Direct Line Cruises Reports Cruise Price Increases Are on the Horizon

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Direct Line Cruises reports several of the major cruise lines are planning to increase cruise prices as the economy continues to show signs of recovery.

Within a few weeks of each other, three of the largest passenger cruise lines announced that they would be raising cruise prices as a result of extremely strong bookings during the industry’s 2010 “wave season” (January – March).

The movement officially began with a February 24, 2010 press release from Carnival Cruise Lines, the world’s largest cruise line, advising of rate increases up to 5% on all Carnival Cruises in June, July and August (the peak Summer season) that are booked on or after March 22, 2010. In that press release, Carnival President and CEO Gerry Cahill said, “We’re seeing significantly increased volume…” while acknowledging that, “…pricing hasn’t fully recovered to 2008 levels…”

Following Carnival’s announcement, Norwegian Cruise Line (NCL) issued a press release on March 4, 2010 in which Kevin Sheehan, Norwegian Cruise Line’s chief executive officer, advised that “…consumers and travel partners can expect to see our prices rise across the fleet, especially for our new, highly anticipated ship Norwegian Epic.” The press release specifically cited a planned fleet wide rate increase up to seven percent on virtually all NCL cruises that are booked on or after Thursday, April 2, 2010.

Rate increases are also expected from Royal Caribbean International and it’s sister company, Celebrity Cruises, following their near-record booking levels over the past few months. In fact, as early as January, Royal Caribbean Chief Financial Officer Brian Rice predicted, "measured price increases" despite the weakened economy.

To many travel agency owners and executives, the planned rate increases are welcome news. “When the economy went into a nose-dive back of September of 2008, the cruise lines did whatever they had to do to fill the ships”, according to Tom Coiro, Vice President of Direct Line Cruises, Inc, one of the largest cruise retailers in the Northeast. “Cruises were already the best vacation value around but the reduced rates helped to keep our business booming through the worst of economic times.”

How will the rate increases impact business? From Mr. Coiro’s perspective, “If cruise prices went up 50%, they would still offer consumers the best vacation value around. Supporting that contention, he continued, “When I started in this business 15 years ago, DLC [Direct Line Cruises] was able to offer its clients cruises from under $100 per person per night, including accommodations, meals and entertainment. Now, with all of the improvements that the industry has made over the past 15 years, our clients can still buy a top-quality cruise on almost any of the major brands from under $100 per person per night.” So, he concluded, “I think these rate increases are long overdue!”

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Greg Coiro