I have always enjoyed reading Paul Motter's articles, but this latest one, Mexican Riviera Recovers! did not ring true for me.
"West Coast cruise prices swooned, but if current prices are any indication they are finally staging a recovery."
The Mariner pulling out of the West Coast market is the biggest factor I believe (along with NCL pulling out). Less cabins available has increased prices for 2011 (supply and demand).
"Prices for cruises to the Mexican Riviera dropped as low as $199 for a seven-day cruise."
I believe when Mariner altered her itinerary north, instead of to Mexico, at the last minute, and gave booked passengers the option of staying on board for the Northern Voyage or re-booking, many cabins flooded the market and RCI was forced to offer cabins starting at $199 for those 7 day cruises North. I was unaware that there were cruises to Mexico for that price, just to Canada.
"With three post 100,000-ton mega-ships sailing out of Los Angeles to the Mexican Riviera every week, the Sapphire Princess, Royal Caribbean's Mariner of the Seas and Carnival Splendor, there was just too much capacity and too little demand."
I agree with you there. Don't forget, NCL was doing weekly trips as well, with discounted pricing to compete.
"For the record, older and smaller Royal Caribbean and Carnival ships had been offering shorter three, four and five-day cruises to Mexico for years. Most of those cruises were eliminated soon after the H1N1 scare and the ships repositioned to smaller ports along the Gulf of Mexico."
I was not aware that the decision to discontinue the shorter cruises (for RCI anyway), out of the West Coast, was due to H1N1, as the article infers. I thought that decision was made prior to the flu scare.
"Now here comes the surprise! Now that nearly all of the remaining scheduled Mexican Riviera cruises on Mariner of the Seas are sold out the remaining full-time megaship sailing on seven-day Mexican Riviera cruises out of Los Angeles, Carnival Splendor, is commanding $719 per person at a minimum and as much as $1099 if you want to sail this month (balcony cabins)."
There are still cabins available on every Mexico sailing on the Mariner. Prices for the Mariner remained low for almost a year, due to the economy. RCI has filled many cabins with passengers paying low prices. Now that the ships are closer to full they can command higher prices (supply and demand), but you can still snag some bargains on Mariner (ie: starting prices for 11/14 $499; 11/21 $479; 12/5 $526). The current higher prices are a result of fewer cabins available. Carnival also filled the Spendor this past year by offering bargain priced cabins.
"Princess cruises is showing balcony cabin prices for Sapphire Princess sailing seven-day Mexican Riviera cruises from now through 2012 at $899 per person. A year ago the same cruises might have cost as little as $399."
Again, I believe those prices reflect fewer cabins available, as opposed to the market being flooded.
"The lesson here is that rightsizing the inventory for any cruising region can have a significant impact on prices."
Again, I agree with you, but I feel RCI's and CCL's decisions to move large ships to the West Coast were made way before the downturn in the ecomomy and H1N1.
"It appears the Royal Caribbean did the rest of the cruise industry a big favor by repositioning its ships away from the West Coast."
Yes, both RCI's and NCL's pulling out of the Mexican Riviera market have had an impact on pricing for the rest. Supply and demand have also ditacted the pricing on the 14 and 15 day Hawaii market, off the West Coast, as well. In addition, look what happened to the pricing when NCL decided to leave just one ship in Hawaii. The prices increased considerably.
"Of course the company would not have done so unless they were convinced the ships would command better returns in their new locations."
Yes, I believe that RCI found the European market makes better sense in this economy.
I don't believe Disney is really a competitor, as their product is unique and one that is not always available on the West Coast. I believe there is a niche for them, that is separate, as it allows families to experience their product without having to fly to Florida (thus spending extra money on airfare and hotels) as they would usually have to do. Their pricing reflects that.