Oil price down effect on cruise fare

[mcatmcat]

I was wondering if now that oil prices is at a five year low if the cruise lines will also lower their prices for the future.

 

 

Sent using the Cruise Critic forums app

[John&LaLa]

Doubt it

 

Sent from my HTC One_M8 using Forums mobile app

[DragonOfTheSeas]

. . the way airline prices have gone down?? :rolleyes:

[bouhunter]

. . the way airline prices have gone down?? :rolleyes:

 

That about sums it up.

[DirtyDawg]

I was wondering if now that oil prices is at a five year low if the cruise lines will also lower their prices for the future.

 

 

Sent using the Cruise Critic forums app

 

This subject was discussed in this thread.

 

http://boards.cruisecritic.com/showthread.php?t=2133232

[WX6Y]

I was wondering if now that oil prices is at a five year low if the cruise lines will also lower their prices for the future.

 

 

Sent using the Cruise Critic forums app

 

Not likely! However, if history offers any clue, transportation costs (including cruises) will rise as soon as the price of oil starts an upward trend. Seldom will they wait for the price of oil to get near the old high before we will see ticket price increases.

 

WX6Y

[cb at sea]

Are you kidding? This is their chance to make a HUGE profit! Keep the prices the same, while their "outlay" is diminishing!

[LMaxwell]

Joe and Jane consumer are going to spend less money on necessities like oil to heat their homes, gasoline for their cars, and maybe even lower food prices. This will create more disposable income for like to have things such as vacation. If demand increases because of more people in the market for a relatively finite number of cruise ship berths you will see rates rise, not drop.

[Deatsch]

Some people sure do smoke funny stuff.

[orville99]

Cruise lines, like airlines and major transportation companies hedge their fuel contracts, so they won't have the advantage of lower prices until their current higher hedge contracts expire and are replaced by contracts hedged against these lower prices. Depending on the nature of individual contracts, it could be six months to a year before these lower fuel prices filter into the revenue stream.

 

 

Sent from my iPad using Forums mobile app

[LMaxwell]

Cruise lines, like airlines and major transportation companies hedge their fuel contracts, so they won't have the advantage of lower prices until their current higher hedge contracts expire and are replaced by contracts hedged against these lower prices. Depending on the nature of individual contracts, it could be six months to a year before these lower fuel prices filter into the revenue stream.

 

 

Sent from my iPad using Forums mobile app

 

 

100% correct. They won't be able to lower fares because their hands are tied on that end. But they can sure raise them if demand increases!

 

Cruising, relatively speaking, is as cheap as it has ever been, I do not know why people think the reduction of the largest overhead expense would relate directly to even lower fares in the near term future.

[justjim312]

That about sums it up.

 

 

Yeah, don't get me going, the flicking airline industry absolutely is ripping us off with air fares. If the cruise ships don't watch themselves, the public could turn on them too.

[George C]

It may help the stock, I have been wanting to buy some

[negc]

It may help the stock, I have been wanting to buy some

 

The stock price has been doing fairly well in recent months (I believe it is currently at an all-time high) and some analysts are predicting that RCI stock will continue to rise in the foreseeable future. I'm not advising for or against investing in their stock, but if you have decided to do so, I see no advantage in delaying a purchase.

[WupperAV]

I bought LUV stock. I'd recommend it, that way mine will go up and I can go on a cruise.:rolleyes:

[BillOh]

I was wondering if now that oil prices is at a five year low if the cruise lines will also lower their prices for the future.

 

 

Sent using the Cruise Critic forums app

 

Maybe they will give back the hour they took in Nassau for Oasis and Allure on the Eastern itinerary.

Edited December 9, 2014 by BillOh

[JasonV1]

Oil typically goes down when summer winds down, although it has dropped quite a bit "more" this time around.

 

Remember that all those oil shale/oil sands fields in the US and Canada only profit when the per-barrel price is above a certain amount. If oil keeps dropping these facilities are likely to stop producing until it rises again, which means less supply, which means prices go up.

 

Plus OPEC will likely cut production as well to ensure that prices stabilize.

 

So gas is cheap for now, but check back again in the spring. If anything Royal will buy up as many fuel contracts as it can at this low price to help stabilize prices when oil goes up (again, since demand in places like China isn't going down any time soon).

Edited December 9, 2014 by JasonV1

[ehfl]

Cruise Lines (and Airlines) use futures and other financial instruments to smooth out fuel prices. They lock in rates so that they can plan accordingly. Unfortunately, that often means that they've locked in higher rates when oil prices drop.

[Big_G]

 

Remember that all those oil shale/oil sands fields in the US and Canada only profit when the per-barrel price is above a certain amount. If oil keeps dropping these facilities are likely to stop producing until it rises again, which means less supply, which means prices go up.

 

Plus OPEC will likely cut production as well to ensure that prices stabilize.

 

 

To your point, OPEC is trying to crush US shale/sand oil producers. Once those producers inevitably go under, they'll cut their own production to get prices back up.

[A&L_Ont]

To your point, OPEC is trying to crush US shale/sand oil producers. Once those producers inevitably go under, they'll cut their own production to get prices back up.

 

100% correct.

 

The only true savings might be the gas in your car for the drive to the airport or port.

[yogimax]

Remember that RCCL is not a charitable institution, nor are they a non profit. They are a publicly traded corporation (RCL) whose mission is to maximize profits for the benefit of their shareholders.

[Paulette3028]

Royal Caribbean had no problem charging us a fuel supplement charge in 2008 after our cruise was booked and paid for. That was before any clause was ever in the contract. Based on that business practice, I should go back and demand partial refund for my upcoming cruise. ;)

 

We have never gotten a fuel supplement charge on a cruise.

[Lionesss]

We have never gotten a fuel supplement charge on a cruise.

 

Before our Freedom of the Seas cruise in 2010 we were notified of a fuel surcharge that would be applied when we sailed and billed on board.

 

It never happened.

 

But, the cruise lines could do what they want.

 

Sea Ya

[JasonV1]

I think they will just close for awhile, but bringing them online again when prices (again) rise does take awhile (based on what I've read).

 

The best thing you can do is set aside the money you are saving on gas today and use it to offset cruise costs. That way your cruises are actually cheaper due to lower gas costs, and you aren't blowing that money on something less important (assuming that money would be "extra", I realize some use it to live on).

 

To understand how it works just look at gold. When the price hits a certain amount old mines reopen as they are suddenly profitable again. Heck tv shows even exist because this.

 

 

100% correct.

 

 

 

The only true savings might be the gas in your car for the drive to the airport or port.

Edited December 14, 2014 by JasonV1

[orville99]

I think they will just close for awhile, but bringing them online again when prices (again) rise does take awhile (based on what I've read).

 

The best thing you can do is set aside the money you are saving on gas today and use it to offset cruise costs. That way your cruises are actually cheaper due to lower gas costs, and you aren't blowing that money on something less important (assuming that money would be "extra", I realize some use it to live on).

 

To understand how it works just look at gold. When the price hits a certain amount old mines reopen as they are suddenly profitable again. Heck tv shows even exist because this.

 

Wells that are currently producing will continue to produce as long as the price of oil covers their fixed costs. While companies will in all likelihood slow down or even discontinue the exploration for and drilling of new wells in the near future, the major impact will be on economies dependent on oil revenue as the major source of GDP (i.e. Russia and Venezuela). Fortunately for the U.S. and most Western nations, oil revenue represents only a small portion of GDP.

Edited December 14, 2014 by orville99