Royal Caribbean Makes an Unpopular Pricing Change

During the covid pandemic, Royal Caribbean had very broad cancellation policies. That made sense because people had no idea whether their cruises would actually happen, and the cruise line needed to keep deposits rolling in.

You could cancel for any reason and get your money back up to 48 hours before your scheduled sailing. That deposit policy was much looser than Royal Caribbean (RCL) had previously, when your entire fare was forfeited after the final payment date unless you booked a rate that specifically had different conditions (which would be rare).

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Once covid rules fully disappeared, the cruise line slowly reverted back to the old rules. The former "Cruise With Confidence" policy, which let people cancel their cruises up to 48 hours before departure, disappeared, and the old policies came back.

Now, the cruise line has tweaked its deposit policies for a certain group of customers, and the change makes them more restrictive than they were before the pandemic. The move protects Royal Caribbean and will hit higher-end passengers where it hurts most: in their wallets.

Forget Royal Caribbean – We’re all in on this travel stock

Suites are more than just larger rooms, they also come with sone perks.
Image source: Royal Caribbean.

Royal Caribbean Changes Its Suite Deposit Policies

Before the pandemic and right now, Royal Caribbean used a set deposit amount -- between $200 and $900 -- for suites, depending upon the length of a cruise.

These deposits are nonrefundable, no matter the reason a passenger has to cancel. (You can purchase travel insurance through the cruise line or privately, and depending upon the policy, this could cover the deposit.)

Now, in an email to travel agents, the cruise line has outlined a new policy that will, in nearly all cases, raise the amount of money that passengers who book suites must put down as nonrefundable deposits.

"Beginning June 1, 2023, Royal Caribbean is adjusting the deposit requirement for new suite bookings confirmed on or after this date," the cruise line says.

"The new suite deposit requirement will be calculated as 10% of the cruise fare per guest and is applicable fleetwide. If the 10% value is less than the standard deposit amount, the required deposit amount will then revert to the standard deposit amount. This policy change will apply to all suite categories, including suite guarantees."

That could be a very meaningful increase, given the premium prices suites sell for. In addition, the policy now applies to junior suites as well.

"With this adjustment, junior suites will now align with all other suite inventory and deposits will be nonrefundable for new bookings created on or after June 1, 2023," according to the email. "At this time, deposit requirements for balcony, oceanview, and interior accommodations will remain unchanged."

That's a tough blow because in many ways junior suites are really just larger rooms as many of the perks that come with suites are unavailable to people staying in them. Junior-suite passengers do not get access to the Suite Lounge, and on ships with Coastal Kitchen, a suite and Pinnacle-loyalty-member-only restaurant, junior-suite customers can eat there only for dinner on a when-room-is-available basis.

Suites Are Big Business for Royal Caribbean

Royal Caribbean has changed how it sells suites as well. Chief Executive Jason Liberty talked about those changes during the cruise line's first-quarter-earnings call.

"We used to kind of put everything out there, and all the suites would be sold basically right off the bat. And then you would kind of work your way down to the inside cabins," he said.

"Well, now we hold back inventory, and we release it, based off of the much more sophisticated revenue management models that we have today."

That likely means higher overall prices for suite bookings, which means higher deposits under the new policy.

"What we're focused on is maximizing yield, which, sometimes ... comes with us having more inventory to sell," the CEO added.

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