Fuel surcharge intrigue continues

Back in November when Carnival Corporation announced the retroactive addition of fuel surcharges to existing bookings, we knew, first, that the rest of the industry would follow, and second, that there would be eventual pushback from customers or regulators. Nobody likes making a reservation, paying a deposit, and then being told sometime later that more money is due.

Sure enough, other brands owned by Carnival (like Cunard, Holland America, and Princess) added the fuel surcharge retroactively to existing bookings and, shortly thereafter, so did Royal Caribbean (and its siblings Celebrity and Azamara).

Meantime one cruise line, Norwegian, stands out as taking the most consumer-friendly approach to skyrocketing fuel prices. They added a fuel surcharge only for new bookings. Good for them!

Which brings us to earlier this month, and the regulatory pushback from Florida's attorney general Bill McCollum. The cruise lines had gotten themselves in hot water in Florida in 1997 over the issue of "port charges," since when ports were skipped (say, due to inclement weather), the "port charges" weren't reliably refunded. This resulted in an agreement between the cruise lines and the state requiring clear explanation of charges that make up the fare.

Apparently when Royal Caribbean was approached by Attorney General McCollum about whether, by adding retroactive charges now, they had run afoul of that 1997 agreement, the cruise line thought his argument was persuasive enough to cave in. So last week Royal Caribbean announced they're going to give back the retroactive charges, and clearly disclose the charges on new bookings.

Carnival, though, is resisting the idea of a rebate. Yesterday, Carnival Corp. dug in its heels on its quarterly conference call with financial analysts, falling back on its fine print which it said had mentioned for some time the possibility of future fuel surcharges. The attorney general disagrees that this constituted adequate disclosure, and it will be fascinating to see how this plays out over the next few weeks. We're thinking that kicking sand at their home-state attorney general will probably not serve them well in the long term.

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Celebrity gives birth to Azamara, a new "deluxe" cruise line

It's rare for an existing cruise line to split itself in two, but that's exactly what Celebrity Cruises has done with its introduction of "deluxe" cruise line Azamara Cruises. "Azamara" is word invented for the occasion, from Romance language roots blue ("aza"), and the sea ("mar").

The new upscale cruise line will sail with two of the extremely popular midsize 700-passenger R-Class ships originally built for now-defunct Renaissance Cruises. One of these vessels, Azamara Journey, had been sailing already as Celebrity Journey and launched the Azamara brand in a re-inaugural voyage May 5. The sister ship, Azamara Quest, comes online in October.

Celebrity has emphasized that the Azamara brand stakes out a new "deluxe" territory between "premium" and "luxury" cruising. However, we would argue that the very successful Oceania Cruises, which has sailed with R-Class vessels since its inception in 2002, had already carved out this same niche.

Azamara Cruises President Dan Hanrahan, who also is president of Celebrity, said "Azamara Cruises is expressly designed for travel enthusiasts who appreciate what a cruise vacation has to offer, but are looking for something a little different, and a little more special. And what's special about Azamara Cruises is its distinctive combination of impeccable service, exceptional cuisine and off-the-beaten-path destinations, with truly immersive excursions."

Journey and Quest offer butler service in every stateroom and suite, as well as concierge-style amenities, including fresh-cut flowers, fresh fruit, Elemis toiletries, complimentary use of Frette cotton robes, two complimentary pairs of slippers, plasma TVs and plush European bedding.

The premium cruise lines like Celebrity have struggled for years to convince guests to pay a premium price over their "non-premium" competitors, so from the perspective of Wall Street, an effort like this one to deliver clearly enhanced benefits with separate branding, and command a higher per-diem price, will be most welcome.

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