Profitability of new and existing cruisers

[canuckinindia]

Often see people quoting some variant of ‘Doesn’t Celebrity get that is cheaper to retain an existing customer than getting a new one’. Did anyone ever stop and think that Celebrity knows that but is also very aware that experienced purchasers are on average not as high margin due to their knowledge.

 

Let’s look at a list of things you typically won’t see a first time cruiser do.

• Carry-on bottled water

• Carry-on bottles of wine

• Avoid ship tours for independent tours

• Figure out how to avoid spending OBC (convert at casino)

• chase fare drops

• stack perks and benefits

• not purchase photographs

 

And last but not least instead of complaining to anyone who would listen to them about how the product isn’t as nice as it was in the good old days, they tell everyone how interesting an experience their first cruise was!

 

Yes some first time cruisers don’t fit this norm (likely those who seek out sites like CC) but I suspect they are very much in the minority.

 

You maybe a valued passenger but don’t assume that doesn’t mean your as profitable, if this category of passenger was more profitable they likely would be doing more to retain them, just as they are doing for their valuable (and profitable) suite guests with last years upgraded Suite benefits (even for those who booked before they were announced).

[Mynki]

I agree. Not only that but Elite, Elite + and Zeniths etc will also impose costs on X due to free laundry, beverages, internet etc. With hundreds of these on each sailing Celebrity will have to recoup the cost from somewhere, hence increases in fairs.

[baldercash]

Some do some don't follow your list.

On my first cruise 17 years ago I took aboard a battery charged blender for making drinks no longer allowed and the cruise line let us to take the hard liquor we bought in port no longer allowed to our rooms. One of my fondest memories was blending ice and a whole pineapple we picked up at the buffet which you rarely see today and adding a stiff amount of rum then pouring it into the souvenir glasses you used to buy but no longer sold. We would take them up to the pool no longer allowed as they were glass container and people would ask where we bought our drinks as they looked so much better then the ones they sold on board. It was so much more fun then the free cocktails they give us now and it cost the cruise line nothing.

 

As well 17 years ago no one had the need for bottled tap water so why would we drag it on board.

 

The cruise lines win as much as we lose.

Edited December 12, 2015 by baldercash

[Bo1953]

Look at First and Business Class air travel, those passengers, for the most part, pay up to 120x the base economy fare and rarely complain about amenities because they do get a lot for what they pay for, often times without discounts.

 

Seat comfort, upgraded amenities no matter how 'bad' it may appear, but somehow better than coach. etc...

 

If a passenger gets upset by the offerings, they usually do not rant about it on social media, as far as I have seen, they just move on to the next best airline and are happy. In some cases it is done for the benefits they believe are due based on fare paid and/or loyalty and were not 'receiving' or changes made in service which was not tolerable. Only their family and business associates know.

 

When the new airline is not living up to par or stops delivering the expected value, we move on to the next one, all without fanfare or international broadcast, for the most part...

 

Believe me, I know it is the perception of the buyer which is most important, to be sure... If there is a 'problem', I will let on-site responsible parties know of the challenge and hopefully they will take care of it. But, unless it is something which is a safety hazard for the most part, it should be, barely, tolerable, until I get home and fire off a letter and start a new search for the next trip.

 

Just my opinion, to be safe... ;-)

 

bon voyage

Edited December 12, 2015 by Bo1953

[Ma Bell]

I disagree. There are a lot of factors to consider including frequency of cruising and cabin selection that balance out small differences in benefits, especially with Celebrity's more all inclusive pricing of late which really negates many of the so called loyalty benefits. Most people have a tendency to upgrade their cruising experience as time goes on.

[baldercash]

I disagree. There are a lot of factors to consider including frequency of cruising and cabin selection that balance out small differences in benefits, especially with Celebrity's more all inclusive pricing of late which really negates many of the so called loyalty benefits. Most people have a tendency to upgrade their cruising experience as time goes on.

 

I agree with this as we started out cruising insides and ocean

view cabins and now we prefer Aqua class A1 cabins or if those are not available aft cabins. The same goes for Specialty dinning it used to be once a cruise as the venues were so limited now we can eat at various pay venues for lunch and dinner on the same day.

 

We are not big drinkers at this age and find the Elite cocktail party each night more then enough for us as we have only one or two drinks a week at home.

We booked the 2017 Mardi Gras cruise which included the drink package which we will never get the value of but we convinced three other couples who are new cruisers to join us and for them it was selling feature and for us we can now join then at the bar anytime of day for a drink.

 

There does appear to be a very hard core of incredibly thrifty cruisers on Cruise Critic that seem to derive more pleasure from the savings they make on a cruise then the cruise experience it self.

[Ma Bell]

I agree with this as we started out cruising insides and ocean

view cabins and now we prefer Aqua class A1 cabins or if those are not available aft cabins. The same goes for Specialty dinning it used to be once a cruise as the venues were so limited now we can eat at various pay venues for lunch and dinner on the same day.

 

We are not big drinkers at this age and find the Elite cocktail party each night more then enough for us as we have only one or two drinks a week at home.

We booked the 2017 Mardi Gras cruise which included the drink package which we will never get the value of but we convinced three other couples who are new cruisers to join us and for them it was selling feature and for us we can now join then at the bar anytime of day for a drink.

 

There does appear to be a very hard core of incredibly thrifty cruisers on Cruise Critic that seem to derive more pleasure from the savings they make on a cruise then the cruise experience it self.

 

Yes, a person's own choice of what is important to them has a lot to do with it. Most people can afford to spend a little more as they progress in their lives and many choose to do so. Some get a lot of pleasure doing things as cheaply as possible. To each his own.

[readyforacruiseagain]

I agree with this as we started out cruising insides and ocean

view cabins and now we prefer Aqua class A1 cabins or if those are not available aft cabins. The same goes for Specialty dinning it used to be once a cruise as the venues were so limited now we can eat at various pay venues for lunch and dinner on the same day.

 

We are not big drinkers at this age and find the Elite cocktail party each night more then enough for us as we have only one or two drinks a week at home.

We booked the 2017 Mardi Gras cruise which included the drink package which we will never get the value of but we convinced three other couples who are new cruisers to join us and for them it was selling feature and for us we can now join then at the bar anytime of day for a drink.

 

There does appear to be a very hard core of incredibly thrifty cruisers on Cruise Critic that seem to derive more pleasure from the savings they make on a cruise then the cruise experience it self.

 

The drink packages always bothered me, but now that they are included I will probably upgrade. Corkage was $10 our first cruise and now $25 I think.

 

I got enough champagne & with a couple of bottles of wine and a drink special here or there was fine. The idea of seeing pages of extra charges I do find off putting.

 

I want fresh OJ, smoothies and 1-2 specialty coffees in the morning (and spouse wants evian, which is nothing ore then water in a bottle imo;)). The cost/day is just silly

 

I also hate people who appear to just want to get liquored up or are trying to pull every scam to smuggle hard liquor on board (sorry even as cheap as I am the battery blender made me laugh out loud and shake my head). Not as much now but I remember 3-5 years ago the long threads about how to smuggle.

 

But I'll be honest too that maybe they do go overboard with perks for long-time cruisers and should create a more middle class and frankly cut off the Elite+..... Sorry but if can afford 60+ days of cruising a year do you really need all those extras (or just include it in the price like airlines)?

[Ma Bell]

I never understand the mentality of worrying about what others are getting. I've been up and I've been down in my life but I always appreciate the opportunity to work for something better.

[WALKER1313]

It seems that existing cruisers have a low cost of acquisition, while it costs the line plenty to get a new cruiser.

[lovemylab]

DH and I are in our mid to late 30s. We have been on 9 cruises. Most people in our social circle have never cruised. Those who have cruised have only done so once or twice. The reason is because they feel a cruise is too expensive compared to other types of vacations (mainly AI resorts and land trips).

 

So while the cruise lines will certainly profit off a first time cruiser; it's important to remember that it's harder to attract first time cruisers than it is to just keep your existing loyal customers.

[grandgeezer]

The drink packages always bothered me, but now that they are included I will probably upgrade. Corkage was $10 our first cruise and now $25 I think.

 

I got enough champagne & with a couple of bottles of wine and a drink special here or there was fine. The idea of seeing pages of extra charges I do find off putting.

 

I want fresh OJ, smoothies and 1-2 specialty coffees in the morning (and spouse wants evian, which is nothing ore then water in a bottle imo;)). The cost/day is just silly

 

I also hate people who appear to just want to get liquored up or are trying to pull every scam to smuggle hard liquor on board (sorry even as cheap as I am the battery blender made me laugh out loud and shake my head). Not as much now but I remember 3-5 years ago the long threads about how to smuggle.

 

But I'll be honest too that maybe they do go overboard with perks for long-time cruisers and should create a more middle class and frankly cut off the Elite+..... Sorry but if can afford 60+ days of cruising a year do you really need all those extras (or just include it in the price like airlines)?

 

One of the reasons we do 60+ days of cruising is the perks. Take away the perks and our days will be cut by 75%. It's not what I can afford, it's what I'm willing to spend.

[readyforacruiseagain]

One of the reasons we do 60+ days of cruising is the perks. Take away the perks and our days will be cut by 75%. It's not what I can afford, it's what I'm willing to spend.

 

So then I wonder how can the cruiseline make money off you if 75% of your costs are reduced thanks to all the perks.

 

Not to sound naive or dumb, but to me it sounds like I'm the one in the end paying for your cruise.....:confused:

[neverbeenhere]

The more expensive the stateroom, the more of the total cruise cost you are paying. Inside staterooms are "supplemented" by Balcony staterooms... Just as economy class flyers are "supplemented" by first class.

 

If a few dollars of perks keep a cruiser loyal (and cruising), then the perks are worth the cost. A cruiser without perks certainly will be "supplementing" the cruiser with perks.

 

Solutions: Buy the cheapest stateroom, never spend a dollar on the ship (or off), take anything that is free or don't cruise.

[az_tchr]

Ready - wow! The poster said they would cruise fewer days if the perks were removed, not that 75% of their costs were related to perks.

 

I and my DW are Elite. We enjoy a couple glasses of wine each evening, just like at home. Having the evening party means we do not buy a drink package. Are YOU paying the approximately $2 per glass for our wine? It is not a big deal costwise.

 

Next is a bag of laundry instead of a $20 coupon deal. Huge cost - no. would easily go back to washing clothes out in the sink.

 

Last is the breakfast. I do enjoy an occasional Mimosa or a smoothie. Again does this really cost the cruiseline much? Would I buy both if I had to pay - yes. As many no as it is simple human nature to use more of something you get for free!

 

Celebrity provides incentives for early booking. They also provide incentives for loyalty. If those perks cost them more than they receive the perks would cease.

 

you are not paying for anyone elses cruise. Sorry

[readyforacruiseagain]

Ready - wow! The poster said they would cruise fewer days if the perks were removed, not that 75% of their costs were related to perks.

 

I and my DW are Elite. We enjoy a couple glasses of wine each evening, just like at home. Having the evening party means we do not buy a drink package. Are YOU paying the approximately $2 per glass for our wine? It is not a big deal costwise.

 

Next is a bag of laundry instead of a $20 coupon deal. Huge cost - no. would easily go back to washing clothes out in the sink.

 

Last is the breakfast. I do enjoy an occasional Mimosa or a smoothie. Again does this really cost the cruiseline much? Would I buy both if I had to pay - yes. As many no as it is simple human nature to use more of something you get for free!

 

Celebrity provides incentives for early booking. They also provide incentives for loyalty. If those perks cost them more than they receive the perks would cease.

 

you are not paying for anyone elses cruise. Sorry

 

Yes tongue in cheek, but it was written that hey get 75% off and if paid the right price could cruise only 15 days vs. 60...... Now there is no doubt a fine line, but does seem that maybe the perks are somewhat skewed.

 

Sure I'm missing something.....:p;)

[baldercash]

Let’s look at a list of things you typically won’t see a first time cruiser do.

• Carry-on bottled water

• Carry-on bottles of wine

• Avoid ship tours for independent tours

• Figure out how to avoid spending OBC (convert at casino)

• chase fare drops

• stack perks and benefits

• not purchase photographs

 

Yes lets look at this list.

They won't carry on water as they have not yet been charged up to $6.00 for a bottle of water that the ship pays around $ .20 for.

 

They won't be carrying on wine that they pay a corkage fee of $25.00 for as they have not yet been charged $45.00 for a bottle of wine that can be had from ABC liquors for $8.00 which the ship pays around $2.00 for.

 

They will likely take the ship tours and pay 3 times the price of a private tour as they have not yet spent most of their time waiting for the tour bus to fill or unload and wait for tardy tour members while being treated like a herd of cattle. Or stuck at a stop that is worth a 5 minute view for an hour and then forced to kill time while everyone shops for trash trinkets.

 

They will spend their OBC as it is all fresh to them and they will not know how tight the casino slots are or that the watch they buy while on board can be bought for less at Costco and the next time they cruise they will pack cough syrup so as not to pay 4 times the land retail price while on the ship.

 

They won't chase fare drops as they will think the Cruise line values them as a customer and would reward them for booking early and contact them if they discount the cruise. They will not realize the cruise line drops the fare only after they have made their final payment.

 

Of course they will not stack perks and benefits they have never cruised before so they don't get any! The cruise line gives these only to get them to come back after doing all the above mentioned things to them on their 1st trip.

 

They will buy pictures as this is their 1st cruise and it is all new and a memorable occasion and they may have OBC they don't know what to do with so they are not deterred by the outrageous price, but after a few more cruises not so much.

Think about it, on the average cruise ship of 2000 people if each cabin bought one $20.00 picture that is $20,000.00 dollars just for that cruise what do you think the overhead is for the cruise line?

 

All part of a grand plan.

Edited December 12, 2015 by baldercash

[grandgeezer]

So then I wonder how can the cruiseline make money off you if 75% of your costs are reduced thanks to all the perks.

 

Not to sound naive or dumb, but to me it sounds like I'm the one in the end paying for your cruise.....:confused:

 

Reread the post, I said the number of days I would cruise would drop by 75%. That would cut my annual spend with them by $10,000. Cutting a couple of hundred dollars in freebies and lose $10,000 in revenue doesn't sound like it's worth it. If you aren't Elite, or higher, you are subsidizing my perks. Get to that level and let the other people contribute.

[Silvery Seas Cruiser]

We will reach Elite Plus on Celebrity in about a year and are Diamond Plus on Royal Caribbean. We do some of the cost cutting tricks mentioned in the OP's list, but neither Royal nor Celebrity are hurting because of that. Why? Because the longer we cruise, the higher class of cabin we book and the longer the cruises we book. We also eat in specialty restuarants and did not do that in our early cruising days.

 

When we first started cruising we booked inside rooms, then began to book ocean view, then began to book balconies and so on. We took short cruises because of obligations at home that prevented lengthy spells away from home.

Now the longer the cruise, the better for us.

 

I don't think Celebrity or Royal are losing any money on us.

[Gracie115]

Yes lets look at this list.

They won't carry on water as they have not yet been charged up to $6.00 for a bottle of water that the ship pays around $ .20 for.

 

They won't be carrying on wine that they pay a corkage fee of $25.00 for as they have not yet been charged $45.00 for a bottle of wine that can be had from ABC liquors for $8.00 which the ship pays around $2.00 for.

 

They will likely take the ship tours and pay 3 times the price of a private tour as they have not yet spent most of their time waiting for the tour bus to fill or unload and wait for tardy tour members while being treated like a herd of cattle. Or stuck at a stop that is worth a 5 minute view for an hour and then forced to kill time while everyone shops for trash trinkets.

 

They will spend their OBC as it is all fresh to them and they will not know how tight the casino slots are or that the watch they buy while on board can be bought for less at Costco and the next time they cruise they will pack cough syrup so as not to pay 4 times the land retail price while on the ship.

 

They won't chase fare drops as they will think the Cruise line values them as a customer and would reward them for booking early and contact them if they discount the cruise. They will not realize the cruise line drops the fare only after they have made their final payment.

 

Of course they will not stack perks and benefits they have never cruised before so they don't get any! The cruise line gives these only to get them to come back after doing all the above mentioned things to them on their 1st trip.

 

They will buy pictures as this is their 1st cruise and it is all new and a memorable occasion and they may have OBC they don't know what to do with so they are not deterred by the outrageous price, but after a few more cruises not so much.

Think about it, on the average cruise ship of 2000 people if each cabin bought one $20.00 picture that is $20,000.00 dollars just for that cruise what do you think the overhead is for the cruise line?

 

All part of a grand plan.

 

and they will spend hefty $$ in the spa, thinking they "must be high end and better than on land" when in fact they are neither and the profit factor on that $210. fifty minute massage is huge...

 

and they will try all the different "specialty drinks" and pay full price for every drink they consume...

 

and "might" even get sucked into an art auction piece.....:eek::D

 

and no matter what anyone thinks these are all the ways that cruiselines make their profits.....its really NOT in the stateroom price

Edited December 13, 2015 by Gracie115

[kitty9]

and they will spend hefty $$ in the spa, thinking they "must be high end and better than on land" when in fact they are neither and the profit factor on that $210. fifty minute massage is huge...

 

and they will try all the different "specialty drinks" and pay full price for every drink they consume...

 

and "might" even get sucked into an art auction piece.....:eek::D

 

and no matter what anyone thinks these are all the ways that cruiselines make their profits.....its really NOT in the stateroom price

 

Gracie, you are correct. There was a show a couple years ago on CNBC about cruise lines and profitability. Throughout the entire show, it was repeated that cruise line profits were based on on-board sales, not on cruise fares. They spoke with a number of cruise executives who were very clear that money spent on shore excursions, drinks and everything else. When a port is skipped, for whatever reason, their profit margin percentage drops quite a bit.

 

But as I've said before, Celebrity has screwed themselves with all these perks. I will fully admit, before all these perks, starting with beverage packages, my on board spending was very big. But now, on my last few cruises, my bill has been nearly non-existent.

[Iamcruzin]

Reread the post, I said the number of days I would cruise would drop by 75%. That would cut my annual spend with them by $10,000. Cutting a couple of hundred dollars in freebies and lose $10,000 in revenue doesn't sound like it's worth it. If you aren't Elite, or higher, you are subsidizing my perks. Get to that level and let the other people contribute.

 

This only works if perks at the top motivate you. I know that I'm in the minority here but I'm not interested in free laundry or cocktails in a specified venue at a specific time. However the lower end perks such as the 1/2 deposit and the one category upgrade along with the beverage package can make the difference of whether I book Princess or Celebrity. I'm Platinum on Princess and the free internet minutes don't compel me to book with them and I have no interest in the Elite unlimited free laundry at their top level. Maybe it will change as I get older but for now I'm just looking at an all inclusive experience at a price that I can afford.

[Redtravel]

Any business wants repeat guests and new guests.All guests are welcome. . Happy guests who book another cruise are a good way to get more people to cruise. If I take a trip and love it, I tell my friends/family how wonderful it was. If a cruise/tour is bad, I also tell it . I don't expect perfection. Celebrity usually meets or exceeds my expectations. If I like a cruise line, I usually book future cruises. Since I am elite+, you can be sure that I like Celebrity. I have been traveling for many years. I often get friends/family asking me how I liked a trip. If I don't like a trip, I also tell friends/family. I have a cruise line and 2 tour companies that I will not book.

[Baron Barracuda]

Took a lot of years and a lot of cruises to make my way up to diamond on Royal, which also made me elite on X. Have also taken a couple on Carnival and Princess, but the prospect of those diamond/elite benefits kept me loyal. Without that carrot hanging in front of me I certainly would have cruised other lines more. Isn't that the business logic for captains club, to motivate customers to keep coming back? I'm currently happy with my elite benefits, and if they remain as is they'll keep me sailing with X. I don't spend as much money on board as a newbie, but if I do three cruises a year with them they'll certainly make enough money off me.