Aussies being ripped off, price gorging and the ACCC.

[Travel Bear Oz]

Just my personal opinion but it's like trying to sue Coles because Wollies is selling the same product cheaper and there's not a shop in your location!

 

Anyone with even the vaugest grasp of global marketing can figure out that different markets can and do attract different pricing.

 

A friend of mine works for a cruise co and the fact is that you can book wherever but if you book with an agent outside your area, generally that agent can make the booking but won't earn commission, hence the reason they won't take the booking and blame the cruise companies! They could do it if they wanted to but as they won't make any money, they refuse to make the booking.

 

Finally at the end of the day, if you don't like the price, you don't have to take the cruise!

 

I fear it's the simplest solution these days to simply whinge and sue rather than shop with your feet.

[Aquarians]

Just my personal opinion but it's like trying to sue Coles because Wollies is selling the same product cheaper and there's not a shop in your location!

 

Anyone with even the vaugest grasp of global marketing can figure out that different markets can and do attract different pricing.

 

A friend of mine works for a cruise co and the fact is that you can book wherever but if you book with an agent outside your area, generally that agent can make the booking but won't earn commission, hence the reason they won't take the booking and blame the cruise companies! They could do it if they wanted to but as they won't make any money, they refuse to make the booking.

Finally at the end of the day, if you don't like the price, you don't have to take the cruise!

I fear it's the simplest solution these days to simply whinge and sue rather than shop with your feet.

Yes, but you can choose which shop to buy at. With cruises you may not be permitted to chose with whom you deal! Not apples with apples!

Aquarians

[SadieN]

I wish I could get Florida resident rates.

 

(I live in California)

[bazzaw]

This is not simply about different prices in different markets - as in some regional markets discounting a product (for whatever a reason). That of course happens - also for whatever reason. On our recent" 3 Queens" cruise, 300 of the 4-500 Aussies onboard were from Perth, and most of those appeared to come from one travel agent. So either the Sandgropers got a better deal than we Easterners - or their TA's did a better job of marketing the cruise :)

 

I really believe the differential that we notice comes from the use of incorrect currency exchange rates. For example - if you go to the "re-directed" Australian RCCL site and look at the cost of shore tours for any of their cruises in Aussie waters, you will find that they are 50% more expensive (in AUD) than those same tours advertised on the US RCCL site. Instead of applying an exchange rate of $1US = approx $1AUD, they are using a rate $1US =$1.50AUD.

 

Barry

[Aquarians]

This is not simply about different prices in different markets - as in some regional markets discounting a product (for whatever a reason). That of course happens - also for whatever reason. On our recent" 3 Queens" cruise, 300 of the 4-500 Aussies onboard were from Perth, and most of those appeared to come from one travel agent. So either the Sandgropers got a better deal than we Easterners - or their TA's did a better job of marketing the cruise :)

 

I really believe the differential that we notice comes from the use of incorrect currency exchange rates. For example - if you go to the "re-directed" Australian RCCL site and look at the cost of shore tours for any of their cruises in Aussie waters, you will find that they are 50% more expensive (in AUD) than those same tours advertised on the US RCCL site. Instead of applying an exchange rate of $1US = approx $1AUD, they are using a rate $1US =$1.50AUD.

 

Barry

The problem is in being prevented from dealing with who you like. Using the above example, if it was an American agency offering the deal you assume the Perth people had, why should I be prevented from using them?

Aquarians

[circuitrider]

I really believe the differential that we notice comes from the use of incorrect currency exchange rates. For example - if you go to the "re-directed" Australian RCCL site and look at the cost of shore tours for any of their cruises in Aussie waters, you will find that they are 50% more expensive (in AUD) than those same tours advertised on the US RCCL site. Instead of applying an exchange rate of $1US = approx $1AUD, they are using a rate $1US =$1.50AUD.

 

I think there's multiple reasons for this. Just focusing on the currency conversion alone, most of the cruise lines here are based in the US (ok, they're international corporations throughout...but they have headquarters in the US, base everything on the US dollar, etc.). Ok, so they have to make sure they make money, they're not going to give you a straight currency conversion; no, they're going to make sure they make a profit even if the currency conversion fluctuates out of their favor. So, they're not looking at it as $1USD = $1AUD...they're looking at it as $1USD = $0.70AUD if converting from USD to AUD, and as $1USD = $1.30AUD when converting from AUD to USD. What makes it even worse, is they're probably converting multiple times. So a tour operator charges then $100AUD per person, the cruise line converts it to USD so they're figuring on it costing $130USD or so. Ok, so their "base" price is $130pp, they add $100 (gotta make some money) so now we're up to $230pp USD. Now if you're paying in AUD, they convert back to AUD and now you're paying nearly $300AUD for a tour that costs $230USD if booked in the US (and $100AUD if you book it direct with the tour operator). Anyways...they use slightly exaggerated currency conversion rates, and are probably converting multiple times, so it can easily get a bit out of hand.

 

Of course, there's also the fact that if they can charge more to a certain group of people, they'll do so. I don't much care for that, and try to work around it any way I can.

 

BTW...I know I didn't use exact math in my numbers above, please forgive me for that...my brain hurts today and apparently can't do currency conversions properly.

[lizzy77]

What I get upset about is that the terms and conditions in Aus are different to our US friends and that is the main reason I use a US agent.

Try to cancel a cruise in Aus??? You will lose some or all of your deposit.

 

I can see that the prices have started to come down here but when they have the same terms and conditions is when I may start to use an Aussie TA again.

[gbenjo]

What gets up my nose is not only do our US friends get a better price than us here in Oz but they also get big OBCs as well. One on line agency that I have used a few times has got, for example, a Princess sale at the moment where, if you are an American citizen, you can get an OBC of around $500 dollars or more but anyone else that books gets nothing.

 

Cannot understand this... our money is as good (or better) than theirs and I recall reading somewhere that US citizens bookings only represented about 50%- 60% of a cruise lines business which means that non US bookings are subsidising the rest.....why??????

[thied]

EASY FIX dont cruise with the US based cruise lines then they will get hint.

[The_Big_M]

EASY FIX dont cruise with the US based cruise lines then they will get hint.

 

True, money talks!

 

BTW, what's the "8000 club"?

[smeyer418]

I have posted this before

 

I am an American lawyer. Let me start off by saying that I want to pay as little for the cruise as possible. That being said its going to rare when you actually pay the least amount for the cruise for a number of reason(where you book and when you book are two of them). As most people know on a airline for instance there may be as many fares as passengers..and some of that may be based on where people reside..perfectly legally.

 

The laws about anti-trust are similar and the agency rules are similar among the various countries. Consumer protection laws and rules concerning which TA you can use are not. These are mostly specifically statutory(local laws) and how they apply varies greatly. The example concerning Coke just does not apply here. The cruise line sell through travel agents or directly. The cruise line can tell its agents what price they can sell and its not an anti-trust issue at all because its isn't the TA that is selling the TA's product. They are making a booking for the cruise line and the cruise line is paying them a commission. Coke sells the syrup to the local bottling company. The bottling company pays a set fee for the syrup and then can sell for any price it wants the final product not so the TA. The risk of loss is with the bottling company. The antitrust issue for the bottling companies which are independent entities deals with their right to compete with other independent bottling companies. The restriction on territories may violate that anti-trust rule.

Many countries and states have rules concerning the registration or licensing of TA's. I believe at least one of the Australian states/territories has such a registration requirement. In most cases while this also protects the TA the primary purpose(traditionally) has been to protect the local consumer from fly by night and unscrupulous TA's. Many US states require licensing or registration to sell to citizens of those individual states-there is no national licensing law here and some states have no such requirement.(California has and you will see on most national US TA sites a registration number-I believe Florida does too). Every US state has a requirement that if the cruise line or TA sell insurance(cruise insurance for instance) that the insurance company be licensed in that state and the cruise lines use a insurance company that is actually licensed in every state for all insurance they sell except for cancel for no reason insurance which they self insure-its technically not insurance but a waiver of the penalty for cancellation. In any case these all were at least in major part done to protect that state's citizens from loss...not to protect the TA although that may be a byproduct of such a law.

Yes I know that the cruise contract has a choice of law provision and place where the lawsuit must be brought but if the cruise contract is in violation of the local consumer protection law these contract terms which violate the local public policy-in the consumer protection laws will NOT be enforced. As An example lets say the local state has a law that requires that the TA be licensed and the cruise company sells to individuals in that state through TA's not so licensed. The State can and has sued the cruise companies to stop and they for the most part do. The Florida Attorney general has aggressively sued the cruise lines when he feels that they are violating consumer protections(as they did when the cruise lines retroactively tried to enforce fuel surcharges that had not been expressly reserved).

 

Most cruise lines(not all) don't allow US TA's to sell to cruiser who reside in Europe or other places and those prices to those residents tend to be higher precisely because of consumer protection laws. When the Iceland volcano exploded the European protection laws required that the people who bought a complete cruise including airfare through the cruise line had to be gotten to the cruise no matter what the cost and the damages for failure to do so where not limited to the cost of the cruise airfare and any additional cost to get there. US cruisers even with insurance were on their own and could only recover limited damages...not so the European consumer.

Its also still true that 90% of all bookings on cruise still come through some form of TA and the cruise lines rely upon them greatly. As many people know the cruise lines have been restricting TA's splitting the commission with the cruiser. Many have made it extremely little they can split with the cruiser. They can do this precisely because they can control their agent and its not an antitrust issue at all(as long as its an individual cruise line decision its ok if the Cruise lines agree among them to restrict it it would not be okay because that is an anti-trust issue an agreement between two independent entities to restrict payments to others would surely violate anti-trust laws but a TA(an agent) and a cruise line(the principal) is not two independent entities.).

 

Of course this is all legalese. The ACCC help line may believe there is a specific legal violation but that doesn't necessarily make that so. I assume like most departments that don't win every case. I assume if they believed that there was a specific violation they would have told them to stop a long time ago..

and finally even though the number of Australians cruising has increased, it still represents a small faction of those cruising(under 5%)...remember these cruise ships are mobile can be easily repositioned..

 

a couple of more points. The fact is that the seller here is the cruise line not the TA= they aren't resellers. They never have a risk of loss on the product and anti-trust just don't extend to that situation.

But that doesn't mean that some TA's don't have access to a lower rate without OBC. some TA get a group fare that they can add other people to even if not in a specific affinity group. You get these rates by having a good relation with the local sales manager of the cruise line or promising a certain number of cabins to be sold to get it. These are then authorized fares. Sometimes the cruise line will actuallysell a net fare room(net payment to the cruiseline) to the TA...and then the risk of loss does pass to the ta but not all cruise lines do that=less and less everyday and the TA is free to charge whatever it wants to- and that would be anti-trust issue if the cruise line interfered.

Most cruise lines show the rate including port fees on their websites, its the TA's who tend to break them up differently.

[Billy and Charlie's Mum]

btw, what's the "8000 club"?

 

I was wondering that too!

[cruiseco]

Be sure to take into account also that several companies may be involved. For example, a US client might be booking through RCI North America and a Aussie client might be booking through RCI Australia -- legally two separate entities. Each company sets its own policies and prices.

 

So, can there be price discrimination when a company sets the same prices for all of its clients? If RCI AU charges everyone the same whether they're from AU, NZ, the US or Hong Kong where's the discrimination? It doesn't matter to them what RCI US charges their clients -- they're a totally separate company and can do what they want.

 

I don't know the answers, just asking.

[Aus Traveller]

EASY FIX dont cruise with the US based cruise lines then they will get hint.

I can only think of a few cruiselines that aren't US based and they don't cruise out of Australia. Examples are Star Cruises (Singapore?) and MSC (Italy?), Fred Olsen (UK). There might be a couple of small operations I have missed.

 

If we want to cruise in this part of the world, we have no option but to cruise with a US based cruise line.:)

[GHDPeter]

From my experience as a small business owner in Australia, the price I display for a product or service MUST include ALL fees, charges and taxes.

 

So in Australia the price has to by Australian Law be all inclusive, there can be no hidden extras. This even extends to cafes restaurants and bar, the menu price must include any "extras" such as holiday surcharges.

[Oz_Steve]

Smeyer

 

Thanks for the explanation. I appreciate there are differences in local laws etc which will cause a geographical differentiation in pricing. In this instance however we are talking about 2 specific issues. The rest is really noise or obfuscation on the issues.

The first is the same cabin on the same cruise using an exchange rate that is heavily biased in the cruise lines favour. Insurance will be different as there are different protections that must be offered etc but the basic cruise, port charges and gratuities. Now they may incur extra costs as they basically have to protect themselves against currency movements but hedges are easy to buy and would only amount to a couple of percent. Actually I would guess that they have traders who trade currencies on their behalf and would make money out of that operation. With current technology they could change the price hourly if they really wanted to based on currency fluctuations but weekly or when there is a move of more than 5% for example they could. A subset of this is the precruise sale where there is a like for like item charged at 50% or more extra in AUD than USD. There is again no excuse for this.

 

The second issue is the automatic redirection away from sites they do not want you to be able to use or probably see. Most will let you book but you can't do it directly, you need to email and talk with them which is ok but it doesn't really create a transparent market. It is a bit rich if you only want there to be a free market when it is in your favour and a transparent market with price transparency is part of that mechanism.

[GHDPeter]

From my experience as a small business owner in Australia, the price I display for a product or service MUST include ALL fees, charges and taxes.

 

So in Australia the price has to by Australian Law be all inclusive, there can be no hidden extras. This even extends to cafes restaurants and bar, the menu price must include any "extras" such as holiday surcharges.

[Aus Traveller]

From my experience as a small business owner in Australia, the price I display for a product or service MUST include ALL fees, charges and taxes.

 

So in Australia the price has to by Australian Law be all inclusive, there can be no hidden extras. This even extends to cafes restaurants and bar, the menu price must include any "extras" such as holiday surcharges.

Yes. That is probably why (on the Grand Princess cruise we booked) we Aussies were quoted an all-includive price inclusing port fees whereas the American price was a little bit lower, but they had to add $615 port fees (making it higher than our all-inclusive price).

[thied]

I can only think of a few cruiselines that aren't US based and they don't cruise out of Australia. Examples are Star Cruises (Singapore?) and MSC (Italy?), Fred Olsen (UK). There might be a couple of small operations I have missed.

 

If we want to cruise in this part of the world, we have no option but to cruise with a US based cruise line.:)

I thought we talking about us based cruise lines cruising from Australia?

[Aus Traveller]

I thought we talking about us based cruise lines cruising from Australia?

Exactly. In your previous post you said -

"EASY FIX dont cruise with the US based cruise lines then they will get hint."

 

The point I was making is that all the cruise lines based in Australia are US cruise lines - unless you want to go on the Spirit of Tasmania back and forth between Melbourne and Devonport. :)

[NikandMick]

Will be keeping an eye on this thread too

[The_Big_M]

Exactly. In your previous post you said -

"EASY FIX dont cruise with the US based cruise lines then they will get hint."

 

The point I was making is that all the cruise lines based in Australia are US cruise lines

 

A few that come to mind that aren't US lines, and that sail here, though there are probably more:

Classic International

Captain Cook cruises

North Star

Orion

[smeyer418]

Smeyer

 

Thanks for the explanation. I appreciate there are differences in local laws etc which will cause a geographical differentiation in pricing. In this instance however we are talking about 2 specific issues. The rest is really noise or obfuscation on the issues.

The first is the same cabin on the same cruise using an exchange rate that is heavily biased in the cruise lines favour. Insurance will be different as there are different protections that must be offered etc but the basic cruise, port charges and gratuities. Now they may incur extra costs as they basically have to protect themselves against currency movements but hedges are easy to buy and would only amount to a couple of percent. Actually I would guess that they have traders who trade currencies on their behalf and would make money out of that operation. With current technology they could change the price hourly if they really wanted to based on currency fluctuations but weekly or when there is a move of more than 5% for example they could. A subset of this is the precruise sale where there is a like for like item charged at 50% or more extra in AUD than USD. There is again no excuse for this.

 

The second issue is the automatic redirection away from sites they do not want you to be able to use or probably see. Most will let you book but you can't do it directly, you need to email and talk with them which is ok but it doesn't really create a transparent market. It is a bit rich if you only want there to be a free market when it is in your favour and a transparent market with price transparency is part of that mechanism.

 

Free market refers to the lack of tariffs and other trade restraints set by the government. Its a governmental protection thing for GOODS not services and a cruise is a service. It doesn't prevent a drug company from charging different amounts for the same product in different countries(we pay more in the US). It in general prevents a government from having a tariff to protect its own manufacturing companies. It also doesn't prevent a government from exercising its police powers to protect its citizens whether from shoddy goods or fly by night TA's- like lead in children toys from China or in restricting you to buy from only licensed TA's.

 

So its perfectly legal to redirect you from the Cruise line website to a site that is permitted to sell you at the prices permitted. Since US based websites(TA's) are not showing you the all inclusive price as required by Australian law, doing so in fact meets the requirements for the cruise line to police its own TA's.

[smeyer418]

nor does it prevent protectionism in other ways. A non-US airline is not permitted to transport directly between two US Cities(so you can't take Qantas for a flight between NY and San Francisco or from NY to Hawaii and get off). They can take you if you stay on the plane on the way to somewhere in another country. Some Asian based flights go from NY to Vancouver and then over to Asia that is ok because Vancouver is in Canada.

 

Its my understanding that most US based cruise lines have established a Australian based subsidiary. They do this precisely because they have to to obey Australian laws-particularly on being licensed to sell to your citizens.

Do American flagged airlines do the same thing?

 

While I do think they can do a better job on the exchange issue, I don't know if they are legally required to or not.

 

I also don't think that the two issues listed above have been made clear before. The Original post was complaining about the price differentials people pay. Even in the US people pay many different prices for the same room based on many different things. When they book, who they book through(some TA's have group or other special rates) senior rates, AAA rates, resident specials, last minute specials, early rates....etc.

 

There is also a business justification for charging more. As you know when the ships were first deployed to Australia there was a really big problem with a fair number(not all) of your countrymen/women removing the auto-tip(or whatever the cruise line called it)..and then not tipping. This was a real problem for the cruise line's employees. They rebelled. The result was that the auto-tip and tipping were rolled into the fare(I believe they added more than just the amount to justify for the tips only). The prevention of your circumventing this and requiring to use Australian based fares is a business justification for the differential.

[MMDown Under]

A few that come to mind that aren't US lines, and that sail here, though there are probably more:

Classic International

Captain Cook cruises

North Star

Orion

 

Unfortunately, true competition will only come when we get more competition here, such as MSC, with its big fleet of beautiful modern ships. MSC have already built up a loyal following through their 2 for the price of 1 offers.

 

In the meantime, we can choose to not cruise with those cruise lines which restrict where we can buy their cruises. The current situation where you cannot buy overseas cruises direct is untenable.

 

I have just spent several months overseas, where I purchased ALL my travel overseas, on the internet!

 

As has been mentioned before, an essential part of the Aussie character is the essence of "a fair go"! We know when, and how, we are being discriminated against!