Richard Fain comments today about pricing

See post 45.

 

In you initial post you said "Most of your points here either aren't true, don't have anything to do with profits, aren't supported by facts, or are just misleading in nature."

 

There were 8 points and you only asked about this one? :confused:

I'm not going to get into the horse race over whether RCI is making more money, or too much money, or whether they are screwing the passengers, but I would take exception to the points you've made, as edited above:

 

4. As I recall, there was a class action suit a few years ago over port fees, and these are now required to be transparent, so if you feel they are too high, why not ask them about it?

 

5. What is your basis for this? In fact, with the implementation of MLC 2006 in 2012 (IIRC), the cruise lines, as well as the rest of the maritime world now has to meet mandated standards for pay, including minimum compensation, overtime, etc., based on the IMO. While I won't say pay has gone up because of this, there has been restructuring of the wages to meet the guidelines, and there for sure has been no reduction in crew wages over the last 2 years, and there are now watchdog measures that allow the crew to report things like this to port state agencies. Last year or the year before, there were a couple of cruise ships detained in Brazil for investigation of MLC violations.

 

6. I guess this is your judgment that the staff is "less qualified". In what areas are they less qualified. Could it be that there is a lot more new staff since some of the more experienced staff is cherry picked to provide training on the new ships?

 

8. While marine fuels are currently low, they are not at "an all time" low. You must realize that your prices for gasoline, automotive diesel and home heating oil have nothing to do with marine fuel prices. Secondly, right up until 1 January this year, the ships could burn low sulfur residual fuel at current prices of $350/metric ton. As of 1 January, when the ships are within 200nm of the North American, Puerto Rican, Hawaiian, and USVI coasts, they must burn low sulfur diesel fuel, at current prices of $600-650/metric ton. So, their fuel cost jumped by 100% this year. The only option to burning the higher cost diesel fuel is to install exhaust gas scrubbers which cost about $1.5 million per engine (figure 4-6 per ship) and have a 5-7 year payback period.

As for the port fees, if you look at a 7 day cruise with RCL and Princess that touch the same ports why is RCL more? I also wonder why port fees and Tax's fluctuate....this has never been the case in the past.... Just look at Alaska or Panama Canal.....You would think that port fees are the same for everyone and taxes also...no?

As for the fuel, Royal Caribbean International reserves the right to impose a fuel supplement on all guests if the price of West Texas Intermediate fuel exceeds $65.00 USD per barrel. The fuel supplement for 1st and 2nd guests would be no more than $10 USD per guest per day, to a maximum of $140 USD per cruise; and for additional guests would be no more than $5 USD per person per day, to a maximum of $70 USD per cruise.

This is from the website, it only seems like common sense that if they charge because the price goes up it must cost them more...seeing that the West Texas Intermediate price is at a 5 year low...one might think they are saving some money....

See post 45.

Opps:D Sorry wrong guy:o

Have you even attempted to do a booking ?

Huh?:confused: I have two cruises booked right now. One in May on RCI and one next April on Celebrity. I've never had a problem getting the advertised (or better) price. Of course, I realize port fees and taxes will be added.

As for the port fees, if you look at a 7 day cruise with RCL and Princess that touch the same ports why is RCL more? I also wonder why port fees and Tax's fluctuate....this has never been the case in the past.... Just look at Alaska or Panama Canal.....You would think that port fees are the same for everyone and taxes also...no?

 

As for the fuel, Royal Caribbean International reserves the right to impose a fuel supplement on all guests if the price of West Texas Intermediate fuel exceeds $65.00 USD per barrel. The fuel supplement for 1st and 2nd guests would be no more than $10 USD per guest per day, to a maximum of $140 USD per cruise; and for additional guests would be no more than $5 USD per person per day, to a maximum of $70 USD per cruise.

 

This is from the website, it only seems like common sense that if they charge because the price goes up it must cost them more...seeing that the West Texas Intermediate price is at a 5 year low...one might think they are saving some money....

Port fees and taxes are not the same for everyone. First, the fees are based on the tonnage and capacity of the ship, and are then divided by the number of guests actually onboard, which is why they will fluctuate right up until you are onboard. So different sized ships pay different rates. The fees depend on contracts between the line and the port, and depend on the economy of the port at the time the contract was signed, how old the contract is, etc. The fees depend on the services the ship receives in that port. Does RCI take on stores (requiring longshoremen), have crew change (requiring security), request additional security, etc. The port taxes are set by the port, the cruise line has no control over these. Again, the lawsuit charged that the lines were overcharging for taxes and fees, and mandated that they break them out of the fare and disclose, if requested, how the taxes and fees are broken down. Write and ask.

And in the 6 or 7 years that crude prices were double that benchmark level, did they ever impose the fuel supplement? It was done once, had a lawsuit about imposing it on people who had already booked, and was dropped by all lines, but it still remains in their contracts. They just got smarter and started buying fuel "futures" to stabilize the prices, and this has slowed the drop in price for them the same way it slowed the climb in price in years past. Because of this, the cruise lines will be paying higher fuel prices than other shipping companies that "spot market" their fuel purchase only when needed, in a time of dropping prices.

This chart shows bunker prices over the last year:

http://www.joc.com/sites/default/files/field_feature_image/image%20%2820%29.png

And while there has been a drop in price starting in Oct 2014, there has not been the steady drop that gasoline prices saw over the same period. Also note, as I've said, that as of January, they have jumped from paying the low sulfur bunker price (red) to the low sulfur gas oil price (yellow), which is higher than the bunker price was all last year. The prices shown are for Rotterdam, but worldwide the trends are the same.

Which of my points would you like me to explain to you?

I'm a few hours delayed getting back to you, but it seems like several folks share my own skepticism on your report. I'll go point-by-point:

1) They have raised prices, a lot! BOGO...ya right! Makes them more money.

This isn't factual, it's relative. I have gone on 3 cruises in the last year that were, in fact, quite a bit cheaper than similar (or lesser) cruises that I took in years past. I can look and find plenty of cruises that are very comparable in price, plenty of cruises that are cheaper, and plenty of cruises that are way more expensive. It's relative to when/where/what ship you are cruising. We took Mariner for 7-nights on an Eastern Caribbean, inside room and then spent nearly $300 less for the same route on Oasis in a balcony room. Same time of year, same route, 8 years later.

2) They have also implemented new tactics to not reduce prices when they drop. (if you touch your booking everything is re-priced) Saves them money.

Meh. I won't argue this one, but I think it's ticky-tack. I personally find it offensive how some cruising hobos try to constantly work the system, so I like that it more difficult. HOWEVER, I don't like that this means the honest folks get penalized. I'll just walk away from this one.

3) Can't use multiple discounts (stock owners) like before and other companies do allow this. Saves them money.

Again... I'm really OK with them plugging loopholes like this. That's good business sense. This isn't some OMG CONSPIRACY thing, it makes it more even across-the-board for most cruisers. However, I think this can be taken too far and hope it doesn't go there. However, the point remains that this is misleading in regards to profits. It's not like they are shafting most people on this, they are keeping most people from shafting them by abusing the system.

4) They have raised port fees/taxes (on exact same ports other companies charge less, where is this extra money going?) Why do they fluctuate so much?

This was much better explained by chengkp75. THOSE are facts. This is some serious misunderstanding of the system on your part.

5) They have reduced employees pay structure, now that tips are automated. Saves them money.

Seriously explain this without using a phrase like "well, I befriended some crew members and we're BFF on Facebook." What are your source facts?

6) They have reduced the quality of service by employing less qualified staff. Cost them less.

Seriously Part II, Electric Boogaloo, explain this without using a phrase like "well, I befriended some crew members and we're BFF on Facebook." What are your source facts?

7) They have increased the prices of Drinks and specialty restaurants. Makes them more money

OK. I believe this is true. Although, to be fair, I'm sure that it's not pure profit like food/bev costs have stayed flat or dropped over the years. Is this a for-profit business or UNICEF we're talking about?

8) Diesel is at an all time low. Saves them a ton of money.

I'd love to see some facts for this one.

Is that detailed enough?

You left out one point. This is a business, they have one obligation and that is to shareholders. Don't like it, don't use the product

Sent from my iPhone using Tapatalk

Apparently, he's never booked a cruise through their website.

Hehe. :-)

How apt if the quote is true.

In Oct, 2005 DW and I went on a 7 day Caribbean cruise on the Navigator of the Seas. We paid $2,049 for the both of us, out the door. This was a balcony. In Oct, 2014 we booked a balcony on the Oasis of the Seas and guess what we paid? $2,049, out the door!! I don't see the outrageous price increases the OP is talking about. Forget about BOGOHO, how much more are you actually paying? For us, the prices for RCI over the past 20 years have remained relatively stable.

In Oct, 2005 DW and I went on a 7 day Caribbean cruise on the Navigator of the Seas. We paid $2,049 for the both of us, out the door. This was a balcony. In Oct, 2014 we booked a balcony on the Oasis of the Seas and guess what we paid? $2,049, out the door!! I don't see the outrageous price increases the OP is talking about. Forget about BOGOHO, how much more are you actually paying? For us, the prices for RCI over the past 20 years have remained relatively stable.

I believe the original comment was specifically about pricing over the past 6 years.

example?

The poster may be talking about the taxes and port fees.

There was a recent example of a "sale" with "free" beverage package. The website gave a cruise fare. When you entered the code (I believe it was "beverage"), the price jumped by $500 pp in my case.

In Oct, 2005 DW and I went on a 7 day Caribbean cruise on the Navigator of the Seas. We paid $2,049 for the both of us, out the door. This was a balcony. In Oct, 2014 we booked a balcony on the Oasis of the Seas and guess what we paid? $2,049, out the door!! I don't see the outrageous price increases the OP is talking about. Forget about BOGOHO, how much more are you actually paying? For us, the prices for RCI over the past 20 years have remained relatively stable.

When we book a cruise we look at what we are actually paying, not how the marketing department decided to offer the prices -- so I enjoy how you have put it, highlighted above. It is all about the 'bottom line' price, not how it was achieved.

But over the years, the cruise experience has changed, and most people are also complaining about that relative to the cost.....per se -- 'I maybe paying the same amount, but am getting less for it'. No intention to hijack this thread away from the original focus.

It is a never ending conversation.

The part I don't appreciate is the total confusion when you get your confirmation sheet with 20 different amounts on the tally: For fair advertised at $629 pp:

Guest 1 Guest 2 Total

871.00 871.00 1742.00

CAS Rates: -90.00 - 45.00

BOGOHO: -298.00

BOGOHO -138.00

Taxes/fees

135.82 135.82 1442.84

How is one supposed to make any sense of that? Where in any accountant lingo is $629.00??? It really makes one lose any sense of trust doesn't it?

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Richard Fain is the total Gentleman.

I have had the pleasure of meeting and Dining with him many times on various RCCL ships.

I believe his view on cruising and pricing.

Why would anyone doubt him ?

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Cruise Critic is covering the convention being held in Miami called Cruise Shipping Miami. Below is a link to todays article that CC has posted:

 

http://www.cruisecritic.com/news/news.cfm?ID=6250

 

It is interesting.

 

One of the things that I found interesting in the piece was about the demographics of the average cruiser:

 

"According to Cruise Lines International Association (CLIA) research, the average cruise traveler is 49 years old, married, and earns $114,000 per year."

 

I am not surprised, because I have personally seen many many more young families with young children on cruises than I ever thought I would. But seeing what there research has delineated is eye opening. I know when I had small children, I could not consider a cruise as a 'family vacation' -- it would have been more than we could afford.

We'd disagree with the CLIA research!:eek:

That might be true for RCL, and most of NCL targeting this group, but I'd have a hard time believing those figures when looking at other cruise lines like, HAL Granny cruises, Carnival youth cruises, Celebrity 50 and up, Princess 50 and up, and the smaller cruise lines that offer the old rich cruises for mortgage amounts!

Now we don't have any fancy polls, or numbers to back up our opinions, but I think most here might agree with us on our perceptions!

Royal Caribbean in the last 5 years has more than tripled in value as a corporation!

 

They make more money today per passenger than ever, why?

 

1) They have raised prices, a lot! BOGO...ya right! Makes them more money.

2) They have also implemented new tactics to not reduce prices when they drop. (if you touch your booking everything is re-priced) Saves them money.

3) Can't use multiple discounts (stock owners) like before and other companies do allow this. Saves them money.

4) They have raised port fees/taxes (on exact same ports other companies charge less, where is this extra money going?) Why do they fluctuate so much?

5) They have reduced employees pay structure, now that tips are automated. Saves them money.

6) They have reduced the quality of service by employing less qualified staff. Cost them less.

7) They have increased the prices of Drinks and specialty restaurants. Makes them more money

8) Diesel is at an all time low. Saves them a ton of money.

 

All of these factors increase revenue therefore causing the stocks to rise as the company is more profitable today then ever....

 

I understand that business is business but seeing as they are making more money then ever...why are they making so many cut backs and providing such a sub par service lately?

We'd agree with you!

As a stock holder we are happy!:D

As a cruiser who's been cruising other cruise lines the past couple years because of the prices and cutbacks, we are angry!:mad:

My first cruise was a 7 day cruise with Carnival in 2009. It was $1400 pp in an interior stateroom. I am sailing on Oasis at the end of the month for $1000 pp in a Grand Suite. My original booking was an ov balcony. Granted I am not an experienced cruiser, but comparatively to earlier cruises the base price is less expensive now than in the past. However, service is also less.

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Richard Fain is the total Gentleman.

I have had the pleasure of meeting and Dining with him many times on various RCCL ships.

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Is there more coming on this......

is there more coming on this......

???

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Richard Fain is the total Gentleman.

I have had the pleasure of meeting and Dining with him many times on various RCCL ships.

 

I believe his view on cruising and pricing.

Why would anyone doubt him ?

 

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Just because you believe him doesn't mean everyone else shares your views about his credibility.

When you click on a cabin prices , put in all your information, then go to exit, the prices jumps dramatically more than the price listed. Why, who knows. Is it the cabins at this price was sold out, was there only a few cabins at that price? This is similiar to the Southwest scam where they advertised 49 dollar one way fares except there was never a seat sold at 49 dollars. The were sued and that practice stopped. I do not believe any other cruise line does this marketing approach

I'm too lazy to do a mock booking, but from what I've seen on most cruise lines' websites is that the cabin price says "starting at $XXX", so within every cabin category there is a spread depending on where on the ship it is.

Yes, I certainly don't believe him on this matter!

When you click on a cabin prices , put in all your information, then go to exit, the prices jumps dramatically more than the price listed. Why, who knows. Is it the cabins at this price was sold out, was there only a few cabins at that price? This is similiar to the Southwest scam where they advertised 49 dollar one way fares except there was never a seat sold at 49 dollars. The were sued and that practice stopped. I do not believe any other cruise line does this marketing approach

When you see a cruise fair for, $800, for example, and you select that cabin at that price you will see your cruise for $800 plus a couple of hundred dollars in port fees and then add tax. It will be much higher than $800. The breakdown on the web site couldn't be clearer. Prices don't just magically jump when you purchase.

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Richard Fain is the total Gentleman.

I have had the pleasure of meeting and Dining with him many times on various RCCL ships.

 

I believe his view on cruising and pricing.

Why would anyone doubt him ?

 

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Excellent post! One of the most convincing arguments I have read since ages.

BTW,

Ayatollah Khomeini is the total Gentleman.

I have had the pleasure of meeting and dining with him many times on various state banquettes.

I believe his view on democracy and philanthropy .

Why would anyone doubt him ?

:eek:

Just because you believe him doesn't mean everyone else shares your views about his credibility.

hes got his fiduciary duty to his shareholders before all else....

at the end of the day royal is a business, they are in it to make money not give away breakeven cruises...