Little confused about the complaints about price hiking

[SonicGuy]

Costs are rising for all cruise lines at presumably the same rate. Prices we pay on RCL over the last five years are within 15-20% of what we paid in 2010. (We always book the same cruises for the same weeks on the same ships each year) Prices we pay for Disney cruises over the same period have doubled. Not a function of supplies cost.

I didn't say it was a function of supply cost, but rather a function of margin. If Disney corporate tells DCL they need to generate X% margin while maintaining X% occupancy, thats how they do it - raise prices. And as long as occupancy rates stay what they are, this model will continue.

 

[eskimoinparadise]

I didn't say it was a function of supply cost, but rather a function of margin. If Disney corporate tells DCL they need to generate X% margin while maintaining X% occupancy, thats how they do it - raise prices. And as long as occupancy rates stay what they are, this model will continue.

We're saying the same thing. Cost based comparisons are irrelevant. DCL is a WDC cash cow. As long as it continues to give milk, WDC will continue to raise the price. And, as long as they can find new people to drink, they have no incentive to worry about courting repeat business.

BTW, "incentivize" is not a word.

 

[SonicGuy]

We're saying the same thing. Cost based comparisons are irrelevant. DCL is a WDC cash cow. As long as it continues to give milk, WDC will continue to raise the price. And, as long as they can find new people to drink, they have no incentive to worry about courting repeat business.

Thats right. Companies tend to feed their "cow". I truly do believe that at some point things will turn to our "consumers" direction.

 

[jenmiller114]

A widespread case of Disneifanaticus I believe. We will all pay what we feel is reasonable to a point. Those more enamored or with personal justifications will accept more so than others, but I know of few that like to pay more for the same (or less with some perks disappearing).

On the sidebar topic of food price increases, they have perfected the practice of hidden price increases (smaller packing at the same price when they cannot get away with same size package price increases) and then cyclically will offer "bonus sizes" to differentiate themselves until all do the same and then one will up-size the package for a price increase and the cycle repeats itself.

Other cruise lines offer OBC's, beverage packages, upgraded restaurant packages, free internet, class upgrades, etc. to sweeten their offerings beyond adjusting their prices to reflect a competitive market. Disney offers OBC/discounts to repeat clients under the pressure of so doing while on-board and GT rates given a cruise has higher than acceptable availability close to the sailing date while seemingly largely increasing prices with each new release.

I wonder what Disney will do when they see the point where they feel their prices have reach a place that impacts their bookings/profitability? I cannot see them reducing prices without there being an significant industry impact (i.e. multiple cases of ship board illness that start to make headlines) or economic event (i.e. prolonged or severe recession). Will we see some perks reappear to once again differentiate themselves or sell (have felt) as a bonus? Will they offer some perks that have a cost now (photo package credit, spa credit)?

There has ben no mention of the amount of money Disney has reinvested into their ships? The Dream just came back this week from a dry-dock where they invested a significant amount of money in updating several areas on the ship. The Dream hasn't even celebrated her 5th birthday yet so I would have never expected that type of money being spent so soon. I am sure many will argue that they just put in a bunch of stuff that is going to cost customers more, but they also added a lot of great new features to keep their ships fresh and different for repeat passengers. And a huge dry dock for the Wonder is scheduled next year. The combination of lost revenue from the ship not sailing and the amount of money it will cost to actually do the work has to be made up somewhere. As it has been noted (repeatedly), they are competing with newer, bigger ships that are coming online every year. If people are going to be asked to pay more to sail on Disney, at least they are trying to give them more. Many want to focus on the less but money is being put back into the company and we will at least benefit from that if we are willing to pay for it.

I imagine that if they get to the point where they are outpricing their customers, they will return to offering kids sail free incentives and OBC offers. I haven't seen one of those offered in at least two years so obviously they feel that their strategy is working. They used to give stuff away because they were trying to fill their ships. Good for them for figuring out how to fill their ships while charging a premium. Not many companies can do that and be as successful. Look at the parks. $300 increase on an annual pass and they are still looking at record crowds. I wish I could figure out how to create a product that people would be willing to pay for no matter much I charge. I promise, if I made the money Disney was making, my feelings would not be hurt if someone wanted to complain about it. I would just pay someone to send them an annoying form letter while I go laughing to the bank. Just kidding. My feelings probably would be hurt which is why I will probably never be the CEO of a multi-billion dollar corporation.

Jennifer

 

[blondietink]

Everybody has a limit on what they will pay and how they determine value for their money. For this family, the value just isn't there. Yes, we could afford it, but for what we perceive has value for our buck, it just isn't there on a Disney cruise. We were interested in the newly announced DVC Member cruise as it would save us a bit on transportation as we could drive to NYC instead of fly to Florida. But whoa! A 4 day cruise for 4 people comes out to $6,000 in an ocean view and is, in my opinion, just ridiculous. Again, my opinion. Now, we bought into DVC over 10 years ago when prices were half of what they are now. Again, now I would never pay the price they are asking as I don't see the value in plunking that kind of money down for basically a timeshare. Other people are happily paying it. It's all in one's perception of value. Sadly, DCL, DVC and the parks are just getting greedy with pricing. But, as long as people are paying it, they will continue to raise prices, but this family is looking elsewhere to get more bang for our buck.

 

[cgolf]

There has ben no mention of the amount of money Disney has reinvested into their ships? The Dream just came back this week from a dry-dock where they invested a significant amount of money in updating several areas on the ship. The Dream hasn't even celebrated her 5th birthday yet so I would have never expected that type of money being spent so soon. I am sure many will argue that they just put in a bunch of stuff that is going to cost customers more, but they also added a lot of great new features to keep their ships fresh and different for repeat passengers. And a huge dry dock for the Wonder is scheduled next year. The combination of lost revenue from the ship not sailing and the amount of money it will cost to actually do the work has to be made up somewhere.
Jennifer

Maybe someone else has a better source than I do, but I had heard a while back that the Dream paid for itself in a ridiculously short amount of time considering the cost of the ship. I want to say it was a year or less, I hope someone on the boards has some more knowledge than I do. To answer that part of your question the dry docks should pay for themselves rather quickly. It will of course hurt the bottom line a little, but any good company schedules in maintenance of the line costs (includes upgrades) in the lifetime project plan for a product, ship in this case. So the dip in profits caused by the cruises that didn't happen and the cost of the upgrades should have been known and planned for in the companies profit forecasts for the quarter.

 

[jenmiller114]

Maybe someone else has a better source than I do, but I had heard a while back that the Dream paid for itself in a ridiculously short amount of time considering the cost of the ship. I want to say it was a year or less, I hope someone on the boards has some more knowledge than I do. To answer that part of your question the dry docks should pay for themselves rather quickly. It will of course hurt the bottom line a little, but any good company schedules in maintenance of the line costs (includes upgrades) in the lifetime project plan for a product, ship in this case. So the dip in profits caused by the cruises that didn't happen and the cost of the upgrades should have been known and planned for in the companies profit forecasts for the quarter.

I am not suggesting that the dry-docks don't pay for themselves because obviously they do. I am just saying, the cruise line is spending some of the money they are making to keep its ships relevant. People suggest that they are charging more and giving less but not recognizing that they do keep making improvements to their ships and investing in their fleet and that should count for something. The purpose of this thread was to look at the business perspective vs. the personal consumer perspective. As a consumer, I get the outrage. But that doesn't mean I don't respect the business.

 

[cgolf]

I am not suggesting that the dry-docks don't pay for themselves because obviously they do. I am just saying, the cruise line is spending some of the money they are making to keep its ships relevant. People suggest that they are charging more and giving less but not recognizing that they do keep making improvements to their ships and investing in their fleet and that should count for something. The purpose of this thread was to look at the business perspective vs. the personal consumer perspective. As a consumer, I get the outrage. But that doesn't mean I don't respect the business.

But the dry docks could be an issue if DCL did not properly plan for the costs. That of course would be a huge mistake on their part, but my guess would be that instead of eating the costs they would pass them on to the consumer.

I will agree with the add ons to the Magic, they made our favorite ship even better I don't think though that people are talking about the ships unfortunately, because they are continually improving, for us not worth the extra premium being charged, but improving

 

[mab2012]

As many others have pointed out, Disney will keep raising prices as long as they feel it's in their interest to do so, and as long as people are paying, complaining about it will change nothing.

The more interesting question, IMO, is whether this is really good business on Disney's part. Disney has built an exceptionally successful business by specifically NOT appearing to be "just another business". They have built a brand that inspires a degree of customer loyalty that is really in a league of its own. They have done this by making people think that they "really care". Details, customer service, "pixie dust". People are willing to pay a premium for the "Disney experience", because Disney makes them feel good. For now.

Consumers aren't stupid. If Disney pushes price increases too far, and/or there is a perception of reduced quality/service/value, they will eventually go elsewhere. But that's not what Disney needs to be worried about. If they lose customers merely because the price is too high, that's easy to correct. They'll just lower prices. But if they've damaged their brand in the meantime, to the point where people start to see Disney as "just another business" and are no longer willing to pay that premium, that could be very bad for Disney in the longer term. And this, I think, is why some people take it so personally when they see prices go up and perceive decreasing value. They have become attached to the brand, and so this becomes more than just a price hike. To some, it starts to feel like a violation of their trust and their loyalty. And that is much harder for Disney to address.

That said, the people who run Disney are also not stupid. Far from it. If I can see this, you can bet they can too. And they have access to a great deal more data than I have. So I expect they know what they're doing, and presumably they've decided that they still have space for increasing profits without risking significant damage to the brand. But corporations are run by individuals, and investors often demand short-term results at the cost of longer-term gain. So they very well might end up pushing too far. I guess time will tell.

 

[texas disney mom]

As many others have pointed out, Disney will keep raising prices as long as they feel it's in their interest to do so, and as long as people are paying, complaining about it will change nothing.

The more interesting question, IMO, is whether this is really good business on Disney's part. Disney has built an exceptionally successful business by specifically NOT appearing to be "just another business". They have built a brand that inspires a degree of customer loyalty that is really in a league of its own. They have done this by making people think that they "really care". Details, customer service, "pixie dust". People are willing to pay a premium for the "Disney experience", because Disney makes them feel good. For now.

Consumers aren't stupid. If Disney pushes price increases too far, and/or there is a perception of reduced quality/service/value, they will eventually go elsewhere. But that's not what Disney needs to be worried about. If they lose customers merely because the price is too high, that's easy to correct. They'll just lower prices. But if they've damaged their brand in the meantime, to the point where people start to see Disney as "just another business" and are no longer willing to pay that premium, that could be very bad for Disney in the longer term. And this, I think, is why some people take it so personally when they see prices go up and perceive decreasing value. They have become attached to the brand, and so this becomes more than just a price hike. To some, it starts to feel like a violation of their trust and their loyalty. And that is much harder for Disney to address.

That said, the people who run Disney are also not stupid. Far from it. If I can see this, you can bet they can too. And they have access to a great deal more data than I have. So I expect they know what they're doing, and presumably they've decided that they still have space for increasing profits without risking significant damage to the brand. But corporations are run by individuals, and investors often demand short-term results at the cost of longer-term gain. So they very well might end up pushing too far. I guess time will tell.

This is it exactly. And I do think they have gone to far. They have damaged their brand. Is it salvageable? You are right. Time will tell. I have been disney starstruck for 20 or 30 years now, but what really did it for me was when I heard that they replaced hundreds of Florida employees with foreign labor and forced them to train their replacements. I keep thinking about this. The visa program they used was designed to fill jobs that could not be filled by americans, not jobs that were already filled by americans. It takes a special level of corporate calculation to do what they did to those people. They did not slowly fade out their jobs and replace them- they directly replaced them with cheaper, less skilled foreign labor, right off the boat, and forced them to train their own replacements. This is not the disney I know but a disney that has gone to the dark side. Disney is a company trying to make profits, but skirting the law and treating employees like absolute commodities is something I never thought disney would do. And now they have started really treating their customers like commodities. And customers are starting to act like commodities going to the lowest bidder.

 

[Julylady]

Interesting thread. Like some of the others, we too, have taken our last Disney cruise. That cruise was our 12th. Each trip we have tried to take advantage of deals, early booking and on board booking discounts, using credit card mileage programs for air fares, etc. to keep the overall cost of our vacation the same while the cruise price was going up. But we are done and out. As has already been pointed out, DCL is increasing the cost while simultaneously decreasing the value.

For example, I have always bragged about the exceptional service provided. However, on our last 3 cruises, I have been less than thrilled with our cabin service. In the past, it seemed like our steward tidied up our cabin every time we left it. If we went to breakfast for even 45 minutes, we returned to a clean room. He/she knew our dining rotation and always cleaned while we were at dinner. That is no longer the case. On our last cruise, our steward appeared to clean each room in order. He cleaned it when he got to you. If you were in the room he asked if you wanted your room cleaned today or just trade out towels. On several nights we returned after dinner to find our room not yet turned down for the evening. I mentioned this to some friends we met on the ship who said that Disney increased the number of cabins that each steward has to clean. So now, they do them in order and no longer have time to tidy up cabins multiple times each day. I don't know if this is true or not, but it seems reasonable given our experience. What I do know is that in the past our cabin stewards always provided an excellent service. On the last cruise, I gave him a less than excellent rating. I felt badly because if its due to a change in Disney policy, I took it out on the wrong person. Bottom line though, I have experienced a decrease in cabin steward service with an increase in the cost.

We had a cruise booked for April 2016 and another placeholder cruise. In October I cancelled them both. At this point we are going to WDW in April since we already have APs which cover that time frame. I have a certain amount of vacation money to spend each year and my goal is to get the most value out of that amount as I can. Disney cruise line has crossed that line for me. I no longer experience a high enough value for the amount of money I am paying. Its sad, but true.

 

[eskimoinparadise]

Disney Dream was due for her 5-year major dry dock, and most of what was done (IMO) was done either to fix things that should have been constructed when she was being built, change out things that didn't generate revenue for things that will, and to bring her up-to-date with similar fixes made to her sister ship. As for how long it takes to pay off a ship, you're looking at a capital outlay of around a billion to build her. If you use Disney's overall operating margin numbers (from their latest 10-K), if She sails full each week, and the average passenger drops$2,000 on a cruise, she generates about 1.5 million a week to the bottom line. At that rate it would take more than 600 weeks to break even (about 12 years)

 

[ChicosWife]

There has ben no mention of the amount of money Disney has reinvested into their ships? The Dream just came back this week from a dry-dock where they invested a significant amount of money in updating several areas on the ship. The Dream hasn't even celebrated her 5th birthday yet so I would have never expected that type of money being spent so soon. I am sure many will argue that they just put in a bunch of stuff that is going to cost customers more, but they also added a lot of great new features to keep their ships fresh and different for repeat passengers. And a huge dry dock for the Wonder is scheduled next year. The combination of lost revenue from the ship not sailing and the amount of money it will cost to actually do the work has to be made up somewhere. As it has been noted (repeatedly), they are competing with newer, bigger ships that are coming online every year. If people are going to be asked to pay more to sail on Disney, at least they are trying to give them more. Many want to focus on the less but money is being put back into the company and we will at least benefit from that if we are willing to pay for it.

Very good point!!!

 

[cgolf]

As many others have pointed out, Disney will keep raising prices as long as they feel it's in their interest to do so, and as long as people are paying, complaining about it will change nothing.

The more interesting question, IMO, is whether this is really good business on Disney's part. Disney has built an exceptionally successful business by specifically NOT appearing to be "just another business". They have built a brand that inspires a degree of customer loyalty that is really in a league of its own. They have done this by making people think that they "really care". Details, customer service, "pixie dust". People are willing to pay a premium for the "Disney experience", because Disney makes them feel good. For now.

Consumers aren't stupid. If Disney pushes price increases too far, and/or there is a perception of reduced quality/service/value, they will eventually go elsewhere. But that's not what Disney needs to be worried about. If they lose customers merely because the price is too high, that's easy to correct. They'll just lower prices. But if they've damaged their brand in the meantime, to the point where people start to see Disney as "just another business" and are no longer willing to pay that premium, that could be very bad for Disney in the longer term. And this, I think, is why some people take it so personally when they see prices go up and perceive decreasing value. They have become attached to the brand, and so this becomes more than just a price hike. To some, it starts to feel like a violation of their trust and their loyalty. And that is much harder for Disney to address.

That said, the people who run Disney are also not stupid. Far from it. If I can see this, you can bet they can too. And they have access to a great deal more data than I have. So I expect they know what they're doing, and presumably they've decided that they still have space for increasing profits without risking significant damage to the brand. But corporations are run by individuals, and investors often demand short-term results at the cost of longer-term gain. So they very well might end up pushing too far. I guess time will tell.

You said it perfectly. What some on this thread and boards are either missing or ignoring, and telling us to just get over it that DCL is a buisness, is that what you wrote is already happening. There is a group of veteran DCL cruisers on the boards now that are saying enough is enough. While we aren't priced out, we don't see the value in DCL anymore.

We got a screaming good deal in 2016 which is why those cruises stay and we will visit the future cruise desk once with the prices from other lines, and from what we saw online we won't be booking unless a sale pops up. Who knows if we will be back, we shall see.

I agree with many that DCLs policy's have them leaning towards a new or short term cruising group. They aren't setting themselves up to be a repeat cruise company, and we are ok with that. If they ever change back to the price points in relation to other lines from say 3 years ago we will look at them again. New itineraries would help too

We don't hate DCL or think it is the evil empire, just not the value it once was.

 

[Jennifer777]

Most of the threads and comments I've read aren't from people upset that prices increased necessarily, it seems their concerns are more centered on how big the increases have been coupled with policy changes that also add to the final price tag. I own a small business and price increases and policy changes are always met with angst and that's ok and should be expected. I know it's not because people are just cheap or don't value what I'm offering, it's because many families live on a tight budget. Even a modest increase could price a family completely out. With that in mind I try to raise rates when I need to and for a reasonable amount so I can keep as many clients as possible and keep them happy.

I expect increases from DCL and I want them to do what they need to do to continue offering a superior, more inclusive service and since we own Disney stock, I obviously want them to be profitable, but I must admit, I was pretty bummed when I saw an almost 20% 2016 price increase for the same cruise we took this year and disappointed again when I learned of the alcohol policy change, which will probably add at least another $100 to our bill (and no...we're not alcoholics). There is no doubt that many families were priced out with these increases which is very sad for them and I'm ok with them voicing their disappointment. If I ever get tired of it, I'll just scroll past.

 

[psac]

We just planned an Alaskan cruise, and all of the cruise lines run old ships on that itinerary. All of the Cruise Critic reviews blast all of the other ships for being terribly out of shape, showing their age, bad smells and stains everywhere, etc. The reviews of the Wonder? Mostly excellent, still in great shape, etc. That swayed our decision, even though we were leaning towards DCL anyway.

Like the PP, we're also Disney stockholders. That is the best way to make yourself feel better about all these increases.

 

[Ofinn]

We just planned an Alaskan cruise, and all of the cruise lines run old ships on that itinerary. All of the Cruise Critic reviews blast all of the other ships for being terribly out of shape, showing their age, bad smells and stains everywhere, etc. The reviews of the Wonder? Mostly excellent, still in great shape, etc. That swayed our decision, even though we were leaning towards DCL anyway.

Like the PP, we're also Disney stockholders. That is the best way to make yourself feel better about all these increases.

I've been reading Alaska reviews and I've only read a few bad reviews. The Wonder gets bad reviews also. There are many people on the disboards that have cruised Alaska on other lines and have been very happy with their cruises.

 

[sweetpee_1993]

We just planned an Alaskan cruise, and all of the cruise lines run old ships on that itinerary. All of the Cruise Critic reviews blast all of the other ships for being terribly out of shape, showing their age, bad smells and stains everywhere, etc. The reviews of the Wonder? Mostly excellent, still in great shape, etc. That swayed our decision, even though we were leaning towards DCL anyway.

Like the PP, we're also Disney stockholders. That is the best way to make yourself feel better about all these increases.

Not to get nit-picky, but in terms of a cruise ship's life the Wonder is no spring chicken. Until she goes to dry dock after the Alaska season in 2016 she is the least up to date in Disney's tiny fleet. We sailed the Wonder 10 nights in the fall of 2014 then 14 nights this year. Hubby says he doesn't want to sail her again until she gets her upgrades. I have to agree.

Here's my thinking on cruises: am I there for the ship or for the ports? If it's a port intensive cruise the ship is less important. More money to pour into port adventures is more important. If it's a sailing with many at-sea days the ship needs to be better for us to enjoy since we'll be on it more.

 

[OurDogCisco]

We just planned an Alaskan cruise, and all of the cruise lines run old ships on that itinerary. All of the Cruise Critic reviews blast all of the other ships for being terribly out of shape, showing their age, bad smells and stains everywhere, etc. The reviews of the Wonder? Mostly excellent, still in great shape, etc. That swayed our decision, even though we were leaning towards DCL anyway.

Like the PP, we're also Disney stockholders. That is the best way to make yourself feel better about all these increases.

In the summer of 2014 we sailed on the NCL Pearl to Alaska instead of Disney. We were able to sail concierge level for the same price for a balcony cabin on Disney. We also picked NCL as it sailed out of Seattle and so it was a bit cheaper transportation wise and saved us time from having to drive across the border. While I loved the Alaska, I can't say it was the same as Disney. We as a family really missed Disney and all the branding, the shows, the movies, etc. We figured out on that cruise we really don't like cruise but we like Disney cruising. I think everyone should try something different to see if it is your cup of tea.

 

[Ofinn]

Not to get nit-picky, but in terms of a cruise ship's life the Wonder is no spring chicken. Until she goes to dry dock after the Alaska season in 2016 she is the least up to date in Disney's tiny fleet. We sailed the Wonder 10 nights in the fall of 2014 then 14 nights this year. Hubby says he doesn't want to sail her again until she gets her upgrades. I have to agree.

Here's my thinking on cruises: am I there for the ship or for the ports? If it's a port intensive cruise the ship is less important. More money to pour into port adventures is more important. If it's a sailing with many at-sea days the ship needs to be better for us to enjoy since we'll be on it more.

We just got off the 10 night Hawaii cruise and are cruising on the Wonder again in 5 weeks. I thought the Wonder was in pretty good shape. What I didn't like was buffet. It is really lacking compared to Cabanas on the other ships. We did have some plumbing and some AC issues. They were promptly fixed when reported. We did have a couple of really hot nights though when the AC stopped working about 3 am. I really wanted to do the PC cruise next year, but decided to wait until the Wonder gets it's makeover. I may regret that decision because the price may go up because of the refurb.
I would love to cruise Alaska on DCL, but the prices are crazy. I've researched CC and actually Radiance of the Seas has a higher rating then the Wonder. I talked to a family on our Hawaii cruise that had just sailed on the Norwegian Pearl in May. They loved it they said it cost them around 2k for two inside rooms. The cheapest Alaska cruise next year is May 23. 5k for a cat 11b and that's with an OBB. I won't even get into the cost of a Verandah on DCL. Scary!!

I wouldn't cruise Alaska on DCL just for the Wonder. I would only spend that kind of money if the Disney experience was more important than actually seeing Alaska.