Big cruise line operators like Royal Caribbean Cruises Ltd (NYSE: RCL), Carnival Corp (NYSE: CCL), and Norwegian Cruise Line Holdings (NYSE: NCLH) are reportedly cutting summer cruise prices to fill cabins, say travel agencies and company websites.
This adjustment comes as more ships head to popular destinations like the Caribbean and Alaska while rerouting from the Red Sea due to ongoing conflicts between Israel and Hamas, Reuters reports.
Despite record demand and increased revenues, cruise prices for trips departing from the U.S. this summer are lower than last year, Reuters quotes from AAA data.
Royal Caribbean's seven-day itineraries in the Caribbean and Bermuda are down 21% year-over-year for June. Norwegian and Carnival cruises in the same region are down 12% and 11%, respectively, as per TripAdvisor's Cruise Critic.
Royal Caribbean is also reducing rates for Caribbean trips in the third and fourth quarters, according to Todd Elliott, CEO of Cruise Vacation Outlet. "It seems more strategic on sailings that need a little more help," Elliott told Reuters.
He added that cruises around Africa, instead of through the Red Sea, are also seeing price cuts.
An AAA spokesperson says older ships are being discounted as newer vessels enter the market. For instance, Royal Caribbean's Icon of the Sea, which debuted in January, commands $500 to $1,000 more per person than similar regional cruises.
Royal Caribbean raised its 2024 profit forecast in April for the second time, while Carnival reported record bookings in the first quarter of this year.
Similar price reductions are seen in Alaskan cruises this summer due to increased capacity. Carnival's Alaskan itineraries for July and August are priced about 20% lower than the same period in 2023, while Royal Caribbean's prices for the same months are 6% and 12% cheaper, respectively, Reuters quotes Cruise Critic.
Price Action: RCL shares were trading higher by 0.18% at $148.23 on the last check Thursday.