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Carnival announces record sales and fare increases
[Default] Thus spake George Leppla :
Stu wrote: snip Do you think this increase will impact on bookings? If they were steadily raising prices already, and now made a public announcement that they are raising prices an additional 5%, it seems like gouging. This may raise stock prices in the short term, but will hurt revenues in the long run. I may have to look elsewhere for my wifes retirement cruise, that's a shame. Will it impact bookings? So far, fares have been going up for the past few months (generally) and the bookings are much higher than normal so higher prices alone aren't impacting bookings. This announcement might spur some additional bookings before March 22... but I doubt that this will have much impact. Look at the language.... fares will increase across the board "up to 5%". Even a 5% increase on a $800 cruise is only $40.... not enough to discourage people from making reservations. I'll assume that many fare increases will be less than that 5%. Overall, the fare increases will be negligible. Is $20 to $40 really enough to make a customer look someplace else. Probably not. If so, where are you going to look? Other cruise lines are going to look at this and act accordingly. They may not make an announcement about rising fares, but you can bet your butt that they will (they already are). Yeah, but the "average guy" sees 5% and says "oh gosh, better book now". Does this hurt Carnival? Not really. Now they get to sit on his deposit for a whole boatload longer ("average guy" was going to book in 6 months for his December cruise, so they get six months extra on the deposit). Meanwhile, six months down the road nobody remembers the hike and sales just keep going. Maybe Carnival is sending a signal to the industry that now is a good time for everyone to raise prices? Maybe they are trying to "set a tone"... a sense of urgency for their customers... "book now while fares are still low"? Like I said. One thing for sure... they are trying to raise the pricing bar, both in the minds of their customers and the competition. It is an interesting business..... and today is a bit more interesting than others. It will be fun to watch how this all plays out. The cruise industry has managed to avoid doing something that has turned out to be a disaster for the airlines. Airfare is a commodity. Continental? American? Delta? Who has the cheapest fare today? That's who I'm booking. Same crappy service, same crappy seats, same crappy everything. But a cruise is an event, an experience. George, Ray, John, have you noticed that the lines are pushing even harder for selling the "experience" rather than the price? Yeah, Carnival is saying "from as little as $70 a day", but if you watch the ads, that's about 10 seconds or less, vs. 50 seconds of balconies, massages, hot tubs and water wediges. -- - dillon I am not invalid You know, I can't think of nothing finer than a fine naked woman holding a gun. And you got all kinds of fine going on. Frankie Figs |
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Carnival announces record sales and fare increases
[Default] Thus spake Ray Goldenberg :
On Wed, 24 Feb 2010 10:20:23 -0600, George Leppla wrote: It is an interesting business..... and today is a bit more interesting than others. It will be fun to watch how this all plays out. Hi George, Another point that I find interesting is that average fares are far below the average fares of 2008. The industry, as you know, really brought fares down last year due to the lack of demand. The low fares stimulated the business to fill the ships but the cruise lines need to normalize the fares AND fill the ships. Ray, you made me look. We paid more for a cat 6B 5 night Carnival cruise in 2003 than we did for a 7 night JS RCI cruise in 2006. And well more than our PR cabin last year on the Liberty otS. I think selling low in the past two years had more to do with "sell it or smell it" than anything else. Of course, having now hooked the people in, they can get them coming back this year and next and still be able to charge a higher price. And they are really pumping up interest. I've had a lot of calls for Carnival in the last 6 to 8 weeks, mainly due to the recent ad campaign. -- - dillon I am not invalid You know, I can't think of nothing finer than a fine naked woman holding a gun. And you got all kinds of fine going on. Frankie Figs |
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