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Why is NCL so generous with their new 48hr cancelation policy?


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This is the cruise line that wont tell you that there's a change in the itinerary till the day AFTER final payment, where you are locked in or lose $ for canceling.

And they wont waive the penalties.

 

they could make $$$ by collecting penalties from customers canceling because fear of corona virus.

so why offer such a generous new policy given FDR's past track record?

 

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If an unknowing infected guest were to successfully board a cruise ship -

the havoc caused with the quarantined expenses it just makes sense to allow a cancel and rebook/credit

with little or no penalty !

 

The loss of one cabin revenue albeit even in a Garden Villa versus the whole ship on lock down think about it

and then look further the schedule for the ship in the cruises to come being altered also.

 

I would not want to be on a Princess cruise - the DIAMOND and now the GRAND are really messed up for

perhaps the whole cruise season - a real nightmare in logistics booking fueling food supplying port concession

excursion planning and the big most important item having a clean virus free crew to operate the ship.

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I wouldn't say that NCL is generous.  It appears that all other cruise lines are doing it, and NCL is one of the last to make the announcement.  They have no choice.

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It's not really changed, yet, though... They aren't doing anything until March 10th.. and if you call, everything is up in the air.

It's almost as if they released this on paper to stop the social media assaults on their accounts.

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Exactly. I just hopped on here after being offline all day. I did a quick read and don't really understand all the details of how this interacts with the CFAR insurance I bought, the cruise next certificates I used, and the prepaid service charges I've paid. It is interesting how all the cruise lines have instituted these policies within the last 24 hours immediately prior to their meeting with the Vice President. Do they know something we don't? It does make you wonder. I am interested to hear the outcome of the meeting tomorrow and it seems to me it is more prudent to learn about the details of the policy before criticizing or praising something I don't fully understand.

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7 minutes ago, blcruising said:

Exactly. I just hopped on here after being offline all day. I did a quick read and don't really understand all the details of how this interacts with the CFAR insurance I bought, the cruise next certificates I used, and the prepaid service charges I've paid. It is interesting how all the cruise lines have instituted these policies within the last 24 hours immediately prior to their meeting with the Vice President. Do they know something we don't? It does make you wonder. I am interested to hear the outcome of the meeting tomorrow and it seems to me it is more prudent to learn about the details of the policy before criticizing or praising something I don't fully understand.

My theory is that the government is going to make them cancel all bookings for like 3 months to high risk areas..

 

And they all want people to reschedule before that is announced...............................................

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I am reading that they are converting the port charges and the prepaid beverage package service charges into future cruise credit. That doesn't sound right. The sum of those charges is more than my entire base cruise fare. I bought CFAR for the cruise fare portion expecting to get a full refund of the refundable part of my fare (service charges, port charges etc) and potentially lose 25% of the base fare....25% is less than $140 in my case. But it sounds like they are changing the rules now and saying everything is nonrefundable future cruise credit which renders the CFAR insurance I paid for useless. And now I have value tied up in a future cruise during a time when I may not want to take a cruise.

 

Again, I am just learning about this so I'll have to read up more on this later, but this was not the outcome I was expecting with CFAR insurance, so hopefully I am wrong.

Edited by blcruising
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11 minutes ago, babydaryl24 said:

My theory is that the government is going to make them cancel all bookings for like 3 months to high risk areas..

 

And they all want people to reschedule before that is announced...............................................

 Very well could be ....

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4 hours ago, fstuff1 said:

This is the cruise line that wont tell you that there's a change in the itinerary till the day AFTER final payment, where you are locked in or lose $ for canceling.

And they wont waive the penalties.

 

they could make $$$ by collecting penalties from customers canceling because fear of corona virus.

so why offer such a generous new policy given FDR's past track record?

First, you know that FDR is not the CEO and President of Norwegian Cruise Lines? Harry Sommer (formerly Andy Stuart) is the CEO and President of Norwegian Cruise Line.

 

Second, it is something the businesses call Marketing. You offer 5 promos and an OBC at a discounted price, get people to give you money with the "peace of mind" about cancellation. Put the money in your bank. And keep the money, even if the passenger cancels their cruise. When the passenger cancels their cruise, NCL can sell the room again, even if that new passenger cancels their cruise.  

 

Later, when the passenger wants to use the FCC, NCL will raise the price and get more money from the passenger . The passenger can't get their money back until they pay the inflated price. 

 

Remember, in the past, when you cancelled, you use to get a refund for your pre-paid grats, shore ex, pre-purchased items, air fare, transfers, etc. Now, NCL keeps all of that money and does not give it back to you in cash. They keep your cash in their accounts as long as the COVID-19 scare continues. 

 

Seems like pretty straightforward business to me. Get people to make a large non-refundable "deposit", then cash in when they want to use the "deposit" on a much more expensive trip next year. 

Edited by BirdTravels
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4 hours ago, proll267 said:

I have a 4/22 encore. I’m still within the 50% penalty...... I wonder if I can get 50 cash 50 credit.

With the new policy, they keep all of your money. And give you a future cruise credit. 

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3 hours ago, babydaryl24 said:

My theory is that the government is going to make them cancel all bookings for like 3 months to high risk areas..

 

And they all want people to reschedule before that is announced...............................................

NCL Policy for High Risk Areas. They will operate at any random port that is not "high risk" and force you to go or use the "peace of mind" cancellation. 

 

Are there any itinerary modification to your European cruises in April and beyond?

At the current time, our plans are to avoid any area that is denoted as a ‘Level 4 – do not travel’ area by the State Department at the time of voyage. We will modify any itinerary visiting those areas approximately 30 days prior to arrival date to avoid last-minute changes. As always, we will continue to monitor all State Department advisories and take appropriate action as necessary.

Edited by BirdTravels
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Here is some back of the envelope analysis.  Figure about 32,000 to 35,000 cabins sail roughly every 7 days.  Assume the vast majority are under the U.S. final payment rules.  Let’s say around 70 percent which is probably low.  Let’s assume an average of around $2k to $2.5k per cabin each 7 days in the cabin, which is also conservative.

 

This would mean that on average every week NCL is taking in at least $50 to $60 million in final payments for cruises that sail in 90 to 120 days.  If even a modest number of June and July reservation holders are not making final payments each and every day, NCL is facing a cash crunch.  If a significant number are spooked it is a very big operational problem.  My numbers are probably low.  When you’re used to reliably taking in upwards of $10 million per day just for services you don’t need to provide for 3 or 4 months, slowing that cash flow is going to hurt and pile up fast.

 

This generous policy is not charity.  It is necessary to keep the cash faucet flowing.  Encourage people to make those final payments, get the cash in the door now, and worry about it down the line as far as you can.  The trick is to do what you can to keep as much cash flowing in and limiting the cash flowing in the other direction as much as possible.

 

I’m sure they would have loved to only have made this policy with respect to cruises for which final payment is not yet due, but that would have been tough to sell.  Plus, they know there will be lots of breakage with people not using their future credits.  Free money is the best kind.  They need the cash today.  Whatever they can do to get people to let them run final payments is very welcome right now I would imagine.

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8 hours ago, proll267 said:

I have a 4/22 encore. I’m still within the 50% pentaly...... I wonder if I can get 50 cash 50 credit.

You should be receiving an email:

 

"We are making temporary changes to our standard cancellation policy. This supersedes all previously announced changes and standard deposit and final payment schedules now apply. As this is a fluid situation, any amendments or reversals of these policies will be communicated to you as they occur"

Edited by esm54687
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8 hours ago, babydaryl24 said:

My theory is that the government is going to make them cancel all bookings for like 3 months to high risk areas..

 

And they all want people to reschedule before that is announced...............................................

Interesting....on other threads you have been complaining that nothing can be changed until Tuesday 10th. So you, for sure, know and understand no one can reschedule before todays' meeting!! 🙄

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5 hours ago, BirdTravels said:

Later, when the passenger wants to use the FCC, NCL will raise the price and get more money from the passenger . The passenger can't get their money back until they pay the inflated price. 

 

Remember, in the past, when you cancelled, you use to get a refund for your pre-paid grats, shore ex, pre-purchased items, air fare, transfers, etc. Now, NCL keeps all of that money and does not give it back to you in cash. They keep your cash in their accounts as long as the COVID-19 scare continues. 

 

these are definitely downsides and, as you say, it is all about cash flow right now.....good business practice. 

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4 hours ago, Regguy said:

This generous policy is not charity.  It is necessary to keep the cash faucet flowing.  Encourage people to make those final payments, get the cash in the door now, and worry about it down the line as far as you can.  The trick is to do what you can to keep as much cash flowing in and limiting the cash flowing in the other direction as much as possible.

 

You nailed it!

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