If you’ve already taken a cruise after the restart a year ago, you may have noticed a few differences. Cleaning your suite may have been cut to just once a day. The food at the buffet is suddenly less plentiful. And the curtain has come down on some shows in the theatre.
What’s going on? Well, like Australia’s mortgagees wrestling with the Reserve Bank’s interest rates, it’s all about managing debt.
According to the financial website Bloomberg, Royal Caribbean Group, Carnival Corporation, and Norwegian Cruise Lines Holdings have an eye-watering $112 billion in debt between them. As well as laying up ships for two years during the pandemic, leaving them without an income, they have also had to make good on orders for new vessels, meet environmental laws, and innovate to attract new guests.
And while most have managed to keep the cruise vibe going, some have succumbed to the number crunchers and made a few economies.
Norwegian Cruise Line Holdings president Frank Del Rio spoke on a conference call with Wall Street analysts on some of the challenges cruise lines are facing in the current climate.
“It is a balance. Obviously, you don’t want to kill the goose that lays the golden egg, which is the customer.
“We’re trying to balance what customers pay, what they actually pay for, and what they receive. So, for example, we did not cut the turndown service across all brands or across all cabin categories … look, it’s management’s responsibility to optimise revenue and minimise costs. That’s economics 101, and that’s what we’re doing.”
Norwegian’s much-heralded entertainment offerings have recently been cut back, according to a crew member who shared an email they received with Cruise Hive.
“After bringing our entire fleet back into service we have reached the time where we transition from operating in a ‘relaunch’ mode to a steadier state of operations. As part of this transition, Norwegian Cruise Line is adjusting its shipboard entertainment operations.
“We regret to inform you that the decision has been made to reduce our Entertainment department manning across all vessels and as a result, your scheduled assignment has been cancelled and your services are no longer required.”
It remains to be seen exactly the effect the reduction of entertainment staff will make, but the impact is already showing itself. For example, ‘Kinky Boots’ was discontinued on Norwegian Encore last month.
NCL had also recently reduced the majority of their staterooms and cabins to only once-daily cleaning.
Royal Caribbean has also announced cutbacks across its services.
While it’s standard across even budget cruise lines to have twice-daily cleans, Royal Caribbean is now implementing a once-a-day cleaning policy across its staterooms. This is despite a rise in gratuities, which while not paid directly by Australians, still impact Aussie cruise fares.
The cruise line said in a statement: “Royal Caribbean International is implementing a once-a-day cleaning service for staterooms across the fleet.
“Vacationers will still regularly see the familiar faces of their stateroom attendants, who will continue to do a thorough cleaning, provide new towels, refresh amenities, and be available to guests for questions and stateroom requests throughout the cruise.”
That said, many other cruise lines, including brands such as MSC, Princess Cruises, Holland American, Disney, and Celebrity continue to offer twice-a-day room servicing.
Other changes are even more subtle. Life Well Cruised is reporting that many cruisers are noticing changes to the food on their cruises.
For example, Celebrity Cruises has reduced its buffet offering by about half and reduced some of the options on its dining menu, reports the site.
Some other cutbacks might not affect your time on your current ship but will rather affect what ships you step onto in the future, with Carnival Corporation slowing down its production and expenditure of new ships.
How long will this last? Well, it will take a while to pay down $112 billion in debt – through the robust return or cruising will certainly help speed things along.
According to the well-researched industry website Skift, new ship spending continues to blow out debts.
“Take Norwegian Cruise Lines, which is planning to invest US$2.4 billion in ship construction-related capital expenditures for 2023, and anticipates the figure to be US$500 million and US$1.8 billion for 2024 and 2025, respectively.
“Royal Caribbean Group also sees approximately US$4.1 billion in ship construction costs in 2023 and an aggregate total of $9.8 billion for all existing ship orders. Carnival Corporation expects contracted new-builds to be US$1.8 billion for 2023, and is reshaping its investment spending outlook to scale back on capital expenditures.”
And while that may seem profligate, it actually increases capacity by 18 per cent – and hopefully revenue to pay off those debts and reinstate services.
Consumer activist Adam Glezer, who is a regular cruiser, said he too has noticed the changes when he was on his last sailing, particularly in the loyalty area.
“On my last cruise, I was being told by repeat customers that some of the perks have started to diminish. They found it to be a slap in the face considering their loyalty to the brand and how much they spend with the cruise line.
“I understand cost-cutting mechanism, but surely you shouldn’t be going taking away from the loyal customer base. I heard some passengers mentioning that if it continues, they will switch to another brand.
“And the thing is, a lot of cruisers will stay with the same brand to get that loyalty status. So surely, they shouldn’t be penalised considering how much money they have forked out.”