Doyinsola Oladipo
NEW YORK (Reuters) – Cruise operators Royal Caribbean, Carnival and Norwegian Cruise Line Holdings are slashing prices for summer itineraries to fill empty rooms on older ships, according to travel agents and their websites.
Companies are cutting summer rates in part because more ships are heading to already popular destinations like the Caribbean and Alaska, and because the ongoing conflict between Israel and Hamas is causing ships to change course away from the Red Sea.
Cruise lines have boasted in recent earnings reports that the number of cruise passengers has surpassed pre-pandemic figures, and record demand has led to a surge in revenue. But data from travel group AAA shows that fares for cruises departing from the U.S. this summer will be cheaper than this time last year.
In the Caribbean and Bermuda, room rates for Royal Caribbean’s seven-day June itineraries were down 21% year-over-year as of May, while comparable itineraries on Norwegian and Carnival were down 12% and 11%, respectively, according to travel-planning website TripAdvisor’s Cruise Critic.
Todd Elliott, CEO of Orlando, Fla.-based travel agency Cruise Vacation Outlet, said Royal Caribbean will cut prices for its Caribbean voyages in the third and fourth quarters.
“It seems to be more strategic for voyages that need a little more support,” Elliott said, noting that cruises around Africa rather than the Red Sea are also being discounted.
Royal Caribbean, Carnival Corp and Norwegian Air declined requests for comment.
Cruise lines are offering discounts on older ships to accommodate newer ships, a AAA spokesman said. Meanwhile, Royal Caribbean’s Icon of the Seas, which made its maiden voyage in January, is asking at least $500 to $1,000 more per person than similar cruises in the region, Elliott said.
“Royal Caribbean has been able to maintain these price integrity due to the attention surrounding the ship,” said Aubrey Manzo Dunn, a spokeswoman for Cruise Critic.
Royal in April raised its profit forecast for 2024 for the second time. Carnival said in March that its North American and European brands set bookings records in the first quarter.
About 202 ships are expected to sail through the Caribbean in 2024, up 8% from the previous year, according to Christian Savelli, director of cruise analysis at Oxford Economics.
“There’s a glut of new ships in the region,” Savelli said, “and the rate seems to be plateauing.”
In Alaska, increased capacity has similarly lowered cruise prices this summer: Interior cabins on Carnival’s summer Alaska cruises are selling for about 20% less in July and August than they would be for the same time in 2023, according to Cruise Critic, while Royal Caribbean’s Alaska trips are 6% and 12% cheaper, respectively, for the same time in the same season.
According to Savelli, the number of ships in the region is up 9.3 percent compared to last year.
(Reporting by Doyinsola Oladipo in New York; Editing by Rod Nickel)
