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Will new policies raise the price of your next cruise?

SmarterTravel

In the past few years, consumers have enjoyed rock-bottom cruise prices. Online cruise sellers offered deals well under brochure rates, and brick-and-mortar travel agents enticed prospective buyers with upgrades, shipboard credit, and other value add-ons. However, with new pricing policies from Carnival, Celebrity, and Royal Caribbean, some of those savings and perks may soon be a thing of the past.

Carnival’s new policy prevents travel agents from advertising discounted rates or other fares not authorized by the cruise line. Royal Caribbean and Celebrity take it a step further and prevent all discounting and rebating on their products. Any offers that can be translated into cash, such as free upgrades, complimentary shipboard credit, or cash-back offers, are now forbidden unless the cruise line itself has created the promotion.

Will these new policies raise the price of your next cruise? We talked to industry experts to find out. While opinions are mixed, it seems like you’ll still be able to get a good value on your cruise, if you know where to look.

Emphasis on service

Royal Caribbean, Celebrity, and Carnival insist that the new pricing policies are only meant to help consumers. Dan Hanrahan, senior vice president of marketing and sales at Royal Caribbean, explained to us that consumers often expressed confusion over cruise pricing. “We want the consumer to drive the price,” he explained. “We want to reward early bookers with lower prices. As it gets closer to the departure dates and sailings begin to fill up, the price should go up accordingly.” According to Hanrahan, consumers were finding deals or high prices at unexpected times, and were uncertain when to book, never knowing if they were getting the best price.

As Royal Caribbean sees it, the benefits of a “no-rebating” policy to the consumer are manifold. Consumers will have a better idea about the value of the fare they’re being quoted, and will feel more confident about when to book. Plus, with travel agents unable to slash the prices of cruises to attract customers, they will have to gain business based on their service. Potential cruisers will have a better experience booking their cruise, and won’t get left in the lurch by a shoddy agency that offers cut-rate fares but no help when a cruise-related problem (lost reservations, itinerary changes, etc.) arises.

The deals are still here

It’s all well and good to talk about service, but with cruise fares often costing over $1,000 per person, consumers want those deals. Luckily, discounts can still be found; they just may be a little harder to come by.

First, though Royal Caribbean and Celebrity have banned unauthorized discounts, Carnival has merely prohibited the advertising of such deals. Walk into a travel agency or call a cruise discounter, and you can still access lower prices on Carnival cruises. You just won’t be able to determine in advance which sellers will offer the rebates.

One way around this problem is to use CruiseCompete. CruiseCompete’s CEO Bob Levinstein told us that his site is the only place where would-be cruisers can request quotes from multiple travel agents all in one place. As agents respond via personal e-mail to a personal, password-protected account, their replies do not count as public advertising, and they can offer you additional discounts they couldn’t otherwise reveal under Carnival’s new rules.

Second, all of the lines will continue to offer promotions of their own, which travel agents will be able to access. If Celebrity chooses to offer free upgrades or shipboard credit, you’ll be able to benefit from those deals, no matter where you decide to book. In addition, many cruise discounters purchase group rates, which are often priced lower and include extra amenities. As these fares are approved by the cruise lines, travel agents can continue to advertise them and consumers can continue to benefit from the low rates.

Third, travel agents will just have to get more creative. Jeffrey Kivet, CEO of Cruise Value Center, says that in order to continue to give customers the discounts they expect, he is going to package Royal Caribbean, Celebrity, and Carnival cruises with air add-ons, cruise insurance, and other travel products. While he can’t change the cruise fare, he can negotiate lower rates on the other parts of the package to ensure that the overall price represents a good deal. Other value add-ons may include vouchers for parking at the cruiseport, a complimentary bottle of wine in your cabin, or an onboard cocktail party.

Industry effects

The industry representatives we spoke with have differing ideas about the benefits of the new policies and the effect on the industry. Bob Wall, president and owner of Vacations at Sea, believes the policy is ultimately a good one. Although his agency focuses on service and will not have to change many practices to comply with the new policies, he told us that agents whose business model is based on rebating will find their operations threatened. CruiseCompete’s Levinstein has much to gain from the new policies, but thinks that they could hurt online cruise sellers such as Travelocity and Orbitz, who do most of their business online and thus won’t be able to offer lower rates over the phone.

Kivet, on the other hand, views the policies in a negative light. He believes they discriminate against the consumer, who will get less value on a cruise price without the rebates and extra perks. His opinion is that other cruise lines will not follow in the footsteps of these three lines and enact their own policies, and that Royal Caribbean may ultimately lose business due to these changes.

No matter which agents are positively or negatively effected, you should be able to find the right price for your budget when you decide to sail the seas on one of these three lines. You just may have to adjust your comparison shopping strategies or search a little harder for that great discount.

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