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.
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.
Labels: Azamara, Carnival, Celebrity Cruises, Cunard, Fuel Surcharges, Norwegian Cruise Line, Princess Cruises, Royal Caribbean
posted by Evan Eggers at 3/21/2008 11:15:00 AM
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