Cruise discount article

[TedC]

Today's Wall Street Journal has a report on cruise lines "cracking down" on discounters. I haven't had time to read it yet. It may be available on wsj.com.

[Krazy Kruizers]

:)

 

Someone started a thread about TA's and penalties here a couple of days ago. It may be the same topic.

:)

[sail7seas]

IMO ... ..They sure didn't mind those discounters when they had a bunch of empty cabins after 9-11. When business stunk, discounters were their best friends

 

 

Now that ships are selling out........

 

(I have never used a discounter; never used an on-line TA so it doesn't personally make any difference to me....it's just an observation)

[Krazy Kruizers]

:)

 

We, also, have never used an on-line or discounter agency. We have used the same travel company and agent for 20 years.

We do watch the different web sites and if we see that our cruise has gone down in price since we originally booked it, we call our TA, and she calls HAL, and we get the lower price.

:)

[TedC]

Now that I've had a chance to look over the article, it appears the bottom line is that discounters won't be able to advertise prices lower than the cruise line's website or print ads. If they do, they apparently will some how be punished by the cruise line. Customers will have to get the price over the phone or by e-mail.

 

RCI and Carnival, which control much of the U.S. market, are both cracking down on the ad prices.

 

Carnival President Robert Dickinson told the WSJ that he can't entirely stop agents from discounting:

 

"What happens between two consenting adults outside of public media, as long as it's not advertised, we're fine with that."

 

(At least he makes it sound kinda sexy)

[DFD1]

We were thinking about a "quickie" cruise next month and I was casting about to see what I might find in the way of a good price. In the process, I talked with a cruise "consultant" at Carnival. He tells me that we are all in for a rude awakening next year; that the cruise lines are running great numbers and the pricing is starting to change significantly and will continue to do so.

I fear that the ever-present law of supply and demand is about to turn around and bite all of us regular curisers in the butt.

I hope I'm wrong. We shall see. DFD1

[Krazy Kruizers]

:)

 

I have been keeping track of the various cruises that we have booked for 2005. ALL have gone up in price. If HAL keeps raising the prices of cruises, they may find a lot of empty cabins for a while.

:)

[JoeCruisin]

Might be a good time to buy stock in a few cruise lines....at least make some money while the business is good.

[DFD1]

JoeCruisin, I did !

[trubey]

I think that if HAL can sell tickets to online TAs at a price where they can sell them to me for what I paid and STILL make a profit, then I don't see what HAL's complaint can possibly be!

 

Lane

 

:p = happy boy for what my TA charged!

[Krazy Kruizers]

:)

 

Already own Carnival stock. Bought it years ago when it was $12 a share.

:)

[sail7seas]

Their complaint could be they want a Bigger Profit.

 

There are still tens of thousands of cabins sailing the high seas each week......they all need to be filled. The "bargains" may be fewer and further between but I think a careful shopper will still find some. (Those markets that have the most competition undoubtedly will have the best bargains....ie Caribbean.)

 

[Orcrone]

:)

 

Already own Carnival stock. Bought it years ago when it was $12 a share.

 

:)

What does it go for now?

[trubey]

I would love to read the article. I went to the Wall Street Journal web page and found the article with a search for "cruise line". Unfortunately, it then told me I didn't have a subscription. Does anyone here subscribe? Could they do a copy and paste for the rest of us?

[D&M]

I also would love to read this article as I nearly always book or find my cruise online and then speak to the agent to discuss the options. Is it cheaper to buy via a US agent? What really consitutes a bargain? Answers on a postcard please!

[wild_rose]

I checked NYSE. Last price today $42.95. . . . .

[taszmom]

We were thinking about a "quickie" cruise next month and I was casting about to see what I might find in the way of a good price. In the process, I talked with a cruise "consultant" at Carnival. He tells me that we are all in for a rude awakening next year; that the cruise lines are running great numbers and the pricing is starting to change significantly and will continue to do so.

I fear that the ever-present law of supply and demand is about to turn around and bite all of us regular curisers in the butt.

I hope I'm wrong. We shall see. DFD1

 

 

Prices are going way up. Fall cruises are OVERBOOKED!!! Can you believe that one! I could not find space on CCL or RCCL for the fall for triple occupancy, already sold out. That and a great promo for HAL is how I ended up booking the Zuiderdam this fall. Here's another one...holiday cruises are cheaper than Sept & Oct cruises. Cruisers are booking for next spring & summer now! Early booking savings is going to be the way to go for 2005.

[srpilo]

I remember the same kind of threads last year at this time... Panic !! prices are on the rise !! OMG !!

 

Yeah , Yeah, The prices are firming up a little right now, but wait a month or two when there's 50 ships sailing the Caribbean again every week...

 

Like S7S said there's alot of cabin to fill every week... Further more the worlds changed alot in last couple of years.. Lets see what happens when the next big threat or attack happens ,and all the new bookings disappear overnight again..

By then It'll be to late... all the prohibited "discount advertising" in the world won't help those big brand new ships fill those thousands of cabins every week ... Lets hear RCCL theory's about how they treat their loyal customers, then..

 

 

I for one am really curious to see how this ill-concieved "anti-consumer" idea plays out.. stay tuned

 

Srpilo

[Smiles]

I found this site, which has the exact same article in the WSJ today: http://www.mlive.com/newsflash/business/index.ssf?/newsflash/get_story.ssf?/cgi-free/getstory_ssf.cgi?f0055_BC_WSJ--Cruise-Discounts&&news&newsflash-financial. Hope I inserted that right. Interesting take by several different parties.

[iluvcruzin]

None of what is going on has to do with empty cabins. It has to do with TA commissions and pricing. They want to level the playing field from the way I see it. Unfortunately it hurts the small TA firm who may be trying to drum up business with special group pricing and may use a portion of their comission as the reduction in fare. This no longer can be done (or at least advertised).

 

I think the biggest effect will be on the online sites. There may not be an advantage to go this route when booking.

 

RCCL and Celebrity's new policy goes in effect on Monday so many are scrambling to get good deals now. Carnival's goes into effect Jan 1st but don't be suprised if the policy applies to all their lines.

[HeatherInFlorida]

Very interesting article and extremely baffling for me. I use one of the agencies mentioned in the article. I have been extremely pleased with their service, minimal though it may be. Based on the content of the article, it looks like I can continue to do so. If I can't continue to cruise with these prices, we can't cruise at all. That's the bottom line. So the cruiselines would lose me and many others like me. So what do they gain with these new restrictions?

 

I just don't see what it matters to the cruiselines if an agent chooses to return its discount to the consumer. All agents are getting the discount; some keep it for themselves and some give it back to the consumer in order to get the business. Other than the fact that brick and mortar agents complain to the cruiselines because they can't make as much money, I just don't see where it should be an issue.

 

The way I see it the cruiseline still gets the same amount in the end.

[Randyk47]

I figure the cruise lines have been bombarded by the brick and mortar agencies, particularly the smaller ones that can't afford to cut their commissions enough to keep up with the discounters. But the bottom line for us is that if discounters disappear then the number of cruises we'll take will fall. I'd say the cruise lines are feeling pretty good right now as demand is high, high enough to allow them to be this bold. Come some hard times and things will change again.

[jazzsea]

Most high volume cruise agencies have special contracts with one or more cruise lines. The contracts guarantee the agency a higher commission rate on bookings for a calendar year. These contracts are signed, legal documents and they require the agency to adhere to certain sales practices.

 

All of the cruise lines that I work with have gone on record announcing a stricter policy on agency rebating. Agency websites are under scrutiny. Our contracts are pretty specific about advertising prices lower than the lowest price offered by the cruise line.

 

It isn't the rebating that is the main problem. It is the lack of service that is the end result of rebating. If I sold cabins at 2% over cost I would not be able to afford any staff. If I sold cabins at 4% over cost I could have a few staff members but they would be limited to little or no customer service time because they would need to be selling all day to make their quota.

 

So the contracts we sign are specific about how and where we can advertise our special or group rates.

 

For instance: Let's say that I have a group contract on the MS Dietdam for my group of chefs from San Antonio. My group discount is 10% and my commission is 12%.

 

In this example I have only category "D" outside large cabins available and the price before the group discount is $1500, excluding port charges and other non discountable amounts.

 

I can advertise the category "D" cabin at $1350 per person, double occupancy because I have a contract at that price. ($1500 - 10%)

 

If I decide to give back (rebate) half of my commission, the cabin cost would be $1350 - 6% or $1269.

 

I can advertise this cruise price of $1269 through email, direct mail or flyers in my office. I can give you this price over the phone, but I cannot legally offer you my lowest price in a newspaper ad or on my website.

 

What's the big deal, you say.

 

Many think that this crack down is in support of the brick and morter agency. That may be true but it is not the only reason.

 

More and more passengers are arriving at the pier unprepared. They don't have proper identification, they don't have the right clothes or they don't have proper documentation for their children. The list goes on and on. The cruise lines do not want to license an agency to sell their product that does not explain the fine details to clients.

 

Think of the phone calls that hit the HAL switchboard all day long from clients that book through an "800" number and then can't get their questions answered by this agency. They call HAL. They don't have a booking number. Imagine the time it takes. It isn't a matter of selling the cruise for less. It's a matter of time study.

 

On this board, most of you are really "cruise literate". Imagine if you weren't. Say you are divorced and you wanted to take your child to Mexico on a cruise. Are you aware that if your child is under the age of 18 you will need a notorized letter from your ex spouse giving you permission to take the child to Mexico? Most of you are aware of this. But what if you didn't know. Is it the kind of question you would automatically ask?

 

Don't mean to get on my soapbox, but I've been at the pier when some of these people have been turned away. I've also been on the ship when novice cruisers are saying "....but my travel agent never told me."

 

No one should spend the money on a cruise and head off to the ship without proper information. A real travel agent will give you the information that you need.

[HeatherInFlorida]

Carol, I want to thank you for a very clear, informative explanation of all this. I found it very interesting and it clears a lot up for me. I will say, though, that the online agency that I use does give me all the information you're speaking of. In addition, when I get my docs, almost all the information necessary for boarding the ship is provided by the cruiseline (except for that unusual scerario you cite about the divorced mother)

 

In the end I believe much of the fault lies with the individual travellers. People don't read anymore; people don't take responsibility for themselves. So I agree with you that a brick and mortar TA would certainly provide them with more handholding and verbal communication, but on the other hand they may still end up at the pier without the necessary clothes or documentation because a lot of people just don't pay attention. It's the old "you can lead a horse to water but you can't make him drink" story.

 

For the most part I think it's the more savvy traveller who uses the internet agencies. If not, I'm not sure they would even know how to navigate through the internet to even find the online agencies.

 

But your point is well taken overall and, again, I really thank you for taking the time to post it.

[sail7seas]

Carol........Excellent, Excellent Thank you.

Finally someone has explained it in a way I can understand.

The bit about all of the "un-savvy" calling HAL for all the things a TA should be explaining certainly makes alot of sense.