Last week I read an interesting article on the cruise lines’ re-emergence in a post-COVID (or maybe a during-COVID) world. Among all the preparations and precautions being taken, one thing really stood out for me. People are not seeing discounted pricing like they did in the wake of 9-11 or the Great Recession (as it is now known I guess). This threw me for a bit of a loop; until I thought about it.
When COVID hit and essentially took the cruise lines from 60MPH to zero overnight and for all intents and purposes put them out of business, my initial thought was – cruising will never recover. And then I thought some more.
I figured that as the virus progresses, the pent-up demand for travel and the need to get back on their feet would result in some bottom-of-the-barrel pricing. Anyone remember the $39/night cruises post 9-11? And with any product, if it is cheap enough, someone will buy it.
But now, that seems to be out the window and to a degree it makes sense to me, but I wonder how it will change what we have come to know as cruising.
Demand is there as the cruise lines ramp up from zero. But the supply is down, so there is no pressing reason to low-ball the pricing. In fact, this is an opportunity to increase the pricing to assist in the financial recovery.
But there is another aspect to this. The bottom feeder. As cruises have become more of a mass market vacation and competition has increased, pricing has dropped to levels where the bottom feeder clients work themselves into a frenzy. Who can resist a $299 cruise for a week.
You know the bottom feeder. They are the ones smuggling vodka in water bottles on board. They used to conveniently miss the final dinner to avoid tipping the wait staff. They are first in line when the bar (or belly flop or hair chest contest) opens. And usually retreat to their interior cabin on the lowest deck. But, with that $299 cruise costing $599 or more, will they still cruise?
Way back in the late 60s or early 70s, my grandmother took a trans-Atlantic cruise on the QE2 and I recall hearing my parents discussing the cost—in the $5000+ range! Back in 1970 that was a huge chunk of change and according to one calculator is about $34,000 in today’s dollars.
Back then, cruising was not for the every man. It was special. It was expensive. And it was exclusive. Are we returning to those days? If the recent studies are an indication, I think we might. And this might be the shot in the arm that the cruise lines need to continue to recover.
All travel companies will be incurring additional costs to keep passengers and guests safe while there is no vaccine and likely well beyond that to insure this does not happen again. Of course, these costs will be passed along to the traveler, so it stands to reason that costs will generally increase.
Time will tell. Thoughts? Please leave a comment!