There are excellent retail reasons why cheap cruises are available, even though steeply discounted cruise cabins reduce profits.
It may surprise many to think of cruise lines as super low-end to high-end retailers.
Cruise ships cover the same type of low/high retailing spectrum, as do the Wal-Marts and Sears to the Nieman-Marcus and Bloomingdale's of the world.
You may recall from reading that cruise cabins are considered inventory.
There is no upside (benefit) to a ship leaving port with empty cabins; and, therefore, this is one of the major reasons why cruises are sometimes heavily discounted.
An empty cabin on a cruise ship is very much like an unsold item on the shelf of a store. If it does not sell it does not generate a profit, or at least some income.
The exception is that unsold items on a store’s shelf may eventually sell. The opportunity of a future sale is always possible, even if the item is sold at below cost. And, oftentimes there’s the possibility of receiving salvage value for unsold or outdated items, depending on the merchandise.
On the other hand, an empty cabin on a cruise ship that has departed port is none re-occurring inventory.
Once a cruise ship leaves port with an empty cabin any possible income that could have come from that cabin, on that sailing, is lost forever.
YES, perhaps income is made on the next sailing, but the opportunity to earn income on that current sailing is gone forever.
Additionally, earning income from the sale of products, (especially) liquor, and services is also lost.
Another reason why cheap cruises are available is the fact that ship employees rely heavily on tips for services they provide. The fewer the number of passengers the fewer the tips employees receive.
Cruise lines contract with many employees to work aboard ship for 6 to 9 months at a time. Tips are a major part, if not the only source, of their income.
Therefore, it is far better to offer very cheap cruises (steep discounts) so as to have warm bodies occupy potentially empty cabins.
In fact, even cabins given away for promotional purposes contribute value and perhaps generate revenue from other sales, besides increasing the amount of tips to employees.
Also, look at repositioning cruises for great deals.
Among the dozens of cruise lines and the many dozens of cruise ships operating around the world, you will find many reasons why cheap cruises are available.
What are your thoughts? Go to 'Expressly Yours' automatic page builder to share what you know; and, read what others say.
With patience, forethought, and a willingness to investigate you can find your share of cheap cruises.
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