Value Message Back In Forefront As Cruise Recovery Slows
Cruise Week

There’s a renewed focus on the value message at both ends of the cruise spectrum.

Most visibly, Carnival is promoting up to $160 ‘cash back’ (via shipboard credits) for a wide range of cruises booked through June 30th for sailings into February 2011. That’s the type of promotion that was commonplace in 2009 but not as frequent in recent months with prices on the upswing.

Carnival’s yield management group has a reputation for spotting market trends early on, so this promo may indicate that the recent spate of bad news is affecting the Caribbean mass market. “There’s a lot of factors in play here, one being that the market has slowed down since early May,” says one cruise seller.

On the luxury side, Cruise Week’s Ralph Grizzle reports that value was very much on the minds of both the hosts and retail leaders attending the Seabourn Sojourn christening in London. Noting space available for Seabourn in Europe this summer, the line’s V.P. Marketing Adam Snitzer pointed out that the “confluence of the financial crisis and the additional capacity” is making for exceptionally good value.

Those onboard Sojourn made the point that the cost comparisons with luxury cruise and luxury land are more disparate than ever.

Tom Baumann, President of Travel Leaders Leisure Group, drew a comparison: “We checked in at the Four Seasons here at Canary Wharf before coming on the ship, and it was £450 per night. Do the math. At US$600 per couple, per night on Sojourn, including drinks and gratuities and food and everything, you cannot begin to compare the value. To stay at the Four Seasons for a week in London would cost at least double, if not triple, the amount of money you’d spend to sail on Sojourn, and you’re going to have a lot less fun.”

In a recently released report on CCL/RCL, analyst Joseph Hovorka says the EU debt problems and the Gulf oil spill could impact what would otherwise be a smoother, more robust cruise recovery.”….The current pricing recovery appears to be weakening somewhat sequentially,” writes Hovorka. “Demand for all three regions (Europe, Alaska, and Caribbean) appears to have moderated from March.” Pricing is still up year over year, Hovorka noted, but appears to be moderating.

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