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Cruise line price scare: real or strategic plan?

by Chris Owen (RSS feed) on Mar 4th 2011 at 7:00AM

Earlier this week, Norwegian Cruise Lines announced that at the end of March prices would go up. Noting high demand for their anything-goes "Freestyle" version of a cruise vacation, the line said it planned to raise prices ten percent. If that announcement has a familiar ring to it, there might be a good reason why says one industry expert. Let's play along.

First, the line cushion's the blow of a 10% price increase by extending their current promotional offers until the end of March in a "we're tough, but we're fair" sort of way.

"We wanted to give consumers and travel agents the opportunity to take advantage of these offers before the price increase." said Norwegian Cruise Line CEO and former Undercover Boss Kevin (Sneaky) Sheehan.

"Thanks, we appreciate your kindness and the heads up." should be the consumer response?

Not so fast says cruise industry expert Stewart Chiron, CEO of CruiseGuy.com "This is NCL's 2nd Annual April Fool's Cruise Sale. For some, it's a message of don't book NCL after 3/31 because you'll pay more."

Indeed, cruise lines often promote a call to action for booking in a number of ways that seem to have a bit of strategic ambiguity built in. While accurate, the helpful announcement or glitzy promotion does not exactly match reality.

"NCL made the same comments last year, but (the timing) followed Carnival's announcement that they were going to raise summer prices." added Chiron reasoning "They may be trying to generate additional attention for their possible future IPO."

A price scare tactic is one way to move buyers toward booking. But cruise lines don't have to mislead the public, they do a great job of that all on their own.

The "cheap cruise" turns out to be much more when taxes and fees are added in. That's no fault of the cruise lines, they do mention that those extra fees are not included. "Free upgrades" suggest that buying a cheap inside cabin might get you a luxurious balcony stateroom. Again, the fine print lines out the details, but buyers seeing a handsome couple standing on their balcony does suggest that upgrading to one is possible.

Still, most buyers learn quickly to read the fine print even though new strategies still throw them off guard.

Whatever the reason, it's buyer beware as this year's busy wave season winds down and the next round of promotions heat up. It might be a good idea to file this information away for later notes Chiron "Stay tuned for next year's announcement. It might sound quite familiar."