Friday, September 25, 2009

The Current State of Cruise Deals

Perhaps you've noticed that change continues to accelerate. Just when you think you have it all figured out, you can count on a few million things outside your control to change. Despite an uncertain environment, however, the cruise industry continues to fill ships.

Some absurdly cheap deals have become available recently for the fall, and many people try to project these changes into the future and across the board, but the cruise lines are simply filling ships on what are traditionally low demand sailings at this time of year.

Think about your own life. Perhaps you have children back in school, or maybe you're resting up from an active summer. For whatever reason, fall is historically slow for immediate travel. The cruise lines take some of their rooms on Mexico or Bahamas cruises and advertise them cheap. Some people will upgrade to better rooms, but what the cruise lines primarily count on is filling the ships with people who arrive with the perception that they have money to burn. Inevitably, some of this windfall goes to shore excursions, gambling, jewelry, souvenirs and adult beverages.

Unfortunately, these cheap lead rates can result in some potential cruisers procrastinating as they wait for the deal of the century. When they discover the ship they want is sold out or has only terrible or high-priced rooms available, they kick themselves for passing up some very good deals. As a rule of thumb, I've always known that if your cruise fare for a mainstream ship comes in at about $100 per day, especially if that buys you an ocean view or balcony, then you already have great vacation value. Yes, right now you might find some inside rooms starting at half that much for the bottom of the line inside rooms on itineraries temporarily overloaded with ships, but you can't expect that on every itinerary.

Looking to the future, keep in mind that Mickey Arison, who as head of Carnival Corporation is unquestionably the most influential man in the cruise industry, recently said, “While the environment for travel remains challenging . . . consumers are responding to the attractive pricing and product offerings our brands have in the marketplace. We have begun to experience an extension in the booking window as consumers realize the best value by booking early." Carnival Corporation, whose lines include Holland America, Princess and, of course, Carnival, as well as several others, managed to make over a billion dollars this past quarter, making the assumptions that the cruise industry is desperate for customers a bit absurd.

As I mentioned, change is afoot. If you are looking to cruise in fall, you obviously must book now, but the time is also ripe to plan your future cruises. If an applicable promotion becomes available, I am happy to get that for you even after you book with me, but if prices go up, I can't necessarily catch that balloon as it floats skyward if you aren't booked. Recently, some long time customers waited a few days too long and ended up paying an extra $100 for a cruise they hoped to save more on. Still, it was a good deal, so they went forward with booking it, but it's always frustrating when that happens.

Another change happening is experienced cruise customers elevating to premium cruise lines on smaller ships, whether in half-steps to lines like Azamara and Oceania whose ships carry only about 700 pampered guests and can fit into smaller ports, or to the finest of all cruise lines, like Seabourn, Silversea, Regent Seven Seas and Crystal, where all the rooms are suites and lots of extras like gratuities, adult beverages, shore excursions or even air fare might be included in the price. The reason is two-fold. First, with the lower prices of mainstream cruises, premium lines pushed their prices lower so they didn't lose all their customers to suites on lines like Celebrity and Cunard. Rather than paying less for the same cruise, these cruise gourmets spend about the same or a little more than they used to spend on a mainstream cruise to experience small ship luxury.

Consider other industries, like computers. I know, for example, that when I bought my first computer about 25 years ago, I was waiting for a computer with two floppy drives (5 ¼ inch) for under $1000. When that $1299 eventually slid down to $999, I bought, and I continued to buy the best computer I could buy for under $1000 for years. All these years later, a dollar will buy one pound of apples where I used to buy five pounds 25 years ago, but a thousand of those dollars will buy me a far superior computer to what I had back then. Sure, I can find one for less than half that much, but if I can afford the better one, including an Apple Computer, why should I necessarily just go to the cheapest brand? The same applies to cruises.

The second reason for customers going upscale has to do with the people attracted by the lowest prices. Without wanting to be snobbish, I think we can all acknowledge that on occasions we have been on a cruise filled with the cheapest customers. Some are like you and me, just taking advantage of a good deal, but others are people who you wouldn't normally seek out for company anywhere else. Going upscale means you arrive at your destinations with a better class of traveling companion, with fewer people flooding ashore. It also means more personal service onboard, with many on the staff knowing you by name. Plus, who knows what business connections you will make that will lead to a more prosperous life when you're traveling with the wealthy?

In summary, if you're traveling soon, remember you don't have to wait for the absolute cheapest price. The quality of your experience will be remembered long after you forget the price. Don't cheap yourself out of a good deal.

Don't spend more than you can afford, but if you plan to take a cruise in the next year or so, get it booked now. Your deposit will probably do better earning nothing than sitting in the bank, and you could be miles ahead of having it in the stock market. When you choose your cruise, think about what you really want and, if you can afford it, go for it.

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