RCL to end last minute discounting ??

[NightOne]

I think a lot of people here are doing a great job of seeing things from their point of view.

 

However, from Royal's view I think Fain is saying a few simple things:

 

1. We want to be the best and not necessarily the cheapest

 

2. We have a premium product and thus feel like it is worthy of a higher price

 

3. The cruise incidents in the past have forced heavy discounting in the industry but we are past that now

 

4. We want to maintain pricing levels even if that means sailing with some empty cabins. We're not going to give cabins away very close to sail date just to fill all cabins because that hurts our pricing model and upsets those who bought early.

 

This is what I took away from the Bloomberg/CNBC special/interviews and the latest press releases.

 

Sounds simple and practical to me. :)

[Big_G]

I think a lot of people here are doing a great job of seeing things from their point of view.

 

Excellent assessment of all points especially the one above. While their are no guarantees in any plan, I'm sure Royal has the numbers to back it up.

[critterchick]

I think a lot of people here are doing a great job of seeing things from their point of view.

 

However, from Royal's view I think Fain is saying a few simple things:

 

1. We want to be the best and not necessarily the cheapest

 

2. We have a premium product and thus feel like it is worthy of a higher price

 

3. The cruise incidents in the past have forced heavy discounting in the industry but we are past that now

 

4. We want to maintain pricing levels even if that means sailing with some empty cabins. We're not going to give cabins away very close to sail date just to fill all cabins because that hurts our pricing model and upsets those who bought early.

 

This is what I took away from the Bloomberg/CNBC special/interviews and the latest press releases.

 

Sounds simple and practical to me. :)

 

Except that RCI isn't a premium product. Silversea, Regent, Windstar, etc. are premium products. RCI is a mass market line that may offer great amusement parks at sea, but their basic food and service are mass market quality. Perhaps there's a big market for those who are willing to pay the premium for Freedom, Oasis and Quantum class ships, but anything smaller than that isn't going to offer the bells and whistles that make the experience anything but a nice, MASS MARKET experience, which IMO doesn't justify premium pricing.

 

I bet that their analysis showed that those who book at the very last second don't spend any money onboard, so there's no loss to the line in shutting off those passengers (or forcing them to pay more). But there is a loss to the crew, who depend on gratuities.

[NightOne]

Except that RCI isn't a premium product. Silversea, Regent, Windstar, etc. are premium products. RCI is a mass market line that may offer great amusement parks at sea, but their basic food and service are mass market quality. Perhaps there's a big market for those who are willing to pay the premium for Freedom, Oasis and Quantum class ships, but anything smaller than that isn't going to offer the bells and whistles that make the experience anything but a nice, MASS MARKET experience, which IMO doesn't justify premium pricing.

 

I bet that their analysis showed that those who book at the very last second don't spend any money onboard, so there's no loss to the line in shutting off those passengers (or forcing them to pay more). But there is a loss to the crew, who depend on gratuities.

 

I am sure Royal would disagree about them being a premium product.

 

Also, you keep using the words "mass market" as if something sold to the masses could not be a premium product. A small list of companies/brands that would likely disagree that marketing/selling to the masses makes them non-premium

 

Lexus, Acura, Infiniti, BMW, Mercedez, Jaguar, Cadillac

Rolex, Omega, Tag

Apple

Starbucks

Calvin Klein, Ralph Lauren, Coach, Chanel, Armani

Grey Goose, Patron

Oakley, Ray-Ban

Briggs & Riley, Tumi

Saks Fifth Avenue

Dyson

[insidecabin]

I think a reality check is needed

 

we are talking about <30days here for the no more discount

 

Most of the cabin clearance happens in the final->30 days out anyway except for the real slow sellers.

 

if anything this makes it easier for the real last minute cruiser, you now can just wait to 30 days and pick knowing this won't go any lower you either book or move to the next one.

 

I suspect there may be another motive here, the forecast for the quarter look bad so this will sets things up for lower occupancy/revenue.

 

In my view the biggest problem is the lack of integrity on ship changes, Oasis Quantum and now Allure are just alienating passengers by disrupting their cruises with excessive building work. and failing to notify in a timely way.

 

If brand image drives prices they have a lot of work to do as high prices does not drive brand.

 

The car salesman is a message to the industry and investors

 

passengers have no business hearing this stuff.

[Trekker954]

what is considered last minute? two months or two weeks?

 

Previously, starting right after final payment, we'd see prices drop on many cruises. Prices would drop weekly, I weekly, to up to a week ahead in some cases. So when should we give up checking price drops now?

 

Also, will this be a global change, or basically US based cruises?

[Ourusualbeach]

what is considered last minute? two months or two weeks?

 

Previously, starting right after final payment, we'd see prices drop on many cruises. Prices would drop weekly, I weekly, to up to a week ahead in some cases. So when should we give up checking price drops now?

 

Also, will this be a global change, or basically US based cruises?

 

Fain did mention 10, 20 and 30 days depending on the length of cruise in one of the articles. Whether that was accurate or a generalization remains to be seen.

 

I have seen some significant drops a week or days before final payment which always had me wondering at the rational for that.

 

I would not be surprised to see increased discounting for residency, senior, military etc. in order to still fill up the ships yet maintain the pricing integrity and not p*** off as many people by the last minute reductions.

[BIGDADDYRICH]

I have to be honest. While those who have booked early will be happy, for one reason or another, the cruise line will have to accept the fact that those last-minute cheap/bargain-hunters may only buy some of the extras some of the time, but now, it will be none of the time. Have alcohol sales really been that good? In light of this past "wave" season, it makes sense as to whats happening at r.c. There is a "financial bottom line" governing its operations. That seemed pretty clear to me in light of the almost non-existant cruise bargains that they offered. Thats ok though, as much as i like r.c. I now have the opportunity to explore other lines, such as my 11 nt med cruise, on the ncl epic, on 24feb16. We paid 799 ea for a balcony, that included their ultimate beverage & dining pkg as a perk. With tax & grats, it came out to just $2,017.00 for both of us. We will take it in conjunction with our trip to holland & germany. Sounds like an opportunity to me!

[critterchick]

I am sure Royal would disagree about them being a premium product.

 

Also, you keep using the words "mass market" as if something sold to the masses could not be a premium product. A small list of companies/brands that would likely disagree that marketing/selling to the masses makes them non-premium

 

Lexus, Acura, Infiniti, BMW, Mercedez, Jaguar, Cadillac

Rolex, Omega, Tag

Apple

Starbucks

Calvin Klein, Ralph Lauren, Coach, Chanel, Armani

Grey Goose, Patron

Oakley, Ray-Ban

Briggs & Riley, Tumi

Saks Fifth Avenue

Dyson

 

Touche. I see what you mean. So I'll say that RCI is a good middle of the road cruiseline (Honda?) but isn't anywhere near being a Lexus. And I love my Honda, I might add.

Edited April 22, 2015 by critterchick

[insidecabin]

I have to be honest. While those who have booked early will be happy, for one reason or another, the cruise line will have to accept the fact that those last-minute cheap/bargain-hunters may only buy some of the extras some of the time, but now, it will be none of the time. Have alcohol sales really been that good? In light of this past "wave" season, it makes sense as to whats happening at r.c. There is a "financial bottom line" governing its operations. That seemed pretty clear to me in light of the almost non-existant cruise bargains that they offered. Thats ok though, as much as i like r.c. I now have the opportunity to explore other lines, such as my 11 nt med cruise, on the ncl epic, on 24feb16. We paid 799 ea for a balcony, that included their ultimate beverage & dining pkg as a perk. With tax & grats, it came out to just $2,017.00 for both of us. We will take it in conjunction with our trip to holland & germany. Sounds like an opportunity to me!

 

All cruise lines hiked prices A LOT, one thing that has been happening is this time the prices and other changes have got people looking elsewhere and some are saying why not give another line a try.

 

NCL through out some crazy bargains in Europe when they gave 2 choices to everyone OV and above and suites getting everything.

 

They have have been upsetting their regulars with various prices changes with no/little notice. People are looking.

 

RCI with the current round of ship refurbs is saying stuff you to passengers having to take cruises in building sites. Hat trick so far, Quantum, Oasis, Allure, lets see what Explorer looks like this week when the first passengers get on board.

 

 

Been giving princess another look the, late prices compared to last year are holding up well.

 

In Europe we always have Costa, MSC and some of the smaller lines to fall back on they are still throwing out bargain basement prices(11days for £250(<$500 inc flights recently) if you need a cruise fix and have some flexibility.

 

 

I think that the reality in the big picture the marginal groups are not that big although some do operate their purchase in the margin areas.

 

Active CC members on most cruise are very low in number.

 

The late booker bargain hunters are probably a very low % of cruise passengers but they mop up the spare cabins.

 

What is clear is many passengers want is open fare pricing.

 

If the cruise lines want early booking then that's the end they need to fix NOT the last 30days.

 

We will know when they are getting serious when they put a no exceptions price promise in place(even then they can just invent a new grade).

[Mikew0805]

I am sure Royal would disagree about them being a premium product.

 

Also, you keep using the words "mass market" as if something sold to the masses could not be a premium product. A small list of companies/brands that would likely disagree that marketing/selling to the masses makes them non-premium

 

Lexus, Acura, Infiniti, BMW, Mercedez, Jaguar, Cadillac

Rolex, Omega, Tag

Apple

Starbucks

Calvin Klein, Ralph Lauren, Coach, Chanel, Armani

Grey Goose, Patron

Oakley, Ray-Ban

Briggs & Riley, Tumi

Saks Fifth Avenue

Dyson

 

LOL I agree with the other poster. RCI is not a premium product! They offer the same thing as CCL and NCL, just with more beautiful ships. The ships are a premium, the product.. is not!

 

To compare RCI as on par with some of the brands listed above is just silly.

[insidecabin]

LOL I agree with the other poster. RCI is not a premium product! They offer the same thing as CCL and NCL, just with more beautiful ships. The ships are a premium, the product.. is not!

 

To compare RCI as on par with some of the brands listed above is just silly.

 

The man said BRAND is the key(not the product), there are enough out there that if you tell them enough times your product is premium they start to belief you.

 

Start with the price to make it look like a premium product.

[Cigar King]

They must be a premium product. They have the word "Royal" in the name. ;-)

[DonnaK]

We've already stopped booking. Once we finish the cruises in the pipeline, we're done until RCL stops playing games.

 

This is how we stand now. No cruises booked, and no plans to book with RCI unless their prices come down and they stop with the bogus promotions. As long as I can get better deals on other lines, that's where I will spend my money

[Earthworm Jim]

I think the "no revenue from empty cabins" argument could possibly be wrong, at least in theory. It depends on who these people buying the last minute cabins on the cheap are. Are they almost all people who would not have sailed at all were it not for the last minute discount? Or are they people that knew they were going to book that cruise on that date, and just waited until the last minute because that's when they knew they'd get the best deal?

 

If it's mostly the first group, then the no revenue from empty cabins idea is correct. But if it's mostly people who were going to be on the ship one way or another, maybe they sell 2 cabins at $1400 ($2800) per cabin with a third cabin empty instead of filling all 3 cabins at a last minute $800 per cabin discount rate ($2400). In that scenario they actually get more revenue from sailing with an empty cabin.

 

Of course, there is the profits from onboard spending to consider too. But perhaps they have data to indicate the price conscious cruisers who will only book at a discount are price conscious on board as well and don't spend much. Therefore, they are not very valuable customers to Royal, and they don't mind risking their loss.

 

Excellent assessment of all points especially the one above. While their are no guarantees in any plan, I'm sure Royal has the numbers to back it up.

 

They have numbers no doubt, but there are also uncertainties. I don't know how they can accurately project what percentage of the cruisers who have been waiting until the last minute will now pay the new higher price, and what percentage will now go to another line where they can still get a discount. Therefore I don't see how they can project the number of empty cabins that will result very accurately.

Edited April 23, 2015 by Earthworm Jim

[boonert]

 

It would not surprise me that they do have those numbers. All on board purchases are made with your sea pass card. They could probably figure out a way of running reports showing how much money is spent by various groups of cruisers- including those who purchase their cabins at the last minute at bargain prices.

[RocketMan275]

They have numbers no doubt, but there are also uncertainties. I don't know how they can accurately project what percentage of the cruisers who have been waiting until the last minute will now pay the new higher price, and what percentage will now go to another line where they can still get a discount. Therefore I don't see how they can project the number of empty cabins that will result very accurately.

 

I can guarantee that RCI knows exactly how much (Both average and standard deviation) any passenger in any category will spend on board. They can slice and dice based upon when you booked, how you booked, your zip code, your age, your gender, and your shoe size. This is trivial. They have millions of passengers each year which will pretty much eliminate any uncertainties. Gathering data is also trivial since all spending is on your seapass. And, remember how much data you give them when you fill out your embarkation paper work.

[boonert]

I can guarantee that RCI knows exactly how much (Both average and standard deviation) any passenger in any category will spend on board. They can slice and dice based upon when you booked, how you booked, your zip code, your age, your gender, and your shoe size. This is trivial. They have millions of passengers each year which will pretty much eliminate any uncertainties. Gathering data is also trivial since all spending is on your seapass. And, remember how much data you give them when you fill out your embarkation paper work.

 

Then I'm sure that the data suggest that certain last minute bookers don't spend any money on board therefor RCI feels better off without them on board.

[Earthworm Jim]

They have numbers no doubt, but there are also uncertainties. I don't know how they can accurately project what percentage of the cruisers who have been waiting until the last minute will now pay the new higher price, and what percentage will now go to another line where they can still get a discount. Therefore I don't see how they can project the number of empty cabins that will result very accurately.

 

It would not surprise me that they do have those numbers. All on board purchases are made with your sea pass card. They could probably figure out a way of running reports showing how much money is spent by various groups of cruisers- including those who purchase their cabins at the last minute at bargain prices.

 

True, but that's not what I said. I said they don't know what percentage of cruisers who book the last minute will book anyway with higher rates, and what percentage will not book at all or book with another line. Presumably they do have data about onboard purchases by every different category and demographic.

 

I can guarantee that RCI knows exactly how much (Both average and standard deviation) any passenger in any category will spend on board. They can slice and dice based upon when you booked, how you booked, your zip code, your age, your gender, and your shoe size. This is trivial. They have millions of passengers each year which will pretty much eliminate any uncertainties. Gathering data is also trivial since all spending is on your seapass. And, remember how much data you give them when you fill out your embarkation paper work.

 

When I said they might have stats showing that people that book at a discount don't spend much, the "might" wasn't that they have the stats. They definitely have the stats. The "might" was the question of whether the stats show these people don't spend much onboard. I have no idea whether that part is true or not, though my guess would be it's true.

Edited April 23, 2015 by Earthworm Jim

[grandgeezer]

True, but that's not what I said. I said they don't know what percentage of cruisers who book the last minute will book anyway with higher rates, and what percentage will not book at all or book with another line. Presumably they do have data about onboard purchases by every different category and demographic.

 

 

 

When I said they might have stats showing that people that book at a discount don't spend much, the "might" wasn't that they have the stats. They definitely have the stats. The "might" was the question of whether the stats show these people don't spend much onboard. I have no idea whether that part is true or not, though my guess would be it's true.

 

We have been known to book a cruise after final payment to get a low price. That doesn't mean we didn't spend money on the ship. We always book balconys, we have a few drinks, we usually make our nightly contribution in the casinos, we used to give extra gratuities to the staff also, and we did a lot of tours. Last spring on a B2b transatlantic on the Silhouette, it was over $1200 worth of tours. We've done five transatlantics and have used Choice Air every time. I wonder if their stats picked all that up.

[grandgeezer]

No more discounting?? May 24, Vision of the Seas, 12 day Med cruise. Royal Caribbean web site show $1149 for an oceanview guarantee. RCL's Tuesday special has it for $899, I think that's a discount. Credibility??

[Cigar King]

I assume on the newer ships they know how often you flush the toilet, so, yes, I would expect them to know everything you spent money on while aboard.

 

Data mining is still somewhat of an art, but, the information that we're talking about is the easy stuff. If they don't know it they should.

[Cigar King]

BTW - Here's a great example of what data mining can get you, once you go into high gear.

 

http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/

[JAMESCC]

We've already stopped booking. Once we finish the cruises in the pipeline, we're done until RCL stops playing games.

 

I never thought I'd say this, but I am getting VERY close to the same decision. I get emails from NCL all the time with insane deals, free dining option for the entire cruise and other incentives. I mean just different things to entice you to book. RCCL does nothing like that. They are starting to really annoy with the nickel and dimming BS. We love doing RCCL because they have HUGE ships and sail from NJ and we live in NJ. BUT, big but NCL now has the Breakaway in NYC. Carnival is putting a brand new very large ship in NYC. Both huge and cheaper rates. We just might switch.

[insidecabin]

I never got the loyalty thing too boring when you cruise multiple times a year.

 

Always mixed it up, great feeling trying out something new first cruise buzz, alternate with an old favourite.