Carnival’s Breeze cruise ship leaves the Port of Miami.
Christina Mendenhall | Bloomberg | Getty Images
As vacationers emerge into a post-pandemic travel world, cruises have experienced a remarkable resurgence, resulting in a surge in ticket prices.
Leading cruise operators, such as Carnival and Royal Caribbean Cruises, have set prices higher than pre-pandemic levels and are considering further increases, despite posting profits comparable to pre-Covid times.
According to data from Cruise Critic, the average price of a five-night Caribbean cruise in December is $736, a significant 37% increase from the previous year. Compared to 2019, December ticket prices have risen by 43%, reflecting the impact of the pandemic on the cruising industry.
Carnival’s CEO, Josh Weinstein, announced during a call with Wall Street analysts that the company’s net revenue per passenger per day for the third quarter reached a record high. Booking volumes have also reached an all-time high, surpassing 2019 levels, indicating strong cruise occupancy and revenue.
Carnival executives noted that as the costs of labor, food, and fuel continue to rise, the company is well-positioned to drive pricing higher by 2024. While specific pricing actions were not disclosed, a Carnival spokesperson stated that the company offers a value of 25% to 50% more compared to land-based vacation alternatives and sees room for further growth.
Royal Caribbean’s CEO, Jason Liberty, expressed similar intentions, stating that his company is considering price increases to meet the surge in demand.
Are High Prices Here to Stay?
Aaron Saunders, a senior editor at Cruise Critic, believes the comparison with high airfares is driving the surge in cruise prices.
Inflation has caused airfare to reach skyrocketing prices, with international airfare up 26% from 2019. Considering that cruises typically include additional amenities like meals and entertainment, consumers are increasingly drawn to cruising as an alternative. This surge in demand is driven by both seasoned cruisers and first-timers, a dynamic that the industry has not witnessed in the past. Saunders suggests that the higher prices may become a permanent feature in the market.
Truist Securities analyst Patrick Scholes points out that rising oil prices do not entirely explain the increase in cruise prices. The demand itself is strong enough to justify the price hikes.
In the past, last-minute bookings often resulted in cheaper deals, but now prices are so high that they are only expected to increase as the vacation date approaches.
According to Ashley Kosciolek, senior cruise writer at The Points Guy, the record-high ticket prices show no signs of slowing down. The industry is also experiencing higher prices for beverage packages and add-on amenities that were previously included in fares. Additionally, the three largest parent companies in the industry—Carnival, Royal Caribbean, and Norwegian Cruise Line Holdings—are still burdened with debt from the pandemic.
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