How Cruise Prices Work: #1. Cruise Line Strategies

Hi. Bob Levinstein from http://www.CruiseCompete.com here—where agents compete to offer you the best cruise deal.

A cruise vacation is a significant purchase, so it can pay to take a little time to understand how cruise lines think when it comes to pricing. So lets take a look at the basic rules of the game from a cruise lines perspective.

Rule number one: fill every cabin for every sailing.

Rule number two: get the highest price per cabin that you can.

The first rule is far more important to the lines than the second. Cruise lines dont save any significant amount of money for each cabin that sails empty. Empty cabins also dont generate onboard revenues—that is, they dont buy drinks at the bars, gamble in the casinos or buy shore excursions from the cruise line.

So the first thing the cruise lines do is try to predict demand. They look at how popular similar sailings have been in the past, and they consider current factors like the state of the economy and changes in capacity. Then, they make a guess as to how high they can price the various cabin categories on a particular sailing and still sell out the ship. Cruises will tend to be priced higher if theyre:

·Over holidays or the summer
·Sailing to popular destinations
·Departing from easy-to-reach ports
·On newer ships
·For cabin categories with limited availability (for example, triples & quads or certain types of suites).




Next, the lines wait to see what happens. If theyve guessed too low and a particular sail date is filling up faster than expected, they raise the prices. If bookings are slow, then they lower prices or add incentives like onboard credits or reduced deposits to try to stimulate demand.

The closer it gets to the sail date, the harder it is sell a given number of cabins—even with reduced prices. So if theres a lot of unsold inventory three to six weeks from sailing, thats when some of the best deals available can be found.

So thats the game for cruise lines setting prices, but its only part of the equation. See why travel agents are important inHow Cruise Prices Work #2; Travel Agent Secrets.

This has been Bob Levinstein, CEO of CruiseCompete.com—where agents compete to offer you the best cruise deal—wishing you many wonderful and memorable cruises.

CruiseCompete on Facebook: http://www.facebook.com/pages/CruiseCompete/73211591044

Great cruise info. at http://www.allthingscruise.com

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