Nickel-and-Dime Economics

It's ironic: Cruise prices are at an all-time low, but at the same time, many passengers feel cheated and misled due to the costs of certain items on board. It's called "nickel and diming" -- the cruise price is attractive at the time of initial purchase, but it ends up costing substantially more by the time it's over due to what one passenger terms "a never-ending stream of schemes to get you to open your wallet."

Many cruise vacations have always featured extra-cost items like drinks, shore excursions, tips and such; but today, passengers face constant hawking of optional items and activities. Some of the most common areas of complaints include the constant encouragement to buy merchandise from the shops, art auctions, higher prices for shore excursions, and expensive on-board drinks. Some lines have been increasing their corkage fees, or confiscating liquor brought onto the ship as passengers try to circumvent the high price of drinks on board. There have also been recent reports of one line charging a $10 fee for passengers wanting to see the "headline" show.

When we spoke to Carnival Corporation Chairman Micky Arison and Carnival Cruise Line President Bob Dickinson, they pointed to an obvious reason for all this. They noted that cruise prices have not increased, but the cruise lines have been building more expensive ships filled with more amenities, more activities and more options, some of them unheard of a decade ago. And many of these optional amenities and features come at a very small cost to the consumer when you consider the cost of the investments to the cruise lines.

Today's cruises are still an excellent value when you consider that for less than $1,000 per person, you are getting accommodations for a week, a wide variety of entertainment, virtually unlimited food, loads of activities and transportation to and from different ports.

While I am no fan of the "nickel and dime syndrome," I must admit that the Carnival executives have a point. Not only have cruise prices not increased -- when you consider inflation and the cost of living index, they have decreased dramatically in constant dollars. Using an online inflation calculator, I performed this little pricing experiment and I think you'll find the results interesting:

In 1983, a seven-night cruise on the Sun Viking; 1983 cost $1,190 per person for a mid-level outside cabin.

In fall of 2002, a seven-night cruise on the Mercury was $699 per person for an ocean-view cabin.

In 1984, a seven-night cruise on the Norway was $1,879 per person in a mid-level ocean-view cabin.

In 2002 or 2003, a seven-night cruise on the Norway is $849 per person in a suite or $649 for an ocean-view cabin.

What's even more interesting is if you adjust the 1983 prices along the lines of inflation and cost of living increases, they would be in the $3,000 range. But just today, I received an e-mail from Celebrity Cruises offering a cruise on the Mercury for $450, or a balcony cabin on the Millennium for $750.

I'm also a big proponent of on-board options--the more the better. While I enjoy low cruise prices, I also like being able to choose among a greater variety of activities and a wider array of dining options (albeit it at an extra cost). On a cruise aboard Radiance of the Seas, I immensely enjoyed my dining experience at Portofino. On the Legend of the Seas, I loved playing miniature golf at sea. And on my most recent voyage aboard Carnival Legend, our dining experience in the Golden Fleece Supper Club was sybaritic. The atmosphere was subdued and sophisticated, the service close to perfect, and the food, in my opinion, was over the top. For the nominal fee most lines charge for alternative dining, I would gladly indulge. But all of these optional activities and dining options are just that, options.

That said, if these options were not available, I would probably not miss them, since I never pined for miniature golf or extra tariff dining in the past. But if they are there, I will certainly take advantage of them if I feel so inclined. Like most passenger's opinions, I also abhor the constant "hawking" and "in your face" attitude some lines have about generating on-board revenue. If you find it bothersome, let the cruise line know. Speak to the Hotel Manager, or write to the executives at headquarters.

In the end, all those nickels and dimes do add up for the cruise lines, but it also adds up for you, the consumer. Cruising is still a tremendous value and the ships are offering more space, comfort, variety and options. And when you consider what you paid for a cruise in the past versus what you received, I find it hard to argue that cruises are not a tremendous value for the money.

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