Luxury Cruise Fares Suddenly Seem Pricier? Look Again

October 13, 2009

You may not have noticed, but prices for some higher-end cruises have gone up by a couple hundred dollars. But we're here to let you in on a little secret -- you may actually find the new fares better than the old ones.

Back in September, sister companies Oceania Cruises and Regent Seven Seas Cruises very quietly tweaked their pricing structures. The big change? Cruise and airline taxes and fees are no longer listed separately from the base fare, a standard practice that causes the final cruise vacation bill to be several hundred dollars higher than the list price. Now, it's "what you see is what you get" -- the listed price is what you will pay for the cruise and air, period.

So how will this policy change affect you as you plan your next vacation? First of all, potential Oceania or Regent customers will no longer have to do any math to calculate the full cost of their cruise ticket or figure out the true cost of a "free airfare" promotion (for which you have to pay taxes on). The only add-ons you'll have to pay are a la carte purchases such as shore excursions (though most are free on RSSC), spa treatments and business-class airfare upgrades.

On the flipside, you'll have to remember that, if you're comparing rates across luxury or "luxury lite" lines (like Azamara Cruises), you are no longer comparing apples to apples. Oceania's and Regent's rates include all taxes and fees; the other lines add those extras in later, as is the industry standard, causing their list prices to be lower than the actual amount you'll need to pay.

We asked Tim Rubacky, spokesperson for Oceania and Prestige Cruise Holdings (the parent company of both Oceania and Regent) what sparked this radical change away from the industry pricing norm. "Our guests and travel agents told us they didn't want to be nickel and dimed onboard, so [Oceania] changed to include bottled water and soft drinks," Rubacky tells us. "But they also didn't want to be nickel and dimed on the purchasing side." So in response, the cruise lines made their pricing structure more inclusive as well.

The goal, according to Rubacky, was also to eliminate pricing confusion and build better brand value -- even if the cruise lines' prices appear on first glance to have increased. "The move definitely raised some eyebrows," Rubacky tells us. "There's a concern amongst marketers that you lose your edge without the lowest price point. But we haven't been exposed to that."

Won't travelers be confused or turned off by higher fares? Rubacky says no, pointing out that Oceania's and Regent's high-end cruisers are looking more for value than the cheapest trip possible. Plus, because most luxury cruises are booked by travel agents, a knowledgeable professional will be explaining to potential cruisers that the fares include all taxes and fees -- while other lines' prices do not. Also, with great promotions across the two lines -- including free airfare, free shore excursions and two-for-one cruise fares -- Regent and Oceania expect to retain their competitive edge.

Indeed, more inclusive pricing seems to be the name of the luxury game these days (Crystal recently introduced two-for-one fares, complimentary onboard credit and free airfare on most 2010 cruises). Because of all these pricing changes, Oceania, Regent and their luxury cruise competitors are seeing a host of new travelers, including younger travelers and honeymooners, as well as premium cruisers trading up from Celebrity Cruises and Holland America to the luxury lines. According to Rubacky, "The silver lining is that this economic cycle really opened up a lot of people's eyes, and brought luxury and upscale products to a place where more people can try them. Then they see that the luxury cruise experience is really worth the difference -- even at back-to-reality pricing."

Do you think other cruise lines should follow this new pricing model? Vote in our poll!

--by Erica Silverstein, Senior Editor