The demand for taking a cruise might be at an unprecedented
level, but it’s coming at a cost.
Literally.
Not only are cruise fares at an all-time high, they’re going
higher.
In the same recent conference call with Wall Street analysts
in which they talked about the number of bookings going through the roof due to
pent-up demand, executives from the Carnival Corporation were all but giddy in
saying that they made a profit that was $175 million more than what they
expected over the most recent three-month quarter.
"We've consistently been delivering pricing well in
excess of 2019 levels, while closing the occupancy gap by 11 [percentage]
points over the course of the year," Carnival Corporation President and
CEO Josh Weinstein said.
The industry has bounced back stronger than ever despite
obstacles such as the pandemic and the war in Ukraine.
“Cruise pricing right now is a double-edged sword,” Tropical
Getaways Travel’s John Maddox said. “While
it shows that demand is exceptionally strong for the cruise sector, my fear is
that it is beginning to price many people out of cruises that previously would
have viewed cruises as a great value for lower and moderate budget travelers.”
“If pricing doesn’t show at least some signs of easing in to
2024, then clients may be forced to look at land-based vacations (both domestic
and in Mexico/Caribbean) to get better bang for their buck,” Maddox continued.
Another Wall Street analyst said in a research note that
fares are up more than 17 percent compared to 2019, the last full year of
cruising. Another analyst wrote that 2024 fares could be up as much as 20-30
percent over 2019, and another said that prices in 2025 could be as much as 50
percent higher than 2019.
In a piece of good news, however, those 2025 projections
could be altered by the fact that people tend to book the higher-end cruises
first. However, analysts and cruise line executives believe fares could rise
based on the strong demand.
“In the earliest days of the return to cruising post-Covid,
clients enjoyed pricing that was below that of where it was before,” We Book
Travel’s Jessie
Morris said. “Since then, prices have been steadily on the rise and since
ships are full nearly every sailing out, it is clear that customers still have
an appetite for cruising even at the increased prices.”
“Even at the higher numbers, cruising is an exceptional
value compared to other vacation types and as long as this continues and the ships
keep filling to capacity, I see the price increases as a good thing for the
travel advisor community,” Morris continued. “We too went without income for
some time and being able to make more now than before is a welcome sight. If
the ships do not fill, the cruise lines will do what they have always done and
adjust prices accordingly.”
Needless to say, it looks like 2024 is going to be a very
profitable year for the cruise industry.
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