The New Cost of Cruising

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While cruising has been paused since March there has been a lot of speculation and questions about cruise deals and how the cruise lines are going to fill their ships. Filling the ships likely won’t be the problem as there is a lot of pent up demand. Die-hard cruisers are chomping at the bit to get back on board and enjoy a cruise vacation. However, finding a great deal could be difficult, and here’s why.

When cruise lines resume operations, there is a fixed cost associated with each cruise - employees, food, maintenance, fuel, etc. Those fixed costs don’t really change from sailing to sailing. That, coupled with the reduced number of passengers on board (per new health and safety protocols), each of the passengers that are sailing will need to pay a higher price for the cruise line to break even on the departure. 

Here’s an example using simple dollar amounts that are in no way realistic, but just for illustrative purposes:

Ship fixed cost of $1,000,000 divided by full capacity of 5,000 passengers means the average per diem per passenger is $200.

Take that same sailing, but operating with only 60% passenger capacity (3,000 guests) means that the average per passenger now jumps to $333 which is an increase of just under 40%.

The same scenario but at 50% passenger capacity (2,500 guests) brings the average cost to $400 per person which is 50% more expensive for the average passenger.

You can see from these examples that when cruising resumes at a reduced capacity, you should expect to pay more for the cruise. With that increased price per passenger, the likelihood of finding a great deal goes down exponentially. Now, the upside is that there will be far fewer passengers on board so the average space per passenger ratio will go up considerably. Getting a chair by the pool will be much easier especially on larger ships. Additionally, it may feel as if you are getting better service since there are fewer passengers onboard. There is a caveat to that last statement, in that some cruise lines may possibly cut back the staff required onboard especially room stewards and waiters since there will be fewer passengers occupying fewer staterooms and dining tables. 


Here’s Why You Should Book Now

It’s hard to know when cruising will return back to its normal cadence and schedule. Most cruise lines have already announced they are starting back with only a few ships in service when they have the green light to resume. The cruise lines will then slowly build their schedule to include more ships once they have a proven track record of success. Based on what we are currently seeing in the marketplace, booking a cruise that is a good deal should be done NOW! 

The prices have steadily gone up the past few weeks for 2021 sailings. Just two months ago, you could easily find many cruise lines offering 7-night Caribbean cruises for $299 to $399 per person. Now you would be hard-pressed to find that deal as prices across most major cruise lines start at least $499 or more per person for the same sailing.

David Crooks, SVP of Product and Operations of World Travel Holdings, told  Cruiseline.com the following on price increases, “We are currently seeing a gradual rate increase for 2021 and suspect this is due to demand vs potential capacity limitations.” He further mentioned, “we anticipate solid demand due to the high usage of FCC’s from canceled cruises as well as overall pent- up demand. This factor in combination with reduced capacity - both in a reduction in ships sailing as well as reduced capacity onboard - would indicate that it is not advisable to wait to buy.”

Bottom line, if you see a good deal on a cruise for 2021, book it now! Even if it’s just an ok deal, we recommend you go ahead and book it! The likelihood of that price staying around for very long is low, so go ahead and lock in the price. Plus you have the peace of mind knowing that should you change your mind, the cruise lines are allowing cancellations and changes as part of their Cruise with Confidence coverage. 

During a recent interview, Joad Hamed from American Discount Cruises advised, “Most cruise lines have extremely flexible reservation policies right now, which is resulting in many customers feeling very comfortable to make a deposit. The policies vary by vendor but are without a doubt the most flexible I’ve seen in my 17+ years in the industry. Cruises are usually booked many months in advance of the departure date, so we’ve found that many of our customers are making reservations now, in anticipation that they’ll be able to take the trip in 2021, and in a worst-case situation they’ll delay the trip a few months if necessary, taking advantage of the flexible policies of the cruise lines.”

Be sure to check with your travel agent as to the policies of the cruise line you are booking. Each cruise line handles things a bit differently, so it’s always best to inquire about the details or check the cruise line site.


Future Cruise Credits

Another consideration to be aware of are the large percentage of cruisers who have canceled sailings in 2020 that have already moved their sailing to a 2021 departure. Greg Coiro from Direct Line Cruises shared with us the following, “Increased demand (through Future Cruise Certificate redemptions or switching sailings) especially during the Summer months of 2021 has had an unexpected impact on pricing.  Quite surprisingly, pricing has held strong in Q3 of 2021 due to this shift in business along with the high utilization rate of Future Cruise Certificates.”

As the 2021 sailings fill, the cruise lines will continue to raise pricing. There are still plenty of cruisers that have future cruise credits that will expire in the next year that will need to be used. Between those with Future Cruise Certificates, pent up demand, and reduced sailing capacity, it’s likely that cruise prices will continue to rise. 


How to Spot a Good Deal

If it feels like a good deal, it probably is - book it immediately. There is actually more to it than just a gut feeling to determine if you’ve uncovered the Golden Ticket. Using a guideline such as a price per night is a good gauge. Also, what is a great deal to one person, may not even tip the meter of enticement for another. As a result, pricing is pretty subjective to most people. Layer in things like value-added amenities and now you have a complex swirling vortex of uncertainty. 

The best way to determine a good deal or a great deal is to look at the type of cabin being offered (balcony, junior suite, suite) as well as the amenities included. Calculate what those amenities would have cost a la carte. If your all-in price is under $100 per night for a mainstream cruise line such as Carnival, Norwegian, or Royal Caribbean in a balcony cabin, then you have a good deal. If the price is $75 per night or less, grab all your friends and family and get everyone booked immediately. 

The more premium cruises lines such as Celebrity, Princess, and Holland America, the same rule of thumb applies. Keep in mind these lines command a little higher pricing, so a threshold of approximately $200 per person per night all in for a good deal and $150 per person per night for a great deal.  

When you jump into the superior cruise lines like Oceania, Azamara, and Viking Ocean if you find anything under $200 per night with amenities, jump at it immediately and don’t look back. Same for the luxury lines such as Seabourn, Crystal, Silversea and Regent anything under $300 per person per night is a steal.


Find a Cruise Deal

 

Keep in mind these are just guidelines and again, a good or great deal is typically determined by the value being offered and the perception of the person making the purchase. The bottom line is if you find a price, cabin, and amenities that fit your budget, book it as soon as possible. Procrastination will not pay if you plan to cruise when sailing resumes! 
 

 

 

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What do you consider to be a great deal when booking a cruise?

1 Comment

Posted by OldGreyWolf

Excellent article with a number of very good points

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