Sometimes Royal Caribbean makes very public moves to gauge how customers feel about potential changes.
The cruise line recently floated the idea of charging for pizza in Sorrento’s, the pizza restaurant on board most of its ships. That suggestion, outlined in a survey of past guests, went over about as well as if the cruise line had said that it planned to charge you extra to access your cabin’s bathroom.
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Making that type of change — taking something that’s both free and popular and charging for it — was always unlikely. It’s too public a move and gives passengers tangible evidence of something they may not be completely aware of — the fact that prices are generally going up across the board.
Royal Caribbean (RCL) – Get Free Report has moved prices higher in its Playmaker Sports Bar and at many of its specialty restaurants. Add-ons like WiFi, and many excursions, as well as the various drink packages, have all nudged higher, but since the cruise line uses variable pricing, it’s actually tough for passengers to tell.
The sort of secretive nature of cruise pricing has generally worked for Royal Caribbean, but Chief Executive Jason Liberty openly talked about prices during his company’s second-quarter-earnings call. What he said may upset some of his cruise line’s customers.
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Royal Caribbean keeps raising prices
When Royal Caribbean resumed sailing from the U.S. in July 2021 after its 15-month covid-related shutdown, both capacity and demand were limited. For months cruises were cheap compared with land-based vacations, likely due to lingering fears about catching the virus.
BOOK YOUR CRUISE: Get the best price possible on Royal Caribbean or any other major cruise line.
Now, load factors have returned to normal levels, with newer ships sailing full the majority of the time. That has led prices to head back to, or even exceed, prepandemic levels. Liberty spoke candidly about pricing during the earnings call.
“I think what has been a surprise to us has just been our ability to continue to raise price and demand continuing to come in at higher levels, significantly higher levels, than we have seen in previous periods,” he said.
Royal Caribbean sees increases in multiple areas
New ships almost always cost more. And Royal Caribbean’s next new ship, the first-in-its-class Icon of the Seas, which sets sail in January out of Miami, has been setting pricing records. Utopia of the Seas, an Oasis-class ship, will soon follow, sailing three- and four-day cruises out of Port Canaveral.
Sales and pricing for both those ships, as well as the current newest ship in the fleet, Wonder of the Seas, have been strong. Liberty wanted to make clear that new ships are not his company’s only strength.
“Clearly, there is incredible demand for our new ships and Icon will certainly break and has broken, I think, probably every record in the book,” he said. “But I think it’s important, when we look at the data inside of our bookings, that it’s not just the new hardware — the like-for-like is also very strong and growing,”
The CEO also laid out some reasons for Royal Caribbean’s ability to continue to raise prices.
“Our commercial teams have been executing and also keeping our customers more and more in our ecosystem,” Liberty said. “That has been a huge tailwind for us. And I think that kind of just a broader combination of things, when you add that to just the value gap to land-based vacations, is driving our ability to raise prices.”
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