would you be willing to pay a fuel surcharge

[grandsix]

Carnival is testing a fuel surcharge on its Costa line and if sucessful, they will expand it. Would you be willing to pay? Let us remember how the charges for the specialty restaurants began.

[bookworm0911]

All companies are going to pass on increased costs to the customer, so you are going to pay one way or the other- a separate fuel surcharge now or increased fares down the road.

[Randyk47]

The easy answer is yes, we'd be willing to pay a reasonable fuel surcharge. However, that doesn't mean we want to show up at the terminal and have the agent hit us with a $400 bill at the last minute. :eek: (I saw that figure some place else here on CC presented as something that had happened to somebody on some line. ;) Not positive it was accurate or that the situation was true or explained properly but that would be a bit of a shock to say the least.) I think cruise lines have more than sufficient time to plan ahead and therefore should have sufficient time to figure fuel costs into their fares in the first place. Certainly there's been a big jump in Caribbean fares for next year's peak season and I think fuel, directly and indirectly, is a large part of the increase. It's not like these major lines just pull up at a dock and ask for fuel like we buy from a gas station....they have contracts.

[torpeedo]

No I would not be willing to pay a surcharge. I agree with Randy that they have a reasonable expectation way ahead of time what their costs are going to be and it should be reflected in the rates when I purchase my fares. They often change the fares at will, down or up. I would rather pay the costs when I purchase my ticket and not expect some additional add on at the end.

[newmexicoNita]

I doubt a fuel charge would be $400 and if I got hit as I was about to embark I would be royally pissed, but as for paying a fuel charge, I do understand. I believe that is one reason we have been quality of food suffering lately; prices have to be cut somewhere. Grandsix brings up a good point: specialty restaurants and how they started and were priced. Then we have the port charges; used to be about $40-$60 per cruise, now look at what they are, if you even know. Extra charges will continue to be added to the cost of cruising to offset inflation. NMNita

[sail7seas]

Do we have any realisitic choice in the matter?

If we have booked our cruises, made final payment and may or may not have yet received our documents.........how many of us are actually going to cancel our cruises if the company assesses a fuel surcharge?

Most will grumble but will pay it. Certainly those who have air tickets, hotel/car rental reservations are most likely to pay up.

I'm sure somewhere in the documents if one wants to spend the morning reading them, they will find language that permits the company to make such an assessment.

[bookworm0911]

I think cruise lines have more than sufficient time to plan ahead and therefore should have sufficient time to figure fuel costs into their fares in the first place.

It's not like these major lines just pull up at a dock and ask for fuel like we buy from a gas station....they have contracts.
Sure they have contracts and the planned fuel costs are built into cruise fares, but it would be no surprise that these contracts also have clauses that under certain fuel price increases the cruiselines can be charged more than the normal contract price. This would then necessitate passing on the increase with a fuel surcharge to the pax.

[GOLDENBONNY]

Carnival is testing a fuel surcharge on its Costa line and if sucessful, they will expand it. Would you be willing to pay? Let us remember how the charges for the specialty restaurants began.

WILL I HAVE A CHOICE?:p

[sail7seas]

WILL I HAVE A CHOICE?:p


Exactly. :)


Think they'll ask if we'd like to pay a fuel surcharge and give us the option of declining the offer.......... ??? I don't think so!!! :D

[whogo]

The HAL cruise contract for my March, 2006 cruise stated:
"In the event of an increase in fuel or other costs above amounts projected, we have the right to increase the fare at any time up to Initial Departure and to require payment of the additional fare prior to Intial Departure."

Later it states:
"Within seven (7) days after you are notified of the additional fare (but no later than Initial Departure), you may elect to surrender this contract to us for cancellation, whereupon you will receive the Refund Amount. Cancellation fees do not apply to this type of refund."

You are responsible for getting the travel agent's fees back.

HAL can already charge you for fuel or any other cost increases. I would hate to pay a surcharge for their poor planning, and would cancel if I didn't have other nonrefundable expenses.

The cruise contract arrived with my documents. I thought I had just booked a cruise, but I had also given them permission to use my likeness in their advertising. "Without any requirement that we compensate you or obtain any additional approvals from you, we are authorized to include photographic, video recordings and other visual portrayals of you, as well as voice recordings included with any videos, in photographs, videos, DVDs or other mediums that we sell at retail or utilize for marketing, promotional, publicity and/or training activities."

The cruise contract is available here: http://www.hollandamerica.com/policies/cruise.do

[sail7seas]

Meanwhile,,,,,,, this is all idle conversation, isn't it? I have not heard anything about HAL charging fuel surcharges. Has anyone heard differently?

[Randyk47]

While I "cited" what I thought, and still think, was an exaggerated fuel surcharge, I'd agree that by the time my DW and I fly to Port "X", stay the night before, and are standing there in the terminal with return airline tickets that are not good until 10-14 days later that we'd pretty much not have any choice but to pay up. The level of grumbling probably would be in direct relationship to the surcharge...the higher the surcharge the louder the...well...you get the idea. While I'd not be a happy cruiser we at least, within reason, have the means to pay up and cruise. I can think of circumstances where that might not be possible for other cruisers. I think HAL, or any other mainstream line for that matter, has to think long and hard before they come up with a surcharge. As Bookworm correctly points out, there could be circumstances that even the line couldn't anticipate but they better be real, real sure or some folks cruise is basically going to be ruined.

[lougee1043]

gee randy------just pay up --some of us know who signs your checks-- lol

as randy stated -- booked rooms --car rental -- air tix etc etc as well as the anticipation of going on another cruise for the x months since you made your initial deposit --------------------you bet im paying the surcharge ---but im going to get even by drinking and gambling less -- that will teach them a lesson

[Randyk47]

Well Lou....at least you can say you know that your tax dollars were well spent. :D

[penwah2002]

A surcharge should be a temporary measure and should fluctuate with the fuel prices. We really don't want them to raise prices to cover fuel when the price may go down. Higher prices are not what anyone wants, but any company doing business has to have a level of profitability and the fuel prices are eating into that. We have to do our part to cover the higher fuel prices, it's a fact of life. We can't ask any company doing business to eat these rising fuel prices and remain profitable and continue to provide the service we expect from our cruise. My husband and own a trucking company and we are no different than a cruise line. We have to surcharge our loads and that fluctuates weekly witht the fuel prices. If we were'nt albe to surcharge we would have been out of business a long time ago. Why be in business if you can't make money? Would you operate your business that way?

[karen2cruz]

No...I would not be willing. Oil barrel prices are down at pre-hurricane levels of last year and yet the oil companies have not lowered the prices for us. We need to put pressure on businesses to pressure oil companies to stop gouging us. Yuck...politics...greed. I am going back to thinking about packing for Alaska now.

[Juanita462]

hmmmmm Carnival posted a $338 million net profit for the first quarter of this year. Sounds like they are doing ok. I read that it was 1.4 billion last year or the year before, can't remember which.

[BasenjiMom]

My husband works at a small oil refinery (500 employees).
They are making $2 million a day PROFIT. Just last year is was $1

We 'are' being gouged.

[kryos]

Carnival is testing a fuel surcharge on its Costa line and if sucessful, they will expand it. Would you be willing to pay? Let us remember how the charges for the specialty restaurants began.
A specialty restaurant is different. I certainly don't HAVE to dine there. I can be fed perfectly well in the main dining room or the Lido. So, in the case of specialty restaurants, it's entirely my own choice whether or not to pay the surcharge assessed for dining there.

As for fuel surcharges ... I said this before and I'll say it again ... if the cruiseline assesses that charge before I've made final payment (and I have the option to just cancel if I am that opposed to paying it), then I have no problem with it. But, if I've already made final payment ... sealed the contract, as it were, and can't cancel without penalty ... then I don't think any extra charges on the part of the cruiseline should be permissible.

Like I said, my final payment sealed the deal and whatever the price is that I agreed to should be my final price. Of course, before final payment is a different story, and yes ... the cruiselines should be free to add a surcharge if they feel the need, but then the passenger is certainly free to cancel at that point as well ... so all is fair.

Blue skies ...

--rita

[kryos]

A surcharge should be a temporary measure and should fluctuate with the fuel prices. We really don't want them to raise prices to cover fuel when the price may go down. Higher prices are not what anyone wants, but any company doing business has to have a level of profitability and the fuel prices are eating into that. We have to do our part to cover the higher fuel prices, it's a fact of life. We can't ask any company doing business to eat these rising fuel prices and remain profitable and continue to provide the service we expect from our cruise. My husband and own a trucking company and we are no different than a cruise line. We have to surcharge our loads and that fluctuates weekly witht the fuel prices. If we were'nt albe to surcharge we would have been out of business a long time ago. Why be in business if you can't make money? Would you operate your business that way?
Oh, the poor cruise lines ... they are taking a beating because the fuel prices went up a bit prior to my sailing. Of course, I should take money out of my pocket to help them out ... keep their bottom line consistent with their projections. No way! Let them surcharge the passengers who book after the surcharge goes into effect. If those passengers are booking at the last minute, then they are already getting a killer rate for their cruise ... far less than what I paid ... and so they can make up the increased fuel prices. Not me. I booked in advance and I made final payment. That should be my FINAL price even if the fuel goes up to $600 a gallon. That's not my problem.

A business like trucking is far different from a cruise line. If tacking on surcharges for individual hauled loads is an accepted practice in that industry, then fine ... there's nothing wrong with it. Technically, you are probably not even assessing a fuel surcharge ... but rather just increasing the base price of what it will cost me to ship my load to California this week, as opposed to what I may have paid last month ... or may pay next month. Trucking is something that does not operate on the long lead times that a cruise does ... I doubt you contract to have a load hauled six months to a year out ... but rather probably a month or so out. Fuel surcharges are the only way to keep a business like that running. Again, what you are talking about in the trucking industry is probably more of an increased charge for hauling a particular load because the gas prices are up at the point in time when that load is contracted for.

But a cruise, at least for a lot of people, is a one-time experience ... or at least one that is not repeated too often ... and their contracted price, sealed by the final payment, should be it. No other charges. People generally plan their cruises much farther out than they would plan to use the services of a trucking company. The cruise lines work out all of their cost macros and figure out a price for the cruise that will allow them to make a certain profit. If some element of those costs go up, that's the cruise line's problem if the passenger has already remitted his final payment. So, I say let the last minute bookers eat it ... or the people who reserve after the increase due to higher fuel costs is assessed.

Blue skies ...

--rita

[thomasale]

what it should be and what it is are 2 seperate issues. I am sure I would pay it and would just have to find a way to have that much better a time. I hate paying sales tax but I do...come to think of it I don't like any taxes :)

[bepsf]

Large corporations who are heavily oil-dependent such as shipping lines use the futures market to hedge against fuel cost increases the same as they do against currency fluctuations and other expenses. Fuel prices are also negotiated well in advance the same as food and other costs - it's not like they drive up to the local Texaco and pay whatever happens to be on the meter...

Fuel costs would have to more than double within the space of time between booking and final payment before I would consider paying a fuel surcharge. Post-Final payment? The price of fuel would have to more than triple since the time of final payment and the time of the request. Otherwise I would refuse to pay and make the biggest stink here known to man...

[jimmy2x]

Large corporations who are heavily oil-dependent such as shipping lines use the futures market to hedge against fuel cost increases the same as they do against currency fluctuations and other expenses. Fuel prices are also negotiated well in advance the same as food and other costs - it's not like they drive up to the local Texaco and pay whatever happens to be on the meter...

Fuel costs would have to more than double within the space of time between booking and final payment before I would consider paying a fuel surcharge. Post-Final payment? The price of fuel would have to more than triple since the time of final payment and the time of the request. Otherwise I would refuse to pay and make the biggest stink here known to man...

As usual Brian was eloquent and I strongly agree. Final payment has nothing to do with it. The cruise line has been sitting on our 1.2K for 4 months already. That's fine and part of the deal for booking early - so was the earlybird price which I expect HAL to hold, and we are confident that they will.

[bookworm0911]

hmmmmm Carnival posted a $338 million net profit for the first quarter of this year. Sounds like they are doing ok. I read that it was 1.4 billion last year or the year before, can't remember which.
Sure, that's a big net income, but still a decrease in earnings from 1st qtr 2005 and now in the 2nd qtr also. And the earnings decrease is what will drop the stock price which is what the stockholders care about.

You can google all the info and Mickey Arison's statement regarding the drop in net income. A major reason he gave was higher fuel costs, so evidently CCL's contracted costs are not locked in totally for the long term.

As the posting of the HAL cruise contract reads you can cancel with no cancellation fee if charged an additional fee and you choose to cancel your cruise.

[wander]

Did you notice the CC News item that appeared while this thread was being done? It lists the lines that already charge a fuel charge and the fact that Crystal has increased their fee by $1 for 2007, except for reservations already made.

[bepsf]

You can google all the info and Mickey Arison's statement regarding the drop in net income. A major reason he gave was higher fuel costs, so evidently CCL's contracted costs are not locked in totally for the long term.

I agree with that - hedging is an effective medium-term strategy at best - higher prices will necessitate higher ticket prices and/or higher onboard revenue for future cruises.

I believe there is a balance of how much the market will bear for cruises - all costs considered. We already see this with the heavy discounting on such itineraries such as the 7-day Caribbean - and the accompanying pressure for big spending while onboard. Once fuel costs rise above a certain level and ticket prices rise accordingly, folks will simply dig in and refuse to pay and lines will be forced to lower prices to below break-even and rely on even more onboard revenue to make their profits - indeed this may already be the case with certain ships and lines: The tales of pressure-selling tactics in the spas are commonplace - and witness the $10 Martini (+fixed tip, +optional tip!) on some lines...

Sadly, some in the industry are maintaining orders for Post-Panamax ships like GM and Ford relied on big SUV's for profits - these new monsters are helping to make the 7-day Caribbean Cruise a commodity for which many US shoppers look at prices more than they do the ship or the line. When fuel prices increase to the level that the economics of making profits on these cruises fails, the lines will not have the flexibility to easily relocate the new behemoths to other itineraries that can sustain higher pricing levels, nor will they have the demand to sustain 100% occupancy on a fleet of 3000+ pax ships and profitable operations.

[CruisinGrams]

It is inevitable, even if it is unacceptable. We were actually charged extra fees onboard on the Westerdam to Alaska because port charges had been increased. I would not mind paying a little extra but you would think that they should be able to keep this to a minimum.

[kryos]

Sadly, some in the industry are maintaining orders for Post-Panamax ships like GM and Ford relied on big SUV's for profits - these new monsters are helping to make the 7-day Caribbean Cruise a commodity for which many US shoppers look at prices more than they do the ship or the line. When fuel prices increase to the level that the economics of making profits on these cruises fails, the lines will not have the flexibility to easily relocate the new behemoths to other itineraries that can sustain higher pricing levels, nor will they have the demand to sustain 100% occupancy on a fleet of 3000+ pax ships and profitable operations.
I think it's great that the cruise lines want to keep building bigger and bigger ships. You know why? Because they are going to over-build and capacity will soon well exceed demand. That's gonna drive prices down ... way down. I foresee a day when the cruise will, in essence, be almost free. The line will then hope to boost onboard spending to make up for the bath they take on the fares.

The problem with building bigger and bigger ships is that because cruising has been an expanding market for many years, the cruise lines think it will continue to expand ad infinitum. That's not necessarily the case. With rising prices in other areas, such as gasoline, coupled with rising unemployment in many sectors, growth in the cruise industry is going to slow. It's slowing already. And where is that going to leave the cruise lines who have built huge megaships? It's gonna leave them with loads of empty cabins on lots of sailings. Those ships are designed to be profitable through economies of scale. You've got lots and lots of ammenities on those ships, but you need lots and lots of passengers to cover the costs of those ammenities. When the ship is sailing at only 70 or 80% full, the cruise line is losing big bucks.

Betcha HAL was happy that they had smaller ships when 9-11 happened. I heard that the Amsterdam sailed on its World Cruise the following January with only something like 400 people onboard. The Amsterdam holds over 1200 passengers. Luckily, though, because they had the Prisendam in their fleet ... a much smaller ship ... they were able to press that vessel into service for the next year's World Cruise ... and were able to sail at pretty much full capacity. Now that World Cruise bookings are up, HAL was able to switch it back over to the larger Amsterdam for next year.

Maybe some other cruise lines should take a lesson from HAL. Bigger is not always necessarily better. Perhaps a variety of size ships in the fleet may prove to be the more profitable way to go.

Blue skies ...

--rita

[JLC@SD]

Carnival is testing a fuel surcharge on its Costa line and if sucessful, they will expand it. Would you be willing to pay? Let us remember how the charges for the specialty restaurants began.

Seems to me that is what all the Cruise Line already do with the Port Charges..........:)

[grandsix]

I hope Hal and the other lines will listen carefully to these comments. Do they want to win the battle and lose the war?