Be warned, cruisers: Cruises aren't as cheap vs. land resorts as they used to be
Bad news, cruisers: The era of the incredible cruise deal is over — at least for now.
Cruise companies in recent weeks have reported sharply rising yields — a measure of the money they are bringing in per day per passenger — and noted that cruises are no longer as inexpensive as they used to be, compared to land-based resorts.
"Last year we talked around having a 40% to 45% gap [in pricing] to land-based vacations," Jason Liberty, Royal Caribbean Group's CEO, noted last week in a conference call with Wall Street analysts. "Our yields in 2023 rose 13.5% ... so we obviously made a dent into that."
Speaking with analysts after Royal Caribbean Group reported strong earnings for the fourth quarter of 2023, Liberty said the company expected to close the gap in pricing with land-based resorts even more this year.
"We are obsessed about [it] really," Liberty said. He noted that the company's focus as a business of late is more about competing with land-based resorts than other cruise companies.
"It's more about how do we close that gap — how do we compete with a land-based vacation?" Liberty said.
Royal Caribbean Group is the parent company of Royal Caribbean, the world's largest cruise line, as well as Celebrity Cruises and luxury brand Silversea Cruises. It's also a part owner of Germany's TUI Cruises and Hapag-Lloyd Cruises.
Cruises are still the better value
Liberty didn't give an estimate of what he saw as the differential in pricing between cruises and land resorts. However, in a report to investors in mid-January, leisure travel analyst Patrick Scholes of Truist pegged the percentage at around 25% to 30%.
While still notable, the differential is down significantly from just two years ago; back then, some Wall Street analysts estimated that cruises, on average, were priced as much as 50% below the cost of land resorts when comparing similar products.
"We are gaining momentum in our ability to close the unwarranted value gap to land-based alternatives," Josh Weinstein, Carnival Corporation's CEO, recently told Wall Street analysts.
Related: Is a cruise right for you? Start by asking yourself these 7 questions
Weinstein spoke with analysts in late December after Carnival Corporation announced solid quarterly earnings. He suggested the company's success in drawing more first-time cruisers over the past year contributed to closing the differential between cruise pricing and land-based resort pricing.
The increase comes as demand for cruises in general soars.
"In 2023, we captured over 3.5 million new-to-cruise guests and remain well-positioned to continue to take share from land-based alternatives," Weinstein said.
Related: Cruises vs. all-inclusive resorts: Which is the better value?
Weinstein also suggested that because COVID-19 caused land resorts to cut back or eliminate many service offerings, cruise lines might have an edge over resorts in raising rates these days since they provide better service.
"We can further champion the fact that while many land-based alternatives have pulled back on service levels, we still deliver incredible service to our guests, thanks to our amazing crew," Weinstein explained.
Carnival Corporation is the parent company of Carnival Cruise Line, Princess Cruises, Holland America and six other major lines that collectively account for nearly half of all cruises taken worldwide.
Royal Caribbean Group's Liberty says his company's cruise brands are working hard to get people to stay in the Royal Caribbean Group "ecosystem." The goal is to keep them booking again and again with one of the company's brands.
It's something the "land-based [resort world] does very well," he added.
The company is asking, "How do we make sure that focus on a vacation of a lifetime evolves into a lifetime of vacation [with Royal Caribbean Group]?" according to Liberty.
He suggested the recent unveiling of Royal Caribbean's much-awaited Icon of the Seas — the line's biggest and most amenity-packed vessel ever — and an expansion of its private island in the Bahamas, Perfect Day at CocoCay, was helping the company compete with land-based resorts.
"When you think about what we're doing on the destination side with Perfect Day, as an example, when you look at Icon, you can see in that how it's an extremely competitive product — we would probably argue even a better product — to what's happening on land," Liberty said. "And that's by us continuing to dream and innovate and deliver on that. That's going to chip away further and further into that value gap to a land-based vacation."
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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
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- 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.
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- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
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. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Intro Offer
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
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
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.