Bloomberg News Reports: NCL's guests spend more in extra fees than most other lines.

[sparks1093]

No...service fees, by their nature, are not counted as they are not considered as income to the cruise line. Besides, pre-paid items like this aren't counted as onboard spending either. That would fall under pre-cruise.

 

I agree...NCL does offer more choices of things that people want to buy. However, they do so PLUS they include all of the things that are included on other lines as well.

 

We have to remember that NCLH is the one providing the data and they can account for it any way they want to (unless of course this data is from an SEC filing, but I didn't get that sense from the article). It wouldn't surprise me a bit if they did include the pre-cruise items in the onboard spend column and as you point out the numbers would only really make sense if that is what they are doing.

[turtle tavern]

Are excursions part of onboard spending? If so I bet that $50 per port is encouraging more people to book excursions directly with NCL. On my last cruise I met two different couples who said they were using NCL only because of that credit. That made me giggle as their excursions are often so over priced that even with the credit you are paying more. I know that there are other advantages of using NCL for excursions but doing so only to not "lose" $50 credit was funny to me.

 

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[LMaxwell]

The amount of upcharges and additional "experience opportunities" on last NCL cruise has put me off making a booking again. Yes, it is optional. No, you don't have to spend. But it's not relaxing constantly being bombarded w pitches and sales. Andy should say you can spend 0 if the staff leave you alone and let you.

[littlelulu01]

Are excursions part of onboard spending? If so I bet that $50 per port is encouraging more people to book excursions directly with NCL. On my last cruise I met two different couples who said they were using NCL only because of that credit. That made me giggle as their excursions are often so over priced that even with the credit you are paying more. I know that there are other advantages of using NCL for excursions but doing so only to not "lose" $50 credit was funny to me.

 

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Granted the Ncl excursions are much higher priced than the other lines and often double compared to diy but not all are a bad deal. If you have the distinctive voyage credit plus free at sea and then 10-15% off pre discount prices for latitude discount, it can be free or lower cost than diy. It’s something that you still have to watch- can still end up paying more than diy even with all the discounts but for our next sailing we intend to make good use of the double credits and latitude discount for a 12 port sailing. Some will still cost just a little less than diy but some are free or considerably less than diy. We also got a nice chunk of obc that puts us at a huge savings overall. we’ll still end up giving Ncl more $ as a result this trip but it’ll be the first time I’m actually leaving most of the shore excursion planning to Ncl on a very port intensive sailing so I’m happy.

 

My friends canceled their Ncl cruise over the high excursion costs. They weren’t comfortable first Europe trip doing diy. Rci’s non discount excursion prices were considerably lower so they switched. Pretty easy for the consumer to compare these extra costs nowadays.

[KeithJenner]

The amount of upcharges and additional "experience opportunities" on last NCL cruise has put me off making a booking again. Yes, it is optional. No, you don't have to spend. But it's not relaxing constantly being bombarded w pitches and sales. Andy should say you can spend 0 if the staff leave you alone and let you.

 

Not disagreeing with your experience, of course, but I have to say that I can't ever recall feeling under any pressure or bombardment with sales (other than the bit mentioned below).

 

Perhaps it is because of where we hang out in comparison with others, and I tend not barely notice printed advertisements.

 

I will say though, that I do always feel a very temporary moment of anger every time we get a personally addressed envelope inviting us as an "art lover" to the auction. That is one that I could do without. It's more to do with the way that they do it, than anything else. I have no problem with cruise next info stuck in the freestyle daily for example. That just goes straight in the bin.

[LrgPizza]

Not disagreeing with your experience, of course, but I have to say that I can't ever recall feeling under any pressure or bombardment with sales (other than the bit mentioned below).

 

Perhaps it is because of where we hang out in comparison with others, and I tend not barely notice printed advertisements.

 

I will say though, that I do always feel a very temporary moment of anger every time we get a personally addressed envelope inviting us as an "art lover" to the auction. That is one that I could do without. It's more to do with the way that they do it, than anything else. I have no problem with cruise next info stuck in the freestyle daily for example. That just goes straight in the bin.

What I don't like are the voicemail messages left in the cabin inviting us to an art auction. Ugh! Other than that, I have never felt pressured or bombarded by anything. I hardly recall hearing about anything, let alone being pressured.

[JamieLogical]

I wonder if they include CruiseNext deposits purchase on board as "on board spending"? We have been on two NCL cruises so far and both times the bulk of our on board balance has been CruiseNext deposits and shore excursions. Both times we have spent $500 on CruiseNext deposits and booked a future cruise. Then as far as shore excursions, I think we have probably spent under $500 total so far?

[takeadip]

When there are more areas for upcharge its a no brainer there is going to be more upcharges. NCL is pretty clever in discovering more and more ways to either raise fees or create new ones. Specialty restaurants used to be the minority on board. Now they are the majority of restaurants on board. Entertainment used to be included in the standard cruise price. NCL started charging for some entertainment years ago. Deck activities used to be included but now some deck activities are added fees.

Its threads like this that make the cheerleader's heads explode. No one is attacking NCL for just pointing out the obvious. I never could understand why some people just get so defensive for commenting or posting a thread like this. This is actually very good news for NCL. It shows their philosophy is working and they are making lots of money.

I see "choices" and "al a carte" lines coming soon. There were ALWAYS choices, its just that more and more of the "choices" come with fees ;)

 

I agree with David..you nailed it...no one is making you spend more money once you board the ship...but NCL will try its hardest to temp you..one needs to set limits when they board the vessel and stick to it...as long as you have extra money someone or something will always try to separate you from it..

[Voelfgar]

Everyone is over complicating the calculation. It is very simple. It is everything you bought on the cruise other than the cost of the actual cruise and any service fee/gratuity. It does not matter how it was paid for. this includes the price of any packages like UBP and then divided by the length of the cruise. When NCL does it, they look at all revenue other than the price of the cruise for all cruises in a period of time and divide that by total number of passenger days across the entire fleet.

[SeaShark]

Everyone is over complicating the calculation. It is very simple. It is everything you bought on the cruise other than the cost of the actual cruise and any service fee/gratuity. It does not matter how it was paid for. this includes the price of any packages like UBP and then divided by the length of the cruise. When NCL does it, they look at all revenue other than the price of the cruise for all cruises in a period of time and divide that by total number of passenger days across the entire fleet.

 

 

I don't think people are over-complicating at all, they are just sharing their individual best guess as to what it includes...much the same as you did.

 

The interesting thing is that NCLS spells out exactly what onboard spend consists of in their annual reports...and yet nobody has actually come up with a guess that matches that definition.

[drsel]

I wonder if they include CruiseNext deposits purchase on board as "on board spending"? We have been on two NCL cruises so far and both times the bulk of our on board balance has been CruiseNext deposits and shore excursions. Both times we have spent $500 on CruiseNext deposits and booked a future cruise. Then as far as shore excursions, I think we have probably spent under $500 total so far?

Yes it is included. While other cruise lines have a separate account for future cruises.

[sparks1093]

I don't think people are over-complicating at all, they are just sharing their individual best guess as to what it includes...much the same as you did.

 

The interesting thing is that NCLS spells out exactly what onboard spend consists of in their annual reports...and yet nobody has actually come up with a guess that matches that definition.

 

So how do they spell it out?

[SeaShark]

So how do they spell it out?

 

They explain exactly what it consists of so that their investors, potential investors, and anyone else reading the annual report can understand exactly how the amount is calculated.

 

Right there in black and white for anyone to see.

[drsel]

They explain exactly what it consists of so that their investors, potential investors, and anyone else reading the annual report can understand exactly how the amount is calculated.

 

Right there in black and white for anyone to see.

So, which are the most profitable cruise lines and which are the least profitable or even loss making?

[SeaShark]

So, which are the most profitable cruise lines and which are the least profitable or even loss making?

 

Aside from being really off-topic, why would you ask me this? If you're really interested in the subject, I'd suggest you put in the time and do the research, or consult with an investment adviser who specializes in the industry.

[sparks1093]

They explain exactly what it consists of so that their investors, potential investors, and anyone else reading the annual report can understand exactly how the amount is calculated.

 

Right there in black and white for anyone to see.

 

Thanks for the link.

[KeithJenner]

If anyone wants to look at the NCLH annual report, just google those words. It's all there.

 

Interestingly, when you do so, you read thinks like this:

 

"Certain of our product offerings are accounted for under the guidance included within multi-element arrangements and result in an allocation of the fair value between passenger ticket revenue and onboard and other revenue".

 

In other words, we don't know how the onboard spend that NCL report is made up, because they allocate some of your cruise fare to it, in a way that I can't see that they explain any further. Which is where we were a few days ago.

 

To be clear, I am not making any statements about how NCL do actually calculate onboard spend, but it almost certainly isn't just the amount that people pay on their onboard account at the end of the cruise. There may just be reallocation of OBC. However, given the level of reported onboard spend at a time when few people will have a significant bar bill, I would suggest that it is at least a possibility that some adjustment is made for promo UBP as well.

Edited June 12, 2018 by KeithJenner

[drsel]

That made me giggle as their excursions are often so over priced that even with the credit you are paying more.

Absolutely! It's hilarious how some folks fall for it.

[drsel]

But it's not relaxing constantly being bombarded w pitches and sales. Andy should say you can spend 0 if the staff leave you alone and let you.

Luckily, we never experienced anything like that on our last Norwegian cruise.

[NLH Arizona]

Luckily, we never experienced anything like that on our last Norwegian cruise.

Nor have I on any of my NCL cruises.

 

I do wish they would ask if we want all the junk flyers or not.

[Tutontow]

Next on Bloomberg:

"Poisonous Snakes can be Dangerous!"

"Kim Jong Un is Korean!"

"Water is Wet!"

 

Film at 11.

 

I need to have a "Like" button!

[ElaineKeagy]

Are excursions part of onboard spending? If so I bet that $50 per port is encouraging more people to book excursions directly with NCL. On my last cruise I met two different couples who said they were using NCL only because of that credit. That made me giggle as their excursions are often so over priced that even with the credit you are paying more. I know that there are other advantages of using NCL for excursions but doing so only to not "lose" $50 credit was funny to me.

 

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Not necessarily. On a recent cruise I did 5 NCL excursions. Three were HOHOs that were payable entirely by the $50 pppd credit. The harbour cruise in Cabo was $39, again covered in full by my $50 credit.

My DIY in Victoria to Butchart Gardens was going to run me $50 taxi and $25 admission. Then at the last minute NCL added a 4.5 hr excursion to the Gardens for $129. Take off my $50 credit and add the extra of a guided bus tour, and once again I was breaking even.

 

Yeah, I giggled too over getting my 5 excursions for $79 total.

You can’t just assume you can’t get a deal using the NCL excursion credit because you can make out very well.

 

 

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[KeithJenner]

I wonder if they include CruiseNext deposits purchase on board as "on board spending"? We have been on two NCL cruises so far and both times the bulk of our on board balance has been CruiseNext deposits and shore excursions. Both times we have spent $500 on CruiseNext deposits and booked a future cruise. Then as far as shore excursions, I think we have probably spent under $500 total so far?

 

From an accounting point of view, CruiseNext deposits are not income at the time they are sold, as they are a deposit towards a future cruise, and will ultimately go towards Passenger Ticket income at the time that you actually take the cruise you use it on.

 

However, we don't know how the OBC you receive is treated. As I see it, it would be valid to discount the value of the deposit carried forward, or to carry forward the full value and allocate the OBC to the current cruise. As far as I can see, this isn't explained.

[JamieLogical]

From an accounting point of view, CruiseNext deposits are not income at the time they are sold, as they are a deposit towards a future cruise, and will ultimately go towards Passenger Ticket income at the time that you actually take the cruise you use it on.

 

However, we don't know how the OBC you receive is treated. As I see it, it would be valid to discount the value of the deposit carried forward, or to carry forward the full value and allocate the OBC to the current cruise. As far as I can see, this isn't explained.

 

I've never done the version of CruiseNext that gives you OBC. I do the one that gives you double-deposits. On each cruise, we have spent $500 to receive $1000 in deposits. So maybe they do not count that as on board spending then?

[sparks1093]

From an accounting point of view, CruiseNext deposits are not income at the time they are sold, as they are a deposit towards a future cruise, and will ultimately go towards Passenger Ticket income at the time that you actually take the cruise you use it on.

 

However, we don't know how the OBC you receive is treated. As I see it, it would be valid to discount the value of the deposit carried forward, or to carry forward the full value and allocate the OBC to the current cruise. As far as I can see, this isn't explained.

 

I think the key take away is that in NCLH's eyes onboard spending by passengers has increased, regardless of which particular line items are considered to be "onboard spending" and since that was one of Del Rio's stated goals when he took over it has to be considered a win from that perspective. But since at least some of that increase is from an increase in prices for things onboard or charging for things that used to be free from a passenger point of view this isn't necessarily a good thing.