Tag Archives: charges

Virgin Voyages

Sir Richard Branson has decided to enter the cruise business. As with other businesses he’s started, he intends to disrupt the industry.
I can’t comment on the ship, since the Scarlet Lady isn’t sailing yet, but I can comment, based on their marketing materials on the website.
When the brand was announced, I signed up for more information, and I was added to the list for early access.
The major selling point first was “All adults.” You must be 21 or over to cruise. This really means “No kids”, which implies “No families.”
This was almost a selling point for me, until last Christmas, when we sailed with our niece and nephew and their kids. You know what? Traveling with kids does not always suck. The kids introduced us to parts of the ship we had never visited before. I was happy we got to help introduce them to cruising.
The more I read their marketing, the more I realized that “Adults Only” probably means “Millennials.”
I’ve been on 19 cruises, and I like being a passenger.
Virgin doesn’t have “passengers”, they have “sailors.” I don’t want to be a sailor, sailors work on the ship. I would just like to ride along.
Virgin doesn’t have “cruises”, they have “voyages.” Call me negative, but when I hear “Voyage”, my brain finishes it with “of the Damned.” Voyages are long trips.
That’s another negative point – their Voyages are short, 4 or 5 days only. Also, the itineraries are boring to me.
I’m not interested in a five-day cruise. I want a week, minimum.
Virgin Voyages prices by the cabin (or by the person.) This is great for a crowd of unmarried friends who will cram into a cabin to save money. I travel with my wife, and the cabin price is twice the single price. So, no savings.
They have free WiFi (if I wasn’t working, I would like to not be connected onboard), all the restaurants are included, many non-alcoholic drinks are included.
I think even adding the costs of included items onto a traditional cruise price still won’t save me money.
So, I think Virgin Voyages is not designed for me. So, if disrupting an industry is designing a cruise line for people who aren’t cruising today, they’re disruptive.
I would remind Sir Richard this was tried in the river cruise space a few years ago. River cruises without old farts! You can’t cruise with us if you’re over 40! It failed.
I’m waiting to see how many “adults” will pay more for a five-day cruise than a seven-day, just to be a sailor on a voyage with an overpacked room to get the costs down. I don’t know if the Virgin brand is worth the upcharge.
(Another interesting thought – how will Virgin Voyages handle lifeboat capacity? We’ve been told the lifeboats have a fixed number of “souls” they hold, and if there’s a cruise with a lot of families – which means more than double-occupancy – some rooms won’t be sold, because the lifeboats are at capacity.)
I think I’ll just stay a passenger on a cruise.

Cruising Scared

I don’t like to think on vacation.
We’re just back from the Norwegian Bliss, and this was an anniversary celebration so we chose the Ultimate Beverage Package (UBP) as a perk, since the UBP means free unlimited drinks, maybe. This was the first time we’ve taken the package in quite a while, because it’s never really been worth it for us – I don’t drink that much, although nobody believes that, and Virginia has maybe two or three drinks in a cruise. It’s cheaper to just pay for each drink.
The UBP is not actually free, since you pay a 20% gratuity on the cost of the package. That’s why it’s not worth it to us because “free” is really over $100 each. I can probably come close to that in drinks in a week, but there’s no way Virginia will ever come close, and the package rules say everyone in the room has to take it. (20% of $99 per day times two people for a seven-day cruise is $277. So, you pay $277 for “free” drinks.)
I do like unlimited options because then I don’t have to think about it – anything I want is covered. That’s the only reason I would choose it – not because I drink that much, but because then I don’t have to keep track. I just don’t choose it, because if I take it, Virginia has to take it, and then I’m paying $138 for two or three BBCs or Bailey’s.
The major issue with the UBP is that the rules are somewhat fluid. Just before we sailed, Norwegian changed some of the rules, which is their prerogative, but it managed to stress everyone out – and the one thing a vacation is not supposed to have is stress (at least from the vendor.)
Usually, Norwegian had just changed the price per day for the package – I think it started in the seventies and now it’s $99 per day. I don’t think many people actually pay $99 per day for the package, but people who take it as a “free” perk pay the 20% gratuity, so if the retail price goes up, the gratuity goes up. If nobody really buys the package, it can be priced astronomically, since you’re really just raising the “free” price. $277 for two people to drink whatever they want for a week is not that bad. Paying $1660+ retail price is probably insane.
So, you can raise the price per day at will because nobody pays it, and if they do, it just makes a lot of money.
The other way to raise prices is to reset the base price of drinks covered. You can’t actually have any drink with the UBP, you can have any drinks $15 or under. Otherwise, you pay the difference. So, a $20 drink costs $5 (plus 20%) with the UBP.
If you don’t want to reset the base price and cause a rebellion, you raise prices of specific drinks above the $15 threshold and only offend a percentage of the people. That’s what Norwegian did just before we sailed.
(Of course, the other way you save money is to water down the drinks. It’s interesting how much “rum punch” I’ve consumed on excursions without a buzz. It’s also interesting that Norwegian premixes many of their frozen drinks now.)
Raising individual prices didn’t affect me, because I drink relatively cheap booze. It did affect one of our friends, who drinks Patron.
Norwegian changed the prices of a whole host of brands (including Patron) which pushed them out of the UBP and into “extra fee” territory.
First of all, the UBP is a marketing ploy that assumes everyone that has it didn’t actually pay retail because retail is $99 per day plus 20% gratuity. So, when they raised drink prices above the $15 per drink package price, they were assuming everyone had the UBP, because otherwise people would be paying $19 per shot for some liquor that’s not really worth that. With the UBP, the $19 drink would be $4.
“Wow! I can get a drink for $4!”
Now, Norwegian marketing probably thought that people would think $4 is a good deal, but only if they had forgotten that they already paid for the package or at least the gratuities.
I’m not sure what millennial MBA came up with this, but people do not forget paying almost $300 for “free” drinks.
Worse, we were traveling with someone whose drink of choice (Patron) was suddenly $4 extra per drink.
So, the cruise started with a cloud, and even though the change for many of the brands was rescinded (“it was a glitch”) and Patron went back to the previous price and was covered by the UBP, every time I asked for something more interesting than Captain Morgan and Ginger Ale, I had to wonder if the drink was going to be on the upcharge menu. (I had Grand Marnier one night and expected to pay extra, but the menu was apparently not updated.)
I also had to think about our future cruises, where we won’t take the package, where I could end up paying $20 for a drink just because it was priced so people with the package would pay $4.
I don’t like thinking on vacation.
So, this was a breach of trust of sorts – even though it didn’t affect me, I had to start thinking “what are they going to do to us next?”
That is not what you want your customers thinking, unless you’re a monopoly or the government.
Norwegian needs to stop screwing around with their “freebies” because people understand they’re not really free.
As a stockholder, I’m happy to see positive results on the stock price. As a traveler with 18 Norwegian cruises, we’re sailing on MSC at Christmas.

Tips, Gratuities, Service Charges

This is an opinion piece, but it’s really just all the stuff I’ve managed to prevent myself from posting on other sites because this is a discussion that seems to come up every five minutes or so, and it’s always the same two groups – “Just leave the tips alone” and “I want to tip whom I want.” 

It’s just like the insurance discussion – a complete waste of time, in my opinion. 

Most cruise lines today have a daily service charge. It goes to a pool for distribution to some non-specific group of onboard employees, some customer-facing and some not. It’s annoying, but it’s not as bad as a Days Inn charging a “resort fee” which is pretty much the same thing. It raises your fare but they can advertise the fare as lower than you will actually pay. At least onboard, I am using the services of the people in the pool. (Do yourself a favor, and splurge on the behind the scenes tour some cruise. You’ll meet a lot of people in the pool down on the lower decks, and along I-95.)

How did we get to this point? Well, it helps the cruise lines with their books, since the service charge is different income than the cruise fee. Travel agents may or may not get commission on it. There’s a whole bunch of really good accounting reasons to separate the service charge. So, like many policies that seem to make people crazy, accountants and lawyers. 

The other reason to have a service charge? It makes sure more people actually tip. In the golden age of sailing, everyone had assigned seating and assigned dining times, so everyone had the same waiters each night. On the last night, you slipped him or her an envelope with some cash for their service. Or, you went to the buffet and stiffed them.

How to avoid stiffing the waiters? Make the tips automatic and call it a “service charge.”

This incenses some people. I’m not really sure why. I suppose they are the ones who went to the buffet to stiff the staff, or constantly lost some of the tip in the casino on their “hot night”, and therefore tipped less. 

I’m sure that when I tip some waiters in some restaurants, the tips are pooled and they pay out to the busboys and the runners. Some places collect the tips and distribute them on their own. New York chefs get sued for this a lot. 

Nobody complains about that. 

People complain a LOT about the same practice on a ship. 

Now, it’s possible Norwegian and Carnival and Royal Caribbean are pocketing all the money, but the employees still get paid, and they are still working there, so it’s just accounting. I don’t understand the issue. 

The usual complaint is “Oh, those poor third world people. They are so underpaid. The cruise lines are so cruel.” When I see a ship that is staffed 60-70% or more from the same nation, I’m pretty sure word has gotten around that this is not a bad way to earn some money. I’ve had dinner with some of those Third  World people who have been promoted multiple times. They seem happy with the job. 

So, can the virtue police just shut up? If you want to stiff the staff, just go fill out the form. If you had a good cruise, just leave it be. 

If you had a great cruise, slip ’em a bit more cash. 

That’s my take on it.