Thread: Could Fuel Supplements Be Coming Back??

Just saw this story about the fact that the price of oil is approaching $100 a barrel and it may have an impact on the airlines' decisions to add fuel surcharges in the near future;

Higher U.S. Airfares Loom as Oil Climbs Toward $100 - Bloomberg

Some cruise lines are saying in their contracts that they reserve the right to add a Fuel Supplement should the cost of sweet light crude oil on the NYMEX exceed $70. The current price is hovering just over $90 and futures show an incline in prices.

It would seem inevitable that either the price of cruises will be going up to accommodate these costs, or the cruise lines may be re-instituting the Fuel Supplements in the very near future.

From a professional's point of view, we hate these supplements for a number of reasons; first, it may affect those who have already booked and may have an additional cost added they hadn't budgeted for.

But the biggest reason we don't like them is because it's a way for cruise lines to increase the cost of a cruise without it affecting agent's commissions.

The fare you pay consists of three items; the cruise fare, port fees, and taxes. An agent's commission is based solely on the cruise fare. If the price of the cruise fare goes up, then the agent's commission goes up. However, if the add a fee, such as a fuel supplement, then they have increased the cost to the passenger without having to increase the commission to the agent. They get the best of both worlds.

Our feeling is that if you have to raise the fares in order to meet addition costs, then do it as a part of the cruise fare and don't just add a fee. If the cost of labor goes up, should they add a Labor Supplement? If the cost of food goes up, should they add a Food Supplement? Of course not. So if the cost of fuel goes up, why do they feel it's appropriate to add a Fuel Supplement instead of just raising the cost of the cruise?

So let's hear what you have to say.

If added, will this supplement (around $9 per person per day) affect your decision to cruise? Will it have an affect on which cruise you'll choose, the type of cabin, or the length?

Do you feel a separate Fuel Supplement is an appropriate way to handle the cost or should it be added to the price of the cruise?

Pete

The extra coins pr day to cruise will not affect my decition to cruise at all.

I think the fuel supplement will come back but most likely disguised as something else.

Lars, they are not going disguise it. If they were going to do that, I think they would have done so in the first place in 2008. It will very well come back if the cost of a barrel of oil hits $85 - $100 per barrel. It will add a substantial amount to the fare. $9 per day on a 7 day cruise is $63 per person and adds US$126 to the cost of a cabin, which as far as I am concerned is a lot of money. As you know, the longer the cruise, the more you pay for the fuel supplement.

Weeel, $126 extra is still not much when you are looking at the total price you pay for the cruise - Not in my opinion anyway....Its the price of an exursion......more or less
I still think the cruise lines will disguise the supplement becasue of all the bad press it recived back in 2008.....The cruise lines can just rise the price of the cruise and then you have got your fuel supp. in disguise....or rise the prices for drinks you purchase onboard, or what you buy in the shops....lots of ways to slip the fuel supp in there without us knowing and everyone is happy.

You can keep tabs on the futures prices and track backwards to see how long the price has been over $90 a barrel and the cruiselines have not overtly put the cost into a cruise ticket.....but how long will it remain so?
link ---> light sweet crude oil

I an waiting for HAL to announce that they will soon be adding the fuel surcharge back onto our bills.

Has to be close, we are at $3.09 a gallon. It won't stop me from cruising either.

Every time I visit the USA i nearly cry when I hear of the tremendous price you pay for gas. Its only around $8 a gallon in the UK and Europe.

Does this explain why cruise prices are so high in Europe and why we may get a surcharge first.

Well, guess I was just slightly ahead of the game because here's the first announcement that just came out today from Cunard raising their fuel supplement. At least they did NOT do it retroactively like we expected. Can others be far behind in implementing theirs?


Dear Travel Partner:

Due to the continued escalation of fuel prices, Cunard Line will increase our fuel supplement from $3.85 (USD) to $6.00 (USD) per person per day. This supplement will not exceed $200.00 per person, per voyage. The supplement applies to each paying guest travelling, including 3rd and 4th person fares and paid children's accommodations.


The new fuel supplement will apply to all new bookings made on or after 31 December 2010 for voyages departing on or after 14 April 2011.

We regret having to take this action, but as fuel prices continue to rise we now find it necessary to implement this additional supplement.

Thank you for your business and continuous support.

Based on Cruise Planner's latest, I'd guess that the per-person-per-day surcharge is inevitable very soon across the board. I mean, the cruise lines are like the airlines, aren't they? So, if one starts charging and getting a surcharge for whatever, all the others will follow along almost immediately.

It's sometimes called the "sheep mentality!"

SWR