According to travel agencies and corporate websites, Royal Caribbean, Carnival, and Norwegian Cruise Line are offering discounts on summer routes to fill vacant cabins.
These companies are reducing prices for summer routes partly because more ships are heading to already popular Caribbean and Alaskan destinations, and they are rerouting to avoid Red Sea destinations due to the ongoing conflict between Israel and Hamas.
In recent earnings calls, cruise operators proudly announced record demand, driving significant revenue growth with passenger numbers exceeding pre-pandemic levels. However, according to AAA Travel Group, prices for cruises departing from the United States this summer will be cheaper than the same period last year.
In the Caribbean and Bermuda regions, Royal Caribbean's seven-day trips in June are down 21% compared to last year. According to Cruise Critic data from TripAdvisor, similar itineraries for Norwegian and Carnival have decreased by 12% and 11% respectively.
Royal Caribbean CEO Todd Elliot stated that the company is reducing prices for Caribbean routes in the third and fourth quarters. He also noted that cruises rerouted around Africa instead of through the Red Sea are being discounted.
Royal Caribbean, Carnival Corporation, and Norwegian Cruise Line declined to comment.
A AAA spokesperson mentioned that cruise operators have been discounting older ships while introducing new ones. Meanwhile, Royal Caribbean's "Icon of the Seas" debuted in January this year, costing at least $500 to $1,000 more per person compared to similar voyages in the region.
"Thanks to the attention surrounding this ship, Royal Caribbean has been able to maintain the integrity of these prices," said Aubrey Manzo Dunn, spokesperson for Cruise Critic.
Royal Caribbean raised its profit forecast for 2024 for the second time in April. Carnival said in March that its North American and European brands set booking records in the first quarter.
Christian Savelli, Director of Cruise Analysis at Oxford Economics, stated that there will be 202 ships sailing in the Caribbean in 2024, an 8% increase year over year.
"There is an oversupply of new ships in the region," Savelli said. "Prices appear to have plateaued."
Similarly, in Alaska, due to the increase in the number of ships, cruise prices are also dropping this summer. According to Cruise Critic, Carnival's summer voyages in Alaska for July and August are about 20% cheaper than the same period in 2023, while Royal Caribbean's Alaskan itineraries are 6% and 12% cheaper in those months, respectively.
Savelli noted that the number of ships in the region has increased by 9.3% year over year.
