October 24, 2008
With the price per barrel of oil continuing to fall, Royal Caribbean Cruises Ltd., owner of Royal Caribbean, Celebrity Cruises and Azamara Cruises, has announced it will drop its fuel supplements on all new bookings made on or after November 10, 2008 for sailings that depart on or after January 1, 2010.
Two weeks ago, Carnival Corporation, which owns lines such as Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America, Seabourn and Princess Cruises, became the first to eliminate some fuel surcharges. Cruise West, which operates soft expedition cruise ships, also has tweaked its policy.
In addition to waiving fuel fees for future cruises (again, 2010 cruises booked on or after November 10, 2008), Royal Caribbean's announcement also addresses refunds -- in the form of onboard credit -- for passengers who've either already booked 2009 and 2010 cruises (and paid the fuel surcharge), or those who will book a 2009 cruise at a later date.
"For 2009 sailings and 2010 sailings booked before November 10, 2008, [or 2009 cruises booked after November 10] the company will determine on a quarterly basis whether fuel supplements will be refunded. Refunds, in the form of an onboard credit, will be provided if the closing price of West Texas Intermediate fuel is $65 or less, at the closing time of the New York Mercantile Exchange, two weeks prior to the beginning of the upcoming calendar quarter. When those conditions are met, an onboard credit will be provided to all guests on sailings that begin during the upcoming calendar quarter."
Confused? We'll translate the statement and also offer two pieces of advice. First, mark your calendar with pertinent dates. And second, bookmark this page, where you'll find information on West Texas Intermediate fuel prices (via the New York Mercantile Exchange).
On December 18, 2008, Royal Caribbean will note the closing price per barrel of West Texas Intermediate fuel. If that price is $65 or less, passengers departing on cruises between January 1 and March 31, 2009 (first quarter 2009) will earn a refund in the form of onboard credit.
On March 18, 2009, if the price is $65 or less, passengers departing on cruises between April 1 and June 30, 2009 (second quarter 2009) will earn a refund in the form of onboard credit.
The June 17, 2009 price will determine whether passengers departing on cruises between July 1 and September 30, 2009 (third quarter 2009) will get the onboard credit.
The September 17, 2009 price will determine whether passengers departing on cruises between October 1 and December 31, 2009 (fourth quarter 2009) will get the onboard credit.
The same dates apply for potential 2010 refunds.
We have to note, of course, that surcharges can be reinstated at any time, depending on the price of oil.
So now that fuel surcharges may be disappearing, the next logical question is this: Does this mean Royal Caribbean will raise cruise fares? It's natural to wonder because, when Carnival announced it would do away with its fuel surcharges, it also noted that price increases would go into effect on all 2010 cruises where surcharges were being waived.
A Royal Caribbean spokesman would not elaborate when contacted today, and issued a statement: "Our pricing is determined by a broad variety of factors, and is highly dynamic. Overall market demand conditions are the most significant driver of price changes, and -- particularly in these times -- these change frequently."
As noted above, along with Carnival and Royal Caribbean's announcements, Cruise West said this week that it will be waiving fuel surcharges on all 2009 Alaska cruises for passengers who book their trip and pay in full by December 12, 2008. The fuel waiver applies to both new and current bookings.
But even if Cruise West, along with the world's two largest cruise lines, have backed away from fuel supplements, we note that there are a number of holdouts that are still levying the fee for oil. These include big-ship lines such as Norwegian Cruise Line and Disney, and luxury operators including Regent Seven Seas, Crystal and Silversea Cruises. U.K.-based companies like Island Cruises and Fred. Olsen fall into this grouping as well, as does Voyages of Discovery, a destination-intensive line that owns the dubious distinction for charging the industry's highest fuel supplement.
We betcha' there will be more news on fuel surcharges in the coming weeks, and as always, we'll keep you posted.
See our At Your Service piece for a full list of cruise line fuel surcharges.
--by Dan Askin, Assistant Editor