Wonder Why Celebrity is accused of cutting corners and raising rates?

A few thoughts on the subject.

http://boomagers.com/sites/boomagers/files/Boomers_-_Marketing's_Most_Valuable_Generation.pdf

Interesting read.

Even more clear now why it seems there is a push begin to move the masses over to RCI, to keep all those ships and berths full, leaving X as a "boutique" brand to fill the smaller niche markets that are around.

On the surface, your analysis makes sense. However I wonder if you're the one who does the grocery shopping in your household? I've noticed a dramatic cost increase in all categories of groceries over the past year.

 

Actually I am the one who does the grocery shopping, and I watch prices like a hawk. My observation says that while food prices are up a bit, it's not all that dramatic. Meat is up some, but just about everything else is moderate or in some cases has actually dropped. PS -- USA Today and similar periodicals are not reliable sources of statistical information. They see a change from 2% to 3% and print headlines using words like "soaring" and "skyrocketing." They sell newspapers, not accurate information.

Keep in mind that the food cost reported includes many things other than meat, particularly beverages for example, and the statistics show that non-alcoholic beverages are actually down over the last year while alcoholic is up only about 1%. Further, there's a lot of food served other than steak -- visit the buffet, or just look at the menus. I doubt that meat per se accounts for more than a small part of the reported total (I'm betting it's less than beverages). Even though its rise was more than the reported increase in food costs generally, the effect it could have on the total would still be very small.

Your claim in the original post was that the reduction in costs in the quarterly financial report shows that passenger service, food quality, etc. is being degraded. You can believe whatever you want to believe, and I'm not here to change your mind. My point is that while it's possible you're right, the opposite is also possible -- the financial data don't provide you with valid evidence to support your claim. It would be necessary to dig much deeper, and the information is not public. We do know, however, that the reported cost reduction that you hung your hat on stemmed mostly from matters totally unrelated to passenger service.

Your claim in the original post was that the reduction in costs in the quarterly financial report shows that passenger service, food quality, etc. is being degraded.

Just to set the record straight, That wasn't my claim. It was the Dow Jones article that said that.

The only part of that post that was mine was the first line. "Because they do" It was an observation of what appears to be an increase of such whining on the boards.

BTW I don't remember who brought up a reduction in Celebrity passenger service, but it wasn't me. My comment in a later post was a generalization of how companies in general were able to beat the bottom line without raising the top line. In the quarterly report, RCL beat both.

Celebrity has cut some corners over the years and they have raised pricing. Just compare your per night price from two to four years ago when the cruise market was soft to the current pricing which isn't as heavily discounted.

I'm not saying it was a bad thing. If I didn't like Celebrity, I wouldn't have booked two cruises for next year. :) I can't speak directly about food quality declining or not until next year's cruise because I haven't been on Celebrity since the Mercury three years ago

Just business. Nothing personal.

Just to set the record straight, That wasn't my claim. It was the Dow Jones article that said that.

 

The only part of that post that was mine was the first line. "Because they do" It was an observation of what appears to be an increase of such whining on the boards.

 

Hmmm. OK, let's see here. You titled the thread which you started as "Wonder Why Celebrity is accused of cutting corners and raising rates?", then you say it's because they do, then you cite the WSJ story which mentions the cost drop and the revenue increase in support of what you just said (cutting corners surely relates to passenger service, n'est pas?), which then set off the latest round of Celebrity bashing. But now you say you didn't claim "that". Sorry, but I'm a little confused here. Exactly what is the "that" that you now say you didn't say?

Just compare your per night price from two to four years ago when the cruise market was soft to the current pricing which isn't as heavily discounted.

Funny you mention this. I just found this table and posted in another thread.

Prices went up fall 2012, down again fall of 2013, and today seem to be slightly below fall of 2013, in general terms, averaged out fleet wide.

I wonder if Fall 2012 was when 123 free beverages were added in thus fares increased? Or if they wanted a year of testing higher fares to determine how far they could push things?

Sites, do not follow the same trend. To me looks as if they fall over time, and looks like highest fares are in winter months (makes sense, people are cold and want to book vacations...)

Fares are up somewhat from several years ago, but it's not a dramatic increase overall. Sure some get high fares some low fares, it's all in when you buy and supply and demand.

This thread sounds like because X is cutting corners and having lots of cut backs, that's why RCI had a great Qtr. Really? For all we know RCCL is making all the money and X is losing money? Again we don't know, X obviously has much less impact on the bottom line than RCCL so I don't think these cutbacks are what is keeping RCI a float. Its probably a necessary business decision to get them more profitable in the eyes of the company execs. If I remember RCCL did the some of the same cuts the past few years and the are still filling ships faster than they can build them.

Like some have said its a delicate balance of what a company can cut from the consumer and still have a product perceived as a value and still get their ROI.

So until RCI reveals who the bread winner really is, you can't say the corner cutting is necessary or not. You can though decide to try another cruise line who by the way is doing the same thing. Pleasing those stock holders.....UGH!;)

And yes I have sailed X, my most favorite cruise....:D

RCI's recent financial quarterly report seems to have led to many assertions about trends in Celebrity's rates (up) and passenger service quality (down). This is largely erroneous. The financial statements provide no evidence at all that rates are up, and little that passenger services are being significantly downgraded.

 

Here is some actual data from the financial statements. Anyone can confirm these numbers. Note, the data refer to RCI as a whole, not just to Celebrity, because RCI does not give a breakdown for individual brands such as RCCL, Celebrity, etc. in its financial reporting.

 

These are some comparisons of Q2 2014 vs. the same period in 2013:

 

Total passenger days: 9.033 million vs. 8.486 (6.43% increase)

Total ticket revenue: $1.455 billion vs. 1.367 (6.44% increase)

On Board revenue: $.525 billion vs. .516 (1.72% increase)

 

The increase in fare revenue exactly tracks the increase in passenger days, meaning overall there was no increase in fares. On-board revenue increased more slowly than passenger days, so this was actually a reduction in passenger charges.

 

On the cost side:

 

Food: $119.2 million vs. 112.5 (5.96% increase)

Shipboard payroll: $209.2 million vs. 209.0 (flat)

 

Food costs tracked passenger days fairly closely, so there is no pattern of cost-cutting there. Shipboard payroll was flat, which would be somewhat expected since manning doesn't change if a few more passengers are aboard. At he same time, there was a 4.5% increase in fleet capacity, so this may suggest some reduction in labor per passenger. In general, however, the largest part of the reported cost reductions were in the "other operating cost" category, particularly costs that were off-loaded due to the restructuring of Pullmantur, and those of course have nothing to do with passenger service on Celebrity.

 

To summarize, it is not correct to infer from the financial results that fares are up. The numbers leave slightly open the claim that service has been materially reduced, but the relationship is fairly weak given that most of the cost reduction was related to matters other than shipboard service.

Nice analysis. Thank you for sharing.

It is really nice to have facts.

I guess this is where someone's perception comes into play. I've dined at some of the best restaurants in many states and most don't have flowers on the table, so it is not something I would equate to fine dining.

 

The best thing about cruising is that we, as consumers, have so many lines/experiences to chose from. If one doesn't suit someone, there are always others to go to.

I have to agree. Any occasion that I have been to either a catered event or at someone's home, the damn flowers are always in the way of either the conversation or the food and they usually get moved to some place other than the table. There is such limited space on some of these 2 top tables on the ship that I can do without the flowers. Actually flowers don't work in select dining because they are always moving the tables to accommodate for the amount of passengers eating together.

How about a naked flameless votive, is that something you'd equate to fine dining?

 

Ambiance plays an important part of the dining experience. If you look at google images for the best restaurants in the US, they all have either flowers or interesting candles. The San Marco on the Connie was dreary and rather sad, the most disappointing part of our cruise.

And when we were there the ambiance and service were not at all good. Very disappointing.

No frills seems here to stay....

So here we are yet again, and what world problems have we fixed?

Oh sorry, what hidden secretes have we discovered?

 

Bottom line, we like the product at the price point and keep coming back.

Or find it lacking and go with someone else. Pretty simple yet again.

EW

Interesting thread, I just went through the whole thing and I think that the above pretty much does summarize it. When Azamara came out, we thought that we had found a home, but after three trips with them, we found that we didn't fit their new demographic and pretty much feet voted and returned to Celebrity. I have pretty much the same perception that others have mentioned, i.e. service has suffered in the MDR and housekeeping because of diminished staffing ( more customers/ server= less personal attention/guest), and where the cuisine used to be exceptional, it is now much more mundane, and less time to chat with your steward (ess). Still I do think that the people on the ships do try very hard to make your experience special and should be recognized for that to say the least. We didn't cruise in 2013, electing a land tour instead. We are doing a B2B on the Constellation in the fall and will be very curious to see if there have been further changes and which way and how far they've gone.

Right now we still think that Celebrity represents good value in terms of cruising experience and only hope that we can continue to hold that opinion.

Interesting thread, I just went through the whole thing and I think that the above pretty much does summarize it. When Azamara came out, we thought that we had found a home, but after three trips with them, we found that we didn't fit their new demographic and pretty much feet voted and returned to Celebrity. I have pretty much the same perception that others have mentioned, i.e. service has suffered in the MDR and housekeeping because of diminished staffing ( more customers/ server= less personal attention/guest), and where the cuisine used to be exceptional, it is now much more mundane, and less time to chat with your steward (ess). Still I do think that the people on the ships do try very hard to make your experience special and should be recognized for that to say the least. We didn't cruise in 2013, electing a land tour instead. We are doing a B2B on the Constellation in the fall and will be very curious to see if there have been further changes and which way and how far they've gone.

 

Right now we still think that Celebrity represents good value in terms of cruising experience and only hope that we can continue to hold that opinion.

What was it about the Azamara demographic that you didn't like? I'm curious because I saw a cruise that intrigued me ( 3 stops in Croatia and 1 in Albania). As I recently joined the 60+demo! would I feel comfortable.

I have to respond to something said up thread and then I'll let it go. If Celebrity was foregoing flowers (and we're talking small bud vase not a wedding reception) to be more flexible with tables I could see that. But that is not the case.

We sailed with another couple and wished to be seated with just them. The first night we were seated at a table for 6; neither the extra flatware nor chairs were taken away. So we are left with the choice of sitting far apart and talking with elevated voices or sitting 4 in a row and craning over each other. When we left we told the desk that we wish to sit at a table of 4 for the rest of our trip. Now we have reservations for the whole trip so this should have been a simple request. Not so. Twice more they tried to seat us at a big table even after we called and requested a table for 4 that day. Now we didn't clamor for window seats, nor did we insist on a certain waiter. All we wanted was to sit at a proper sized table to talk and enjoy each other's company.

We saw other parties of 4 being seated none too happily at larger tables. If the dining makes adjustments based on reservation requests and cabin bookings we didn't see it; night after night the tables remained static. That each night we had to joke about whether or not this simple request would be granted is the biggest reason that, unless there's an itinerary that really excites me, I will probably now choose HAL, Princess or a small cruise line instead.

What was it about the Azamara demographic that you didn't like? I'm curious because I saw a cruise that intrigued me ( 3 stops in Croatia and 1 in Albania). As I recently joined the 60+demo! would I feel comfortable.

 

I have to respond to something said up thread and then I'll let it go. If Celebrity was foregoing flowers (and we're talking small bud vase not a wedding reception) to be more flexible with tables I could see that. But that is not the case.

We sailed with another couple and wished to be seated with just them. The first night we were seated at a table for 6; neither the extra flatware nor chairs were taken away. So we are left with the choice of sitting far apart and talking with elevated voices or sitting 4 in a row and craning over each other. When we left we told the desk that we wish to sit at a table of 4 for the rest of our trip. Now we have reservations for the whole trip so this should have been a simple request. Not so. Twice more they tried to seat us at a big table even after we called and requested a table for 4 that day. Now we didn't clamor for window seats, nor did we insist on a certain waiter. All we wanted was to sit at a proper sized table to talk and enjoy each other's company.

 

We saw other parties of 4 being seated none too happily at larger tables. If the dining makes adjustments based on reservation requests and cabin bookings we didn't see it; night after night the tables remained static. That each night we had to joke about whether or not this simple request would be granted is the biggest reason that, unless there's an itinerary that really excites me, I will probably now choose HAL, Princess or a small cruise line instead.

I agree they need to stay in business and make a reasonable profit. I also know when they are pushing it as far as they can until the customers are unhappy. I have been a happy Celebrity customer for many years but I'm not a fool.

 

I've seen lots of changes through the years but a great part of Celebrity's success is because of the fine product they delivered while making changes. I'm keeping an open mind but I saw a considerable difference in the product on my last cruise and it wasn't just change, it was a decline. I'll be on Equinox for a month in October/November and will decide if it's the cruise line for me any more. Maybe it's true that they won't miss the customers who have been extremely loyal to them and then again, they may find that they have pushed things just a little too far and it will be difficult to replace those customers.

Exactly! We saw many changes on our recent Millenium cruise from Yokohama to Vancouver.

We are booked aboard Silhouette for the 11/1 TA. Following that voyage we will form our conclusion as to whether "X" remains our line of choice or if we jump to ships of another company.

Funny you mention this. I just found this table and posted in another thread.

 

Prices went up fall 2012, down again fall of 2013, and today seem to be slightly below fall of 2013, in general terms, averaged out fleet wide.

 

I wonder if Fall 2012 was when 123 free beverages were added in thus fares increased? Or if they wanted a year of testing higher fares to determine how far they could push things?

 

Sites, do not follow the same trend. To me looks as if they fall over time, and looks like highest fares are in winter months (makes sense, people are cold and want to book vacations...)

 

Fares are up somewhat from several years ago, but it's not a dramatic increase overall. Sure some get high fares some low fares, it's all in when you buy and supply and demand.

 

Our 14 days cruise on Eclipse in April, 2014 cost 20 % less than in March , 2015 for the same balcony category, I would say - prices are up - thanks to 123 promo

Our 14 days cruise on Eclipse in April, 2014 cost 20 % less than in March , 2015 for the same balcony category, I would say - prices are up - thanks to 123 promo

Wouldn't say it's due to 123. 123 has been around since 2012, so prices if they were going to rise from that would have risen before 2015.