Royal Caribbean reverses course on fuel surcharges

mercedes · March 11, 2008

Looks like the cruise lines have blinked in the showdown over fuel surcharges.

Royal Caribbean announced late Monday that it has reached a settlement with the Florida Attorney General's office, which is investigating the industry's recent use of fuel surcharges, and the line will refund more than $20 million to passengers.

In a move expected to be followed quickly by other lines, Royal Caribbean says it will offer refunds to passengers who were forced to pay a $5-a-day fuel surcharge for recent and upcoming voyages even though they had booked their trips before Nov. 16, 2007, the day the surcharge was announced.

In a statement issued late Monday, Royal Caribbean says passengers booked before Nov. 16 who paid the fuel surcharge and have taken their cruise will receive a refund through the form of payment used to purchase their sailing. Passengers booked before Nov. 16 who paid the fuel supplement and have not taken their cruise will receive their refund as an onboard credit during their sailing.

The company did not charge the fuel surcharge, which it calls a supplement, to guests with bookings made and paid in full before Nov. 16.

The fuel surcharge will remain in place for North American bookings made on or after Nov. 16, 2007 at all three Royal Caribbean brands: Royal Caribbean, Celebrity Cruises and Azamara Cruises. The fuel surcharge applies only to the first and second passenger in a cabin and is capped at $70 per person per sailing.

The Florida Attorney General began investigating fuel surcharges at cruise lines last month after more than 150 cruisers filed complaints with the agency over the practice. Most major lines have implemented a fuel surcharge over the past four months as oil prices have shot up. Carnival Corp., the parent company of Carnival, Princess, Holland America and more than half a dozen other lines, is charging passengers an extra $5 per day. Norwegian Cruise Line has begun charging $7 per day, and a few lines are charging even more, including Windstar ($8.50 per day) and Silversea ($10 per day).

There still are a few holdouts in the rush to add fuel surcharges. Among major lines, Disney has yet to add one. And as we reported here in December, small ship and river cruise operator Tauck World Discovery has vowed not to add a fuel surcharge, despite soaring fuel costs.