Cruise lines generally charge what the market will bear.
When times are tough or interest in cruising wanes, that generally means cheaper base fares. That's something Carnival, Royal Caribbean, and MSC did extensively during the early days of the 2021 return to sailing after the Covid pandemic eased enough.
Two other major cruise players Walt Disney (DIS) -) and Norwegian Cruise Line (NCLH) -), took different strategies.
Norwegian simply discounted less visibly than its rivals using all-included (drinks and WiFi) promotions to sort of obscure the actual cruise fare pricing. Disney took a different tactic and just kept its fleet docked for about five weeks longer than its rivals and brought its full five-ship fleet back more slowly.
Related: Carnival Cruise Line makes the worst part of cruising better
Cruise fares, however, are not the only things passengers pay for on many cruise lines. Carnival Cruise Line (CCL) -) generally sell their cruises on an a la carte basis. That means that your base ticket gets you a cabin, meals in the main dining room, the buffet, and select other restaurants, as well as access to entertainment and pools.
Your cruise fare on Royal Caribbean and Carnival does not include gratuities (and both cruise lines raised their per-day gratuities this year), nor does it include excursions, specialty dining, or beverages beyond basic water, coffee, tea, and some flavored waters.
In addition, both Royal Caribbean and Carnival charge extra for internet access. If you want to use your phone or your laptop to stay connected while on board (or in an increasing number of cases, to work) you need to buy a WiFi package. Royal Caribbean uses demand-based pricing for WiFi (and drink packages) meaning that there's no set fee for passengers.
Carnival, however, sells its three internet packages at fixed prices and those are going up.
Image source: Carnival Cruise Line
Carnival raises WiFi prices
Carnival, like Royal Caribbean, has added Elon Musk's Starlink to its fleet. That has meant faster, somewhat more reliable internet connections for customers.
In the case of Royal Caribbean, it has also meant that the cruise line has stopped selling multiple internet packages. The cruise line used to sell a cheaper WiFi package that allowed people to text, check their email, and visit some basic websites (like Facebook). Now, Royal Caribbean only sells its top-tier Voom Surf and Stream package that, in theory, lets people use streaming services or attend video meetings.
Carnival, however, still has three three-tiered internet package offers — Social, Value, and Premium. The cruise line has raised the prices for all three.
If you book the Social WiFi package onboard, you will pay $18 per day. That's an increase from $15 previously. Buying that package before your cruise will cost you $15.30, an increase from $12.7, In both cases, that's a 20% increase for the lowest-level internet package.
If you want the two higher tiers, you will still pay more but the percentage increases will be lower. Prices are on a per-day basis:
- Value (pre-cruise): $19.55 (up from $17)
- Value (onboard): $20 (up from $23)
- Premium (pre-cruise): $21.25 (up from $18.70)
- Premium (onboard): $25 (up from $22)
This is Carnival's fourth WiFi price increase since September of 2022, Cruzely reported.
Carnival reports strong revenue
Carnival had a very strong third quarter, exceeding its guidance and reporting very strong demand, specifically in North America. CEO Josh Weinstein talked about the cruise line's results during its third-quarter earnings call
"By all accounts, it's a great start to 2024. While we see no signs of demand slowing for our brands, at some point, booking volumes for 2024 will recede as we simply run out of inventory to sell. Now we appreciate there are heightened concerns around the state of the consumer as of late. But the fact is we just haven't seen it in our bookings or our results, and we believe consumers are continuing to prioritize spending on experiences over material goods," he shared.
The CEO expects that to continue.
"And the vacation value we offer will continue to resonate with those seeking more for their vacation dollar. As you know, we have been leaning into that message given the unprecedented and unwarranted value to land-based vacation alternatives," he added.
Carnival's stock has not recovered and remains about 41% below where it was five years ago. On the plus side, shares have been trading at roughly double their 52-week low of $7.53.
