by - Some cruise lines have recorded record bookings in recent months.
- These milestones signal that higher prices may be on the way.
- Cruise prices are up from last summer but remain lower than elsewhere in the travel industry, according to one expert.
Cynthia Nelson loves a good deal. So when she saw a reasonable rate for a January cruise to Mexico with Princess Cruises, she took it.
“I’m a bargain shopper myself,” she told USA TODAY. The 54-year-old decided to forgo a balcony and book a cheaper interior room for her and her husband to spend money on excursions like whale watching.
Nelson took his first cruise last year and found that sailing can be a cost-effective alternative to other types of vacations. The Bay Area resident said her week-long cruise last month cost about $1,800, including food, excursions and miscellaneous costs.
But cruise deals may be harder to come by soon. As the cruise industry continues to recover from the pandemic, some lines have seen record bookings in recent months, signaling that higher prices may be on the way.
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Travel prices are on the rise, as they are in much of the economy, but cruises “are going to be something of an anomaly in the travel world right now,” said Patrick Scholes, lodging and leisure analyst at Truist Securities.
After the industry’s pandemic-induced shutdown, cruise lines have had to offer widespread discounts to entice travelers to come back, Scholes said. And while companies have gained more traction recently, prices remain lower than elsewhere in the travel industry, such as hotels and airlines.
“They’re still kind of crawling out of it,” he added.
Last summer, cruise prices were down 5% from a comparable period in 2019, according to Scholes’ estimates. And while prices are rising – around 5% to 10% above pre-COVID-19 levels for mainstream lines and above 15% for luxury lines – travelers can still find them significantly lower than hotels and resorts. , for example.
“You know, you want to go to Miami Beach or Colorado or something like that,[hotel/resort]prices go up about 40% or 50%,” Scholes said.
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“Today, by far, the best value vacation will be booking a cruise,” he said. “Many people will find that airfare costs significantly more than the cruise itself.”
Some lines have raised prices on amenities like Wi-Fi and gratuities while cutting other services, but Scholes said not all recent changes are the same. Higher Internet prices, as Carnival Cruise Line recently rolled out, are “just a natural inflationary spike,” Scholes said, while cuts in cabin cleaning, as Norwegian Cruise Line has done, could be related in part to continued shortages. of staff.
Scholes also noted that Norwegian Cruise Line Holdings Ltd. “definitely has been under the most pressure from Wall Street to cut costs” from the three major publicly traded cruise companies, which also include Carnival Corp. and Royal Caribbean Group. Norwegian Cruise Line did not immediately respond to a request for comment.
(Truist Securities Inc. and/or an affiliate of the company own equity interests in Carnival Corp. and Norwegian Cruise Line Holdings. Truist Securities Inc. and/or an affiliate of the company have already provided and/or may seek to provide to future customers clearing services for Carnival Corp., Norwegian Cruise Line Holdings and Royal Caribbean Group.)
Confidence in cruise lines has increased
Even with the increase in prices, the sentiment of travelers on cruises has changed after the pandemic. Lindsey Roeschke, travel and hospitality analyst at Morning Consult, said that among nearly 2,200 American adults the company surveys monthly, 47% said they trust cruise lines in January, up 6 percentage points from a year earlier.
That bucked a trend she’s seen elsewhere in the industry, with confidence in airlines falling after a series of holiday and hotel air travel disruptions. Airlines are down 3 percentage points over the same period, while hotels are down 4.
“Cruise lines are getting a little boost from people coming out of concerns about COVID that has kept them from cruising in the first place,” said Roeschke.
Morning Consult also asked about their travel plans and found that 22% of those hoping to take a trip in the next year said they would take a cruise, up five points from the previous year.
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This is reflected in bookings. Royal Caribbean Group, which owns brands including Royal Caribbean International and Celebrity Cruises, said during its fourth-quarter earnings update this week that the company had the seven biggest weeks of bookings in its history since reporting its previous earnings in November.
Cruise lines report higher bookings
Royal Caribbean Group CFO Naftali Holtz said the company has continued to ramp up its offerings for guests. For example, Hideaway Beach, a new adults-only area on Royal Caribbean’s private island Perfect Day at CocoCay, is expected to open in the fourth quarter of 2023.
“We just elevated and evolved the product… bringing new ships and new experiences to them, and you can see that resonating,” he told USA TODAY.
Holtz added that its cruises are “a really compelling value proposition” for passengers, and said dropping most of its pre-cruise COVID-19 protocols last year broadened the company’s potential customer base.
Other major cruise lines have recorded similar milestones. Holland America Line said its bookings for the third week of January were the highest the line has ever recorded for any week in January, in what the line called an “early sign of a successful wave season”, according to a press release. Norwegian also posted record bookings per day, week and month in November.
In the coming months, Scholes said, travelers can expect fewer last-minute discounts on fares, as cruise lines have fewer cabins they need to fill and fewer deals that add benefits to fares.
“They don’t have to give as much incentive as, say, six months or a year ago to get someone on a cruise, and … all these companies are very aware of how much debt they have to pay off,” he said. . Because of this, potential passengers may want to book earlier rather than later.
“I would expect that the longer you wait here to book, the more (the) price will go up,” Scholes said.
Nathan Diller is a USA TODAY travel reporter based in Nashville. You can contact him at [email protected].
