Thursday, April 23, 2015

Last minute cruise deals are not going away

Earlier this week Royal Caribbean made plenty of headlines announcing that they would no longer do "any last minute discounts on bookings in North America." The policy got attention and discourages potential cruise pasengers from shopping around or waiting to book their next cruise, but it is not realistic. All the cruise lines -- including Royal Caribbean -- will continue to discount. They cannot help it. They have cabins to fill and investors to please. But how they offer last minute deals will slightly change and adapt.

What is a "last minute deal"?

What you consider a last minute deal may be very different from what we consider a last minute deal. To some cruise fans, it might be two weeks out from departure. To others, it could be as the ship is pulling up its gangway. The reality is that on the major cruise lines, more than 90% of the cabins are booked before Royal Caribbean's new 10-day window. And most vacationers cannot wait until ten days out to buy their cruise. Unless they live close to their departure port and already have a bag packed, the typical cruise passenger needs to book flights to the ship and plan for the vacation. Very few can drop work or other commitments without some foresight and scheduling. So these true last minute deals are already few and far between. You may run into someone at bingo or the buffet who tells you she booked the cruise two days ago, but that is not typical. Real discounts meant to boost bookings on a particular ship that is not tracking well will come 60 to 30 days out from departure. Regular cruisers know this as do travel agents and cruise companies. That is where plenty of deals will still be found.

Honoring Prices

Royal Caribbean emphasized that they created the new policy so that people who booked early don't feel cheated when late bookers get the same experience at a discount. That is an honorable plan and we bet they enforce it by saying the rates are the same. However, there are ways around the prices of a cruise that can make two identical "deals" seem very different. Royal Caribbean could upgrade the early booker's cabin so that the last minute shopper's better deal is not really an apples to apples comparison. Or Royal Caribbean could throw in onboard credits to the last minute deal, so that their price is the same as the early booker, but the value of the cruise is different.

Another work around is avoiding a public sale. Royal Caribbean -- and all the cruise lines -- have deep databases filled with loyal customers who they can sell directly to at the last minute. Therefore no policy is violated, because the discounted cabin is never sold publicly. The discount will just be presented to loyal customers in a private sale.

Bigger Ships = More Cabins, More Cabins = More Sales

The cruise companies have probably seen the airlines move away from last minute deals while increasing their loads and revenue and think it can be done at sea too. But even with the best revenue management tools, the airlines really reduced last minute deals with better capacity controls. Consolidation and the ability to park planes, meant there were fewer planes and less competition. Of course deals went away. The cruise lines don't have that same luxury. Bigger ships are coming down the line and they need to be filled. An airline can park a plane in the desert when things are slow. Even the biggest cruise lines don't have that luxury. They already do renovations and dry docks during slow times. But you cannot park a cruise liner in the middle of wave season if one week's bookings are slow. And every empty cabin is a missed opportunity for the cruise line to make money. They want those rooms filled.

What is means for the passengers

If you are a deal junkie who is willing to drop everything to sail on a discounted cruise, things won't change. The deals might not be presented in the same way, but with ship credits or other non-cash values, you will still get discounts. Just make sure you are in the loyalty program and email lists of your favorite cruise line. If you are a first time cruiser looking for a deal, plan ahead. Don't wait until the last minute. Find a site or travel agent you trust. Shop around and then buy when you think the price is fair. And if one person onboard got a better deal than you, don't sweat it. Enjoy your vacation, because cruising remains a great deal at nearly any price.

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