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The Street
The Street
Business
Daniel Kline

Royal Caribbean Quietly Makes a Key Casino-Policy Change

Cruise lines have a variety of different loyalty and rewards programs. 

Royal Caribbean (RCL), for example, has its Crown & Anchor Society, which rewards customers with perks based on how many nights they have sailed. Accrue 80 points and you hit Diamond level, which gets you access to an onboard loyalty lounge, four free drinks a day while sailing, and a number of other things.

The cruise line also offers a casino program, which rewards frequent players. Earn 2,500 points over the course of a year -- points are earned based on gameplay, not winning or losing -- and you get free drinks in the casino for the rest of the year and all of the next year, along with a free annual cruise of your choice, and a few other benefits.

Royal Caribbean also has a program that rewards passengers for their gameplay on an individual cruise. Rewards kick in when you earn 1,000 points, which gives players a discount on a cruise. Hit 2,500 in a single cruise -- the standard is the same whether you're on a short trip or a long one -- and you get a free interior cabin on pretty much any cruise (with balconies and even suites awarded for higher points earned).

When the cruise line came back into service in July, it changed how it awarded those so-called instant certificates, which grant discounts and free cruises.

TheStreet

Royal Caribbean Changes Casino Offers

During the cruise line's restart, it's fair to say, free cruises were often easier to come by than they normally were. Some sailings offered a free cruise from a select list of sailings at 800 points earned rather than 2,500. That wasn't true on every cruise, but the offer popped up quite often.

Prepandemic, however, earned certificates were waiting in your cabin on the last night of the cruise (they got adjusted if you earned more points after the award). In the pandemic return, those earned certificates were not issued until the next cruise.

The company never detailed these policies, and it's possible that a phone call to the Casino Royale help line would get a certificate awarded if a passenger had no next cruise upcoming. 

But whatever the exact policy was, it has changed again, according to an email sent by the Casino Royale (in response to a question about an earned free cruise).

"Our certificate program recently changed. We no longer offer prequalified certificates, that are based on the previous sailing. We still have a certificate program, but now they are based on the active sailing and are awarded at the end of the sailing," the company said.

Royal Caribbean Returns to Normal

The new policy actually represents a return to normal. Awarding certificates on the last night is how Royal Caribbean's Casino Royale awarded its earned discounts and free cruises before the pandemic hit.

And while the change is inconsequential for many cruisers, it's in line with comments Chief Executive Jason Liberty made during the company's first-quarter-earnings call.

"Strong demand for cruise experiences continues to translate into robust onboard revenue performance for us across all categories from casino, beverage, and shore excursions to internet, retail, and spa," he said.

Basically, people are spending more onboard, and passenger counts have been rising to normal or near-normal levels. That enables Royal Caribbean to go back to some of its prepandemic policies.

Casino gamblers who earn free cruises produce revenue for Royal Caribbean. It can vary by game, but slot players earn one point for every $5 they cycle through a machine. That means that you have to put $12,500 at risk in order to hit that 2,500-point level. 

It's, of course, possible to win (and it won't generally cost you nearly that much to earn a free cruise), but the numbers favor the house.

Free is, of course, relative in this case, but "free cruises" likely drive significant revenue for the company, not just from what the gamblers lose onboard but also from whatever else they might buy while on the ships.

 

     

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