Pier pressure: Cruise lines boost ticket costs

By Anita Dunham-Potter

Travel columnist

updated 3:43 p.m. ET Nov. 16, 2007

Going on a cruise just got more expensive this week as 16 cruise lines announced new fees to be imposed upon passengers to cover rising fuel costs.

Last week, Carnival Corporation, the world’s largest cruise operator, announced a fuel surcharge of $5 per person, per day, for the following Carnival brands: Carnival Cruise Lines, Cunard Line, Holland America Line, Princess Cruises and Seabourn Cruise Line. Earlier this year, Carnival added a fuel charge on its European brands, Costa Cruises and AIDA Cruises. Before Carnival announced its surcharges, luxury operator Regent Seven Seas Cruises announced that it will implement a fuel surcharge of $7.50 per person, per day, for its 2008 sailings.

However, it didn’t take long for the rest of the cruise lines to follow Carnival’s lead.

On Monday, Oceania Cruises announced it too would implement a $7 per person, per day fuel surcharge for all published sailings through April 2009. Then on Wednesday, ultra-luxury line Silversea Cruises announced a $10 per person, per day fuel surcharge for all sailings in 2008. On Thursday, Norwegian Cruise Line announced a fuel surcharge of $7 per person, per day for the first two passengers in a stateroom and $3 per person, per day, for additional passengers in the same room.

Today, Royal Caribbean International, the world’s second-largest cruise company, succumbed to the pressure and announced that their brands: Royal Caribbean Cruises, Celebrity Cruises, and Azamara Cruises would match Carnival’s fuel supplement policy of $5 per person, per day.  Royal Caribbean’s European brand, Pullmantur Cruises, has also implemented a fuel supplement of €50 per person for its cruises that depart on or after January 1, 2008. After Royal Caribbean made their announcement, Windstar Cruises and Majestic America Line, owned by Ambassadors Cruise Group, announced fuel fees of $8.50 per person, per day.

Regent’s charges apply to new bookings made after December 1, 2007, and to existing bookings that are not paid in full by that same date. Carnival and Royal Caribbean’s surcharges will be imposed on bookings for cruises departing on or after February 1, 2008, and will apply only to the first and second passenger in a stateroom; the charges will be capped at $70 per person, per voyage. However, unlike Carnival, they will not charge retroactive fees for cruises already paid in full. Oceania says the surcharge applies to new and existing reservations that are not paid in full by December 1, 2007. Silversea says reservations made prior to November 14 are exempt from the surcharge. Norwegian says their surcharge will be effective on all new bookings made on or after December 1, 2007. Windstar says the surcharge applies to all published sailings through March 2009 that have not been paid in full by December 15, 2007. Steamboat operator Majestic America Line says the surcharge will be applied to new bookings made after December 15, 2007 and to existing bookings that are not paid in full by the same date.

Carnival Corporation, Regent Seven Seas, Oceania Cruises, Silversea Cruises, Norwegian Cruise Line, Royal Caribbean International, Windstar Cruises, and Majestic America Line now join Crystal Cruises, which has been charging a fuel fee of $5 per person, per day, and Hurtigruten, a Norwegian cruise line, which currently charges $6 per person, per day.

Blame the airlines
When petroleum prices began climbing back in 1999, the airlines saw not just a challenge but an opportunity. Instead of increasing their fares to match the increase in expenses, most major airlines created fuel surcharges, which are add-on fees. Now cruise lines are doing the same.

Carnival says its fuel costs have increased 140 percent over the last three years, with a 50 percent increase in the past seven months alone. Micky Arison, Carnival’s chairman and CEO, said, “We had hoped to avoid a similar supplement for our North American brands, but with the price of oil approaching $100 a barrel this is no longer possible.”

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Regent spokesman Andrew Poulton explained that Regent’s fuel surcharges are higher because its ships are smaller; fuel economies are such that the per-passenger cost of fuel is higher on a small ship than on a mega-ship, where the costs are spread among thousands of people.

Royal Caribbean says it has gone to great lengths to minimize the impact of rising fuel costs by designing and building more fuel-efficient ships, installing energy-saving lighting, and using air conditioning more efficiently. “Unfortunately, as fuel prices have reached record highs, we are forced to take this extraordinary step to offset those costs,” says Brian Rice, executive vice president and chief financial officer of Royal Caribbean Cruises.

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