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Royal Caribbean Won’t Add a New Fee, But Carnival May Have To

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Royal Caribbean Won't Add a New Fee, But Carnival May Have To

Cruise lines are not immune to inflation, rising labor costs, and the fact that gas/oil prices are generally high.

Royal Caribbean (RCL) – Get the Royal Caribbean Group reportcarnival (CCL) – Get Carnival Corporation Reportand Norwegian Cruise Line (NCLH) – Get Norwegian Cruise Line Holdings Ltd report. However, unlike the rest of the trip, they can’t easily pass the cost on to the client because no one has to take the cruise.

Sometimes people have to get on a plane or stay in a hotel. You may not want to go to your cousin’s wedding or your partner’s high school reunion, but you may not have a choice whether to go.

kinda like walt disney (DIS) – Get The Walt Disney Company Report Theme park trips can also be negotiated, but Disney has a lot of leverage to cut costs or pass them on to customers that don’t involve raising ticket or hotel prices.

Disney World and Disneyland could reduce food portions or increase prices on non-ticket, non-hotel items.

However, cruise ships offer a semi-all-inclusive experience. Your ticket not only gives you access to your room, but also to many dining options and entertainment.

Royal Caribbean, Carnival and Norway may increase beverage prices or charge more at specialty restaurants, but casual customers will simply cut back on drinks and stick to free meal options.

That’s putting the big three in the cruise industry in a tough spot in the face of rising fuel costs. They can act, but they won’t be welcomed by customers.

How are cruise lines coping with high oil prices?

Cruise lines can, like airlines, choose to hedge their fuel bets. According to The Points Guy’s Gene Sloan, Royal Caribbean has locked in its 2022 fuel prices for more than half of its needs, while Norwegian has hedged 42% of its fuel below current prices.

Carnival did not hedge any fuel needs for 2022.

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Fuel costs are a fluid thing. Oil prices are mixed, so cruise lines are often slow to pass on the increased costs to customers. However, if prices remain high, Royal Caribbean, Carnival and Norwegian may pass these costs on to customers through fuel surcharges.

They usually don’t want to do this because while their contracts allow them to, no business wants to increase their final price after the fact.

That could mean any of the three cruise lines could decide to add a fuel surcharge to new bookings, but that would push up overall prices and could lead some people to choose not to book a cruise.

Will Carnival, Royal Caribbean or Norway add fuel surcharges?

None of the big three cruise lines wants to increase fuel surcharges.

The industry is only just beginning to return to normal after the pandemic-related shutdowns and various restrictions on people traveling on cruise ships.

The adjusted oil price per barrel is still about 40% lower than in 2007 and 2008 when the fuel surcharge was last used. This explains why Royal Caribbean, Carnival and Norwegian haven’t added them yet, but don’t rule out using them in the future.

“We don’t impose fuel surcharges,” Royal Caribbean spokesman Jonathon Fishman told The Points Guy in an emailed response to questions on the subject.

Carnival, the only cruise line that doesn’t hedge fuel prices, won’t answer that question directly. That doesn’t mean cruise lines plan to introduce fuel surcharges, but it doesn’t mean the possibility of shutting them down.

The Norwegians didn’t give The Points Guy any answers at all.

Oil prices are still volatile, and there may be a point where all three cruise lines can add these extras, which are usually paid on a daily basis, with the first two people staying in a room.

Carnival may be the first domino to fall, but it’s also possible that fuel prices will stabilize, or even fall, without the three major cruise lines having to implement this rather drastic, customer-unfriendly move.

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