Shore Excursions are a Profit Center Not an Amenity for Passengers
Written by: Kuki
Originally when cruise ships began offering shore excursions for their guests, in most cases they were the responsibility of the ships Cruise Directors. The Cruise Directors were in contact with various tour companies throughout the ports of call on the itineraries their ships were sailing, and the profit’s the Cruise Directors were able to realize from organizing and selling these tours to guests went directly to them serving to subsidize their salaries.
Eventually the cruise lines became more aware of just how significant the amounts those Cruise Directors were able to make from those enterprises, which to that point the cruise lines had viewed as a bit of a throwaway. And that realization led to them establishing their own Shore Excursion Departments.
They realized they were able to contract with the largest tour operators in locations around the world, and offer those tours to their passengers with significant mark-ups above what they were paying the contractors. They discovered a Profit Center. Of course the tour operators viewed the bulk buying power of the cruise lines as an attractive way to do business, enabling them to fill their tours , and they were happy to discount their prices to the cruise lines in order to do business. For them it was also much easier to deal with the cruise lines on contracts that covered all the ships in their fleet, as opposed to dealing with every ship’s Cruise Director individually.
As the tourism and cruise industries grew this has evolved into a multi-million dollar industry within the industry. And as it did several ex Cruise Directors and staff who’d worked for the Shore Excursion Departments started companies offering to set up shore excursions for cruise ship guests privately, and at lower prices than those the cruise lines were offering.
These “after market” companies became a fairly significant thorn in the side of the cruise line’s Shore Excursion Departments, cutting into their revenues for some time. There was a point where some of the cruise lines demanded those tour operators they dealt with sign exclusivity agreement in order to retain their business.
By the turn of the century the cruise lines got a better understanding of the use of the Internet and were building much improved corporate web sites. They began to understand they could improve the bottom line of their shore excursion departments by encouraging their passengers to book their shore tours in advance of their cruises using the cruise line’s own web sites (In fact some cruise lines collect payments for these shore tours in advance, thus increasing revenues well in advance of the dates they are required to pay their contracted tour operators).
The cruise lines admit that now that a full 30% of passengers book their shore excursions in advance, using this method. I’m sure there are variety of reasons for people doing this, but they are encouraged to do so with advice from the cruise lines with remarks such as “ the popular shore excursions sell out quickly”, or have “limited availability”, which is probably true on more exotic itineraries; though they are not so likely true on more standard Caribbean itineraries.
Another factor is people’s insecurity when traveling to destinations they are unfamiliar with. They want the cruise lines to be responsible for getting them to whatever tour they choose, and safely back to the ship. Many may have also heard the stories of people missing their ship’s departure time by going off and touring on their own, and become afraid they are going to be one of those if they ventured off on their own. Though there are surely instances when this occurs, I believe most often when passengers miss their ship’s departure it’s due to circumstances they could have controlled; like drinking less in bars within a short taxi ride of the pier and losing track of time. Those cases of course have nothing to do with the cruise line VS private shore tours discussions.
No question there are some ports of call where security is an issue, and you’re less likely to encounter problems on excursions you book through the ship.
However one should always be aware the cruise lines charge a significant premium for all their shore excursions. As we learned watching Peter Greenberg’s documentary on CNBC, Cruises Inc, Big Money on the High Seas http://www.cnbc.com/id/29139914 the cruise lines retain approximately 50% of the shore excursion ticket price, and that department is one of the top three profit centers for onboard revenue.
And on ship’s excursions the down-side, beyond the premium you’re paying for convenience, is the excursion will proceed only as quickly as the slowest participant.
Private shore tours are available world-wide in nearly every port where cruise ships visit. Either a “Google” search or an inquiry posted on the message boards is an easy way to get recommendations for quality tour operators.
My recommendation is to try some private tours at ports you feel comfortable with. You’ll always save money this way, and you’ll get to experience much more in the limited time available to you; just plan well enough to make certain you don’t miss the ship. I do occassionally do book ship’s excursions, but mostly only in ports where I believe security issues to be a major concern.
The above is my opinion, but I’d like to hear yours as well.
Do you prefer to pay the extra for the convenience of having the cruise lines responsible for you? Do you book the ship’s excursions reluctantly, simply so you know you won’t be left standing at the pier? Do you prefer to dig a little and find private tours, or do you skip any type of tours and go off exploring on your own?
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Posted: March 24th, 2009 under Kuki.