Travel and Tourism
OP-ED: Cruise Lines Need Lesson In Truth In Advertising
published May 30, 2012 by Huntington News Network and June 2, 2012 by Caribbean News Now!
By Rene A. Henry
SEATTLE, Wash., May 30 – The cruise line industry is notorious for its pricing. Every cruise is promoted
as being a deal. 2-for-1 offers. 60 percent off. An 82 percent savings. But a savings of what and two for
what? Everybody loves a bargain, especially a 2-for-1 sale in this economy. But sometimes with a
2-for-1 offer the buyer does not get 2-for-1.
Cruise lines have misled consumers for years with regard to pricing. In the more than 200 articles he
has written, Thomas A. Dickerson, a justice of the Supreme Court of the State of New York, cites
scores of lawsuits against cruise lines involving false, misleading and deceptive advertising. The
industry is a crisis in waiting if consumer advocates, the Federal Trade Commission, the Department of
Justice and some state attorneys general decide to investigate pricing practices.
The Internet is filled with so many complaints about cruise lines it would take volumes to document all
of the cases. This reflects how customer service has become an oxymoron with so many cruise lines.
There are a handful of exceptions and they continue to be the best in the industry. The industry needs
to be less honestly enthusiastic about promoting its so-called bargains and more enthusiastically honest
when it comes to pricing.
According to the FTC, one of the most common forms of bargain advertising is a price reduction. Most
consumers believe that a list or suggested retail price is the price at which a product or service is
generally sold. If this price was not offered to the public on a regular basis for a reasonably substantial
period of time, but inflated, then it could be considered fictitious, the bargain deceptive and the reduced
price in reality is just the regular selling price.
Cruise lines are synonymous for fictitious pricing. I have been unable to find any travel agency or
passenger that ever paid the so-called “brochure price” or the price from which reductions are made.
Further confusing the issue are web-based discount clearing houses which may offer even lower prices
than those offered by the cruise line or through travel agents. According to Vacations To Go, an Internet
clearing house for discount cruises, some cruise lines offer additional regional discounts for people
who live in certain states or provinces, customers who are 55 years or older, airline employees, police,
firefighters, EMTs, teachers, active and retired military personnel and former cruise passengers.
No one I know has travelled as extensively as my good friend Sir Clive Banfield of Charlotte Amalie, St.
Thomas, U.S. Virgin Islands. He has taken more than 300 cruises since his first in 1955. He
tells me that he has sailed on ships of more than a score of cruise lines and not once ever paid the
full listed or brochure price for a cruise. And he adds that he does not know anyone who has paid the
so-called fictitious price.
When I hear of a 2-for-1 sale, I think of Safeway selling two $1 lemons for $1 or the equivalent of
50 cents each. Or Nordstrom’s selling two $50 shirts for $50, a savings of $50 or the equivalent of $25
each. And Wolfgang Puck having a luncheon special on $25 entrees at Spago where I can pay $25
and my friend and I can each have a $25 entree for the price of one, or I can pay $25 and just eat two
entrees. All prices are based per person, per sale, per customer.
So when I received a promotional mailing from one of my favorite cruise lines offering 2-for-1 fares, up to
$1,000 savings and all inclusive wine, spirits and gratuities, I had my travel agency, Corniche Travel in
Los Angeles, check it out. I’ve sailed on their ships a number of times and have praised them in my
articles and books for their customer service.
However, my math doesn’t synch with cruise line pricing. I interpret 2-for-1 as being where an individual
can pay one fare and two people can cruise for that amount, or the individual could pay that and cruise
alone. I asked my agent at Corniche to check out a cruise the brochure listed at $6,420 with a special
discounted price of $2,140, if booked before the end of June.
You can imagine my surprise when she came back and told me she was quoted $4,370. Somewhere
along the way the cruise line discriminated against single travelers and marked up the original high-end,
pre-discount price about 150 percent. Applying this same pricing principle to retailers, the lemons
would be sold to a single buyer for $1.50, the shirts for $75 and the entrees for $37.50. The industry is
becoming infamous for its pricing policies.
There is one company that is an exception and a shining star in the industry – American Cruise Lines,
headquartered in Guilford, Conn., and the country’s largest cruise company. The line does not
discriminate against single travelers and its listed brochure price is its only price. It flies the U.S. flag
on the newest fleet of small ships in the industry and abides by all U.S. regulations and pays U.S. taxes.
“Over the years we’ve experienced an increase in solo travelers, so we naturally want to provide them
with the best accommodations,” said Susan Shultz, the company’s director of sales. “All of our ships
boast single staterooms and single rates so passengers traveling alone do not have to pay a single
supplement rate, which is often upwards of 175 percent.
“When renovating the Queen of the West, our paddlewheeler on the Columbia and Snake Rivers,
additional single staterooms were added to meet the demand. Furthermore, aboard our newly built
paddlewheeler, Queen of the Mississippi, 15 percent of the staterooms are singles, an industry high.
“Our ships are very appealing to single travelers due to their small size and personalized service, a
hallmark of our cruise line,” Schultz added. “Passengers traveling alone feel comfortable and at ease
among like-minded guests and a friendly all-American crew.” American Cruise Lines has 35 itineraries
along the inland waterways and rivers of the Pacific Northwest, Alaska, the Mississippi River System
and the U.S. East Coast from New England to Florida.
The world’s two largest cruise lines are headquartered in Miami – Carnival Corporation and Royal
Caribbean Cruises Ltd. Carnival has a fleet of more than 100 ships that sail under a number of brands
and controls 49.2% of the market. Unlike American Cruise Lines, the ships of both Carnival and Royal
Caribbean fly foreign flags and are exempt from both U.S. regulation and taxes.
With most cruise lines, forget trying to get your money back if your plans change even in the event of a
medical or family emergency. The lawyers have written the contracts completely in favor of the cruise
lines and passengers have waived away virtually all rights, even if the ship loses power and floats
aimlessly for several days or runs aground and sinks. They also disclaim any responsibility or being
accountable for the shore excursions they recommend. Even the medical practice or malpractice of the
officer-doctor on board is exempted from any cruise line responsibility.
Holland America, owned by Carnival, even refused to honor its own pricing mistake. When the cruise
line accidentally sold cabins for $849 that normally cost $1,399 a person on 10 sailings aboard its MS
Noordam, it required the passengers who booked the fares and who had confirmed reservations to
pay the difference or it would deny them boarding. Compare this with a mistake U.S. Airways made several
years ago when it erroneously listed and sold flights for an unbelievable $1.86. The airline
honored its mistake and reaped a public relations windfall.
In the face of crises that have plagued the industry and the economy restricting consumer discretionary
spending, cruise lines are doing well. According to North American Cruise statistics reported by the
Maritime Administration, more than 10.9 million passengers were on 4,222 cruises in 2011 for a total of
71.8 million passenger nights, an increase of 2.8 percent over the previous year. These people need
some guarantee or protection and recourse when a cruise line behaves badly.
It would be refreshing to see several cruise lines break from the industry pack and think of the customer
first before Congress does it for them. Sen. John D. (Jay) Rockefeller IV (D-W. Va.), chair of the U.S.
Senate Committee on Commerce, Science and Transportation, is planning hearings to see if American
consumers are protected. “Complicated ticket contracts limit passenger rights and antiquated laws
prevent passengers from collecting fair compensation,” he said.
But with the cruise lines so lawyered-up and spending millions to lobby their special interests, I believe
that the changes will have to first come voluntarily. In the past four years Cruise Line International
Association, the industry’s trade association, spent $8.562 million and Royal Caribbean $6.847
million on lobbying. This does not include money given directly to members of Congress, PACs or
Super PACs or routed through law firms. I wonder what Sen. Al Franken (D-Minn.), who in 2004
authored Lies and the Lying Liars Who Tell Them, would think about cruise industry pricing.
My favorite cruise line did get my business. I still consider them one of the very best. And the cruise is
going to destinations I want to see.
Rene A. Henry lives in Seattle, Washington, has authored eight books and writes on a variety of
subjects. In his book, “Communicating In A Crisis,” he devotes one chapter just to crises in the
tourism and travel industry as well as one on customer service which should be on the must read list
of all management in the cruise lines industry. For David M. Kinchen's review of "Communicating in
a Crisis" click: www.huntingtonnews.net/.../080930-kinchen-columnsbookreview.html. Many of his
widely published articles are posted on his website www.renehenry.com.
Selected Op/Eds and Commentaries
To access any of the following, click on the headline....
Op-Ed - Cruise Lines Need Lesson In Truth In Advertising, published May 30, 2012 by Huntington News
Network and June 2, 2012 by Caribbean News NowThe cruise line industry is notorious for its pricing. Every
cruise is promoted as being a deal. 2-for-1 offers. 60 percent off. An 82 percent savings. But a savings of what
and two for what? Everybody loves a bargain, especially a 2-for-1 sale in this economy. But sometimes with a 2
-for-1 offer the buyer does not get 2-for-1. Cruise lines have misled consumers for years with regard to pricing ...
Cruise Lines Need A Watchdog Agency, published March 11, 2012 by Huntington News Network and March
14 by Caribbean News Now! and Caribseek NewsThe traveling public needs an official agency to gather and report
on safety, health, security and environmental issues, customer service and complaints against cruise lines. Nearly 13
million Americans took a cruise last year and not all of them had a Love Boat experience. The U.S. Department of
Transportation regularly publicizes and ranks U.S. airlines on their on-time performance, lost baggage and customer
complaints but there is no central source for consumer information regarding cruise ships.
Cruise Lines Discriminate Against Single Travelers, published March 28, 2009 by Huntington News Network
For years I never took a cruise because I resented being discriminated against as a single traveler. The cruise lines
don’t like to hear anyone use the words “penalty” or “discrimination” so they call the overcharge a “single supplement.”
This way they charge a single passenger anywhere from 125 to 200 percent more than the basic fare....
Fed Up With the Airlines: Blame Congress, Not the Airlines, published by Huntington News Network, April 12,
Don't blame the airlines if you're one of the hundreds of thousands of passengers they failed in any number of ways
this year. Blame Congress. For more than 25 years, Republicans, Democrats and Independents alike in Congress
have ignored ..
It's Time to Reregulate the Airlines, published by Huntington News Network, July 19, 2006
Every time Congress decides to deregulate an industry, it ends up costing the American taxpayer millions and billions
of dollars. Remember the savings and loan debacle? Or energy and telephone? And now, the airlines. ...