Pricing Travel Takes Creative Turn On Airlines, Cruise Lines

pricing travel
When it comes to pricing travel, common complaints from air travelers concern fees charged for checked luggage and changes to tickets after buying. Cruise travelers are often surprised to find out that the advertised price they see is not the total price. Both want more options, flexibility and pricing that fits their needs. Several travel companies are making moves to give them just that.

American Airlines recently rolled out simple three-tier pricing aimed to take the unknown out of the equation, make comparing prices among airlines easier and perhaps adding value.

“This will eliminate the fear about what-ifs,” Rick Elieson, managing director of aa.com


Read more here: http://www.miamiherald.com/2012/12/12/3139557/american-airlines-rolls-out-new.html#storylink=cpy

said in a Miami Herald report. He said it will encourage customers to compare airlines by quality and reward those, “like American, that invest so much in its product.”

Now, American Airlines lowest and refundable fare brackets are divided into three options:

Read more here: http://www.miamiherald.com/2012/12/12/3139557/american-airlines-rolls-out-new.html#storylink=cpy

Choice fares are the same as how tickets are done now and will be the lowest fare. If someone wants to check a bag, they pay for it. This is the basic fare. This is no doubt the fare to compare with other airlines.

Choice Essential fares add $68 per round trip but include one checked bag, no change fees and early boarding.

Choice Plus fares add $88 per round trip, and include the Choice Essential benefits plus bonus miles for frequent fliers, standby privileges, a free drink and other perks.

Will other airlines follow American? Probably, as disclosure, transparency and a traveler-friendly system of pricing and booking seem to be the direction travel companies are headed.

This year, we saw a new U.S. Transportation Department (DOT) rule that requires airlines to include all taxes and fees in their advertised fares, among other consumer-friendly features. Cruise lines have no such rules and commonly do not include taxes and other fees in advertised pricing.

But in what we believe to be an unprecedented move, Princess Cruises began advertising the total price per person, including port charges, taxes and government fees, in advertising for their Season of Saving sale, running through December 21.

“These cruise fares include government fees and taxes so you can see what each voyage actually costs from the start,” says Princess Cruises on its website. “It makes planning your next vacation easier and saves the surprises for the pleasant ones you’ll discover on your cruise.”

Reaching further, Carnival Cruise Lines added new pricing options this month with what appears to be something for everyone.

Some time ago, Carnival came out with their Early Saver Fare, a restricted fare that was guaranteed to be the lowest price, no matter what. Throughout the life of a booking, if the price went down, the difference went to the buyer in one way or another via the Early Saver Fare’s price protection quality.

Like a discounted airline ticket, the Early Saver Fare came with some restrictions too. Topping the list was that the deposit was non-refundable and any changes incurred a $50 per person, per change administrative fee. It was the best price but not for everyone. A traveler with uncertain travel plans? This was not for them.

So Carnival increased the number of fare codes they offer from four to seven, adding additional fare codes that allow more flexibility, options and the ability to find a better fit for each individual traveler. As booking a cruise is more complicated than booking an airline ticket, more complicated are the Carnival fare codes as well.

Some Carnival fares are available far in advance of sailing. As time grows closer to sailing, other fares with different rules, aimed at those who are entering the booking arena are introduced then fall off as time marches on.

Winning at the new Carnival Cruise Lines fare code system seems to be a lot about timing and determination.

For example, those who need or prefer to book at the last minute might like Carnival’s new Instant Saver Fare, available 30 to 45 days prior to sailing.

Choosing this option, the cruise line requires that full payment is due at the time of booking and is 100% non refundable, among other restrictions. But someone booking further in advance will have a different selection of fare codes to choose from.

Available between five and three months prior to sailing, Carnival’s Super Saver Fare has a non-refundable deposit, no changes can be made for any reason, there is no price protection and the cruise line selects the passengers stateroom on the day of check-in at the pier.

Aimed at travelers who missed out on the Early Saver Fare because they waited too long to book, the Super Saver Fare is offered closer to sailing but with more restrictions.

Significantly new to booking procedures on some fares is that the cruise line (rather than the passenger) selects the cabin at the time of pier check-in. Now we’re into that “determination” comfort level and passengers who need or want to have their stateroom at a certain location on the ship will not like this qualifier. Those prone to suffering from motion discomfort commonly look for a stateroom location closer to the middle of the ship, where the laws of physics say the ride is smoother.

At the end of the day, those booking Carnival Cruise Lines may want to consider travel insurance more seriously in response new restrictions and use the services of a travel agent that works with this system daily to be sure they select the right pricing option.


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[Photo Credit- Flickr user Simon_sees]

Pricing travel: Be careful what you ask for

Pricing travelThe Price, what we pay for travel, is often a big factor in making a buying decision and rightfully so. If for no other reason, prices can vary a lot between sources. Trying to be sure we have the best price possible for exactly the same fare makes a lot of sense. When we find the price that works with our plans we call it a win and move along. Most of the time. Sometimes that low price can come back to bite us later causing buyers to be a bit more careful when pricing travel.

Gil’s Cruise Center had been a sales leader in the United Kingdom for a long time, offering low fares on major cruise line sailings. In business 55 years, Gil’s Cruise Center is closed now due at least in part to the heavy discounting of fares. Its a topic consumers ask few questions about when booking that can come back to haunt them later.

“They were discounting to unsustainable levels. Customers would ask us to ‘price-match’ the deal Gill’s were offering. When we saw the price, it was clear they were selling loss leaders.” a rival agent told the Independent.

This is a really good example of why, in most cases, we should insist that travel agents make payments directly to cruise lines. One of the most important questions we can ask a travel agent when making a booking is

“What company will the charge on my card statement show?”

If the answer is anything other than the name of the cruise line that booking is with, walk away, hang up the phone, delete the email, do whatever we have to do to avoid doing business with them. That’s not to say any given travel agency, website or other seller of travel is in financial trouble or about to go out of business, there is simply no reason for agencies to hold money these days other than to take advantage of the cash flow opportunities holding payments offer.

But let’s back this up a little bit and talk briefly about how travel agencies make money.

Legitimate income for travel agencies comes in the form of commission on cruises they sell. The services of a travel agent cost consumers nothing. In most cases, working with a good travel agent actually saves consumers money due to the inside information they naturally have by working cruises every day. They will know where the legitimate discounts and sale prices are at the time of booking and on down the line between booking and final payment when other offers or discounts might become available for which consumers qualify.

The problem with that commission income model is that agencies often wait many months to be “paid” for their services, creating a real need to manage incoming cash to fund day-to-day operations, make payroll, etc. A new agency, just starting out, might not see any income from commissions at all for many months even though they are booking guests on cruises.

That commission agencies get varies too. New agencies just starting out get a lower commission than producing agencies with a track record of proven sales. Its an annually-reviewed number with sales goals created by the cruise lines that must be met to retain their current commission level or attain the next higher level available.

What happened several years ago, during the peak of the world-wide recession, was that agencies would give up part of their commission in the form of a discount to consumers. That discount made prices frequently lower than even the cruise lines themselves would charge. Those agencies were surviving by making a small amount on a whole lot of bookings. The result was that those agencies spent most of their time selling new clients which left little time to service existing bookings, a situation the cruise lines did not like one bit.

In the case of Gils Cruise Centre, cruise lines got wise to their heavy discounting and cut their commission rate from 15% to 5%, chewing up that 10% (or more) discount Gils was giving up to get the sale a few months ago. This was after serious warnings were issued by cruise lines industry-wide that discounting outside of approved programming offered by the lines was forbidden.

That situation of heavy-discounting by large, online agencies, wiped out a lot of smaller operators who could not afford to match prices. Due to the lower sales volume of smaller operators, they did not make commission as high as big-volume travel agencies. In an effort to level the playing field and make service, not price, a driving factor in the decision of where to by, cruise lines started cracking down.

Unlike the failure of a US-based travel agency, UK buyers are protected from the closure of a travel agency by ABTA, a UK travel association that backs agencies and protects payments made by consumers to agencies that, as a practice, hold payments rather than sending them directly to cruise lines. In the US, the protection burden falls on the consumers who must buy travel insurance to back their purchase and even then not all travel insurance companies cover default by the agency.

That’s a whole lot of explanation about a problem that is really easy to avoid by just asking that one simple question:

“What company will the charge on my card statement show?”

The odds of your major cruise line going out of business are slim. The cruise industry is a healthy, growing concern that will provide quality vacations of an inclusive-nature for decades to come.

Still “buyer beware” is a good couple of words to keep in our heads when dealing with any seller of travel.

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