Taking the Concordia grounding off the table for a minute, sort of like trying not to work Justin Bieber into the conversation at the peak of his teen wonder moments/media domination, the cruise industry has been working on shoring up the balance sheet for quite some time. Looking past the crazy-popular vacation option that they are, toward a responsible future, cruise lines are making some smart moves. Some of those moves will never affect most passengers, others will affect a few and some will affect us all. In this first post of a series on the evolving cruise industry, we look at cancellation fees.
Fact: There are more cruise ships with more cabins making for more passenger carrying capacity at sea right now than ever before.
Fact: Cruise lines need those ships to sail as full as possible to make their business model work.
Much like circulation in the newspaper business, census in the hospital business, unique daily visitors in the website business, occupancy rates in the cruise business, very much like the hotel business, is king. Good, healthy, honest numbers make any one of those industries strong and viable. Convoluted, suspicious, numbers in any one of them is reason for concern.
Cruise lines have always had good numbers in an industry that has a strong future growth to look forward to. But now, along the way, cruise lines have great big targets on their backs with everyone from maritime liability attorneys to environmental groups locked in on their every move. The down side to their mobile assets that can be moved to where the business is without a whole lot of expense is that it takes fuel to move them and world oil market conditions vary greatly. These and other concerns create variable expenses they don’t have a lot of control over. It’s no surprise that when given the chance, cruise lines choose to shore up expenses in other areas that they do have control over.
Rules that affect occupancy are one of those areas, one that is controlled via the Passenger Contract and terms for buying a ride on a cruise ship that, up until the Concordia grounding, few passengers paid much attention to. That’s how closely our perception of what the cruise experience should be matched what cruise lines were delivering. There was little need to know what that contract said; everyone was happy and for the most part, everyone still is.
Still, there is room to tighten things up in that contract, a good reflection of the way they do business, and the cruise lines are doing just that.
For example, in the past, Travel agents or passengers booking directly could put a courtesy hold on a cruise cabin to lock in the price and availability for a given period of time. That took the cabin out of the available inventory for others to choose from, much like airlines are being forced to do now by allowing buyers to hold a fare for 24 hours without buying. Affecting available inventory and pricing even more, huge blocks of cabins on a given sailing could be held out of available inventory for a proposed group sailing, artificially inflating occupancy levels.
On the other end, cruise line cancellation policies were more generous in the past, allowing passengers to book up to a year or more in advance and cancel just before final payment with no penalty. Cancellation charges started on the day final payment was due and increased as the date of sailing came closer, to where if passengers canceled within 7 days of sailing the cancellation penalties would be as much as was paid for the booking. Now, that 100% penalty time is happening farther out from sailing, giving the cruise line more time to sell that cabin to someone else and further discouraging passengers from cancelling.
Carnival Cruise Lines new cancellation policy, adds penalties for canceling a booking faster than ever before. Still, most people won’t want to cancel their cruise and will never know about this unless they read their Passenger Contract. Other lines are heading in this direction as well.
Should we care? Probably not. It is one more point in favor of buying the optional travel protection cruise lines all offer or through a third-party source as many experts recommend.
This is one of those things that is fair unless we come up on the wrong side of it, unprepared. The cruise lines have every right in the world to have a fair chance at sailing full ships. Canceling at the last minute does not give them a lot of time to sell that cabin to someone else. If that’s bad news for anyone, its bad news for those who still cling to the notion of a “last-minute deal”, an animal that cruise lines would just as soon was extinct.
Updated Fact: There are more cruise ships, with more cabins, making for more passenger carrying capacity at sea right now than ever before and they have more features and options than ever before because we said we wanted them.
Updated Fact: Cruise lines want to sail full ships and really don’t want to discount the price because we asked for lots of new,different and exciting onboard features, they delivered them and paid a lot of money to add, staff and maintain them.
Related articles
- Travel experts offer travel safety tips for cruise passengers (chriscruises.net)
- Cruise industry group announces global safety review (chriscruises.net)
- Obsolete cruise ship photo operations see change on the horizon (chriscruises.net)
- Your cruise questions: Who has the best deal? (examiner.com)
- Choosing the right cruise line- Who are you? (chriscruises.net)
