Pier pressure: Cruise lines boost ticket costs
As oil prices soar, Carnival, competitors tack on fuel surcharge
by Anita Dunham-Potter
Nov 16th, 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
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.”
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
Consumer stuck in fee-land
“This is not very good news for the consumer, on top of the miscellaneous fees already being charged by the
cruise lines,” says Stewart Chiron, a cruise industry expert who is nationally recognized as “The Cruise Guy.”
Chiron notes that consumers on a seven-night cruise, for example, will see their add-on fees increase 22
percent from $159 to $194 per person.
Chiron is talking about the fees listed in the cruise bill under “non-commissionable fares.” These fees, which
are added on to the advertised ticket price and do not return a commission to travel agents, might include
such port services as shore power, piloting and ground labor. These fees have nothing to do with government
levies like port taxes, and cruise lines are free to raise and lower them to reflect their costs. The new fuel
surcharges will generally appear as a separate line item on the list of non-commissionable fares.
The proliferation of non-commissionable fares catches consumers in the middle of a squeeze play. All cruise
lines have restructured their prices so they can promote lower prices and at the same time reduce their
commissions to travel agents — and that makes it difficult for the consumer to see the real cost of a cruise
Cruise vacationers that have paid in full for upcoming cruises are particularly angry at the cruise lines
charging them retroactive fuel fees.
“It’s bad business,” says Toronto resident John Ropac. He adds that cruise lines should adjust their pricing for
the additional costs of fuel, doing it retroactively to people who have already paid in full is wrong. Michigan
resident Darrel Kozikowski understands charging fees for new bookings but not for existing ones. “I booked
my upcoming Princess Cruise at an agreed upon price, then two months later I am told I have to pay an extra
$100 for my wife and I to cruise. I don’t like it,” he says.
Travel agents coping
Most travel agents say they are dealing with the changes just fine.
When she learned about the fuel surcharge, Lynn Dudish, a travel agent from Johnstown, Penn., immediately
contacted her customers who would be affected. “Two clients gave me heck and two fully understand the
changes,” she says. Dudish herself supports the surcharges, arguing that with the cost of oil at an
unprecedented high, the cruise lines cannot be expected to absorb the costs.
Other agents understand yet are frustrated by the whole process. Julie Blackman, a travel agent in Beaverton,
Ore., says, “I think that future cruise fares should simply be adjusted to include the fuel surcharge. I find such
surcharges extremely annoying; I’d rather have it wrapped into the cruise fare and have it done with.”
While most don’t like the added fees, it’s hard to overlook the overall vacation value cruising does still offer.
“Despite the announcement of fuel surcharges, cruising is still one of the best vacation options available,” says
So, what should consumers do? When comparing cruise prices, always ask for the total cost, including taxes,
port fees and any fuel surcharges. On an average seven-day cruise additional fees still amount to less than
$200 per person, but on short three- or four-day cruises, those fees can push the overall price up by 30
percent. It pays to compare and budget accordingly.