|Lower Cruise Prices: Will Cruise Lines Sink or Float?|
|Key Words||Prices, upgrades, credit, discounts|
Cruise prices are falling to unprecedented levels. Prices have fallen ten percent compared to a year ago. Carnival Cruise Lines reports that on the whole prices are below 1980 levels. They sold some cabins aboard the Sensation in August for $260 per person for a seven-day cruise. Even the luxury cruise lines are offering first-class upgrades and on-board shopping credit. The discounts are evident not only for the traditionall slow Fall season, but also for the peak Winter season.
The main reason for falling prices is the launching of several new cruise ships. Capacity has risen 39 percent over the past three years. This is drawing in many first-time cruise passengers. Putting a brave face on the situation, a Carnival spokesman, says that there has been no miscalculation by the cruise lines: research shows that once people take a cruise, they get hooked and keep returning.
The only concern that passengers have is whether the price cuts will result in lower quality. There is a fear that the standard of entertainment and food will be lower.
(Updated October 1, 2000)
2. In the long run, the cruise lines, hope that first-time cruise passengers
return for more cruises.
3. On balance, do you think that increasing the number of cruise ships was a miscalculation by the cruise companies? Explain your answer.
|Source||Gene Sloan, "With so many ships afloat, cruise prices are sinking," USA Today, September 1, 2000.|
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