Oasis and RCI pricing strategy?

[The Flying Pirate]

Originally Posted by lakette3

Hank,

I still don't understand why you want to be part of the OASIS posts. ...
Me

Ummm, where else would this thread go? It is after all about the Oasis of the Seas.

I think some of you missed the origional point. Hank was not bashing the ship, mearly asking if the current pricing model was appropriate for the state of the economy.

Personally I have two main concerns about the ship before I reserve a cruise.
1) The cost, it is about double what the rest of the RCCL fleet is going for for a 7 day cruise. It may very well be worth it, but the fact is it is double the price of some of the other ships.

2) The crowd. I have been on all of the current classes of ships. Mariner of the Seas was fantastic and we enjoyed it. We sailed on Freedom last year and it constantly felt overcrowded. Everywhere you went there was a crowd and it was mainly from poor crowd control on the part of the crew. We have been on three cruises since Freedom and I have noticed that all three ships have taken steps to eliminate some of those crowd control issues. I suspect that it is a problem that they have taken a serious look at since they do not want to have those type of issues with Oasis.

It has been said that the target market for Oasis is not so much the Crown and Anchor Diamond members but rather the people that have avoided going on a crusie in favor of the "all inclusive" resorts. (If anyone cares I have stayed at several All Inclusives around the Caribbean and cruising is MUCH better) Hopefully that works. Once you get someone hooked on cruises they usually come back. Which is good for the industry as a whole.

[Hlitner]

Alseau, Great post and very thought provoking. We agree with much of what you say, especially regarding the Caribbean ports. I sure hope the future is good for RCI so I can make some money on their stock We think your point on the innovation done by RCI is key. How much are folks willing to pay for that innovation is the business question that you can be sure has kept RCI decision makers awake at night. The other very important business issue is can RCI increase the on-board/per passenger day revenue (to translate, how much can they get you to spend on the ship) to cover the huge debt-service and operating expenses of the Oasis. Three years ago we got so fed up with the nickel and diming stuff we decided to try our first all-inclusive instead of a cruise. To our amazement we loved the AI and the fact that at the end of the week our bill was zero! We have since gone to 3 other AIs and were also pleased with the bang for the buck. Those 4 AIs would have previously been 7 day cruises, but we have pretty much abandoned all 7 day cruises in favor of AIs and now limit our cruising to longer cruises. We still intend to cruise about 60 - 75 days a year, but the 7 day Caribbean market would be our lowest priorty cruise. We recently spent 7 days at a Dreams All-Inclusive that cost us $1600 total (for 2) which included round trip air (Phl to Cancun) + 7 nights. Our total cost for that $1600 booking was $1600! No extra tips, no charge for drinks, no charges for alternative restaurants, no annoying PA announcements etc. And we never had to fight for a nice chair on the beach! We are soon off on a 10 day Ruby Princess Cruise. The cruise cost was about $2000 (for a nice balcony cabin) + our airfare which adds about $350. Based on our experience we expect to spend about $60 per passenger day on the ship (tips and booze) and essentially nothing on the ports (we usually just go to the beach or snorkel). This means that the Ruby will cost about $3000for our 10 day cruise (a pretty good deal) or $150 per passenger day. A comparable cabin on the Oasis would cost us more than twice the price per passenger day (factoring in all the usual charges). We continue to wonder if there is a large enough market willing to pay that extra money to be on the Oasis. It will be very interesting to watch the market over the next year and see what impact the Oasis has on the industry.

Hank

[Islandbear]

Originally Posted by smoothy

I'd have to disagree with that. Just in the US there are roughly 300 million people, according to CLIA only 20% have ever cruised (10% in the last 3 yrs), so obviously the industry is not offering something for everyone. If Oasis can attract even 1 percent of the 240 million people (and again that's only from US, imagine those numbers if they included the rest of the countries that are actively marketed for cruising) that would be 2.4 million new cruisers, enough for 12,000 berths/week for almost 4 years. That is on top of people who have previously cruised and want to use the Oasis.

I have a little trouble following your math. But, the reality is that cruising is down in this recession and fewer people are cruising and more of those cruising are looking for value for the dollars spent. Oasis offers a lot of value. But the addition of the new cabins doesn't substantially increase the pool of potential cruisers.

[smoothy]

Originally Posted by Islandbear

I have a little trouble following your math. But, the reality is that cruising is down in this recession and fewer people are cruising and more of those cruising are looking for value for the dollars spent. Oasis offers a lot of value. But the addition of the new cabins doesn't substantially increase the pool of potential cruisers.

My point is, in the US there are about 240 million people who haven't ever cruised. Some cannot afford, but for others, they see no value in cruising (or at least the value doesn't offset the cost). By making the ship so different, RCI is hoping to entice some of those people to give it a try. More or bigger versions of the same won't get many new clients, but offering different and unique will pull in new people.

[Islandbear]

I agree, to get a younger generation cruising is going to take a major change in "cruising".

20-40 years ago cruise ships offered "Country Club" service and the Grand Tour itinerary. See the world in the elegant comfort of your floating hotel.


For the last twenty years it has been a focus getting the millions of baby boomers into FUN cruising. More is better, forget the ports (except for shopping), it's the ship and WOW factor.

What is it going to take to get the X & Y generation on a cruise ship?

[LunaSoma]

What is it going to take to get the X & Y generation on a cruise ship?

DH and I are 25 and 26 years old respectively and we LOVE cruising as do many of our friends. We've been on a few different types of ships and find that they each have their pros and cons and while we are more likely to gravitate toward bigger ships, we wouldn't rule out a smaller ship in the future(we both loved Grandeur and he really liked Majesty which I have never been on).

Oasis is expensive, but it is also really appealing to us. We are both saving up now to go in 2011 and for us it is worth it.For the record we are NOT all inclusive types at all. We don't like the fact that it seems at the inclusives all there is to do is lay on a beach and drink. For us these "floating resorts" are great, since they offer so much more and much of it is included in the cost.

Yes, it will be more expensive than a cruise on a smaller ship and yes we have been to these ports before but we love the idea that when we're on the boat there is so much to do. Sure we could do some of the boat activities on land, like mini-golfing, but there is something really cool about golfing while overlooking the ocean. That kind of experience is tough to replicate. I also don't mind the fact that there are restaurants and activities that come with an upcharge. I like that the options are there if we choose to partake, but if we don't want to, there's still a ton of activities included in the cost already. Besides, I'd rather pay a few bucks more for a specialty latte, for example, if I choose than not have specialty lattes available at all.

Aside from us, my parents who are both 65 years old are also really excited about this ship and thinking of joining us on this cruise. They have done smaller ships on Celebrity and MSC in the past that were less expensive and had better ports, but they are excited about all the options available to them as well, so I think this ship does have some mass appeal.

Anyway, my long and rambling point is, I'm a member of Gen Y and I love cruising, I am excited about Oasis/planning to sail on it and know I'm not alone. Those that don't like Oasis will take advantage of one of RCCL's other ships or another line, and that's totally fine. It's not going to be for everyone, but I now DH and I will go and have a great time

[Islandbear]

Karen,

Thank you for your responce. Your comments show why ships like Oasis, with a wide variaty of options, and price points, are positioned well to serve the next wave of cruisers. But the Florida-Caribbean Cruise Association noted that the avergage age of cruisers increased from 49 in 2008 to 50 in 2009.

[ALSEAU]

Originally Posted by Islandbear

Karen,

Thank you for your responce. Your comments show why ships like Oasis, with a wide variaty of options, and price points, are positioned well to serve the next wave of cruisers. But the Florida-Caribbean Cruise Association noted that the avergage age of cruisers increased from 49 in 2008 to 50 in 2009.

Which may only be a temporary speed bump due to the current economy. Which has affected all tourist industries including the AI's.

[Islandbear]

Originally Posted by ALSEAU

Which may only be a temporary speed bump due to the current economy. Which has affected all tourist industries including the AI's.

I think when the recession is over and people get confidence in the economy again there is going to be a rush back into cruising. A lot of people have put off their vacation plans over the past two years and are anxious to get back on their favorite ships and try Oasis and the other new ships. But I still think the numbers will continue a decades long trend of cruisers getting older on average.

[ALSEAU]

Originally Posted by Islandbear

I think when the recession is over and people get confidence in the economy again there is going to be a rush back into cruising. A lot of people have put off their vacation plans over the past two years and are anxious to get back on their favorite ships and try Oasis and the other new ships. But I still think the numbers will continue a decades long trend of cruisers getting older on average.

You my be right. But RCI is betting that their new ships will give younger passengers and first time cruisers a reason to cruise

[sealord]

Originally Posted by Islandbear

I think when the recession is over and people get confidence in the economy again there is going to be a rush back into cruising. A lot of people have put off their vacation plans over the past two years and are anxious to get back on their favorite ships and try Oasis and the other new ships. But I still think the numbers will continue a decades long trend of cruisers getting older on average.

"Throw The Bottle!" Catch! Actually, for those who are not having financial difficulties, this is exactly the right time to cruise. The pricing on expensive cruises is really good. As to the large ships, it is a strictly a matter of taste I guess. For a moment an analogy to aircraft carrier museums. Some have had stairs, elevators, restaurants and other major modifications. The USS Hornet, where I am a volunteer, is a National Historical Monument and as such 'may not be modified'. One, it must be maintained as it was in service, and two, it remains a 'ship', not a building that houses exhibits. In my view these megaships resemble floating buildings that house exhibits ... and an amusement park. I really love ships, and I don't much like amusement parks. That's my thing. After cruising Voyager class at least four times, and all of the others, our trend is to the smaller ships (see below). I don't see us returning to the 'big' ships until our physical capabilities and quest for adventure wains. Therefore, we will be among those who cause the average age on the big ships to increase, not decrease. And if I want to go to Central Park, I will fly to New York and also take in a real Broadway show.