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Price cutting strategy may be the best way forward for the cruise industry


dopting a price-cutting strategy will likely be the most effective way of getting passengers back on cruise ships once travel restrictions are lifted.

Carnival subsidiary Princess Cruises has announced it will be cutting prices by up to $125 to make week-long sailings available from less than $630. The discounts apply to more than 800 departures between December this year and May 2022.

Princess is not the first cruise liner to adopt this approach; Norwegian Cruises has offered a week in the Caribbean for $300, whilst Royal Caribbean has offered a week in the UAE for less than $200. These savings are being offered alongside new and unique itineraries, booking perks and deals for transatlantic sailings.

Getting passengers on ships as soon as the pandemic eases is crucial to the survival of the cruise industry. It was expected discounts would start by August time, initiating them this early illustrates that companies are desperate to entice passengers back onto their ships and revert the industry back to normality as soon as possible.

Cruise industry took a similar approach in 9/11 aftermath

The 9/11 terror attacks had an enormous impact on the cruise industry, as well as the wider tourism sector.

Cruise companies responded by lowering rates. which led to a resurgence in passenger numbers. Companies will be hoping that the same strategy will be effective in offsetting the impact of Covid-19.

However, the implications of Covid-19 are very different to the challenges posed by 9/11. For cruise companies, the reputational damage caused by Covid-19 is much more severe than that of 9/11, cruise liners, therefore, face a tougher struggle to get passengers back on board. Furthermore, offering discounts at a time when cruise companies have been put under extreme financial strain may not have a sufficient economic impact in terms of revenue generated.

Discounts are not the only actions cruise companies need to take

Discounts may be an important and effective step in re-attracting customers to the cruise industry. However, the reputational damage that has been caused by Covid-19 has been so severe that companies must do more.

Cruise liners will need to put comprehensive crew training in place to reinforce effective cleaning procedures and health and hygiene protocols. Passengers also need to be educated on health and hygiene procedures; it’s the cruise operators duty to ensure this happens.

Finally, emergency contingency plans must be put in place to prevent extended periods of ships being stranded at sea. These measures along with discounts may see a return of passengers to cruise ships when restrictions are lifted.

For more market data and analysis visit GlobalData's Travel & Tourism Intelligence Centre

Cover image credit: Uniworld

Cover image credit: Uniworld