Cruise operators offer summer discounts as ships crowd the Caribbean, Alaska

By Doyinsola Oladipo

NEW YORK (Reuters) -Cruise operators Royal Caribbean, Carnival and Norwegian Cruise Line Holdings are discounting summer itineraries as they look to fill empty cabins aboard older ships, according to travel agencies and company websites.

The companies are lowering summer prices in part because more vessels are headed for already popular Caribbean and Alaskan destinations - and as they reroute ships away from Red Sea destinations due to the ongoing conflict between Israel and Hamas.

Cruise operators on earnings calls have recently boasted of record demand that has driven revenue sharply higher as cruise passenger volumes surpass pre-pandemic figures. However, prices for cruises departing domestically from the United States this summer will be cheaper than the same period last year, according to data from travel group AAA.

In the Caribbean and Bermuda, Royal Caribbean's seven-day itinerary prices for interior cabins in June are down 21% year-over-year as of May. Similar Norwegian and Carnival itineraries are down 12% and 11% respectively, according to TripAdvisor's Cruise Critic, a vacation planning website.

Royal Caribbean is cutting rates for Caribbean itineraries for the third and fourth quarters, said Todd Elliott, CEO of Orlando, Florida-based Cruise Vacation Outlet, a travel agency.

"It seems more strategic on sailings that need a little more help," said Elliott. He noted cruises sailing around Africa instead of through the Red Sea are also being discounted.

Royal Caribbean, Carnival Corp and Norwegian declined requests for comment.

Cruise operators have been offering discounts on older vessels with newer ships coming onto the market, said an AAA spokesperson. Meanwhile, Royal Caribbean's Icon of the Sea, which had its first voyage in January, demands at least $500 to $1,000 more per person than similar sailings in the region, Elliott said.

"Royal Caribbean has been able to keep the integrity of those prices thanks to the interest surrounding the ship," said Cruise Critic spokesperson, Aubrey Manzo Dunn.

Royal in April raised its 2024 profit forecast for a second time. Carnival said in March that its North American and European brands set booking records in the first quarter.

Some 202 vessels are sailing the Caribbean in 2024, an 8% increase year-over-year, according to Christian Savelli, cruise analytics director at Oxford Economics.

"There is an over-representation of new vessels in the region," said Savelli. "Rates seem to have reached a plateau."

Cruise fares are similarly falling this summer in Alaska due to increased capacity. Interior cabins aboard Carnival's Alaskan summer cruises are selling for about 20% less in July and August than they were in the same period in 2023, said Cruise Critic, while Royal Caribbean's Alaska trips are 6% and 12% cheaper in the same period for those months, respectively.

The number of vessels in the region are up 9.3% year-over-year according to Savelli.

(Reporting by Doyinsola Oladipo in New York; Editing by Rod Nickel)