Is RCL heading in the Wrong Direction... ?

There seems to have been a lot of negativity in the past several months about a vast array of different things and different ships in the RC fleet - most recently the changes performed to the Oasis from it's recent dry dock. Royal Caribbean has also just announced that it will be holding firm on it's cruise prices and not to expect last minute discounts anymore. It seems they are putting it's shareholders ahead of it's customers and looking at the "bottom line." Will this come back to bite them down the road... ?

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

- Doc

It is understandable, but it will dramatically cut down on passengers in Florida/NYC/Baltimore etc and surrounding states that can drive in a reasonable amount of time to get away at the last minute.

Additionally, if there will not be cost savings why book so early?

I think they're heading in the wrong direction from the perspective of part of their current demographic, which, of course is largely represented on this forum. However, I think this is a conscious decision on RC's behalf to court a new - and they hope more profitable - demographic going forward.

No matter how "loyal to Royal" any of us have been, if the cruise experience on RC is no longer what we want it to be, that's when it's time to move on and find another line that better fulfills our individual needs. For some, that will continue to be RC. For others, it won't.

In my time with RC, I unfortunately also have to admit that I've seen a constant decline that has become more noticeable, distracting, and frustrating. We're finally to the point that we don't think we'll cruise with RC again for awhile after we complete the cruises we already have booked with them.

Going back to my original point, the big question is if this new demographic of RC cruiser will be as loyal and frequent cruisers as those of us who have been gradually pushed into looking for an alternative to RC.

I had always cruised on Royal and Celebrity until the past several years after their product had changed in some negative ways in our mind (i.e. food, overall vibe).

I personally feel all lines are now very similar and you just pick the time/route/price that best suits you at the time and go with it. I have found the Royal prices extremely high lately like others and haven't traveled on them in a few years. I will be curious how Quantum stacks up when we are on it in a few months with it's high price tag.

There seems to have been a lot of negativity in the past several months about a vast array of different things and different ships in the RC fleet - most recently the changes performed to the Oasis from it's recent dry dock. Royal Caribbean has also just announced that it will be holding firm on it's cruise prices and not to expect last minute discounts anymore. It seems they are putting it's shareholders ahead of it's customers and looking at the "bottom line." Will this come back to bite them down the road... ?

 

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

 

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

 

- Doc

In all fairness, that's what a for-profit company should do.

There seems to have been a lot of negativity in the past several months about a vast array of different things and different ships in the RC fleet - most recently the changes performed to the Oasis from it's recent dry dock. Royal Caribbean has also just announced that it will be holding firm on it's cruise prices and not to expect last minute discounts anymore. It seems they are putting it's shareholders ahead of it's customers and looking at the "bottom line." Will this come back to bite them down the road... ?

 

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

 

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

 

- Doc

I think that's more wishful thinking than reality. Royal operates in a competitive environment with other cruise lines.

I think that's more wishful thinking than reality. Royal operates in a competitive environment with other cruise lines.

Agreed. There is lots of competitive pricing out there at the moment between all the lines.

Good to see you back Bob. Hope you had a great trip:D

For most people, change is bad. So it's pretty natural that people think that all these things will be bad.

I'm going to judge when we finally experience it.

It's interesting to hear people be really upset that the VCL is going away, and they have every right to be. But I'd be willing to bet that the trade off of losing them vs. what they gain is probably worth while. Using the space is a good thing.

Same with the hidden balconies- things that nobody used (which is whey they were "secret" or hidden).

The 100 more people on the Oasis is nothing compared to the addition on the Enchantment, so I don't think the crowding issue on the TA was that- it was that not enough stuff was open, most of the time was inside, etc etc.

Anyway, I'm not going to judge on changes with out experiencing them. Food wise- I accept the trade off of food vs. cost. That, and we still have not really seen that big of drop off- maybe we like the new menus... dunno.

Granted, it's not all great. But it still what we want to do. Especially for the value.

Agreed. There is lots of competitive pricing out there at the moment between all the lines.

 

Good to see you back Bob. Hope you had a great trip:D

Thanks, we did have an enjoyable cruise on Enchantment. Met some very nice folks too.:) Suffering severe PCD now.

I think that's more wishful thinking than reality. Royal operates in a competitive environment with other cruise lines.

We Floridians hope that you are right:D

I think they're heading in the wrong direction from the perspective of part of their current demographic, which, of course is largely represented on this forum. However, I think this is a conscious decision on RC's behalf to court a new - and they hope more profitable - demographic going forward.

 

I agree 100%. Royal has a problem with repeat cruisers - they take up too many resources. D,D+, & Pin cruisers earn less per cruise for the cruise line. The strategy back in the day was to entice us to cruise more. But, we all see the eroding benefits. But, I really think Royal is perfectly fine with this.. in fact they want to rely less upon repeat cruisers, which is why they build the newer ships geared towards the families, and the experience - likely to attract the one-off cruiser.

They would rather fill your berth with a one-time cruiser who likely (on averages) spends more every cruise. The trick is how to do that without the D, D+ and Pins noticing. :cool:

I believe we will see even more eroding of repeat cruiser perks. They will keep enough of them to make us JUST interested enough to keep coming back. Of course, statistically, that means many will leave because their acceptable/not acceptable threshold has been passed.

Met some very nice folks too.:) .

Present company excluded?? Or maybe included:eek: It was fun

I'm going to judge when we finally experience it.

 

Same here. The only thing that has me skeptical right now is Dynamic Dining. I certainly will try it and at that time I'll judge it. However, if it kills service on RCI like Freestyle killed service on NCL, my preference will certainly be focused elsewhere...most likely Celebrity.

At least that'll still keep the shareholders happy. ;)

 

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

 

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

 

- Doc

What I am reading here is that they are going to be reducing inventory to support higher pricing. Moving ships to other markets will definitely reduce cabin inventory in the Caribbean and that would certainly support higher price points so it sounds like a good business decision for them.

Also, without them having to fire sale the unsold inventory last minute they raise the satisfaction of their early bookers. Sounds like a win-win for RCI.

It also sounds like they are willing to let go of the most price sensitive customers in favor of those who will support higher margins. To me, this falls in line with the recent Oasis dry dock changes as well.

Just my 2 cents and not redeemable for that amount.

Present company excluded?? Or maybe included:eek: It was fun

Included of course!:) By the way, we did find Candy's on the second cruise and liked it better than Goldies.

I think that's more wishful thinking than reality. Royal operates in a competitive environment with other cruise lines.

With the big three players in the Cruise industry having about 75% market share the cruise industry is more like an Oligopoly (or should be anyways). Any good Oligopolist worth his or her salt will not want to compete on price. Better for all industry participants' bottom line if they don't. Will it work? Depends if the other cruise lines' CEOs were listening!;)

Included of course!:) By the way, we did find Candy's on the second cruise and liked it better than Goldies.

Thanks- I was going to ask you where you went on the next portion of your adventure- - We will check that one out in February

Regarding the pricing- We will find out shortly. There usually are some good deals to be had the first couple of weeks after New Years. Only time will tell.

In all fairness, that's what a for-profit company should do.

Very true, however a company has to strike a balance here or they will not achieve either goal. If they do not provide a value for the customer then short term gains will turn to long term losses for the stockholder. But the direction should be guided by what is best in the long term interest for the stockholder, if it isn't, why should anyone buy the stock?

There seems to have been a lot of negativity in the past several months about a vast array of different things and different ships in the RC fleet - most recently the changes performed to the Oasis from it's recent dry dock. Royal Caribbean has also just announced that it will be holding firm on it's cruise prices and not to expect last minute discounts anymore. It seems they are putting it's shareholders ahead of it's customers and looking at the "bottom line." Will this come back to bite them down the road... ?

 

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

 

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

 

- Doc

There are still quite a bit of last minute discounts on the ships sailing out of Florida right now. You can still get an inside cabin sailing out of Port Canaveral for $119 pp. that seems really cheap to me

There seems to have been a lot of negativity in the past several months about a vast array of different things and different ships in the RC fleet - most recently the changes performed to the Oasis from it's recent dry dock. Royal Caribbean has also just announced that it will be holding firm on it's cruise prices and not to expect last minute discounts anymore. It seems they are putting it's shareholders ahead of it's customers and looking at the "bottom line." Will this come back to bite them down the road... ?

 

http://www.businessweek.com/articles/2014-10-27/royal-caribbean-to-cruisers-stop-expecting-last-minute-discounts?campaign_id=yhoo

 

Just looking for some different opinions and perspectives about this. I love this cruise line and it's sister company Celebrity and have remained loyal for over 12 years now. I have to admit that my cruise experience on RCL has diminished in quality over the years, but still found good value in the vacations. If the "value" is taken away, and service and quality is diminished - at what point do people start jumping ship?

 

- Doc

If you have to continually cut price to fill the ships then eventually you will have to slash costs to balance the books. Discounting is the death knell for service and quality. In the end, "you get what you pay for, not what you wish for.";)

This is fine if they balance it somewhat with more even/competitive pricing when booking in advance.

To look at bookings that are $729 now and then $150 later on, encourages the game to be played...something say at around the $500 mark would be a happy medium in that example, but still allow them to have some sales/discounts within reason.....

The travel industry is pretty competitive, they will do what they need to do to fill their ships. It will be interesting to see how they choose to compete with the all-inclusive resorts since they have chosen to focus quite a bit of attention in increasing on-board expenditures of their cruisers. The new ships seem to have lots of extra expenses, while the on-shore resorts seem to be trending towards the all-inclusive options.

I agree 100%. Royal has a problem with repeat cruisers - they take up too many resources. D,D+, & Pin cruisers earn less per cruise for the cruise line. The strategy back in the day was to entice us to cruise more. But, we all see the eroding benefits. But, I really think Royal is perfectly fine with this.. in fact they want to rely less upon repeat cruisers, which is why they build the newer ships geared towards the families, and the experience - likely to attract the one-off cruiser.

 

They would rather fill your berth with a one-time cruiser who likely (on averages) spends more every cruise. The trick is how to do that without the D, D+ and Pins noticing. :cool:

 

I believe we will see even more eroding of repeat cruiser perks. They will keep enough of them to make us JUST interested enough to keep coming back. Of course, statistically, that means many will leave because their acceptable/not acceptable threshold has been passed.

Royal has been courting the first time cruisers for several years now, as well as entering non-US markets that have entire populations for whom cruising is a brand new experience. I do not think that they care if we notice.

If they hold their prices firm (and I seem to recall them saying this four or five years ago), then the ships will sail partly empty unless the other mass market lines do the same thing. I imagine that it would have the most direct impact on the crew who depend on a full ship for their incomes. And, although I am sure that many top cruisers don't spend as much onboard as a newbie, I'm sure that many of us spend a respectable amount. So it's better to have the warm body than not.

The goal of reducing inventory is incompatible with bringing ever larger ships to the fleet

The next move to reduce inventory after that becomes reducing the number and variety of sailings. If RCL fails to offer a balanced schedule of departure ports and destinations, it simply becomes a vacuum for someone else to try to fill. Fact is, if this worked, the Airlines would simply run one flight a day on a 747 or 777 between two well-traveled domestic city pairs. In reality, they end up flying a 737 or A319 10 to 12 times a day.

If RCL wants to persuade me that they want to reduce inventory, the magic two-word combinations are SMALLER SHIPS or FEWER CABINS. That's first-year Economics.

Question becomes just where is the break-even point on a cabin, and is RCL willing to sail with empty cabins rather than use blowout sale prices to fill them? I think that sounds like tough talk to please the shareholders, but they may not be willing to accept the hit the bottom line could take while this change gets implemented. At my job here every month-end we turned into a Persian Rug Bazaar trying to hit the numbers. New owner said we weren't going to do that. Sales declined, which hurt but it didn't hurt as bad since we weren't paying customers to take stuff. Sales recovered-- at better margins-- once the customers realized the Persian Rug Days were over.

If they feel profit margins will be higher in other markets than the caribbean in next few years, naturally they will move ships into those markets. They seem to be doing that with Asia right now. Relocating ships to other markets will reduce berths in the caribbean which may put upward pressure on prices...unless/until another ship is placed in that caribbean slot by this cruiseline or another cruiseline.

Like other businesses, cruise ships have fixed costs and marginal costs. The fixed costs are large (ships, permanent staff, fuel, etc). The marginal cost of carrying one more passenger is probably low (a bit more food, water and power), so if there are unfilled cabins as sail date approaches, the cruiselines tend to discount to fill those last few cabins rather than sail with empty cabins. Optimally, they'd get the price point just right start to finish, so there is no excess inventory at the end; that is easier said than done.

When they do have last minute inventory, will they really sail with unsold cabins rather than discount? I rather doubt it; they'd be leaving money on the table. If they generally improve their pricing/marketing systems, maybe we will see less discounting...I'm not holding my breath.