Bad news, cruisers: The era of the incredible cruise deal<\/a> is over \u2014 at least for now.<\/p>\n Cruise companies in recent weeks have reported sharply rising yields \u2014 a measure of the money they are bringing in per day per passenger \u2014 and noted that cruises are no longer as inexpensive as they used to be, compared to land-based resorts.<\/p>\n “Last year we talked around having a 40% to 45% gap [in pricing] to land-based vacations,” Jason Liberty, Royal Caribbean Group’s CEO, noted last week in a conference call with Wall Street analysts. “Our yields in 2023 rose 13.5% … so we obviously made a dent into that.”<\/p>\n For more cruise news, guides and tips, sign up for TPG’s cruise newsletter<\/a>.<\/strong><\/p>\n Speaking with analysts after Royal Caribbean Group reported strong earnings for the fourth quarter of 2023, Liberty said the company expected to close the gap in pricing with land-based resorts even more this year.<\/p>\n “We are obsessed about [it] really,” Liberty said. He noted that the company’s focus as a business of late is more about competing with land-based resorts than other cruise companies.<\/p>\n “It’s more about how do we close that gap \u2014 how do we compete with a land-based vacation?” Liberty said.<\/p>\n Royal Caribbean Group is the parent company of Royal Caribbean<\/a>, the world’s largest cruise line, as well as Celebrity Cruises<\/a> and luxury brand Silversea Cruises<\/a>. It’s also a part owner of Germany’s TUI Cruises and Hapag-Lloyd Cruises.<\/p>\n Liberty didn’t give an estimate of what he saw as the differential in pricing between cruises and land resorts. However, in a report to investors in mid-January, leisure travel analyst Patrick Scholes of Truist pegged the percentage at around 25% to 30%.<\/p>\n Daily Newsletter<\/p>\n Reward your inbox with the TPG Daily newsletter<\/p>\n Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG\u2019s experts<\/p>\n<\/div>\n<\/div>\n While still notable, the differential is down significantly from just two years ago; back then, some Wall Street analysts estimated that cruises, on average, were priced as much as 50% below the cost of land resorts<\/a> when comparing similar products.<\/p>\n “We are gaining momentum in our ability to close the unwarranted value gap to land-based alternatives,” Josh Weinstein, Carnival Corporation’s CEO, recently told Wall Street analysts.<\/p>\n Related: Is a cruise right for you? Start by asking yourself these 7 questions<\/a><\/strong><\/p>\n Weinstein spoke with analysts in late December after Carnival Corporation announced solid quarterly earnings. He suggested the company’s success in drawing more first-time cruisers over the past year contributed to closing the differential between cruise pricing and land-based resort pricing.<\/p>\n The increase comes as demand for cruises in general soars<\/a>.<\/p>\n “In 2023, we captured over 3.5 million new-to-cruise guests and remain well-positioned to continue to take share from land-based alternatives,” Weinstein said.<\/p>\n Related: Cruises vs. all-inclusive resorts: Which is the better value?<\/a><\/strong><\/p>\n Weinstein also suggested that because COVID-19 caused land resorts to cut back or eliminate many service offerings, cruise lines might have an edge over resorts in raising rates these days since they provide better service.<\/p>\n “We can further champion the fact that while many land-based alternatives have pulled back on service levels, we still deliver incredible service to our guests, thanks to our amazing crew,” Weinstein explained.<\/p>\n Carnival Corporation is the parent company of Carnival Cruise Line<\/a>, Princess Cruises<\/a>, Holland America<\/a> and six other major lines that collectively account for nearly half of all cruises taken worldwide.<\/p>\nCruises are still the better value<\/h2>\n
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