Could Bargain Holidays be Ending?

During the recession airlines and tour operators, hoteliers and destinations worked hard to get us to visit them as people became more careful with their money. Good deals were to be had despite the efforts of the government to wring more taxes out of us with increases in Air Passenger Duty.  But cruise ships (and domestic holidays) don’t pay these taxes so cruising had a financial appeal as well. Increases in holiday prices are beginning to seep through and Carnival Cruise lines is one of those that are planning to increase their prices during the booking period. From 22nd of March, their prices go up by 5%.

The reason? Strong booking for their summer sailings they say.

The question is whether this is really going to happen. Almost every newspaper you pick up offers discounts off cruises. The prices you find in the glossy brochures seem to be negotiable at times as there are so many cruise ships pleading with you to travel on them. Airlines try to raise prices and, if their rivals don’t follow quickly, the price rises often disappear. Will a similar situation happen with cruising? As I wrote earlier, there are lots of ships out there and some very big ships which they ordered in the good times (I mean the good times for the cruise companies) have come into service in the last 12 months. They need filling with passengers to pay for their construction and 100 cabins at discounted prices still make a contribution. Will people who considered Carnival switch to other cruise lines? In fairness to Carnival, they point out that prices are still below 2008 levels. But back then there weren’t as many ships around as today.

Some tour operators increased their prices when their new season brochures came out. They will offer discounts as well. It is how quickly those discounts dry up that will show the rest of us whether holiday prices are generally likely to rise in the next year or so.

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