Prices are expected to increase further in 2024. According to Wall Street analyst Brandt Montour, ticket price increases for the 2024 sailing will be 20% to 30% above 2019 levels.
2023 The cruise industry is booming, having largely surpassed 2019 levels before the pandemic and making a rapid comeback to break sales records. Cruise market revenues are expected to reach $25.14 billion this year. Amid strong and growing travel demand, cruise operators are raising ticket prices.
Top cruise operator, Carnival Corporation & PLC and Royal Caribbean Cruises Limited (NYSE: RCL), are already setting some ticket prices at a higher level. Notably, the average price for a five-night cruise on Royal Caribbean for December 2023 is $736, nearly 37% higher than the average price a year ago and 43% above pre-pandemic levels.
The final price of a cruise depends on several factors: itinerary, number of nights, type of cabin, amenities, and cruise line. It also depends on flights and transportation to and from the cruise ship, as well as various packages of drinks and specialty coffees. For example, Royal Caribbean charges about $50 to $100 per day for its Deluxe Beverage Package, which includes an unlimited drinks package. Royal Caribbean customers pay more for their drink packages and many order it, cancel it, get a refund, and buy it again when the price is lower.
Meanwhile, Carnival Corporation uses a fixed price for its Cheers beverage packages. Previously, passengers had to pay a fixed daily fee of $59.95 pre-cruise or $64.95 onboard for access to unlimited non-alcohol beverages and up to 15 alcoholic beverages per day. On October 3, the company announced the price change. Now, the Cheers Beverage Package has increased by 17% or $69.95 per day. Passengers who choose to book onboard will see the same increase of $10 per day, going from $64.95 per day to $74.95 per day, which is a 15% increase.
The pricing policy in cruise companies is updated for several reasons. First of all, there is a wide difference between the prices of cruises and land-based vacations. For comparison, before the pandemic cruise vacations were on average 15% to 20% cheaper than land-based vacations. Now this difference has increased to 50%.
Josh Weinstein, CEO of Carnival Corporation where did it go,
“We are working hard to reduce the abusive and unfair 25% to 50% price differential in land-based offerings over time.”
Secondly, labor costs, marketing, and port and freight expenses are increasing, causing cruise operators to also raise prices. Moreover, the demand for such tours is not decreasing, leading to further increase in prices.
Cruise Critic senior editor Aaron Saunders commented:
,[The higher prices] Possibly subject to fluctuations – but generally what we’re seeing is that there are higher prices today, but those higher prices will accelerate across different sectors. Cruise lines don’t need to lower prices like they used to… they don’t need to lower fares or really offer a lot of incentives just because people are booking.
Prices are expected to increase further in 2024. According to Wall Street analyst Brandt Montour, ticket price increases for the 2024 sailing will be 20% to 30% above 2019 levels.
Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in exploring the ways in which blockchain can transform various industries and bring our lives to a different level.
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