As close to FREE as it gets

A lot of people out there think that because of high fuel prices, taking a cruise vacation is not affordable any more. Quite wrong, actually. If you have the flexibility to go when the ships are hurting, we are seeing some phenomenal prices out there. Particularly for Senior Citizens. Just today, I sold a client a full 7-night cruise on the Carnival Liberty about as close to FREE as it gets. Keep in mind, we're not talking about some 50-year old dog of a ship -- the Liberty was just built 3 years ago, entering service in July 2005. My clients are on a fixed income, and they can only travel when the price is right. Well, I booked them on the December 13th sailing of this ship, using a Senior Citizens promotion, and the cruise rate was only $220 per person! That's under $32 per person per day for meals, entertainment, and the full cruise for a week sailing the Caribbean. Avast, Mateys - that's a DEAL. Of course, there are a bunch of taxes that had to be added on.....$159 in port charges, $55.10 government fees and a $63 fuel supplement each person, but even when you add all that together they're cruising for less than $500 each, for a week on a beautiful new ship. That works out to just $71 per person per day even with all the taxes thrown in. At those kind of prices, it's cheaper to cruise than to stay home!

You see my fellow Americans, here's how deal pricing works. The cruise lines maximize their profits by building ENORMOUSLY LARGE ships that hold mucho many humans, so that during peak travel times (whenever schools are out such as Summer months, or particularly over Holidays like Christmas and New Year's) they are rolling in profits. Their internal costs of fuel, food and labor are divided out amongst those thousands of paying passengers, who are also spending money left and right buying shore trips, beverages (The Cap'n's favorite part), gifts and jewelry, onboard services, and gambling. And beverages. I did mention beverages, didn't I? That's why if you're investing in travel, cruise line stocks remain strong, while airline stocks are in the latrine.

But then there come the times when it's off-season for them, and it's very difficult to fill those monster-ships with enough folks. Like after Thanksgiving, but before Christmas. Teachers can't travel. Neither can families. Professors. School officials. Administators. Staff. Custodians & Maintenance. Yes, everybody cruises, but not when schools and colleges are in session! That puts a huge kink into the cruise line's demographic, so they reduce prices by a boat-load (get it?). People with flexibility to go when these deals come up can take 2 or 3 cruises a year, for what other people pay for 1. So why don't the cruise lines just keep prices up regardless, and deal with having half their cabins empty in the off-season? Because of how the staff is paid....

There's an antiquated International Seamen's law on the books, that states that every professional sailor in the world must make at least $45 per month. Yeah, it was written a long time ago when $45 per month ($1.50 per day) was a handsome living for a man to make. I'm thinking that was around 1993, but I could be wrong. Meanwhile, this old beat-up law remains on the books, and with most foreign-flag cruise companies, that's what they pay the waiters, busboys, and cabin stewards on their ships even today. Before you start feeling sorry for them though, the lines created a "gratuity" system that remains basically intact. They have tipping guidelines or recommendations, which are usually something like $3.50 per person per day for the waiter, same for the cabin steward, and about half that for their assistants. So a really snappy waiter with skills, although his salary is $45 per month, can easily make $500 or more per week, cash money, plus he's already being supplied room and board and medical care on top of that. For people from Caribbean nations, Eastern Europe, South America, the Phillipines, etc that can be some mighty fine money -- sometimes 10 times what they could make back home. But they pay for it with brutally long hours, and sleeping 4-6 in a dorm room situation, so it's a tough life but a rewarding one for good workers.

That brings us back to why don't they let the ships sail half-empty? That would mean these guys would be taking a 50% pay cut, and you'd have a revolution (mutiny) at sea. Yes they'll work in those conditions for the big tips, but if the cruise companies failed to fill the ships, it would make work conditions intolerable. From pure economics, it's in the cruise lines' best interest to fill the ships 100%, every week, every ship, to keep the peace and keep the crew happy. Even if on paper they're losing a little bit on some sailings, the onboard revenue makes up a healthy chunk, led by the casinos. On cruise products that don't have casinos, such as Disney or the NCL Hawaii cruise, it's a lot harder. They have to maintain higher pricing, and count on their niche in the marketplace to keep them going and keep demand high. You were expecting me to say "afloat", weren't you? Admit it!!

Out in the Caribbean, Ike is still being Ike, so all Eastern Texas residents need to keep a watchful eye. We don't know exactly when or where he's coming, but he's definitely coming and now assumed to be category 3-ish when he come's a-calling. VERY dangerous storm, so please look out for yourselves and your neighbors.