CTN Investigates: is discounting diminishing the value of cruise?
For some agents, slashed fares can help attract a new strain of customer, but for others, they impact overheads and diminish cruise’s value proposition. Will Payne speaks to the industry to determine whether price cuts remain the way forward
Pricing has long been a hot topic of debate across the cruise industry. In the short-term, cheaper rates can help get more passengers on board. However, in the long run, continued cuts can hinder growth. With more than 20 new ships set to come online this year, 2024 is tipped to be one of the busiest years for cruise since the pandemic, which means agents and lines are going to have to work even harder to sell their inventory.
Cutting prices is a tried-and-tested formula for attracting new-to-cruise guests. In a bid to encourage more travellers to book its European and Arabian Gulf cruises, Celestyal offered sailings for just £29pp per night as part of a one-day leap-year offer on 29 February, resulting in a 630 per cent uplift in overall sales.
However, this comes at a risk. Decrease prices too much and too often and it can make it more challenging to book repeat guests further down the line when prices return to normal levels. It can also have an adverse impact on revenue and commissions.
Despite recent reductions, agents say that prices are remaining strong for 2024 compared to previous years.
“Pricing for spring and summer departures are holding up well compared with prior years with almost all cruise lines,” says Alison Earnshaw, managing director of World Travel Holdings. “Our average selling prices overall are higher than we have seen previously.”
Like everything currently, cruise prices have gone up, but it still represents great value
She explains how add-on packages have helped maintain price levels in recent months by enabling clients to customise their cruise and pre-purchase on board amenities. This in turn improves value for money while supporting higher average selling rates.
“In both the mainstream and luxury markets the message from cruise lines regarding 2024 is that they are better sold than ever,” Earnshaw adds.
Current prices in the industry support these claims. However, Earnshaw admits that discounting is an ongoing challenge, saying that there will always be sailings which come in under the required rate of sale. “Overall, the market continues to be competitive, despite discount levels remaining high in January.”
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Value for money
Earnshaw’s optimism over strong prices is echoed by Lee Trowbridge, Not Just Travel homeworker and co-owner of Your Holiday. “Cruising is once again proving to be a great option for good value, especially for families,” he says.
According to Trowbridge, the price of a European land-based holiday is coming in “significantly” higher than previous years, making cruise a popular alternative for his customers. For this reason, Trowbridge thinks discounts are good for the industry.
“It has been an opportunity to attract new clients who have never cruised before and don’t want to spend a fortune to try something they’re not sure about,” he says.
One line which has proven popular for Trowbridge is Royal Caribbean, which has rolled out several offers for its 2025 departures following the launch of the 7,600-guest Icon of the Seas earlier this year.
“Like everything currently, cruise prices have gone up, but it still represents great value,” he continues. “We booked a 14-night P&O Cruises sailing last month for a solo traveller – with flights included – to Bridgetown, Barbados from Southampton for just over £2,000.
“When you compare that to a land-based holiday, you’d be hard pushed to get anywhere near that, considering food is also included.”
An agent’s worth
Craig Goodridge, owner of Craig Goodridge Travel, accepts that discounting in the cruise industry will always be prevalent. “I always think if someone has come to you for a quote or a booking, especially if they are a regular, and you’re there to support them pre, during and post booking, then I don’t see [discounts] as a hurdle,” he reasons.
Goodridge says customers have been booking further in advance despite prices increasing compared with last year, with lines making value for money a priority.
While discounting may drive short-term demand, we prioritise the long-term sustainability of our offerings
“More lines are offering discounts or free drink upgrades, or other added extras. These can help with sales as they’re still showing that there’s a saving to be had. With 2025/26 and beyond now coming on sale, these seasons have been more appealing to my cruise regulars than picking up a last-minute deal.”
Goodridge argues that one of the reasons customers are booking further in advance is so they can secure their personal preferences, whether it’s a certain cabin, a spot on a favourite excursion or a slot on a dream itinerary, all of which are often unavailable in a last-minute deal.
Value focus
Regardless of fares, Giles Hawke, vice president and managing director UK, Ireland and EMEA, Celebrity Cruises believes agents should primarily focus on the value of a cruise holiday when talking to consumers.
“While we need to remain cognisant of price, it’s vital to emphasise the wealth of inclusions to demonstrate value compared to land-based alternatives, regardless of the cost,” Hawke says.
The line’s prices for the summer are holding up “remarkably well”, he says, with Celebrity’s available passenger days (APD) increasing. “While lead-in prices may entice new-to-cruise guests, highlighting overall value is paramount,” Hawke adds. “Individual customer needs will always vary, depending on their priorities when booking a holiday.”
For P&O Cruises, value is key to attracting new-to-cruise guests and retaining existing ones. “We know that once guests experience a P&O Cruises holiday and realise the value that it offers, they will return, which in the long term will support our business, the sector and our travel agent partners,” says the line’s sales director Ruth Venn.
From a river cruise perspective, prices are holding up compared to this time last year, according to Lucia Rowe, managing director UK and Ireland for A-Rosa. “We should be focusing on the all-inclusive nature of river cruising rather than just low prices,” Rowe says.
“Agents can then demonstrate the great value for money that it offers to their customers. Once they understand what a river cruise experience entails and the value it offers, they will be sure to return time and time again.”
Changes on the horizon
The message remains clear with Ambassador Cruise Line chief commercial officer Phil Gardner, who says despite discounts being appealing, the line’s competitive advantage lies in promoting onboard experiences to consumers, which is pivotal to attracting new-to-cruise clients.
“Price is always a key consideration in the booking process, but since launching last April, we have enjoyed a stronger early booking curve compared to the year prior, courtesy of a succession of campaigns focused on promoting our no-fly offering,” he explains.
“With our value-driven offering prioritised over mere price points, these proactive measures have positioned us ahead in numbers year-on-year, where robust pricing and a healthy balance between supply and demand means we have less capacity left to sell.”
“Our approach involves elevating our brand in the consumer area and showcasing exceptional value through our trade partners.”
A lengthening of the booking curve has also tracked with MSC Cruises. The line’s director of sales for UK and Ireland Steve Williams said he has seen a “notable increase” in early business in recent months. “Demand has been stronger than ever, with prices holding up incredibly well for summer 2024,” he says.
While attracting new guests with lower prices may be tempting, Williams explains that maintaining balance is a key cog in its sales strategy. “Our approach involves elevating our brand in the consumer area and showcasing exceptional value through our trade partners.”
For example, a recent TV campaign deliberately steered away from mentioning pricing, instead emphasising MSC’s on and offshore offerings. “While discounting may drive short-term demand, we prioritise the long-term sustainability of our offerings,” Williams adds.
Regardless of its merits and disadvantages, discounting will remain integral to the cruise industry due to its ability to attract new guests as lines continue to build bigger vessels capable of carrying more passengers than ever. Once potential first-timers are convinced by a holiday-at-sea, it’s then up to agents to demonstrate cruises’ unique value proposition to encourage them to book again once prices are stronger.
How to sell without cutting prices
Focus on value
Instead of basing your sales pitch on prices, wax lyrical about the value of a cruise compared
to a land-based holiday, breaking down a sailing into helpful day‑by-day costs.
Plan ahead
Lines are encouraging agents to begin preparing for 2025 and even 2026 already. Secure better rates for consumers’ future holidays now to minimise the risk of higher prices closer to departure.
Sell the destination
One of the best things about a holiday at sea is the vast array of destinations in one trip. Paint a picture of an itinerary before delving into prices and specific cruise lines.
