Norwegian Wants $4 More Per Day

Interesting article regarding increases in costs for drinks to raise profits. I'm OK with it. Heck I see prices going up everywhere.

http://www.bloomberg.com/news/articles/2015-02-27/norwegian-needs-you-to-spend-just-4-more-per-day-on-your-cruise

interesting article, thanks for sharing

That was an interesting, though short, article.

I want the cruise lines to be profitable, so they will be around for us to cruise. 👍

When a market is profitable, more competition will be created and hopefully some of that money will be used for more robust and satisfying customer experiences. Them making more $$ should be good for us, the pax. When a company loses profit, they start cutting back...none of us want that.

$4 per day is a tiny percentage of the cost of a cruise. In my industry, it is common to have average price increases of around 3-4% per year. My perspective may differ from some, but that's how I feel.

I saw that article and someone else noticed the comments - it's the two short sentences just before that got my attention -

How about making money the old fashion ways - earn it instead of hoping to pry it, or, at least make the case for raising prices. It is NOT about needing to spend, making that wanting to spending an extra $56 a week while cruising.

I agree.

The sentences you quoted were not quotes, they were the words and interpretation of the author. He wasn't even paraphrasing.

Your thoughts are still quite valid. That is the Holy Grail of business....getting your customers to WANT to spend more.

And in vacations, all that money is discretionary spend. So the best way to part my money from me is to create a good value - then I am happy to spend it.

I like the unlimited beverage and dining packages - if those are of interest then they are a great value. A single watered down drink at 8.95 going up to 9.95 is NOT a good value and I won't buy more than a few of those!

I don't care for NCL's nickel and diming at bakery, ince cream, pizza, coffee, etc. Royal Carribean and Carnival both give you more basics and are a little more free-style in that regard.

And in vacations, all that money is discretionary spend. So the best way to part my money from me is to create a good value - then I am happy to spend it.

 

I like the unlimited beverage and dining packages - if those are of interest then they are a great value. A single watered down drink at 8.95 going up to 9.95 is NOT a good value and I won't buy more than a few of those!

 

I don't care for NCL's nickel and diming at bakery, ince cream, pizza, coffee, etc. Royal Carribean and Carnival both give you more basics and are a little more free-style in that regard.

Since it doesn't appear you've been on NCL before, what is it that you get on RCCL and Carnival which you don't get on NCL as basics?

So far I haven't heard of anything from any other posters.

Also, I can attest that the drinks are not watered down. I've spent many a pleasant buzzed afternoon.... :)

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Could it be that NCL and the rest of the cruise industry mis-managed their new- found profits from fuel being the lowest cost it's been in years?

I don't recall any of the cruise lines lowering prices because the price of a barrel of oil went down.

Guess it's easier to raise the price of a beer......

Could it be that NCL and the rest of the cruise industry mis-managed their new- found profits from fuel being the lowest cost it's been in years?

 

I don't recall any of the cruise lines lowering prices because the price of a barrel of oil went down.

 

Guess it's easier to raise the price of a beer......

I doubt its a case of mismanagement but, more likely, an opportunity to increase profits. As for lowering prices when the cost of oil goes down, who does that? You may see lower gas prices but that's about all. The cost of everything we buy is partially dependent on the cost of oil but I'm spending just as much as I did a year ago at the grocery store.

For the past several years NCL could have done the fuel surcharge thing and they have not.

Im trying to find the actual interview from the new CEO. The interpretation of the article isnt correct. The CEO was asking what they'd have to do in order to get the customer to pay $4 more a day to go on NCL versus other cruise lines. The CEO was talking about making NCL more efficient by placing ships in areas that made more sense through out the year. He didnt say they'd stop expanding the fleet like I keep seeing, but that there's more to being successful at getting people to sail with NCL that just continuing to bring new ships.

Im trying to find the actual interview from the new CEO. The interpretation of the article isnt correct. The CEO was asking what they'd have to do in order to get the customer to pay $4 more a day to go on NCL versus other cruise lines. The CEO was talking about making NCL more efficient by placing ships in areas that made more sense through out the year. He didnt say they'd stop expanding the fleet like I keep seeing, but that there's more to being successful at getting people to sail with NCL that just continuing to bring new ships.

http://www.thestreet.com/story/13054496/1/how-norwegian-cruise-lines-new-ceo-plans-to-shake-up-the-cruise-industry.html

Could it be that NCL and the rest of the cruise industry mis-managed their new- found profits from fuel being the lowest cost it's been in years?

 

I don't recall any of the cruise lines lowering prices because the price of a barrel of oil went down.

 

Guess it's easier to raise the price of a beer......

And in vacations, all that money is discretionary spend. So the best way to part my money from me is to create a good value - then I am happy to spend it.

 

I don't care for NCL's nickel and diming at bakery, ince cream, pizza, coffee, etc. Royal Carribean and Carnival both give you more basics and are a little more free-style in that regard.

I agree, keep making great dinner shows like Illusionarium or Cirque, keep the quality up at Cagneys, etc., keep me up later doing more fun things ( and buying more drinks ) and NCL will easily get an extra $50+ odd dollars from us.

But I don't agree with your "nickel and diming" comment. Aside from paying $5 once for a delivered pizza ( and it was worth every penny, delivered to us in a bar while we watched a comedy show ). Other than that, it is available for free in the buffet. I have never paid for ice cream. Both soft serve and hard ice cream are available in the buffet. Dinner in a specialty includes excellent French press coffee with the meal. Have yet to find any need to buy any coffee at the Java Cafe. It's free in the MDRs or room service. Never felt the need to visit a specialty bakery. Lots of free desserts around. Look up the def of Nickel and Dime. What you have described is not it. I can easily find and enjoy any of the things you mentioned without extra $$.

I hate to say it and I hope NCL does not read this but their drink prices are extremely reasonable. I live in Miami and the drink prices are less expensive on board than if you would drink on Miami Beach or Miami.

I just got back from a Getaway cruise yesterday and the drinks definitely were not watered down. You would spend about 8.50 for a mixed drink.

On the flip side. There are no more specials period. I remember getting 2 for 1 martinis at the Epic Club and 2 for 1 martinis at the Plantation club on Sky. Those were the days!!!

Since their fuel contracts are not month to month, I would doubt that they have seen any additional revenue on this yet.

Fuel prices have been consistently lower for over a year. They've had time to reap those benefits. If they have not that is their choice in contracting strategy and not really the passengers' fault. Southwest gives their savings back to passengers in free checked baggage benefit. As a result whenever I go on vacation I assume I'll fly SW because that policy saves me $50-100 per trip, per person. Other airlines pocket the savings and please Wall St. and stockholders.

The CEO wants me to spend $4 more per day with NCL than I might or than I have in the past. Carlos Bake shop and specialty coffee places make it easier to pry that $4 each day. As another poster said, put value offerings in front and me and I'll spend.

Fuel prices have been consistently lower for over a year. They've had time to reap those benefits. If they have not that is their choice in contracting strategy and not really the passengers' fault. Southwest gives their savings back to passengers in free checked baggage benefit. As a result whenever I go on vacation I assume I'll fly SW because that policy saves me $50-100 per trip, per person. Other airlines pocket the savings and please Wall St. and stockholders.

 

The CEO wants me to spend $4 more per day with NCL than I might or than I have in the past. Carlos Bake shop and specialty coffee places make it easier to pry that $4 each day. As another poster said, put value offerings in front and me and I'll spend.

First off, the price of bunker fuel is a lot less volatile than gasoline or crude oil. While gasoline has been falling for months, the price of bunker fuel has remained steady, and only started a marginal drop in February. Offset this with the requirement that as of 1 January, 2015, the ships must burn the much more expensive low sulfur diesel fuel while within 200 miles of the US coast, rather than the cheaper residual fuel they have been burning for decades (diesel is about twice the cost of residual fuel).

I hate to say it and I hope NCL does not read this but their drink prices are extremely reasonable. I live in Miami and the drink prices are less expensive on board than if you would drink on Miami Beach or Miami.

Drink prices on Miami Beach are way over priced to begin with! lol

First off, the price of bunker fuel is a lot less volatile than gasoline or crude oil. While gasoline has been falling for months, the price of bunker fuel has remained steady, and only started a marginal drop in February. Offset this with the requirement that as of 1 January, 2015, the ships must burn the much more expensive low sulfur diesel fuel while within 200 miles of the US coast, rather than the cheaper residual fuel they have been burning for decades (diesel is about twice the cost of residual fuel).

NCL has installed scrubbers on many of their ships thar spend lots of their time around the US. Doesn't that allow them to burn the cheap fuel?

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NCL has installed scrubbers on many of their ships thar spend lots of their time around the US. Doesn't that allow them to burn the cheap fuel?

 

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The Breakaway and Getaway had scrubbers from new construction. The only ship that has had them retrofitted is the POA, and that installation is still not complete one year later, and their exemption from the EPA based on the installation of these units is in jeopardy. They also only installed 4 scrubbers for 6 engines, so 2 engines have to burn the higher cost diesel fuel full time, since she is inside the US ECA full time. A friend of mine is a chief engineer with NCL, and he will be heading up the scrubber retrofit program for the remainder of the fleet, but this has not happened yet, based on the difficulties experienced with the POA. Besides, each scrubber is about $1.5 million, or $6 million for the POA, so they cannot pass the fuel savings down until the payback period of the scrubbers, which for POA will be 5-6 years.

I personally do not have a problem with Norwegian trying to get an extra $4 out of me per day as long as I feel that the product is still good. I think that one of the problems with the quote is the fact that we know very little about FDR and for him to say that in one of his first interview is troubling. I understand that as a CEO he number one priority is to make money for NCL. However, what about taking a cruise and learning about the customers you are serving - what are their likes and dislikes about NCL, and then try to generate more revenue by improving the areas that need improve.

I am willing to pay for a product when I am happy with it.

Im trying to find the actual interview from the new CEO. The interpretation of the article isnt correct. The CEO was asking what they'd have to do in order to get the customer to pay $4 more a day to go on NCL versus other cruise lines. The CEO was talking about making NCL more efficient by placing ships in areas that made more sense through out the year. He didnt say they'd stop expanding the fleet like I keep seeing, but that there's more to being successful at getting people to sail with NCL that just continuing to bring new ships.

I hope that he won't discontinue ships ships out of Boston. The Bermuda runs seem to sail full. It would be nice to convert the Boston- Canada runs to round trip, as RCI does.

Dunno about anyone else but NCL (or any cruise line for that matter) will have to offer / sale something really appealing to me to buy it everyday on a cruise trip. See, me I don't buy everyday even for lunch at work let alone every single day for a vacation trip. I like to drink every now and then but definitely not everday nor gupling down so many ( I like to be buzzed and at least functioning to walk and talk, not stupidly drunk and unable on my own to go back to my room but thats a different discussion). I like to buy at gift shops but again not everyday and it has to appeal to my aesthetics plus price range or I'm not buying it.

And like other posters have said it hard to be 'nickel & dimed' when there's so many free options available especially in food. The only true way NCL (or any other cruise line) can 'nickel & dimed' is via drinks that are not free and even that is not possible because you the consumer can simplely can choose not to partake in it by not drinking it. It possible to not buy anything on a cruise, even excursions and just using the free options onboard - NCL has to figure out how to get people like that plus those who buy every other day to pretty much spend $4 everyday and to be honest, NCL going to have hard time doing that. They can raise or lower prices across the board and it still will not be enough to make people spend additional money or any thing.

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I saw that article and someone else noticed the comments - it's the two short sentences just before that got my attention -

"

He wants to kick the industrywide addiction to discounts. Above all, he hopes to pry just a little more money from his passengers.

"

How about making money the old fashion ways - earn it instead of hoping to pry it, or, at least make the case for raising prices. It is NOT about needing to spend, making that wanting to spending an extra $56 a week while cruising.

1) That quote is an OPINION.

2) How are they not EARNING it?

I think you missed the point. From the way I read it, if he can raise $4 per day per person, regardless of whether this is from onboard revenue (drinks, etc.), ticket price, or improvements in cost control, he can double the earnings per share. I don't think he is looking for something new for you to buy every day.