Cruise passengers think a lot about drinks.
When you buy a cruise cabin from Royal Caribbean or Carnival, only very basic beverages are included. You get water (not bottled water), brewed coffee, tea and, if you go to the buffet, lemonade, iced tea and nonfresh-juice-like beverages.
Outside the buffet and main dining rooms, the only included beverages are glasses of water from any bar or tap water in your cabin.
Related: Royal Caribbean leans into 2 huge food-and-beverage trends
The selection is designed to push people to buy some sort of beverage package. Those choices include soda packages on both cruise lines, while Royal Caribbean (RCL) -) offers a Refreshment package that includes everything except alcoholic beverages.
Carnival does not have an offer similar to Royal Caribbean's Refreshment package, but it does more or less match its Unlimited Beverage Package, albeit with a couple of key differences.
First, Carnival's Cheers all-you-can-drink package costs a flat $59.95 per day, per person when purchased before a cruise while Royal Caribbean uses variable pricing, which is almost always higher than that.
In addition, Carnival Cruise Line's (CCL) -) Cheers has a 15-drink daily cap on alcoholic beverages, so it's not unlimited. Beverage packages, however, are not the only way to get drinks onboard without paying for them one at a time.
Both cruise lines offer precruise in-room beverage deals, and Carnival has once again raised the price on a popular beverage offer.
Image source: Carnival Cruise Line.
Carnival jacks up the price of bottled water
Carnival and Royal Caribbean both allow customers to bring some water or soda onboard with them.
"On embarkation day, a small quantity of nonalcoholic beverages (i.e., sparkling water, sodas, energy drinks, juice, and milk), packaged in cans or cartons, may be brought on board and must be in the guest's carry-on luggage," Carnival says on its website.
"A small quantity is considered a maximum of 12 sealed, unopened cans/cartons of 12-ounces/354-ml each or less, per person."
Many people do that but others want water, and canned water has generally not been a popular choice. To address this preference Carnival sells a variety of water packages that passengers can purchase before they board:
- $11.95 (plus an 18% delivery fee) for a 12-pack of bottled water (16.9-ounce bottle/500-ml bottle) — [$1.41 per bottle]
- $4.50 (plus an 18% delivery fee) for 1 large bottled water (50.72-ounce bottle/1.5-liter bottle)
- $24.95 (plus an 18% delivery fee) for 8-pack of bottled water (50.72-ounce bottle/1.5-liter bottle) — [$3.68 per bottle]
That seems reasonable until you realize how much the price has increased over two separate price hikes.
About a year ago, the 12-pack cost $4.95 — not much more than you would pay in a grocery store. The other two price increases are much less drastic, but the cost of the 12-pack has nearly tripled in just over a year.
Carnival did not notify guests (as it sometimes does before an onboard price increase) that water prices were being increased.
Carnival (and Royal Caribbean) grow onboard revenue
Carnival and Royal Caribbean have been raising prices on onboard and precruise purchases. That strategy has seen both cruise lines increase their revenue.
Carnival CEO Josh Weinstein talked about precruise sales during his company's fourth-quarter-earnings call.
"We are continuing to pull forward onboard revenue through bundling and pre-cruise sales," he said. "This strategy, coupled with even more features on board our newer ships for our guests to enjoy, positions us well for further onboard revenue growth next year."
Royal Caribbean CEO Jason Liberty gave more specific details about onboard revenue during his company's Q3 earnings call.
"We had record yields for the quarter, driven by new hardware, record pricing in the Caribbean and Europe, as well as onboard revenue rates that were up about 30%," he said.
He disclosed even more later in the call.
"In the third quarter, about 70% of guests made precruise purchases at much higher (prices) than in prior years," he said.
"In the third quarter, customers who purchased onboard experiences before their cruise spend 2.5 times more than those who only bought once on board. As we look into 2024, we have booked over double the amount of precruise revenue compared to this year, with more guests engaging before their cruise and at higher prices."
Simplify the pulse of the market landscape with bite-sized intel from the masters. Real Money Pro is your dynamic financial ally, transforming market insights into strategic moves. Start your membership to elevate your portfolio.
