Is the era of amazing cruise deals coming to an end?
Are we in the waning days of the era of amazing cruise deals?
Some industry watchers are suggesting as much as the cruise industry's rebound from a nearly three-year-long, COVID-19 pandemic-related downturn picks up steam.
After a prolonged period that saw some cruise lines discount heavily to fill ships, several Wall Street analysts have noted in recent weeks that rising occupancies on vessels have finally allowed cruise lines to begin raising average pricing above levels seen before the pandemic.
The fourth quarter of 2022 "is the first quarter where we expect pricing to be up vs. 2019 levels," Truist lodging and leisure analyst Patrick Scholes wrote in a research report this week. "Looking forward into 2023, barring unforeseen circumstances, we expect pricing to continue to accelerate vs. 2019’s comparable levels."
For now, the fare increases that Scholes and others are seeing aren't monumental in size. Scholes said he expected average pricing for major cruise lines to finish out the current quarter "up mid-single-digits," percentage-wise — as compared to pricing in the fourth quarter of 2019.
Given that the cumulative inflation rate in the U.S. since 2019 has run around 17%, as measured by the U.S. Bureau of Labor Statistics' Consumer Price Index, that's still a decline in prices in real terms.
Still, in just the last few weeks, some of the wildly low cruise fares that were available for last-minute sailings in October, November and December have disappeared.
Related: The ultimate guide to picking the right cruise line for you
Budget cruise leader Carnival Cruise Line, for instance, is no longer advertising last-minute space on four-night sailings for just $104, or just $26 a day, as it was in October. As of Wednesday, the lowest fares for four-night sailings available on Carnival's website were $149 — or $37.25 a day.
While still a notably low price for a four-night getaway, that's a 30% increase in starting fares in just a few weeks.
Similarly, Royal Caribbean, the world's largest cruise line, on Wednesday was selling last-minute space on three-night sailings on its website starting at $123 — or $41 a day. Just a few weeks ago, the line was advertising three-night sailings as low as $99.
The higher pricing for last-minute space on ships in recent days is partly the result of the always-discounted fall cruise season coming to an end. The fall is offseason in the cruise world and always brings lower fares for cruises than other times of the year.
But the higher pricing is also the result of stronger demand for cruises that is letting cruise lines back off on heavy last-minute discounting to fill ships, cruise industry watchers suggest.
"While pricing still shows modest slippage as sailing dates get closer, slippage is far less than the 'crash & burn' price deceleration as sailing dates got closer that we observed for most of the year," Scholes noted this week in his research report.
Scholes said the rising prices come amid a "sizable acceleration" of the pace of cruise bookings for the current quarter and first quarter of 2023 over the past eight weeks.
"This is in sharp contrast to the trend for most of the past year where bookings for the current quarter and [the first quarter of 2023] were extremely weak," he said.
Cruise ship occupancies on the rise
The rising fares come as cruise ship occupancies continue to rebound from the unprecedently low levels seen in the wake of the industry's COVID-19 pandemic shutdown.
Occupancy on Norwegian Cruise Line Holdings ships, for instance, rose to 82% during the three-month period that ended Oct. 31 — up from 65% in the three months before that — the line said earlier this month. Occupancy is continuing to rise in the current quarter.
"We expect load factors to continue improving sequentially to the mid-to-high 80% range in the [current quarter] ... and the steady occupancy ramp-up is expected to continue until we reach historical 100%-plus levels beginning in the second quarter of 2023," Norwegian Cruise Line Holdings president and CEO Frank Del Rio said during a conference call with Wall Street analysts earlier this month.
Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.
Del Rio's comments came just days after Royal Caribbean Group chief financial officer Naftali Holtz told analysts the company expected occupancy levels to return to historical levels at the company's brands by the spring.
Royal Caribbean Group is the parent company of Royal Caribbean, Celebrity Cruises and Silversea Cruises, and it's also a part owner in German lines TUI Cruises and Hapag-Lloyd Cruises.
Holtz said Royal Caribbean Group ships finished the third quarter at a 96% occupancy level, which was up significantly from an 82% occupancy level in the second quarter but still below normal.
Royal Caribbean Group ships normally sail at more than 100% occupancies — something possible when more than two people occupy a cabin.
Cruise pricing still low in relative terms
Even if starting rates for cruises rise in the coming months, cruise pricing still will be notably low as compared to the cost of vacationing on land.
As TPG has written about several times in recent months, hotels, resorts and airlines have been able to push up rates much faster than cruise lines over the past year as travel rebounds in the wake of the pandemic.
Related: Why the best value in cruising right now may be a cruise
That's made what has long been a notable differential between the cost of land vacations and the cost of cruise vacations even wider than it was before.
In a recent analysis, travel insurance comparison site insuremytrip.com pegged the differential at around 30%, noting that real-time data it had on what customers were paying showed the average land trip costing $6,426 — $1,469 more than the average cruise.
The bottom line: Cruises remain a great value. But if you're in the market for a cruise, this may be a time when it pays to snag whatever deal you see now versus waiting for a better offer.
Planning a cruise? Start with these stories:
- The 5 most desirable cabin locations on any cruise ship
- The 8 worst cabin locations on any cruise ship
- A quick guide to the most popular cruise lines
- 21 tips and tricks that will make your cruise go smoothly
- 15 ways cruisers waste money
- 12 best cruises for people who never want to grow up
- What to pack for your first cruise
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.