Cruise Demand Increases, But So Does the Expense

Demand for cruise bookings is surging as most ships back sailing and protocols are easing, but the cost for guests is increasing.

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There will have been smiling faces in the boardrooms of Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Holdings in the last couple of weeks. The CDC removed its travel advice for cruises, bookings have been at record levels, and as a result, stock prices for all three have gone up significantly. 

But the good news could just be for the boardrooms and not necessarily for the guests. As costs for cruise lines have gone up, they have started to look at passing costs to guests. Either in the form of increased prices for WIFI packages, drinks packages, or specialty dining. 

At the same time, both Norwegian Cruise Line and Carnival have already announced increased gratuity rates to combat inflation that has been hurting many worldwide. So as the demand for cruises surges so does the cost of those cruises. 

Biggest Week in History

Carnival Cruise Line said on Monday it had seen the busiest booking week in history between March 28 and April 3. Virgin Voyages announced the same, saying the cruise line saw a huge increase in bookings after the CDC announced the withdrawal of the negative travel notice.

Scarlet Lady Cruise Ship in Miami
Photo Courtesy: Virgin Voyages

With nearly all ships operational at this point and the final ship returning in May 2022, Carnival Cruise Line is leading the way for a profitable Q3 for Carnival Corporation.

Although Carnival Cruise Line has sold several ships in the last two years, it will be able to carry more passengers than it did in 2019 by lower berth capacity, and Carnival is not alone.

Nearly all cruise lines went through one of the busiest weeks in history, leading to a jump in stock prices that they haven’t seen in years. 

Carnival Corporation stock prices went up to $20.32, up $4.80 or 30.88% in the last month. Royal Caribbean stock performed equally well, the stock price now sitting at $83.89, up $20.61 or 32.57% in the past month.

The best performer, by far, seems to be NCLH, their stock trading at $22.31, up $6.93 or 45.06% since early March. 

“The excitement of the industry’s restart, our successful return of our entire fleet, the guest reaction to Mardi Gras, our loyal guest response to our 50th birthday this year, the support of our travel advisor partners — and of course, the amazing work of our Carnival team — have all contributed to the strong demand we are seeing, and this record-breaking booking week,” stated Carnival Cruise Line President Christine Duffy.

Carnival Cruise Ship at Terminal
Photo Credit: JHVEPhoto / Shutterstock

However, where the cruise lines were doing their best to draw guests in with promotions, flexible booking terms, and easy cancellation options, the tide seems to be turning somewhat. Royal Caribbean and Celebrity already let their Cruise with Confidence program expire at the end of March.

And with gratuities increasing and pre-paid plans costing more, the price of the cruise line’s success seems to be with guests.

Cruises Become More Expensive As Costs Go Up

During March and early April, it became increasingly evident that cruising would become more expensive. Norwegian Cruise Line was the first to announce an increase in gratuities in March starting April 1, while Carnival Cruise Line announced the same on Monday, April 4, for cruises from May 1.

While there will be some understanding from most guests on the gratuity increase, especially considering the record levels of inflation affecting everyone, particularly crew members working for low wages, increases in other areas will not be as welcome.

Cruise Ships in Miami, Florida
Photo Credit: Microfile.org / Shutterstock.com

Read Also: How Much Do Cruise Ship Workers Make?

On Carnival Cruise Line, the Cheers Drink Package will see a 13% increase from May 1, the new pre-purchase price will be $59,95, according to reports online.

The bottomless Bubbles Soda Package will go up 11%, Cucina Del Capitano and JiJi’s Asian Kitchen 17%, and Steakhouse/ Fahrenheit 555 10%. 

The increases in pricing can be explained. With oil prices to power the ship on the rise and prices for everyday commodities such as grain, cooking oil, rice, meat, and fish all increasing, the cruise lines need to take action to keep their business profitable. 

A higher stock price due to record bookings is excellent, but investors will not be pleased to see record numbers on board ships that are not making money. 

Carnival Cruise Ship Lido

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