Carnival CEO plans to raise prices: "we are way too much of a value"

[pc_load_letter]

6 minutes ago, Out of Iowa said:

I admit - for the first time, yesterday I peeked at the cost of an NCCL Alaska cruise from Seattle in the shoulder season.  $3,000 for two of us in an interior - including airfare from our little local airport and a wishlist that would impress others but doesn't do all that much for me:  grats included (I always prepay them on CCL), free internet, free drinks (we only enjoy 1-2 drinks per cruise), free upscale dining (never been there, the MDR is always sufficient for us) and excursion credits....and now Justafem on this board reports that CCL has removed the watermelon from the Mexican place on Lido?  Good watermelon is hard to find in the Midwest most of the year....I always savored Carnival's watermelon.

 

NCCL works out to be just $150 per person, all-in...that is very, very inviting. 

 

See my post above. If it's on Bliss...book it. You won't be disappointed.

 

[ontheweb]

13 minutes ago, Out of Iowa said:

I admit - for the first time, yesterday I peeked at the cost of an NCCL Alaska cruise from Seattle in the shoulder season.  $3,000 for two of us in an interior - including airfare from our little local airport and a wishlist that would impress others but doesn't do all that much for me:  grats included (I always prepay them on CCL), free internet, free drinks (we only enjoy 1-2 drinks per cruise), free upscale dining (never been there, the MDR is always sufficient for us) and excursion credits....and now Justafem on this board reports that CCL has removed the watermelon from the Mexican place on Lido?  Good watermelon is hard to find in the Midwest most of the year....I always savored Carnival's watermelon.

 

NCCL works out to be just $150 per person, all-in...that is very, very inviting. 

Actually, it will work out for more than $150 per person if you take some of those perks. They add to your invoice tips for the specialty dining (even if you do not use it) and tips for the free drinks based on you used the maximum allowed by the package.

[ontheweb]

1 hour ago, resetjet said:

I love cruising but he has to realize that with land there are limitless possibilities.  The biggest problem we face today is itinerary.  How many times can you go to St Thomas?????  I don't care to ever go again.  That and seasickness, viruses, etc.....So far I have been in a hurricane that is famous with carnival crew, our ship hit an iceberg in alaska tearing a 25 foot hole in it, stranded in port, got a terrible staff infection in the hot tub that took over a year to get rid of, caught some kind of virus many times, got food poisoning, fogged in and various other things.  I have stayed on land, much more, but I can't say that I have ever had much of a mishap.  At least nothing comes to mind.  Its a different animal then land and will always be priced considerably less.  

Wow, that is a lot of bad luck. 😢 Remind me never to sail on the same ship as you.

[snowballs mom]

2 hours ago, evandbob said:

I may continue to book Carnival's newest ships like the MG & Celebration.  But after 40 plus Carnival cruises, I haven't been interested in booking their older ships. even with free casino fares for OV or inside cabins.  Been there, done it, not interested any more.

 

Value wise, Celebrity is a winner for us now.  Better ships & decor, MDR food is more to our liking, and just seems a bit classier than Carnival.

We are booking more on Celebrity now, too. We also tried Cunard for the first time and liked that, but we don't mind dressing up a bit more.

[ctlyf]

4 hours ago, mz-s said:

 

The problem with this is they have strong competition that may not have to cut as much. For just a few things - there is no bacon crisis on RCL and you still get twice-daily room service despite paying the same (or similar) daily gratuity. RCL's prices really aren't much higher than CCL, in fact they're pretty much the same most of the time.

RCL may be changing to once daily as well - 

https://www.royalcaribbeanblog.com/boards/index.php?/topic/36989-change-in-frequency-of-housekeeping-service/

[Top_of_the_Cube]

Carnival has made marketing blunders in the past, but for the most part, Carnival has read the market and their customers pretty well.  For everyone who says they may leave Carnival because of one thing or another, there apparently are many more who are attracted to Carnival based on the strong bookings even after the phenomenal deals became less frequent.

 

Raising prices MAY help in a lot of ways, in spite of the complaining -

    Dissuade customers who are prone to misbehaving;

    Increase spending to provide more consistent service and food quality;

    Provide more revenue to pay down debt;  etc.

 

The balancing act is that Carnival will have to maintain a price point that is, on the whole, less than their competitors.  Because if I can find cruises that fit my criteria and are less than Carnival, that is where my dollars will be spent.

 

Don't question me or my reputation as a business and financial guru.  My resume includes helping notable companies like FTX and Blockbuster to become what they are today.

[Eli_6]

All my cruises have been good since the restart except for my Pride Europe sailing--and it was the one I paid the most for!  The financial channels are predicting we will go into a recession towards the first of this upcoming year and today stocks were down significantly and have been for the last three days...some of them (like tech) the lowest they have been since Covid shut downs.  One of the first things people are going to cut in a recession is discretionary spending on vacations.  Increasing the prices is not going to help the majority of carnival's clientele (who are likely the middle class or even lower middle class) cruise more frequently during a recession. 

[Eli_6]

34 minutes ago, Top_of_the_Cube said:

 

Don't question me or my reputation as a business and financial guru.  My resume includes helping notable companies like FTX and Blockbuster to become what they are today.

😂🤣

[jam19872016]

3 hours ago, BlerkOne said:

This ^^^^

 

Cutback on the freeloaders and the average price per cabin to Carnival goes up.

Lmao. Talk to a casino host sometime. They will proudly confirm on any given sailing over 50% of onboard revenue comes from the casino. An event cruise that number can be 70-80%.

 

If your sign and sail bill plus cruise fare combined is not a 1 with at least four zeros behind it, you are the real freeloader to the bean counters.

 

Freeloader. Hilarious.

[jam19872016]

2 hours ago, BlerkOne said:

The casino is not paying full fare, if they pay at all.

 

"Trust me" are words of politicians.

 

But there are accounting differences. One is upfront cash vs no guaranteed onboard spend. A gamble indeed.

Another thing to keep in mind, if a sailing is not selling they can lower the price and watch everyone paying attention price match and lose that revenue.

 

Or they can target offers to specific people with a history of spending money in the casino and try to fill it that way before taking the hit to revenue from the general population. 

 

Win-win for Carnival.

 

Yes, it is a gamble. But I think most people know in the long run, the house always wins in gambling. Right?

[cruisingguy007]

20 minutes ago, Eli_6 said:

All my cruises have been good since the restart except for my Pride Europe sailing--and it was the one I paid the most for!  The financial channels are predicting we will go into a recession towards the first of this upcoming year and today stocks were down significantly and have been for the last three days...some of them (like tech) the lowest they have been since Covid shut downs.  One of the first things people are going to cut in a recession is discretionary spending on vacations.  Increasing the prices is not going to help the majority of carnival's clientele (who are likely the middle class or even lower middle class) cruise more frequently during a recession. 

 

Recession! Recession! Recession! Reminds me of Marsha! Marsha! Marsha! LOL. Some of these folks are wishing/hoping on a star for it. Makes you wonder what positions they have and if their tune will change come December 30th when tax-loss harvesting is over and December 31st when all the washes have been washed out. It will be interesting to see if the same rhetoric is around come Jan 2nd and Jan 30th. 

 

In the meantime, Disneyland/Disnyworld is packed, airports are full, buying a new car is still a challenge and high end cars are selling out before even being built, they can't build houses fast enough, Apple still selling more status phones than ever, people still taking expensive vacations, etc etc etc. All these doom and gloom predictions, yet the beat goes on!       

[DallasGuy75219]

4 minutes ago, jam19872016 said:

Or they can target offers to specific people with a history of spending money in the casino and try to fill it that way before taking the hit to revenue from the general population. 

Or target offers to any group (residents of certain states, senior citizens, airline employees, first responders...) so the whole ship doesn't qualify for price protection.

[BlerkOne]

If you add up all the money gamblers claim to spend annually (to say nothing of smoking gamblers), it is about 1000% of the total revenue since time began. The free room offers will decline for most. Trust me.

[BlerkOne]

4 minutes ago, cruisingguy007 said:

 

In the meantime, Disneyland/Disnyworld is packed, airports are full, buying a new car is still a challenge and high end cars are selling out before even being built, they can't build houses fast enough, Apple still selling more status phones than ever, people still taking expensive vacations, etc etc etc. All these doom and gloom predictions, yet the beat goes on!       

Disney jacked rated by about a zillion dollars a day. Buying a new car is a challenge because there is no supply. Housing market is collapsing with prices continuing to decline. Apple has serious issues with China. Had to inject some reality into the conversation.

[cruisingguy007]

4 minutes ago, BlerkOne said:

If you add up all the money gamblers claim to spend annually (to say nothing of smoking gamblers), it is about 1000% of the total revenue since time began. The free room offers will decline for most. Trust me.

 

I make it a habit to never trust anyone who finishes with "trust me". 😁

[crewsweeper]

Cheap is not value.  Cheap prices don't add value to shareholders.  Cheap environments don't add value to users.    When the CEO of Carnival speaks of the possibility of raising fares its raising fares on all lines under the Carnival umbrella, not just Carnival ships.  Royal and NCL are looking at doing the same--raising prices.  Disney will follow suit under Iger, if not already. 

But there'll be a limit on how high they'll go.  My guess is the "Suite Life" on all is going to turn a it sour and frequent cruising perks become a bit less enticing.

The leisure economy has been strong due in part to COVID Stimulus money and the rebound from lockdowns.  That's about to end.  

[BlerkOne]

1 minute ago, cruisingguy007 said:

 

I make it a habit to never trust anyone who finishes with "trust me". 😁

So?

[cruisingguy007]

Just now, BlerkOne said:

Disney jacked rated by about a zillion dollars a day. Buying a new car is a challenge because there is no supply. Housing market is collapsing with prices continuing to decline. Apple has serious issues with China. Had to inject some reality into the conversation.

 

Disney just increased prices for fast lane to $25. The chip shortage has caused a great opportunity for the US to reduce dependence on China (CHIPS and science act). Housing still costs more than ever and is no where near collapse (maybe where you live, not where I live). Apples phones cost increased in every other market (and let's face it, are grossly overpriced in the US). There is your reality! 😉 

[Joebucks]

Carnival's biggest issue is that they don't listen to all of the experts on here. Who have already drawn their line in the sand. However, if prices were raised 15% tomorrow, most wouldn't even know. Not to mention few actually read the article that said Royal also wants to raise their prices. 

 

The fact of the matter is that the cruise industry is still hurting. Not only the shutdown, but the insane rise of costs for everything. Labor shortages are generally only solved when you raise wages, if you're lucky, which has to come with higher revenues. Cutting costs is a good short-term method to correct or balance out expenses. However, it is not a long-term strategy for a solid business. People also pay exorbitant costs for "service," which brings great margins.

 

If they are smart, they are watching their new models to gauge price perception. What might a Celebration, with more options, including more included dinner options, and increased entertainment, fetch? What about an Italian-themed ship that breaks the mold of a party ship? There's a lot more at play here than "I WOULDN'T BOOK THE CONQUEST AT TRIPLE THE PRICE!"

 

People asked for Carnival to get rid of the poor people. Then they complain when there is a movement that would do so. You will never make anyone happy because they expect treatment and action that doesn't exist. 

 

One challenging obstacle for Carnival is to overcome is perception. If they suddenly decided to become a more premium service tomorrow, the public's perception might not change with it. Many already associate Carnival with vomit on the deck and below golden corral food. It can be done. It won't be easy though. 

[Theosprey247]

Well said, but I’m afraid it will fall on deaf ears here. 

[Purvis1231]

I have booked five cruises since the resumption of cruising (already completed two) all of them are cheaper than my last few pre-pandemic cruises.  Higher prices must happen in order for Carnival to have a chance of survival. 

[firefly333]

If carnival could get the bookings at a higher price the prices would already be higher.

 

RCL is coming after carnival in 2024 with harmony doing 6/8 and 7/7. The 8 day out of Galveston is going to coco cay. Dream 8 days have been going up in price and you can bet rcl noticed. No bargains but coco cay out of Galveston will only go up in price. Newer ship. Carnival has lots more competition out of Galveston than before with the new terminal meaning more ships and more cruiselines. Princess and ncl. Imo carnival is already losing bookings .. and I'm still a ccl stockholder. Looking tough to me. 

[PrincessArlena'sDad]

For our two cruises this coming summer (first cones since covid):

Horizon cruise is a replacement of our cancelled 2020 cruise. We had purchased the discounted allstate gift cards, and had just about enough to pay for the cruise when Covid hit.  We've been sitting on the cards ever since (but, can't complain too much, the 11% return we get on the gift cards is better than anything I would have gotten with the money sitting in the bank).  Cruise fares for the two cruises are actually within $150. 

2020 cruise: 9 days on Radiance, a balcony and an interior

2023 cruise: 8 days on Horizon, family harbor suite for all of us. ($5800)

 

But, for our Glory cruise (7 days), that is dirt cheap.

1267/oceanview cabin.  

 

And, yet, the Horizon is filled, and the Glory seems like it'll be a ghost town

 

My point? They could have easily charged $100/person more on the Horizon, and made $300,000 more on cruise fare.  Probably double that, and still sail mostly full.

 

But, the Glory cruise. Well, if they can't sell it at that price, then they need to rethink their market for it.

 

 

[PrincessArlena'sDad]

7 hours ago, cruisingguy007 said:

In the meantime, Disneyland/Disnyworld is packed, airports are full, buying a new car is still a challenge and high end cars are selling out before even being built, they can't build houses fast enough, Apple still selling more status phones than ever, people still taking expensive vacations, etc etc etc. All these doom and gloom predictions, yet the beat goes on!       

Covid has really made the have's and have-nots divide a lot greater. Yes, the top 15%ers or so can still afford vacations, and that's enough to fill Disney, luxury cars, and luxury homes. They've done great since Covid. 

 

But, for many: loss of income, higher prices, etc.  These are the people who will be skipping a hoped for vacation.  And, these are the people Carnival needs to fill many of their ships (especially those that market to local areas).  For example: the Horizon vs. Glory cruises in my post above.  Horizon is priced towards the upper income families, and it's pretty full. Glory is priced towards the working class, and they can't sell cabins.

[mowogo]

MSC is making a big run at the price sensitive traveler.  Why take a casino discount 3 day to Princess Cays on the Conquest when I can get a regular rate to Ocean Cay for the same price with drinks and internet included where the old ship is only 10 years old and doesn't look it. 

 

And thanks to the generous status match program that MSC offers I was able to get up to Diamond so I have the free thermal pass, free steakhouse dinner, and all the general elite benefits just adds to the value that MSC offers to a savvy traveler.  Although right now the competition is just Miami, Canaveral, and NYC there are already reports of MSC offering to build a new terminal in Galveston.  

 

MSC has many issues, but they have already grown to be a large player in Europe and are launching new ships comparable to the new ships of RCL, NCL, and CCL and are making a commitment to the US market.  With Carnival having the market of new cruisers who are more likely to be price sensitive over all else, the low fares of MSC make it harder to raise fares on 20 year old ships.