Celebrity is jumping ....

[JoeyandDavid]

this is true from rccl home page

The company will not apply the supplement where the guest has already paid the full cost of the cruise for bookings paid in full prior to the implementation date.

Thanks John for the additional information

[Dan]

"Obviously, the rapidly escalating price of fuel was

the justification given by each of the lines, but Crystal

president Gregg Michael gave the most graphic example

today. "We set our 2008 cruise fares in late 2006, yet

the price for fuel rose 66-70% from February to November

2007. ""

Well Mr Michael at least put a plausible reason on the ravble...for that I do appreciate the response.. but it also occurs to me ... that when pricing cruise fares that far out should they not already take into account inflation???....

Inflation is one thing, 70% increase in fuel can't be accounted for in "inflation".

[JoeyandDavid]

"Obviously, the rapidly escalating price of fuel was

the justification given by each of the lines, but Crystal

president Gregg Michael gave the most graphic example

today. "We set our 2008 cruise fares in late 2006, yet

the price for fuel rose 66-70% from February to November

2007. ""

Well Mr Michael at least put a plausible reason on the ravble...for that I do appreciate the response.. but it also occurs to me ... that when pricing cruise fares that far out should they not already take into account inflation???....

Inflation is one thing, 70% increase in fuel can't be accounted for in "inflation".

As always Dan I stand corrected...i just figured that in business most would factor in a possible increased costs at the time of pricing.... I was taught that in jr high.. if they chose not to factor in those rising costs over the time ...well....

[rogue]

Joey,

The thing that you don't see is that they did factor it in. They tried to keep the cost increases to a minimum just in case fuel costs remained within reasonable rates, and if they went up as they did, they could always go with the surcharge. One thing that I realized about the cruise lines is that they're run quite well. As it is, for a seven day cruise that costs $1000, the rise in cost is 3.5%. The price of fuel has increased much more than 305% so, in a sense, we are actually getting a bargain. I suspect that when the new prices come out, you'll see a much higher increase in the cost of a cruise than 3.5%.

Nobody can really expect that the cruise companies would eat the cost of fuel at these prices. If they did, then some companies would probably go under, and then you would see a much greater increase in prices then these. The Law of Supply and Demand can seldom be ignored.

[JoeyandDavid]

Howard you guys may be right......... i still question this "surcharge" I don't think everything is as it appears..

[Dan]

Joey,

The thing that you don't see is that they did factor it in. They tried to keep the cost increases to a minimum just in case fuel costs remained within reasonable rates, and if they went up as they did, they could always go with the surcharge. One thing that I realized about the cruise lines is that they're run quite well. As it is, for a seven day cruise that costs $1000, the rise in cost is 3.5%. The price of fuel has increased much more than 305% so, in a sense, we are actually getting a bargain. I suspect that when the new prices come out, you'll see a much higher increase in the cost of a cruise than 3.5%.

Nobody can really expect that the cruise companies would eat the cost of fuel at these prices. If they did, then some companies would probably go under, and then you would see a much greater increase in prices then these. The Law of Supply and Demand can seldom be ignored.

Howard you guys may be right......... i still question this "surcharge" I don't think everything is as it appears..

I didn't mean to come across as correcting you, I'm just thinking that inflationary price increases are fine, but how can they predict fuel increases like this? Fuel is such an a big expense that it's really hard to absorb that increase. The courier company I work for has a fuel surcharge of somewhere around 11% right now. I know our major competitors also have one, that varies between the service offered. They get adjusted on a monthly basis depending on the average price of either diesel or jet fuel.

I think based on what we are charging, the cruise company's surcharges are a bargain. $35 per person for a week is a pretty low percentage. And at least they didn't go with a percentage, because I think it would be unfair to charge someone who pays for a suite a fuel charge several times that of someone who buys an inside cabin, when they are both using the same amount of fuel.

[JoeyandDavid]

Dan i guess i just figured that if fuel prices went up they would raise cabin prices across the board...

just like they do when a cruise is selling well ...and they want to increase revenue...

they raise the price they lower the price... i just don't understand why we as consumers need to know how they are dividing the price of the cruise..... they could have as easily buried those charges in the pricing structure and this discussion would have never taken place....

I just have a problem with adding charges after a booking price had been agreed upon...

[Dan]

I had the opportunity to ask the President of my company earlier this year why we have this fuel surcharge when reality is that the fuel prices will never drop to the point listed on our surcharge chart to where the percentage would be zero, and we should just be adjusting our base prices. He said that amongst the various reasons, one is we couldn't raise our advertised rates and lower the surcharge unless Fedex, UPS and DHL also did this because that would appear to make us less competitive than those guys.

Another reason is we can't simply raise the base rates on all our contracts, which account for the vast majority of our business. Contracts have provisions for such surcharges, and this is standard across the transportation industry. Shippers don't want to have fuel surcharges included in the base rates because they know that at various points in the year, the surcharge goes down.

As for cruise lines, I think for them to just roll the cost over into the fares would require them all to come to an agreement to do this. I'm pretty sure they have tons of expensive research to show that when people shop for a cruise based on price, they look at the fares, and not the extras. The get drawn by the big "$699" in the newspaper ad, and usually ignore the little "*plus taxes and fees of $200" or whatever it might say. So, if the big number in one ad was $699 and was $734 in another, and the small numbers were $200 and $165 respectively, which do you think people will go to?

The other factor I think plays a big part in not rolling the fuel into the base fares is that travel agents don't get commission on taxes and fees.

[JoeyandDavid]

Dan thanks for a great post.....

your responses sound logical to me.... doesn't mean I agree with the reasoning.... but i do thank you for making this point a bit more clear to me...

[crazy4disney]

I'm glad Disney hasn't jumped on this yet, since we next sail on February 2nd! I understand that fuel costs have gone up, but I really really disagree with the way Carnival Corp. is tacking the surcharge on to ALL bookings, period. "Paid in full" means just that -- there shouldn't be anything tacked on to your base fare at that point. My cruise has been paid off for several weeks now, and I'd be twelve different kinds of ticked off if they decided that they needed to suddenly charge me more.

I guess what really irks me about all these companies doing this sort of thing is that there's nothing we can really do about it on our end. It's not like we can keep going to our bosses, the way these companies come to us, and say, "I'm very sorry to have to do this, but I'm afraid I'm going to have to tack on a cost-of-living surcharge to what you pay me. This is necessary due to the rising cost of fuel, insurance, groceries, and everything else." Yeah, that would go over well, wouldn't it?

-gina-