P&O Pricing Strategy

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There was much speculation as to how P&O would approach their price point for the 2022 brochure release given the following:

 

- Lower income for 2020 and 2021, including the costs of implementing the social distancing and capacity reduction measures.

- The perception that with the loss of Oceana and gain of Iona, that P&O would be serving another "space" in the Carnival market.

- Need to reclaim the 25pc bonuses given out to passengers for disruption in 2020 etc!

 

It does appear from a look at 2022 that P&O are either thinking that they can reclaim losses next year, or are sufficiently concerned about PR, passenger sentiment and fill rate to reduce prices.

 

For example, whilst passing the time in lockdown, I compared the price of a June 2020 18 night cruise on Aurora, booked at pre registration for over £3k for the cabin, with an 18 night cruise on Aurora in May 2022. 

 

The same cabin grade, similar Med (not exact) itinerary, and similar mid season off peak cruise price now comes in about 15% lower.  This includes the various discounts, early bookings incentives, and is the compared at the "Select Fare," rate for a direct booking. 

 

One thing that I would say is that "Select Fare" is still remarkably still much more expensive than "Early Saver" given there is little to choose at the moment!

 

A couple of questions:

 

- For those of you who are booking early, have you seen any similar "bargains"?

- Do you think that with the recent comments around potentially reducing the shore excursion costs temporarily, matched with the comparison above, are showing that P&O are trying to be more competitive on price to cover up their other shortcomings I.e. customer service? 

 

In other words, do you think that have they chosen to "double down" on the current strategy?  Grateful for your thoughts, thank you.

[terrierjohn]

The 2022 select launch prices do seem to be in line with previous years and there appears to be no uplift to account for any continuation of the possible reduction in passenger numbers.

It would be nice to assume it is an attempt to improve their PR, and as a thank you to past passengers for their forbearance with the refund fiasco.  But I suspect it is more likely to be a marketing attempt to try and ensure that they maximise bookings.

Whatever the reasons are, I am rather glad they have not sought to recover any of the major losses they have been, and are continuing to incur whilst they are not cruising, and I hope it continues into the future. 

[grapau27]

With Covid19 and job losses now and after furlough they probably think it is wise to offer reasonable prices at 2022 launch to get bookings in.

Once things hopefully improve by next Spring/Summer prices will increase accordingly.

Graham

[Dermotsgirl]

I’ve registered to move a cruise into August 2022, and was pleasantly surprised at the fare, which I thought was very reasonable for a 16 night cruise at that time of the year. 
 

However, I wouldn’t be tempted to book a brand new cruise. Even at the reasonable price, I’d still want to wait until things were much more certain before booking anything completely new. 

[jeanlyon]

Totally agree with you.  I am booking for October 2022 using a deposit for April 2021 and a small FCC.  I decided I wouldn't be spending any more money. 

[tring]

What costs will be on board is another matter and an unknown at present.  They may be hoping to make those up in other ways and could also increase prices more quickly as bookings are made. 

[jeanlyon]

Well that's only drinks for us.  Don't do excursions.  What else is there?

[pete14]

It hasn’t taken long for the positivity in the first few posts to dissipate. I think the prices for the new cruises are well in line with those in previous years and that should be welcomed. They will rise of course because they always do, but can’t we just be happy rather than speculating about where P&O will seek to make more money.

[DamianG]

2019 Ventura Superior Deluxe cabin 2 adults 1 child 12 nights: £5,157

2020 (cancelled) Britannia suite 2 adults 1 child 14 nights: £6,117

2021 Britannia suite 2 adults 1 child 14 nights: £6,269

2022 (pre-register quote) Ventura suite 2 adults 1 child 14 nights: £5,471

 

All select fares booked at launch with a small TA discount and all were/are for August school holidays.

 

The change to reduced child fares from 2020 onwards made a big difference to us (hence we were able to book suites).

 

Our 2022 booking request will hopefully be confirmed tomorrow.

[No pager thank you]

2 hours ago, grapau27 said:

With Covid19 and job losses now and after furlough they probably think it is wise to offer reasonable prices at 2022 launch to get bookings in.

Once things hopefully improve by next Spring/Summer prices will increase accordingly.

Graham

Yes, I'd agree - it's probably a recognition that some people are more careful with their money, given the continuing impact of the pandemic.

 

I'd be surprised if P&O go after the drinks and speciality dining costs that much... that's too obvious to their generally loyal, repeat passengers.

 

Hopefully costs will not be cut in other ways, such as staffing ratios in MDR and cabins.  Interestingly, the limited booking incentives seem to be untouched.

[No pager thank you]

34 minutes ago, DamianG said:

2019 Ventura Superior Deluxe cabin 2 adults 1 child 12 nights: £5,157

2020 (cancelled) Britannia suite 2 adults 1 child 14 nights: £6,117

2021 Britannia suite 2 adults 1 child 14 nights: £6,269

2022 (pre-register quote) Ventura suite 2 adults 1 child 14 nights: £5,471

 

All select fares booked at launch with a small TA discount and all were/are for August school holidays.

 

The change to reduced child fares from 2020 onwards made a big difference to us (hence we were able to book suites).

 

Our 2022 booking request will hopefully be confirmed tomorrow.

Looks like a good deal to me... enjoy!

[terrierjohn]

1 hour ago, pete14 said:

It hasn’t taken long for the positivity in the first few posts to dissipate. I think the prices for the new cruises are well in line with those in previous years and that should be welcomed. They will rise of course because they always do, but can’t we just be happy rather than speculating about where P&O will seek to make more money.

What fun would that be for all the Jonahs on here?

[Selbourne]

I’ve only priced up Iona and the prices (balcony and suite) looked pretty normal. Certainly not bargains but not inflated either. I think that’s a sensible approach. Experts predict it will take the cruise industry 5-10 years to recover to 2019 levels, so they would be shooting themselves in the foot to over price them. Also, as each month goes by, cash flow will become more and more critical, so pricing at a level that will generate new bookings is sensible

Edited November 8, 2020 by Selbourne

[Josy1953]

I have some concerns about how the cruise lines will handle the need to bring in money when they do restart.

I don't think that the prices will be significantly higher because they need to be priced to attract psssengers, on the other hand  if the passenger numbers are lower and the prices don't increase then the only thing I can imagine is that costs will be cut elsewhere, does this equate to a poorer experience?  Only time will tell.

[Windsurfboy]

I think prices are in line with previous launch prices, pleasantly surprised. 

 

Interesting to see how fast they rise. With Dynamic pricing prices will go up if they get full, but not if demand is low.  On my cancelled 2020 cruise  prices had risen by 10% a few days after pre registration ended. Pricing will be a good indicator of drmand.

[molecrochip]

The important metrics for 2021 & 2022 will be turnover, breaking even, debt reduction and customer satisfaction.

 

It will not be about maximising profit although that would be a bonus.

[wowzz]

1 hour ago, molecrochip said:

and customer satisfaction.

Yes of course! But how exactly will that be measured ?

Cut staffing levels by 10%, customer satisfaction levels go down 20%, but profits increase 5%. Is that good or bad from P&O 's point of view?

[terrierjohn]

Just now, wowzz said:

Yes of course! But how exactly will that be measured ?

Cut staffing levels by 10%, customer satisfaction levels go down 20%, but profits increase 5%. Is that good or bad from P&O 's point of view?

You need to change your tea leaves wowzz, they are beginning to go mouldy.

[Britboys]

Having pre-registered for Aurora in late August 2022, I was pleasantly surprised with the sole occupancy fare.

I suspect there are many factors in play. P&O have taken a bit of a battering across a number of media areas lately. They will also be keen to get some money coming in and to avoid too many people with FCC's deciding to request refunds instead. Attractive prices at this stage will persuade pax to commit their FCC's to 2022 cruises.

Additionally, I wonder about the 'Iona Factor'. She is going to be cheaper to run than the rest of the fleet and P&O will be hoping for good revenue from the plethora of on-board revenue centres. She will have almost twice the number of extra-charge restaurants than those included, two ice cream outlets, the on-board gin distillery and no doubt copious shopping opportunities. They will also be hoping that she attracts a different passenger demographic, with higher numbers of people who are happy to shell out for all sorts of extras. If they can virtually fill her with 5200 pax every week for the Norway Summer season, then it could be very good business indeed. 

[pete14]

18 hours ago, Windsurfboy said:

I think prices are in line with previous launch prices, pleasantly surprised. 

 

Interesting to see how fast they rise. With Dynamic pricing prices will go up if they get full, but not if demand is low.  On my cancelled 2020 cruise  prices had risen by 10% a few days after pre registration ended. Pricing will be a good indicator of drmand.

Used FCC to book a cruise in October 2022 this morning. Price was as displayed on the website last week less further 5% because we have cruised before. Excellent value and we still have some FCC left over. Prices will rise, even if it is only due to the 10% discount ending next month but this is not unusual. They will be keen to get money coming in and this won’t happen if they price most of us out of the market.

[Bobblehat71]

Has anyone booked a new cruise without using FCC or refunded deposits?  I would imagine they are getting desperate for some new money. So its not surprising prices have remained competitive.

There's loads of great deals around at the moment for 2021 but with no idea what a future cruise will look like there's no way I'm parting with my cash.

[jaydee6969]

1 hour ago, pete14 said:

Price was as displayed on the website last week less further 5% because we have cruised before. 

 

 

That's the 2nd thing to brighten my day today, after the vaccine news.  I don't know why, but I had assumed that the prices displayed after I logged in included all discounts.  

 

Happy days!!

[kevcharben]

On 11/9/2020 at 12:47 PM, Bobblehat71 said:

Has anyone booked a new cruise without using FCC or refunded deposits?  I would imagine they are getting desperate for some new money. So its not surprising prices have remained competitive.

There's loads of great deals around at the moment for 2021 but with no idea what a future cruise will look like there's no way I'm parting with my cash.

Yeah just booked for July 2022, £150 deposit so not exactly putting money in coffers.

Prices are excellent though

 

Booked last month for May 2021 again small deposit, I think with the vaccine news I may well pay for this one

[jaydee6969]

I can give an example of 2020 to 2022 prices.  We had booked Iona at launch for a 2020 cruise, and still have the paperwork.

 

The same cruise in the same cabin would be £27 dearer in 2022, but with £50 less OBC.

 

Could this be how they may claw back some money?

 

Still happy with the price I just paid for Iona.  I always looked at the OBC as a bonus anyway.

[pete14]

12 hours ago, kevcharben said:

Yeah just booked for July 2022, £150 deposit so not exactly putting money in coffers.

Prices are excellent though

 

Booked last month for May 2021 again small deposit, I think with the vaccine news I may well pay for this one

Seems like a good idea. If it sails in May 2021, you get a much needed holiday, if not, you can choose the 25% uplift on future cruise credit (or a refund).