Brace yourself, Carnival Cruise Line fans: You're about to pay more for everything from drinks to dining
Bad news, Carnival Cruise Line fans: You're about to pay more for everything from drinks to Wi-Fi when sailing on the brand's ships.
The world's second largest cruise line this week announced a wide range of sometimes steep price hikes for extra-charge items on its vessels that will take effect on May 1.
Among the most noticeable price hikes is a whopping 15.3% increase in the cost of buying a drinks package in advance of a sailing.
Effective May 1, the line's Cheers! drinks package will cost $59.95 per person, per day when booked in advance of a sailing — up $8 per day from the current price.
If you wait until you're on board a Carnival ship to buy a drinks package, you'll now pay $64.95 per person, per day. That's also up $8 per day.
The above prices don't include an 18% service charge that is automatically added onto the final bill for such drinks packages.
Related: The ultimate guide to Carnival Cruise Line
Also rising significantly will be the cost of dining at the Chef's Table found in some kitchens on Carnival ships. The upscale experience will cost $99 per person starting on May 1 — a nearly 24% increase from the current $80 per person rate.
Other Carnival price increases announced this week include:
- A nearly 11% hike to the fixed price for dining at night in Carnival steakhouses. They'll now cost $42 per person.
- A 9.4% hike to the fixed price for dining at Carnival teppanyaki eateries. They'll now cost $35 per person.
- A 20% hike to the fixed price for dining at Carnival's Italian eateries, called Cucina del Capitano. They'll now cost $18 per person.
In addition, automatic gratuity charges at Carnival will jump by 3.6% on May 1 to $14.50 per person for passengers staying in most types of cabins. The cost of some Wi-Fi packages also will be going up by about 8%, though the cost of the highest speed Premium package isn't changing. It runs $13.60 per day.
The price hikes come even as Carnival has been discounting its base fares for some close-in sailings to fill ships. As of Thursday, some five-night sailings to Mexico on Carnival's website were available for as little as $31.80 per person, per day.
The result is that some Carnival fans will be spending less to get on a Carnival ship in the coming months but more once they get on board.
Carnival and other cruise lines have struggled to build occupancy levels on ships in recent months due to the surge in COVID-19 cases at the start of the year, leading some lines to lower fares. Carnival's parent company, Carnival Corporation, saw more cancellations than new bookings during the three month period that ended on Feb. 28, according to recent financial disclosures.
That trend has been reversing in recent weeks as COVID-19 has faded from the headlines. Cruise bookings once again are on the rise. But booking levels for the coming months remain lower than lines would like to see.
In a conference call with Wall Street analysts in late March, Carnival Corporation CFO David Bernstein said the company's cumulative advanced book position for the second half of 2022 was at "the lower end of the historical range." Translation: Carnival Corporation ships aren't as booked up for the second half of 2022 as they normally would be by this time of year.
Carnival's steep price hikes this week for some extra-charge items on its ships come after a long period without any such price hikes. The last time Carnival increased prices for such items as drinks packages, Wi-Fi and extra-charge restaurants was before the start of the COVID-19 pandemic in early 2020.
The price hikes also come after a period of sharply rising inflation in North America — Carnival's main market. When adjusted for inflation, the price hikes, notably, aren't nearly as high as they look.
The Consumer Price Index in the United States is up 9.7% since February 2020. As a result, some extra charges on Carnival ships, such as gratuity charges, are now lower than they were two years ago, adjusted for inflation — even after the price increases announced this week.
Like many mass-market cruise brands, Carnival gets a significant portion of its revenue from onboard spending. In that sense, it's similar to a discount airline such as Spirit that charges a relatively low base fare but brings in a lot of revenue through fees for extra services. But the analogy isn't quite right. Even the most mass-market cruise lines such as Carnival still get a large percentage of their revenue from base fares.
In 2019, the last normal year for cruise operations, passenger tickets accounted for about 68% of revenue at Carnival Corporation, according to the company's most recent 10-K filing with the U.S. Securities and Exchange Commission. Onboard spending was just 32% of revenue.
Carnival is the largest cruise brand at Carnival Corporation. The company also owns Princess Cruises, Costa Cruises, Holland America and five other cruise brands.
The Cheers! drinks package that is rising in cost on May 1 is popular with Carnival passengers. It allows passengers to order up to 15 alcoholic drinks in a 24-hour period plus sodas, juices, specialty coffees, energy drinks and bottled water.
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