|Posted on July 18, 2011 at 4:46 PM|
Royal Caribbean recently announced that it is increasing some charges, and changing the pricing structure, in some of its onboard specialty restaurants. There have been a lot of social media postings complaining about these increases, so I wanted to comment on the situation in this blog.
I have always been against additional onboard charges, especially for dining. When I started cruising, back in 1980, all food - including sodas in the dining room - was included in the cruise ticket. Of course, ticket prices were higher then too. During the 80's and 90's, I remember paying approximately $1,400 - $1,500 per person, based on double occupancy, for an inside room and an additional $800 per person for third and fourth passengers.
Then, after September 11th, cruise lines had to drastically cut prices because people were reluctant to travel. Cruise fares dropped to $700, $800, or even less, per passenger based on double occupancy. In order to remain profitable, cruise lines had to make up the revenue difference somewhere - and that's when onboard charges for sodas in the dining room and other items became common.
As a passenger, I much preferred paying a slightly higher ticket price, and knowing my vacation vas virtually paid for in full. The only extras were bar expenses, the casino, shore excursions, tips, and the gift shop. Since I don't drink or gamble much, and prefer to stay on the ship while in port, that left me with a nice gift shop budget. Although, if you count up all the clothing in my closet that has a Royal Caribbean logo, I probably spent more in the gift shop than most people spent in the bars and casino combined. My personal opinion is that the cruise lines should offer an additional package that a guest can purchase for a couple of hundred dollars when booking that would include a soda package, a meal at a specialty restaurant, etc. Then those who want to “pay as they go” can, and those who want a mostly-inclusive package would have an option.
As a travel agent, I review many vacation options daily, and despite onboard charges, a cruise is still the best vacation value. I have compared the cost of cruising to comparable length land-based vacations, and cruising still has the lowest per person, per day cost.
To fully understand a situation, sometimes you need to wear the other party's shoes, or in this case, sandals. Royal Caribbean Cruises Ltd. (RCCL) operates Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, and two small cruise lines based in Spain and France. I looked up RCCL's financial statements for last year at www.rclinvestor.com and found some very interesting information.
RCCL provided cruise vacations to 4.6 million guests last year, and their total ticket revenue was $4.9 billion. RCCL’s total expenses, however, totaled $6.2 billion, which resulted in a loss of $1.3 billion, or $283 per passenger, before anyone spent a dime onboard.
Luckily for RCCL, and all those who enjoy their cruises, the average passenger spent $402 onboard, which resulted in a net profit of $119 per guest. Read that again. Including cruise ticket revenue, bar tabs, casino earnings, shore excursion, photograph, and gift shop sales, and all those specialty restaurant charges, RCCL only made an average profit of $119 per passenger.
Now, a $119 profit per customer is nothing to sneeze at, but it is probably much less than what most people would assume. Since the above figures are averages, RCCL obviously makes more profit on guests sailing on longer cruises in suites than on shorter ones in interior cabins, but if the average guest spent just $120 less while onboard, the cruise line would be losing money.
I have taken 44 cruises, aboard 21 ships, and have never dined in a specialty restaurant. Except for sodas, I spend less onboard now than I did when I started cruising. Specialty restaurants are great for celebrating special occasions, but are not necessary to enjoy a fantastic cruise. So, if you object to the additional charge, just don’t eat there. If enough people stop eating at the specialty restaurants, the cruise lines will get the message. And, don’t forget to document your objection on your comment card.