Is It Nickel & Diming, Or Is It Math?
Written by: Kuki
In recent years a very common complaint is that the cruise lines are ”nickel and diming” their customers.
People generally just aren’t happy when they find there are so many “extras” to be paid for in addition to their cruise fare.
The philosophy of businesses, and even governments, to user pay practices is not a new one. Sales taxes were in fact designed specifically so those making a purchase of choice would automatically pay more than those who bypassed choosing to purchase those same goods ( or purchased less of them).
In fact what are commonly known around the world as “sin taxes”, i.e. alcohol, tobacco, etc. are always a frequent target for governments to raise funds through further add on charges (taxes), because it is an area where they can do so while facing the least resistance from the general population.
More recently, what was a struggling airline industry has increased their revenues by Billions of dollars by charging for checked luggage. And, as that practice has been shown to be so affective, they’ve gone further, adding extra charges for drinks and food, which used to be included in the price of your ticket.
As those additional fees proved increasingly effective in affecting their bottom lines, the airlines, have continued to find all variety of things they could implement add on charges for; “premium seating”, early boarding, etc.
It was a trend the cruise industry had difficulty ignoring because of it’s success. Should we really be all that surprised that they’ve followed suit? In some ways, purely for fiscal reasons, the cruise industry has been forced into following suit.
After Sept. 11/2001 the pricing models for the cruise industry changed dramatically.
Much of the world suddenly halted travel. And leisure travel level dropped drastically. The inevitable reaction to combat the public’s hesitancy to cruise was to slash prices to historical lows. Simply, they had to make it so cheap to cruise people would hopefully set aside their hesitancy, and once again fill their ships.
Since that time pricing has rebounded to some degree; on some ships and itineraries more than others.
Yet, including the rate of inflation since that time, today’s cruise fare pricing, remains much lower than it was prior to 9/11/01.
While many experienced cruisers will claim they would rather see the rates raised to adequately reflect the actual final costs of the cruise, most everyone is still out there searching for the $599 balcony cabin when booking their next cruise.
Because of the continued public demand for that type of pricing, the cruise lines, in many ways, have been forced to provide them, in order to keep their ships sailing at near capacity.
Along the way the lower base pricing on cruises has drawn in a new and significant number of potential passengers, increasing the size and type of audience the cruise industry can target.
This has also led to the development of new and different sectors within the industry. Whereas there used to really be three sectors within the industry (budget, mass market, and luxury), there are now several new categories, attempting to fill the “in between needs”. They are targeting the parts of the cruise population who are truly willing to pay the rate required for those cruise lines to be more all-inclusive, yet still make money. It is a small, but quickly growing niche market.
But, for the ”major cruise lines”, with the largest number of ships, and the larger ships the mass market still remains their primary target; they have to fill those beds!
On those ships it is still quite possible to cruise while spending very little over and above the cost of your cruise fare. You just have to have the discipline to ignore the add on (extra charge) amenities the cruise lines make available. Or, you budget and plan to participate and consume in just enough of those extra charge choices to satisfy your needs and your budget.
I’m not sure it’s fair to complain, and expect the cruise line to supply what was a $2000 + cruise experience for $599.
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Posted: August 20th, 2013 under Kuki.