Richard Fain comments today about pricing

I just know one thing - we got a GREAT price on our 2016 cruise from SJU (wow, an actual BOGO good price??!!). But that was booked long ago when they actually had decent prices....... It's now priced a LOT higher. After that one it may be a long time before we cruise RCCL again based on what we see in their pricing now. Previously we would be thinking about looking at winter 2017 cruises soon, but it hasn't even entererd our minds for now as we know their prices are getting absurd. Florida and/or Caribbean all-inclusives are looking a lot more attractive right now.......

Completely agree!

 

Our first cruise:

 

Radiance Alaska May 2005 Cat N $1753

Radiance Alaska May 2015 Cat N $1520

 

Our first Transatlantic:

 

Independence Nov 2010 Cat PR $1798

Harmony Oct 2016 Cat C1 $1759 (booked yesterday)

 

I do agree that some prices have become very expensive such as the Allure and Harmony in Europe, but overall cruising can still be very good value.

Accounting for inflation, you're actually coming out (mildly) ahead.

Apparently, he's never booked a cruise through their website. I have yet to find a cruise that you could actually book at the advertised price. When you get through to the part about picking a cabin, the price magically jumps up, and is not what you see on the search screen.

Guess you never bought a car

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We got a good price for a Galveston cruise in fall 2016. That being said, I was looking at the Harmony prices, and mumbled "$2,200 too high for a JS." Of course, Harmony being a new ship gets higher pricing.

When they're raising the price and throwing in a beverage package, that's not cool. We end up paying for a beverage package we don't want, and get poor bar service because the servers don't make the tips they used to. They forget with pooled tips, they're actually making money for work they're not personally doing.

Over on Celebrity, we're staying in a concierge class room that's actually costing us more than the Sky Suite we got a few years ago. But again, they threw in $300 OBC that we didn't get on the first cruise, so they probably raised their prices to compensate.

We used to get price drops on maybe 1/3 of our cruises, but since these WOW specials the price drops stopped coming. At this point, we can no longer plan on price dropping before final payment.

What's Richard Fain's title? I thought Goldstein took over his position.

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?

Seems like a guy I'd hire if I was running a business

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If you really want to see what is going on with Royal Caribbean, read their SEC filings. This is from the annual 10k for 2014 recently posted. Note that ticket prices for Caribbean sailings were actually down in 2014 while ticket prices were up for Europe and Asian sailings.

 

"Passenger ticket revenues comprised 73.0% of our 2014 total revenues. Passenger ticket revenues increased by $171.1 million, or 3.0%, to $5.9 billion in 2014 from $5.7 billion in 2013. The increase was primarily due to:

 

• a 2.4% increase in capacity, which increased Passenger ticket revenues by $134.6 million. The increase in capacity was primarily due to the addition of Quantum of the Seas which entered service in October 2014 and the transfer of Monarch of the Seas to Pullmantur in April 2013 reducing capacity in 2013 due to the two-month lag further discussed in Note 1. General to our consolidated financial statements. Passenger ticket revenues also includes the impact of the change in our voyage proration methodology; and

 

• an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a decrease in ticket prices for Caribbean sailings, all of which contributed to a $99.1 million increase in Passenger ticket revenues.

 

The increase in passenger ticket revenues was partially offset by the unfavorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of approximately $62.5 million.

 

The remaining 27.0% of 2014 total revenues was comprised of onboard and other revenues , which decreased $57.2 million, or 2.6%. The decrease in onboard and other revenues was primarily due to a $177.2 million decrease in revenues related to Pullmantur's non-core businesses that were sold in 2014 as noted above. The decrease was partially offset by:

 

• a $45.5 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our ship upgrade programs and other revenue enhancing initiatives, including various beverage initiatives, the addition and promotion of specialty restaurants, the increased revenue associated with internet and other telecommunication services and other onboard activities;

 

• a $46.0 million increase attributable to the 2.4% increase in capacity noted above, which includes the impact of the change in our voyage proration; and

 

• a $28.7 million increase in other revenue of which the largest driver is attributable to an out-of-period adjustment of approximately $13.9 million that was recorded in 2013 to correct the calculation of our liability for our credit card rewards program.

 

Onboard and other revenues included concession revenues of $324.3 million in 2014 and $316.3 million in 2013."

Very interesting. Thank you for posting this.

I surely do not KNOW (as some folks seem to), but when someone at that level talks about rates, he is talking fleetwide and across all ships.

 

Just because some rates are higher, it does not mean they all are. They do deep discounting often to fill cabins and not everyone will see those rates.

 

On each sailing, the same category cabin will sell for MANY different prices.

 

I am thinking rates have not gone up in that time myself.

I tend to agree. Some are up and some down. There are discounts to be had, but finding them is harder. Comparing our rates looks like this. FOS Jan 2012 cat E1 $1399, Feb 2016 cat E1 $1549. Close enough for me. IOS Jan 2015 cat GS $1799, Jan 2016 cat GS $1719 but 1 less day.

On the other hand Oasis Christmas 2014 D1 $1900, Christmas 2015 D1 $2700...Yikes, to high for me for a D1.

Thrifty99 put it well.

SEC filings are one good measure as mentioned.

"In my opinion" or "I think" don't get us too far in measuring Fain's words.

All I know I have not yet paid the price I have booked with. I do see prices go up and down daily and on our end you have to watch. Be diligent. It's work but I monitor the site very carefully and yes most of the time prices start hiking up closer to sailing but every once in awhile you catch a one day price drop. It's like a one day sale in macys lol. I do think the farther out you book the better as a starting price or the closest you book cause they need to fill the ship. I find air fair the problem with getting to ports. Sometimes I feel that can price you out. [emoji267][emoji41]

What's Richard Fain's title? I thought Goldstein took over his position.

Fain is still CEO and Chairman for RCCL (the parent company to all the cruise lines under it: RCI, Celebrity, Azamara, etc.). Goldstein is President and Chief Operating Officer for RCCL. Michael Bayley is President and CEO of RCI (the single cruise line).

Have you even attempted to do a booking ?

We booked a cruise a year in advance for this summer...and the price back then was literally 80% lower than today's rate.

That said...booking in advance tends to be advantageous in terms of a lower price, as would last-minute cruiser pricing. In general, pricing is also impacted by the time of year you book (specials & deals in low booking periods). The cruise lines have data to pin down the optimum promotional times (for them).

With careful planning, the rates we paid on the 2015 and also the past 2 cruises in 2014 were at the lowest price points ever offered.

Where the pricing is escalating is on the "ancillary" services - beverages, speciality meals, as well as excursions (where they partner and get a % of the fees). That seems to follow the "restaurant pricing model", where you may a reasonable price for the meal, but appetizers, desserts, and/or drinks are extra and typically the most profitable.

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?

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.

I'll give you a C- on this report.

Interesting comments on this thread. Back to the OP's original comment about prices not rising for six years. I went back and priced my last 5 Caribbean cruises - same room, same itinerary and date - ( 1 year later). Each cruise was much more. The average was 52.8 percent. This was using today's prices which are down slightly from last week. Those are the facts ....just the facts

WOW (pun intended) what a pile of hooha. He thinks the WOW sales fool everybody I guess.

Whether you believe him or not, as long as RCI can continue to sail its ships at or near full capacity, the prices will continue to be what you consider to be "high" or will go higher. During the Recession, when people were hesitant to book cruises, the lines had to resort to sales and rock bottom prices to fill their ships. Now that the economy has improved and people are once again booking, the cruise lines would be derelict in their fiduciary responsibilities not to charge whatever they believe the market will bear. If you want prices to return to those lower levels, you might consider rooting for another recession, but I doubt most thinking consumers would wish for that.

The bottom line is that if you believe that today's cruises are overpriced, look at alternatives, whether they be other lines or other vacation options. None of the cruise lines are forcing you to book.

Whether you believe him or not, as long as RCI can continue to sail its ships at or near full capacity, the prices will continue to be what you consider to be "high" or will go higher. During the Recession, when people were hesitant to book cruises, the lines had to resort to sales and rock bottom prices to fill their ships. Now that the economy has improved and people are once again booking, the cruise lines would be derelict in their fiduciary responsibilities not to charge whatever they believe the market will bear. If you want prices to return to those lower levels, you might consider rooting for another recession, but I doubt most thinking consumers would wish for that.

The bottom line is that if you believe that today's cruises are overpriced, look at alternatives, whether they be other lines or other vacation options. None of the cruise lines are forcing you to book.

Its not really "across the board" higher anyway. My upcoming cruise on Freedom is several hundred less than 2012 for the same month and same category of cabin.

Maybe I just paid too much in 2012 :D

There are still deals out there if one is flexible on when they can cruise.

Whether you believe him or not, as long as RCI can continue to sail its ships at or near full capacity, the prices will continue to be what you consider to be "high" or will go higher. During the Recession, when people were hesitant to book cruises, the lines had to resort to sales and rock bottom prices to fill their ships. Now that the economy has improved and people are once again booking, the cruise lines would be derelict in their fiduciary responsibilities not to charge whatever they believe the market will bear. If you want prices to return to those lower levels, you might consider rooting for another recession, but I doubt most thinking consumers would wish for that.

The bottom line is that if you believe that today's cruises are overpriced, look at alternatives, whether they be other lines or other vacation options. None of the cruise lines are forcing you to book.

I prefer the rates stay high, and hope they go higher...keeps the riffraff away

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.

 

I'll give you a C- on this report.

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

I guess Galveston is the exception. Royal Caribbean seems to always be a better deal than Carnival.

To be honest, when I think about what I was paying for cruises from 2007-2010, I don't think I'm paying more now. Taxes and tips have gone up, but not the base fares. Then and now, we typically cruise in the off or shoulder seasons, so maybe peak season fares are up if that's what others are seeing.

Basic fares have not increase significantly for us since we started cruising in 1996! We have all our cruise records so we know what we paid per person per day.

Its not really "across the board" higher anyway. My upcoming cruise on Freedom is several hundred less than 2012 for the same month and same category of cabin.

 

Maybe I just paid too much in 2012 :D

 

There are still deals out there if one is flexible on when they can cruise.

I think that Freedom is becoming a older ship, which usually drives the price down. That is a great bargain by the way.

It's all supply and demand. Sometimes your paying more and sometimes your paying less.

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Where is the like button?

Whether you believe him or not, as long as RCI can continue to sail its ships at or near full capacity, the prices will continue to be what you consider to be "high" or will go higher. During the Recession, when people were hesitant to book cruises, the lines had to resort to sales and rock bottom prices to fill their ships. Now that the economy has improved and people are once again booking, the cruise lines would be derelict in their fiduciary responsibilities not to charge whatever they believe the market will bear. If you want prices to return to those lower levels, you might consider rooting for another recession, but I doubt most thinking consumers would wish for that.

The bottom line is that if you believe that today's cruises are overpriced, look at alternatives, whether they be other lines or other vacation options. None of the cruise lines are forcing you to book.[/QUOTE]

What is your source of information?

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?

 

What is your source of information?

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?

What is your source of information?

We have been cruising since 1998 and have made many friends, a lot of them are current and past RCL employees from F&B manager all the way down to cleaning staff.

The staff that still work do so because they make more than working in there own countries but all had the same complaint. We work more now then we did in the past and our salary has been cut in some cases by 50%.

I have no reason to doubt what they tell me and I have seen how in the past 3-4 years the quality of staff has been reduced. I don't mean the new staff is bad just not as refined as in the past. This is happening because you get what you pay for....