!

Meow!

 

Are you comparing apples to apples? What month was your cruise in 2004? If it was in a less expensive month, that may explain some of the difference in per diem rates. Also, as a general rule, all things being equal, a longer cruise has a lower per diem for a given cabin. For example, I priced an A2 cabin on a 12-day Mediterranean cruise and on a 14-day Mediterranean cruise, including air and all taxes.. Both cruises are this October. The 14-day cruise has a per diem of $430, while the 12-day cruise has a per diem of $505. So some of the difference you're seeing between 2004 and 2008 may simply reflect a comparison of a 14-day cruise in 2004 with a 12-day cruise in 2008.

 

In addition, what sort of increases have other cruise lines imposed? For example, I remember looking at an Alaska cruise on Regent in 2004 or 2005. The fare was about $3200. Today, that same cruise is about $4200.

 

In any event, IMHO it's a mistake to generalize based on one fare comparison. I also believe it's dangerous to rely on percentages because the same increase on a different base obviously results in a different percentage increase. For example, a $1000 increase on a base of $3000 is a 33 1/3% increase, while a $1000 increase on a base of $10000 is a 10% increase. The 33 1/3% increase seems much worse but in either case, I have to pay the same $1000 additional fare. So the apparent 23 1/3% difference is meaningless in my example.

 

This is an interesting thread. Keep em coming. :D

 

Dave

[meow!]

You have made very good points. The 2004 Regatta voyage was in April, the 2008 Nautica will be in October, both being the "marginal" months for the Mediterranian, not July or August. A quick search on the Oceania website show an April 2009 (early booking) 14 day Barcelona to Istanbul (versus Barcelona to Venice before, as that voyage is not available in April) the same B category at $5299, which is 5299/3199 or 66%, 10.6% annual compounded more than in 2004. So the numbers remain like what I have said.

 

It is a lot harder to compare 2004 and 2008 prices for other cruise lines, as unlike Oceania, whose prices start at an initial offer level (the point of comparison) and will only go up, other cruise lines use "yield management pricing", just like the airlines, where prices fluctuate from day to day depending on how seats/cabins fill up.

 

Oceania has done nothing wrong, its management is very capable and doing great for their investors. They charge what the market will bear, which is their right, but we also should be aware that even if we do buy their product, we are paying for that "privilege" rather "dearly"!

[LHT28]

Oceania has done nothing wrong, its management is very capable and doing great for their investors. They charge what the market will bear, which is their right, but we also should be aware that even if we do buy their product, we are paying for that "privilege" rather "dearly"!

 

If people do not want to "Pay dearly" they will go elsewhere.

I am sure all the other deluxe or premium cruise lines have increased their fares since 2004.

 

There is still time for you to cancel and go with one of them:rolleyes:

[LHT28]

Since a couple of posters have indicated their delight and interest in further discussing this topic, let us consider the following (I know that this discussion will have no impact on reality, just consider it a mental exercise to keep our minds active):

 

In 2004, we had a wonderful 14 day voyage on the Regatta, category B (no subdivision at the time), for $3200 including air (in fact it was subsequently reduced by 5%, strangely enough). Take that as the basis of our calculation.

 

Now after 4 years, the governments (U.S. and E.C.) have their official inflation rate at around 2%. Of course, fuel has more than doubled, so now we pay the "fuel surcharge". Cruise line costs may be different from official inflation. Staff salary if paid in euros have sky rocketed. (Silversea, for example, changed their staff from mainly European to mainly Philipino, and those new staff are jolly in nature and very well received, while their home pesos devalued with the US$, so why can't Oceania do the same?)

 

Your assumptions are flawed.

Cruise lines do not operate like everyday businesses that you can say it is 2% inflation rates ...they spend most of their $$ in fuel.

 

The inflation rate is an average of all services & commodities ...that does not mean everything only raises 2% per year, some may raise 10 % others may only raise 1 %

The official inflation rate is based on averages.

 

If you look at your own household expenses over the past 4 years they probably have risen more than 2% in some cases & less in others.

[meow!]

If instead, we give them 5% increase per year compounded, this coming voyage would be at $3,333, then I would say its pricing is very good.

That is why for the sake of discussion, I have suggested 5% per annum compounded for calculation, isn't that high enough for you? It is interesting to see so many customers eager (not just willing as we may have to be this time) to pay 10+% per annum compounded increases!

[meow!]

To be fair, a cursory study of a few cruise lines' websites show that the 2009/2008 increases for Oceania "steadying" while those for several other cruise lines moving upwards (at least in brochure prices, partly due to the fuel crisis and insufficient compensation from "fuel surcharges", and if they don't sell, then they will deep discount afterwards). So, at least in terms of brochure prices, there appear to be a tendancy to converge in percentage increases for Oceania and the others from now on.

 

Perhaps Oceania increased more than the others in the earlier years as its "start up sales" gave way to "fruits of success", which will be easy to understand from the cruise line's point of view.

[lcand1923]

I am really enjoying this thread.

 

I do not know how many ships RSSC has, but O only has three. I can remember doing cost studies at work and frequently the price of things was based on the universe involved. We found that we could set prices cheaper because we could spread the overhead to a larger population. In other words, the monies brought in at a popular location could subsidize the costs at a less popular location. (I've been out of the working world for several years, so I don't know if this is still a popular technique.)

 

In any case, RSSC was faced with a sailing that was not selling. They lowered the price and threw in perks so that they could bring in more passengers and make enough to cover the cost of the sailing. (The alternative would be cancel the cruise. Not likely.) If RSSC has more than three vessels, they can do similar things for other sailings.

 

O has a universe of three vessels with which to make money. So far, they are filling their vessels so they don't need to do much to attract passengers. Perhaps, when the new vessels come on line, we will see changes in their pricing policies since their universe will expand.

[Jana]

I am just an average consumer, I have no knowledge of economics and my math skills are nil. I do know that in cruising, just like in air travel, the operators do whatever they can to avoid "spoilage," or empty berths or seats. When that ship sails or that plane flies, there's no recouping the loss. Oceania, like all cruise lines, also operates on the yield management platform. We might not see the maneuverings but they intend to sail with full ships and for the most part, they do.

 

Back to me not being an economist: If something I want to purchase looks like a good deal to me and I can afford it, then it's a good deal. There have, of course, been a few times when I've smacked my head and wished I had waited because the deal got better later, but then if I had waited, could I have been assured that whatever I wanted would have waited as well? Would have been available for me? So I spend little time smacking my head and a lot of time appreciating my acquisition.

 

Going backwards in this discussion, DaveFr and I both live in San Diego County so he will certainly understand this: The home that I purchased in mid-2005 was a great good deal and I was thrilled. If I wanted or needed to sell it now, I'd get 70% - 75% of my purchase price, if I could sell it at all. The local Ford dealer's lot is filled with discounted Explorers and Expeditions. I read recently that Hummer is ceasing operations.

 

On the other hand, rents in San Diego county are up 10 - 12% and sales of Prius, Honda Civic hybrids, Toyota Yaris and Honda Fit are way up.

 

Meow!, I have always enjoyed your posts and am amazed at your attention to detail. In this instance, though, I just wonder if going so deeply into the nitty-gritty of your pricing issues will detract from the enjoyment of your cruise. I certainly hope not!

 

Jana

[ChatKat in Ca.]

Regent has 3 ships they own - Voyager, Mariner and Navigator and they manage the Paul Gauguin in Tahiti. They are now owned by Apollo - same as Oceania. The passenger capacity of the three O ships are 684 each; The capacity of the Voyager and Mariner are 700 each and the Navigator is 490.

 

Regent is all inclusive of Alcohol, beverages and tips and cabins are all suites with no inside cabins. Oceania has a tiered passenger cabin structure with rooms of varied sizes.

 

Both have open seating dining. Oceania is all Country Club Casual in dress/atmosphere; Regent has some itineraries that include Formal and Informal Dress - mostly in Europe and in No. America is generally all CCC.

 

Ship daily actiivites are quite similar with Tea, Trivia, lectures, evening shows with Regent still offering Production shows.

 

Products are very similar

[haymish]

I must be in the wrong league. I am taking Oceania, 14 days transatlantic from Barcelona to Miami and I am in an inside cabin for 1250.00 per person including all taxes. Granted it's only an inside cabin, but I hope to have as much fun as everyone else does. It blows me away when I hear 40,000 vs. 80,000 etc.

[Rickey 88]

Haymish, you are NOT in the wrong league!! You've made a good choice and you should enjoy your crossing - we will be on that same cruise and this will be our fourth Transatlantic.

 

The inside cabins are just an enjoyable as any - and others we know have been quite pleased and quite comfortable. People pay for what they want - some more and some less. Don't worry about it!

 

The poster who was quoting 30,000 to 40,000 was talking about some B2B (back to back) cruises which would last for 3 or 4 weeks. They were also talking about the upgraded suite category - not quite the same!

 

Hope to see you on board.....

[lcand1923]

Thanks, ChatKat in Ca, for providing the stats.

 

As a favorite waitress in a favorite restuarant responded when we questioned changes in the menu, "I think they're trying to see what they can get away with." (We went to the restaurant two more times to see if it changed back. It didn't. We stopped going.)

 

I think that's where O is with their pricing ... they're trying to see what they can get away with.

 

We like O. It is our favorite cruise line for various reasons. We feel we are getting reasonable value for our money. That being said, we have changed lines in the past and can do so in the future.

[meow!]

It is nice to see this thread generating so many replies. This discussion helps us explore cruise related questions even when we are at home, before and after voyages. In any case, in the long run, it is always better to have better informed consumers!

[haymish]

Thanks Rickey. That was a nice reply that made me feel better.