Retailers Reflect on Cruise Fare ‘Unbundling’
by Donna TunneyPerhaps taking their cue from the airlines, several contemporary and premium cruise lines are moving full steam ahead to unbundle their fares—a practice that is frustrating agents to varying degrees.
Some retailers say they dislike the fact their clients now must pay extra for room service, headliner theater shows, lobster tail in the dining room, and other lifestyle amenities that for decades were the backbone of the sector’s pay-one-price marketing strategy.
“I’m frustrated by it and I think clients have to be, too,” said Cruise Planners agent Debbie Devine in Rockaway, NJ. “I haven’t had many complaints about it yet, but my biggest concern is when new fees are implemented after people have booked. I have clients who booked a long time ago and now they’ll get onboard and find things have changed. It doesn’t make people happy.”
Some customers opt to move up to a higher product because they don’t want to feel nickle-and-dimed, Devine said. “They’ll pay more, but there will be more stuff included,” she said, adding that often customers will stay with the same line but upgrade to a suite category if gratuities or a beverage package is included. “Sometimes it becomes a difference worth noting.”
Keeping tabs
The bigger issue for Devine is monitoring all the fees.
“Norwegian charges for some shows, room service, dining venues, and the prices change from one day to the next. Agents have to go looking for these changes across the cruise lines and the information is not easy to find. Sometimes they don’t even notify us, or if they do they’ll sneak out an email around the holidays or some other busy time,” she said. “NCL did let us know about the room service charge but I don’t think Royal Caribbean ever notified me, or Carnival either.”
Norwegian earlier this year began charging a room service delivery fee of $7.95 per order, except for continental breakfast, which is still delivered free between 6 and 10 a.m. Royal Caribbean’s is $4.95, but only in the late-night hours.
Specialty restaurant charges are all over the map; one of the priciest is $40 at 150 Central Park, on Royal’s Oasis class ships. And then there are changes within the specialty venues. At Norwegian’s Cagney’s Steakhouse, for example, guests can pay a $30 cover charge or choose from an a la carte menu with main courses starting at around $18.
Additionally, some fancier entrees in the main dining rooms now come with a price tag. At Carnival Cruise Line, for instance, guests pay $20 for lobster and certain prime steaks.
The problem is, clients blame her when they get onboard and find out there’s some new charge they didn’t know about, Devine said. And unbundling also complicates the booking process.
“People ask, ‘What is this going to cost me?’ and it takes that much longer to say, ‘Well, if you do this and this and this, it will cost this much. But if you do this and that and that, it will cost this much,” she said.
Susan Mirabito, executive vice president of operations for Travel Network, in Englewood Cliffs, NJ, said, “Both agents and clients are unfortunately accustomed to the concept of being nickel-and-dimed by the cruise lines so they are not surprised when yet another charge is added.”
And she agreed that advance notice is crucial. Agents are voicing serious complaints when a fee change comes out of the blue, she said.
Norwegian’s room service fee was one of those times.
“This affected agents, and passengers who had [just] boarded. Their complaints were swift and fierce,” she recalled.
Kathleen Scallon, an independent agent affiliated with host agency Nexion in Somerset, MA., said her own credibility comes into play when service fees are added or changed. “I get people who think I’m trying to pull the wool over their eyes. I tell them the dining rooms are excellent and they don’t have to pay extra for a specialty restaurant, but, if they do pay for it, they’ll appreciate it because they really are excellent.”
Adding charges for room service is ultimately going to “take away from the luxury of cruising. When I’m on a cruise I get room service for breakfast. People shouldn’t have to pay for that. It’s bad enough you have to pay for water,” she added.
Bundle up
For as much unbundling that’s happening now, there seems to be an equal amount of bundling, as more cruise lines patch together special promotions that come with a choice of freebies.
“I know that the new ‘inclusive’ concepts that began with Celebrity Cruise Line’s 123 Go! promotion were devised to address and offset agent and consumer complaints about individual charges. All of the cruise lines in one format or another have imitated Celebrity and enhanced their concept of offering more free amenities,” said Travel Network’s Mirabito.
The 123 Go! promotion launched last spring and offered guests their choice of two out of three amenities: gratuities, an onboard credit, or a beverage package. Now, hardly a day goes by without one of the contemporary or premium lines offering a promotion with a choice of free perks, usually based on the stateroom category booked.
The good news for agents is that in those cases commission is paid on the whole promotion package, whereas if a customer buys a separate beverage plan retailers don’t earn commission on it.
MSC Cruises has taken the bundling concept to new heights. The line last year made a structural change in booking choices with the launch of Inclusive Experiences. Clients choose from four options, Bella, Fantastica, Aurea, and the top level, MSC Yacht Club, each offering different amenities and with fares increasing based on each category’s included services. Bella is the most basic and inexpensive choice, with no add-ons, while Fantastica, the second level, provides a 12-drink voucher, free room- service delivery, fitness class discounts, and free classes for kids.
Ken Muskat, the line’s executive vice president, said reaction to the four categories from agents and consumers has been “extremely positive.”
“Our best travel agent partners pre-qualify their clients before suggesting a specific cruise, and they find it very easy to put their clients into one of our four Experience categories based on the desires of the consumer,” Muskat told TMR. “As travel agents become more familiar with MSC, this structure helps them a great deal in explaining the product. It takes what has traditionally been known as a complicated shopping process and makes it very easy for consumers to understand and for travel agents to market and sell. Our program gives a very clear and easy choice to consumers.”
Cruise Planner Devine suggested that MSC’s structure can be a challenge, however, “especially when you’re booking more than one stateroom and you’ve got a group booked in different categories.”
Stiff competition
Bundling and unbundling in the ocean cruise sector begs the question: Will more blue-water cruisers turn to river cruising, with its simplistic inclusive pricing? Mirabito thinks not.
“River cruising attracts a completely different demographic and socioeconomic group of passengers,” she said. For one thing, river cruising is only all-inclusive at the top luxury vessels; passengers are surprised by charges for certain shore excursions and for premium liquor.
Among her customers, river cruising is waning in popularity for several reasons: – oversupply; fear of terrorist attacks, since ships are moored right next to land or to other ships, making them an easy perfect target; and political events. Low rivers this past summer also have been a detriment, she said.
The biggest competitors now to ocean cruising, she said, are all-inclusive land resorts, which are “truly all-inclusive.”
