There is an interesting debate in the cruise industry at present as to why it appears that there are an increasing number of cruise deals available during peak travel seasons, whereas historically it would be almost impossible to find any low cost options. This has been due to revenue teams watching price versus demand and generally prices rising when cruises are popular, in the peak, and any last cabins being made available through more ‘hidden’ channels in order not to dilute pricing of any passengers already booked.
However, with the UK still in post recession recovery, a new government and recent Emergency budget – plus some key sporting events such as the World Cup and Wimbledon, it seems that there is still more capacity to sell than usual, and cruiselines are having to look at deals on some of their sailings. Plus cruise specialists and travel agents generally use part of their commission to discount the sailing price and offer the best possible
cruise deals to entice you to book with them instead of the competition, so when their phones are quiet, they are likely to look at even stronger offers to encourage people to book with them. Also, if the market is quiet, cruiselines will often offer travel agents bonus’s if they achieve a certain level of bookings so it is in their best interests to ‘do a deal’ even with a low profit margin.
Price and value for money are the most important factors for customers when booking a cruise at the moment as households have to scrutinise their budgets. However, the UK cruise industry has appeared to defy the recent economic downturn by booking more top suites, with 31,000 paying more than £5,000 per person with a further 200,000 paying between £2,500 and £5,000 in 2009.
The reason given by the Passenger Shipping Association was the result of “extra value for money” pricing which cruiselines have adopted to ride out the economic storm. This meant including more in the cruise price such as flights, drinks, excursions or on board credit – less profit margin to ensure ships do not sail with empty staterooms.
Interestingly there has been a sharp drop in late bookings – maybe due to cruiselines introducing increasingly aggressive early booking offers, or maybe customers on a budget have decided to book early to enable them to pay for their holiday over a longer period of time. Cruisers also seem more willing than ever to switch to a different cruiseline to secure the best price and therefore cruiselines are having to ensure deals, even in peak season in order to maintain passenger loyalty.
With an increasing capacity in the cruise market, and a more demanding public for the best possible cruise deals, it will be interesting to watch how cruiselines will avoid a price war in the future, and maintain any sort of profit to fill their staterooms, whether during their peak season, or an other time of the year. It may be we see an industry where finally, prices are more stable throughout the year, which would be great news for families who could only historically holiday at certain times of the year.