Agents, Analysts Pleased As RCCL Avoids Close-In Discounting
discipline has been a major soft spot for the cruise industry in recent years.
But as Travel
Weekly reports, Royal Caribbean Cruises Ltd. is
sticking to a pledge to refrain from deeply discounting its cruises in the last
few weeks before departure.
years, the mantra for most cruise lines has been "sail full, whatever it
takes." While pax may have paid less for their cruise, lines believed that
onboard spend would make up for the shortfall.
that approach has clear limitations. Deeply discounted prices mean low
commissions for agents, many of whom have turned away from mass market cruise
sales due to little return. And there’s always the problem of pax learning from
each other of significant differences between what each paid.
the past several months, Royal has taken a different tack, forgoing last-minute
discounts in an effort to wean pax from the practice of waiting until close to
the sailing date for the best deals.
Several agents interviewed say they are pleased
that RCCL has been sticking to its guns and maintaining price integrity with
much more vigour than in the past.
analyst Patrick Scholes confirms that a monthly survey of cruise pricing has
found close-in fares for Royal to be significantly higher than they were at
this time last year. In fact, they have risen each month since March, when the
policy began, and are now averaging about 15% higher.
"This is the strongest near-in advertised
pricing growth we have ever observed for the Royal brand," Scholes said of
the July numbers, which saw a 16.9% gain.
Under its "price integrity" policy,
Royal stops discounting 10, 20 or 30 days before departure, depending on
itinerary and other variables. In a conference call with analysts in July,
Richard Fain, Chairman & CEO of Royal's parent, Royal Caribbean Cruises
Ltd., said that one sign the program is working was that Royal recently extended
the no-discount period to 40 days in some cases.
"We recognize that this policy is costing
us some money in the short term, but we believe that in the long term it will
pay handsome dividends," he said.