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Nickel and Diming on Cruise Ships

Written by: Paul Motter

Kuki’s recent blog, “Cruise Lines in Flux,” cites recently adopted onboard revenue enhancing techniques some cruise lines are now using in the face of lower cruise fares. One travel agent commented that there is a good reason for this – because his callers are only concerned about one thing – price. When the basic price of a cruise becomes the customer’s primary concern, it is that much more important for cruise lines to compete with lower cruise fares. And when cruise fares drop to historic lows the only way to make up lost revenue is by selling more onboard.

NCL’s just announced last quarter earnings were surprisingly better than expected while they fill their ships beyond the 100% occupancy level. How does that work? Cruise ships count all of the permanent berths, generally two people per cabin, as their full occupancy, but when you add third or fourth guests to a cabin built for two people the ship’s occupancy goes beyond 100%.

The cruise industry works under what is called a “full occupancy business model.” Most cruise lines have determined it is better to fill a ship at almost any price and those bodies onboard create more potential revenue from onboard sales.

Since we all know that cruise fares are at historically low levels – why are we suddenly surprised when we see measures to increase revenue onboard? Of course the cruise lines are going to try to make more money when and where they can. Every leisure industry does it. Resort hotels are suddenly charging towel fees and other vague “resort fees.” Some airlines are charging for each bag, blanket, pillow and soda.

Are the cruise lines doing anything any other travel and leisure company is not doing? No, in fact they are less guilty than most.

Arthur Frommer, the renowned travel writer now in his 70s, recently wrote a piece decrying the state of the cruise industry. According to Arthur, a cruise is supposed to be only about the experience of being at sea; with your deck chair, a cup of bullion, a blanket and the open sea air. Arthur’s complaint was about all that “extra stuff you see on cruise ships these days, like boxing rings, rock climbing walls and water slides.” Those things have no place on a cruise ship, says Arthur. Well Arthur, no one is forcing you to get in that boxing ring, and furthermore there is no extra charge for any of those things. So what is the harm?

If you believe that cruise ships are doing too much nickel and diming these days then my assumption is that you somehow believe everything you see is costing you money, whether you actually spend any extra money or not. I suggest you and Arthur get together and take a cruise on the oldest ship you can find so you won’t see anything other than a cabin, dining room and deck chairs. Heaven forbid you might actually see an optional activity that carries a service fee.

Or you can go on a beautiful brand new cruise ship and just not spend any extra money, because the truth is that no one is twisting your arm to spend an extra penny on anything.

To the travel agent complaining about customers calling him and only asking about price, it is your job to educate people on the value of cruising. You need to tell them there is excellent food, great entertainment and exotic destinations all available to them for basic cruise fares that are at historic lows. When I see a seven-night cruise to Alaska selling for $249 per person I don’t want to hear about cruise ships “nickel and diming” customers. It isn’t nickel and diming unless they are charging for things you must buy that used to be given away for free.

Princess has been accused of “nickel and diming” ever since they opened their first Haagen Dazs ice cream parlor onboard. They do charge for ice cream, but no one is forcing you to buy it. You can still get desserts in the dining rooms and buffet areas for no extra charge. You can even call room service and get ice cream any time of day. The newest Princess ships have fantastic gelato. You can get two, four or six scoops and the charge for six scoops is about two dollars. Six scoops of gelato is enough for three or four people. If you went to your local toney mall, the gelato parlor there would charge you close to $10 for the same amount.

Royal Caribbean’s newer ships have Flowrider wave machines, great water parks with water slides, miniature golf, inline skating, ice skating, rock climbing and other sports fun. They do not charge you to use any of them. They will rent skates to you although you can bring your own if you want. Where is the nickel and diming there?

Carnival Cruise Lines has sushi bars on their ships – free soft-serve icecream all day long (RCL and NCL also have this). They have giant movie screens by the pools with “movies under the stars” at night. Here in Phoenix the hotel resorts charge residents for a pool pass to use the water slides and about $12 per person just to enter the pool area during movies at night. Sushi? Expect to pay about $30 per person. Not on Carnival – no extra charge for any of those items. So where is the nickel and diming?

Princess for a little while many years back tried putting a disposable film camera in your room mid-cruise. At first it appeared to be a gift from Princess until you read the fine print that said your room account would be charged $10 if you opened the package. A lot of people referred to that practice as “nickel & diming,” but if it isn’t obligatory then it isn’t nickel & diming. It was a bit deceptive for people who didn’t read the instructions carefully but at the same time I know for a fact that Princess took a lot of unused cameras off of guests’ final bills before they discontinued the practice.

Royal Caribbean now charges a $2.99 delivery fee for room service between midnight and 5:00 a.m. Is that nickel and diming? If you are so hungry at those wee hours that you just have to have food NOW then I don’t think $2.99 is a lot to pay. Not that hungry, then why are you calling room service anyway? Granted, it is a service that used to be free that they are now charging for, but you paid $300 less for your cruise and no one is making you order room service at 3:30 a.m. Put on your gym clothes and go to the free pizza parlor open all night.

Bottom line – if you are complaining about nickel and diming you are overlooking the obvious – that cruising is now a better value than ever in history. Cruise fares are unbelievably low and you still get everything a cruise ever promised you – and more. Maybe they are not giving their most loyal repeat cruisers the same cocktail they used to give them every night, but consider that former practice as a bonus they could afford when cruises cost twice as much. Dollar for dollar you are still better off now.

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Comments

Comment from JaxCondie
Time May 21, 2009 at 11:44 am

Paul, this is probably the most level-headed take on the so-called “nickel and diming” trend that I’ve read so far. Many thanks for helping everyone to put things in perspective.

Comment from charles
Time May 21, 2009 at 2:08 pm

Cruise prices may be better than ever but the ships are jamming more and more people on board making the decks like a crowded day the the new jersey shore.
There goes the relaxing cruise experience.

Then you do get nickled and dimed for some things and completely soaked for drinks in a captured enviroment.

So although the cruise price may be down all of the other charges that at one time were either nonexistent or minimal, make your overall expense much greater than it would have been when cruise prices were higher.

Comment from Paul Motter
Time May 21, 2009 at 7:24 pm

no offense, but your comment doesn’t follow what I was saying. Cruise ships have always sailed full, that isnt any different. And the price of onboard charges is not nearly high enough to overcome the discounts you are currently getting. That was the whole point of what I was saying.

Comment from Rita
Time May 21, 2009 at 10:13 pm

I’ve always told my somewhat “cheap” parents that you always get what you pay for. Mom used to bargain hunt, and then brag about the good deal she got on that new dress, only to have the dress turn out to be of cheap quality where the seam split the second time she wore it. If you get something at a reduced cost, there is a reason, and often the deal will turn out to not be as good a deal as you originally thought.

It’s the same with cruises. Yes, the cruise lines are charging lower and lower prices today just to get warm bodies on the ship. But since they are not making much of a profit on the accommodation sales, they have to make it on something else. And that something else is charging for things that maybe at one time used to be free.

As you say, no one makes you order room service at 3:30 a.m. You can always throw on some clothes and run up to the Lido to grab a bite to eat if you are hungry. No one forces you to pay $10.00 for a drink. Instead, why not just fill that mug up with iced tea at the free dispenser in the Lido and be done with it. But don’t complain that the cruise lines are nickle and diming you. Instead of complaining, then do something about it. As in don’t buy.

I think this is only the beginning. Frankly, I think in the coming year (if the economy doesn’t turn substantially around), you’re gonna see even more charges for things that at one time had been free. For example, want to take a run on that Flowrider? $5.00 a pop please. Want to try your hand at putt putt golf? That’ll be $8.00 a game. Want to attend that movie in the theater … the one that just came out of movie theaters last week? $5.00 each please.

If the cruise lines can’t cover their operating costs, then it doesn’t make sense for them to sail every week. They would probably be better off just docking the ships somewhere rather than lose money week in and week out. So, yes, you might get the base cost of your cruise cheaper, but in the end that trip is gonna wind up costing you more, because in order to have a half way decent time, you’re gonna be forced to spend more onboard than you ever did before. And, plain and simple … if you can’t afford it, then maybe you’d be better off to just stay home, or find another vacation option that is much cheaper.

Comment from Kuki
Time May 21, 2009 at 10:41 pm

My Blog this week was in fact somewhat supportive of the cruise lines attempts to enhance the onboard revenue during this time that they seem to find it necessary to attract passengers.

My concern (question) is that once the economic conditions for the industry improve and prices rise will they rework their present business model to account for the higher price, or will they stick with the model they’re working with now?

It’ll be disappointing if it’s the latter.

Comment from Gordon
Time May 22, 2009 at 9:03 am

Charles, I couldn’t disagree with you more. My first cruise, in 1991 (SS Norway), cost twice as much as the cruise I will be taking in June (Carnival Freedom). The Carnival trip will have better free food, better extra-cost food, better service, more varied entertainment, a balcony cabin, and to boot is a day longer (8 days v. 7). Yes, drinks and shore excursions are more expensive, and some optional activities are no longer free (fitness classes, for example), but I don’t think those prices are hugely out of line with respect to what a land resort would charge. In any case I could indulge in those extras 24/7 and still not come close to spending the amount of the difference in the cruise fare between then and now.

No, I won’t have the ambience of the Norway, and a grand old tub she was.

Except for that, the Freedom will be a much better all-around V-A-L-U-E. And I think some of the pay-as-you-go extras actually increase the value – $30 for dinner in a Carnival supper club buys true fine dining and is a screamin’ bargain by any measure (and no, I’ve never been served a meal of that quality in the main dining room so no grousing about how it used to be “free”).

No one will be forcing me to spend extra money on anything, and it’s the same ocean for everyone, no matter how much we spend. No one gets charged extra for the best parts of cruising: the sea and the sun and the awesome sense of vastness (even Oasis of the Seas will seem tiny in the middle of the ocean). That’s why I keep cruising – the best parts really are included in the price, and folks who pass over this in favor of concentrating on and complaining about extra cost items are, umm, missing the boat.

As for your question, Kuki, I think competition will decide. We passengers are going to have even more choices in a year or so than we do now, and the cruise lines will have a lot more berths to fill. So shop shrewdly! In the meantime, let’s not forget that some extra freebies that have been added over time have NOT disappeared in this economy – I’m thinking of the robes in Carnival cabins and even those silly amenity baskets in the bathrooms, which were added as free extras to keep up with competition. I’ll keep voting with my wallet, and if I really have to worry about “nickel and diming,” I’ll probably be staying home until I don’t.

Comment from Manya
Time May 22, 2009 at 12:36 pm

People who think that they are going to go on a cruise and not have any extra expenses are… to put it buntly, delusional. These are the people you see smuggling food off the ship for their lunch and having the gratuities removed from their accounts at the end of the cruise… I wonder why anyone who apparently likes a ‘classy’ vacation like cruise, (let’s face it, those of us who cruise appreicate finer things in life and generally are not going to destinations to see in how many countiries they’ve eaten mcDonald’s) would act so ‘classless’ .

I am starting to prepare first tme cruisers that you should budget for a certain amount of extra expenses (I start them off with budgetting $50 per day plus shore excursions) and I prepare them that they will need to know what their account balance could potentially be by keeping their receipts and asking for a bill halfway through the cruise.

Drink prices are really not that outrageous for people who are used to going out to a lounge before dinner or who order wine with dinner when they are out. Those who stay home all the time will always look at the price of what they would have paid for that bottle if they were sitting at home.

Sure, the bingo cards may cost $20 to play 4 games but the prizes are also not bad and the number of participants are lower… the basic culinary demos might be included but the hands on demos have a fee attached.

I have sailed both HAL and Princess in the last year and what I NEVER felt was that I was being decieved into thinking something was free when there was a charge. Every charge for an activity, drink or class was clearly indicated in the evening ‘news’ for the next day.

I would much rather keep the price for a cruise lower and pay for those ‘extras’ that I may or may not need.

My respose to those who come into my agency looking not to be ‘nickel and dimed’ is that I recommend that they put $500 on their shipboard account before their cruise because that is how much more their cruise would be for them to pay for everyone’s booze-yes even the falling down drunk slob who puked on you during the show, the spin class that you wouldn’t be able to take because it’s at 6am and you sleep until 7am, the dvd rental that you already saw before you left and oh… I forgot- the 100 minutes of internet time joe down the hall used to confirm his flights and chat with his mistress in Boca.

Wouldn’t you rather use that $$ towards something YOU woud like to purchase or do?!?
Why not use it towards that beautiful gift were getting your wonderful travel agent?!?

Comment from Bob
Time May 26, 2009 at 11:10 am

“Or you can go on a beautiful brand new cruise ship and just not spend any extra money, because the truth is that no one is twisting your arm to spend an extra penny on anything.” – while they are not exactly twisting your arm the CD and staff do try all they can to influence you to spend money. And if you are the Oscar Wilde type that can “resist anything but temptation” you may be in trouble.

That said I’ll sign up to sail with Paul well ahead of Arthur Froomer.

Comment from Bryn
Time June 23, 2010 at 8:52 am

Manya, I agree! Why should I pay for something I don’t use! I have no need of a cabin – I can sleep out on deck “under the stars”. I think the cruise ships should charge extra for the luxury of sleeping in a cabin. I also don’t need to eat “all I can eat”. I’m a very modest eater. I think that the base-price should just include modest meals. If you want to eat more, pay! I also prefer to stay on the ship at ports of call. Leaving and returning costs the cruise line in terms of security. So I think they should charge for the priveledge of leaving the ship! You’re on to a great idea, Manya!

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