Mexican Riviera Recovers!
Mexican Riviera Recovers!
Just last year we had a cruise pricing pandemic on the United States West Coast when the mainstream media suddenly discovered the "Mexican flu," - which soon became known as the "Mexican Swine Flu" and eventually received the more politically-correct name H1N1 virus. West Coast cruise prices swooned, but if current prices are any indication they are finally staging a recovery.
On April 28, 2009, we had the first new reports of the "Mexican flu" outbreak, and that morning every cruise line declared it would not change a single itinerary. But by midday the incessant drumbeat of media hyperbole was deafening. By 4:00 PM every cruise line had canceled every single stop in Mexico. Talk about a cruise to nowhere, one ship already within sight of Cabo San Lucas didn't stop there - even though the entire Baja Peninsula was H1N1 free. That ship ended up spending seven days at sea before returning to San Diego.
During the following summer a few cruise ships endured H1N1 fallout, not from any verified outbreaks of the H1N1 virus onboard a cruise ship, but merely from rumors that one or two "may" have the virus onboard. Several Caribbean islands refused anchorage to let these false-rumor-afflicted cruise ships.
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One Royal Caribbean ship spent almost a week at sea in the Gulf of Mexico. In the end the crewmember flu tests came back as showing the presence of Influenza-A, but not H1N1. (H1N1 is a form of Influenza-A, but not all Influenza-A is H1N1). The same events transpired in Europe and the South Pacific. Any ship even rumored to have H1N1 onboard was effectively barred from landing for most of the summer of 2009. It seems like years ago now, doesn't it?
Prices for cruises to the Mexican Riviera dropped as low as $199 for a seven-day cruise. Even balcony cabins were as low as $349. Making matters even worse, this was the same year that both Carnival and Royal Caribbean had gone to great pains to relocate megaships to the Los Angeles market expressly for seven-day Mexican Riviera cruises. They had to sail each of these ships around South America because both were too large for the Panama Canal.
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. Princess took the first step to relieve the pressure by announcing alternative cruise itineraries for Sapphire Princess in 2010 including 30 day cruises to Hawaii and the South Pacific and trans-Pacific cruises to Asia.
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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.
Then in April, 2010, Royal Caribbean shocked the cruise world by announcing that the largest ship on the West Coast, Mariner of the Seas, would be returning to the East Coast and Europe. At that point balcony cruise prices for seven-day Mexican Riviera cruises were still in the range of $399-$500.
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).
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.
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One of the better deals still available to the Mexican Riviera is the Holland America Oosterdam sailing out of San Diego through December starting at $549 for a veranda stateroom. Beginning in January, 2011, the price for the same cruise jumps to $799 per person.
Carnival Spirit, one of the smaller, newer and nicer Carnival ships of the Vista-class, offers some of the better itineraries to the Mexican Riviera. For the rest of 2010 Carnival Spirit will sail out of San Diego on regular seven-day Mexican Riviera cruises with balcony cabins ranging from $729-$849. However there are a number of alternate six-day and nine-day cruises selling for under $100 a day per person, balcony cabin.
And it certainly looks like Disney Cruise Line picked the right time to return to the West Coast with Disney Wonder. The line begins offering seven-day cruises from Los Angeles to Puerto Vallarta, Mazatlan and Cabo San Lucas this January, 2011. Prices are rather dear, like most Disney cruises, starting at about $1200 per person. This coincides with the brand new Disney Dream arriving in Port Canaveral, Florida. The move to the West Coast by Disney Wonder is permanent with Mexico in winter and Alaska in the summer.
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If you want to go luxury Crystal Symphony is saling a seven-day cruise for $2165 per person, including $500 in shipboard credits. The ship sails Sunday, November 28 to Cabo, Mazatlan and Puerto Vallarta. The Science and Technology theme features five guests lecturers including two Space Shuttle astronauts, five productions shows, one of favorite comedic pianists Dale Gonyea. By the wat, Crystal has some excellent luxury cruise values this fall and next year.
The lesson here is that rightsizing the inventory for any cruising region can have a significant impact on prices. It appears the Royal Caribbean did the rest of the cruise industry a big favor by repositioning its ships away from the West Coast. Of course the company would not have done so unless they were convinced the ships would command better returns in their new locations.
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.
You are inferring I am making some conclusions I am not making. I said the small ships moved out after the H1N1 scare, which is true, but I did not say it was solely because of the H1N1 scare.
Some of the shorter cruises, RCLs out of Los Angeles, were ended sooner than some of the later ones like Radiance and the Carnival fantasy-class ships out of San Diego - and regardless, it is impossible to separate demand and H1N1 as reasons for the move. H1N1 contributed heavily to lower demand (along with the economy and violence on the border). It was not my intention to describe the specific reasons why demand dropped, it was just to show that when you get a market right-sized prices rebound.
I am surprised they rebounded, and it may not last, but it is a pretty robust price rebound as of now.
NCL is still in the market with 7-day cruises, by the way. Norwegian Star in 2010 and Norwegian Pearl in 2011.
I agree with you on Disney - it is a separate market.
As to whether there were any cruises to Mexico at $199, you are probably right, but there were ships sailing from the west coast at that price, and others to Mexico at close to it.
You are also technically correct on cabins aboard Mariner - but they are at the point where the deep discounts to full the ship are gone. When prices on a ship go from lower to higher towards within a handful of weeks of the sailing date it is usually because the ship is nearly full. I personally consider that ship "sold out" as I would not book it. You only pay extra to fly or cruise someplace if you need to leave on a specific date. But I will concede this - I should have considered that Mariner was gaining the benefits of higher prices just like every other ship is.
Two months ago the ship was prices like inside:$299, outside:$399, balcony:$459, suite:$699... now it is... (November dates)
$709.00 $769.00 $959.00 $1,188.00
$545.00 $656.00 $929.00 $1,130.00 http://www.royalcaribbean.com/s.gif
$749.00 $849.00 $1,069. $1,452.00
http://www.royalcaribbean.com/s.gif$479.00 $559.00 $722.00 $1,105.00
THank you for your comments - you make some good points.
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