As of this writing, the cruise line industry in the United States is completely shut down. There are no sailings into or out of the country. It’s not just in the U.S. Other non-U.S. cruise lines have also begun to do the same thing. The two biggest questions on cruisers’ minds are: When will cruise lines start sailing again? And what will cruise ships do after the virus outbreak is over?
The answer to the first question is difficult to predict. The United States government has imposed a 30-day restriction on cruise ship sailing. Some individual cruise lines have voluntarily gone even farther. Princess Cruises was the first cruise line to suspend service, promising a return after 60 days. Sir Richard Branson’s highly anticipated new cruise line, Virgin Voyages, was just about to launch. The maiden voyage of that ship won’t happen until August 7, 2020.
What about the second question, what will cruise ships do after the virus outbreak is over? Now, that is an interesting question. The answer is actually hidden inside what the cruise lines have already done.
Cruise Lines Want Your Money
The cruise line industry is taking a heavy hit because of the COVID-19 outbreak. Guest were canceling their cruises before things got bad. Public perception of cruise ships being factories for the virus likely made those decisions easier. Although, in a funny role reversal, the lengths that organizations and transportation systems are taking to sanitize are what happens on every single day on every single cruise ship. The rest of the world is late to the party.
In view of these cancelations, cruise companies are hemorrhaging money. But they have an industry practice that, if they can convince their customers to buy into, can slow the bleeding.
It’s called a “future cruise credit”. How does it work? Is it something you should consider?
What Is a “Future Cruise Credit”?
A “future cruise credit” is exactly what it sounds like. It’s a credit you are given to take a cruise in the future. Sounds simple enough. But we still need the answers to the questions: ‘How does it work?’ and ‘Is it something you should consider’?
The first thing you should know about future cruise credits is that, the money you left as a deposit or paid in full will be applied toward a cruise you will take with that cruise line in the future. No refund will be issued to your credit card. Cruise lines often add perks to this to entice you to leave your money with them as opposed to refunding it to you.
The details vary from cruise line to cruise line. Some will only offer 100% of the money to be applied to a future cruise. To sweeten the deal, they might provide additional onboard credit. The amount will vary depending on what type of cabin you select. So, for example, let’s say your package provided for a $100-dollar onboard credit. To convince you to not to ask for a refund, the cruise line might give you an additional $100 as part of the deal. Hence, when you take your future cruise, you’ll have $200 to spend.
One thing to keep in mind is that taxes and fees are not included in the future cruise credit. Only the price of your cabin.
Is a Future Cruise Credit Something You Should Consider?
The answer to that question is totally up to you. From a monetary perspective, it might make sense. After all, you’re already out of the money. You were prepared to take the cruise anyway. With the future cruise credit, you don’t need to do nothing more and you can still sail on another date. You can even select a different ship than the one you originally booked.
Plus, you’re getting additional room/cabin credit. In most cases, you can use it for anything you can spend money for on your cruise. Want to book specialty dining that’s not included in the cost of your cruise? Do it! Didn’t have enough money to take that excursion to swim with the dolphins? Perhaps you can now. Did you want the drink package but didn’t want to spend the extra money? Now you can. Or you can use it to settle your account at the end of your cruise. It can pay for all those little things that add up, like those stops to the gelato shop, gifts you bought while onboard, or the liquor in the duty-free shop on the ship.
On the other hand, you might want your money back because you have an emergency that money could be better spent on. Perhaps you want to give another cruise line a try. There is no “right” answer as to whether you should accept the future cruise credit or get your money refunded.
Real-world Future Cruise Credit Examples
Because of the coronavirus outbreak and its effect on cruising worldwide, you’d be hard pressed to find a cruise line that isn’t offering future cruise credits. Here are a few examples of what some cruise lines are offering in the wake of coronavirus:
To keep customers happy, MSC Cruises is extending a %125 future cruise credit to those whose cruise was canceled due to coronavirus. As an example, if you paid $800 for your stateroom, this would now give you $1,000 for your stateroom on a future cruise. That might be enough to bump you up to the next category of stateroom. And you wouldn’t have to pay extra for the upgrade.
Carnival Cruise Line
Carnival Cruise Line has offered displaced guests a 100% cruise credit. Sounds good. But they’ve upped the ante considerably.
If you were booked for a 6-day or longer cruise, you’ll get a $600 stateroom credit. A $600 credit! If it was 5 days or less, you’ll get a $300 credit! If I sound excited, it’s because this is a very, very generous offer. When it comes to stateroom credits, most cruise lines offer them on a typical sailing. The higher category your stateroom, the bigger your credit tends to be.
In this case, Carnival is giving anyone who agrees to leave their money with the cruise line $600, regardless of stateroom category. If you booked an inside cabin, you still get the $600. If you forget to notify them you want this, it’s OK. You have until December 31, 2020 to ask for a refund. Otherwise, you’ll get this awesome credit by default.
What Happens After the Outbreak Is Over?
Considering that I cannot see into the future, I can’t say with absolute certainty what exactly each cruise line will offer once things go back to normal.
What I do know is that the entire cruise line industry will be desperate to begin sailing again. As well as to repair its reputation. People that had never cruised and got scared off because of media reports will be harder to convince this time around. Freshman cruisers that enjoyed their first cruise might decide to do a land-based vacation until talk about the virus has cooled down.
That leaves seasoned cruisers. They’re the ones that will cruise regardless of media coverage. These are the people the cruise lines will appeal to first. If the cruise lines can get them back onboard, those individuals will become ambassadors, recruiting the other two groups to join them.
Rewarded for Loyalty
The first thing I suspect the cruise lines will do is to reach out to those that are members of their loyalty programs. Be it Norwegian Cruise Line’s Latitudes Rewards Loyalty Program, Carnival Cruise Lines VIFPP (Very Important Fun Person), or Celebrity Cruises Captain’s Club, expect to see offers and specials that the public in general won’t get to share in.
But here’s an inside tip I’m sharing that I want you to keep just between us: most cruise lines let you join their rewards program even if you haven’t booked a cruise with them. So, once you’re on the list you’ll get those offers too.
Deep, Deep Discounts
This outbreak will make the cost of a lot of goods and services go down. When people aren’t buying (low demand), the prices fall to entice buyers to shop. Perhaps no industry has felt this harder than the cruise line industry.
That’s why I foresee discounts taking various forms. From two-for-one specials to bring your kids for free, cruise lines will be doing everything fiscally reasonable to compel the public to start sailing again. Some of these discounts might take the form of onboard credit. Others will be lower than normal pricing for higher category rooms like balconies and suites. I can even see them paying for all or part of passenger airfare like they’ve done in the past.
Deeper ‘Book Your Next Cruise’ Discounts
Experienced cruisers know that the cruise line wants you to spend every dollar on vacation with them. To this end, there are times during your cruise on sea days where there will be a presentation inviting you to pay a little money down for a cruise in the future. In return, the cruise line will double whatever the price is.
For example, the offer might be to pay $250 while on the ship (these offers are only available while on the cruise). You can then apply that credit on a later cruise. But instead of having a $250 credit, the cruise line will double it. Now that voucher is worth $500. I believe they will increase the value of that credit beyond 50%.
After folks begin cruising again, I suspect the cruise lines to really sweeten this pot. They know that they have your money tied up. And most people don’t like throwing money away. So they know you’re going to cash that in. Then you’ll buy drink packages for that next cruise. You’ll pay for excursions. Perhaps an upgrade to the dining packing might be in order.
In short, they know that if they can commit to getting you back on one of their ships, they’ll make up the money they offered to you as a discount.
Keep On the Lookout
As I said earlier, no one knows when this virus will blow over. It certainly won’t last forever. Financially, times will be tight for everyone. And the cruise lines know that. Which is why I suspect they’ll create the offers I just mentioned. Going on vacation is a luxury, not a necessity. Hence, the cruise lines will bend over backwards to entice you to spend what little you have with them.
That’s why I recommend you sign up for the rewards programs on all the cruise lines you might be interested in. This is probably the best way to take advantage of what will be coming after the virus outbreak dies down. And it costs you absolutely nothing. But you’ll get a lot in return.
What do you think the cruise lines will do? Do you think they’ll offer things we didn’t talk about here? Share your thoughts in the comments below. Join our Facebook Group and share your thoughts in the community too.