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Cruise Tip #4. Timing Your Cruise Purchase

How to save money on your cruises and other related costs by timing your cruise purchase.

Most people think about where they would like to cruise first, and then they think about a convenient time to take a vacation. This is backwards. Getting a real cruise bargain is like finding a Van Gogh in a Goodwill Store – you never know when it will happen, and when it does you had better grab it quickly or it could disappear soon.

Many cruise novices make the mistake of thinking cruise prices are calculated like train fares, with a set price on a recurring timetable and prices directly related to mileage. Nothing could be further from the truth. The cruise industry has created a business model that depends upon filling up every ship at any price. The closest comparison is airlines and hotels, pricing is purely based on supply and demand where the supplier has what is called a "perishable commodity," meaning they can't sell a stateroom on a cruise that has already sailed.

Cruise prices are set over a year in advance, but the prices will change as the sail date gets closer. If the ship still has rooms left close to the sail date the prices can drop drastically as the cruise gets closer – solely depending on how full that ship gets. Logically, this implies that the best deals are to be had by waiting until the last minute. But there is no guarantee that prices will follow this course. In fact, if a ship becomes almost full well before the sail date it will become more expensive than ever, so waiting for the last minute can be a big mistake.

The cruise lines have a target capacity – 100% of "berth capacity," meaning a number equal to all the cabins filled at double occupancy. But in actuality the ship can be sold at 100% berth capacity with extra passengers in many cabins, but still have many empty cabins available. At this point the cruise line may decide the ship is full enough and raise prices higher than where they started a year out. The logic is that anyone who wants to cruise on that specific ship at a late date probably has a good reason; it's their only vacation time, or they want to join friends onboard. They know these people will pay a premium to get on that ship.

Or they may lower prices to sell those empty cabins - depending on what they feel is the best strategy to make the most money based upon demand. The buyer never knows which direction prices are going until he sees them change. They may go down one week and up drastically the next, because a ship that was relatively empty suddenly hit its mark in capacity. So, there is no "best time to buy a cruise" rule – there are merely rough guidelines and understanding cruise pricing strategy.

Examples to Contemplate

Here are examples of pricing anoamlies I have observed: in 2007 the Caribbean was soft in demand, so it had the best prices. In 2008 it was Mexico, in 2009 it was Alaska, in 2010 it was the Eastern Mediterranean, in 2011 it was the Western Mediterranean. Pricing is lowest (on an average "per day" basis) in the cruising regions where the cruise lines have too many staterooms to fill and/or demand is soft. The Mediterranean has been experiencing soft demand solely because of the political strife in Northern African states like Algeria, Lybia, and Egypt. Higher airfare costs due to oil prices have also slowed down demand in Europe.

The biggest factor in Europe was the Concordia tragedy. The event received far more press in Europe, where it happened, than it did in the U.S. Furthermore, Europeans are even more leery of cruising in general as they are newer to the experience than Americans. Of course, no one predicted the Concordia disaster would happen, so when it did it was too late to change the number of ships scheduled to sail in the Mediterranean that summer (2012). As a result, the cruise prices there in summer, 2012, are as low as they have ever been. We are seeing 10-day cruises as low as $499 per person.

So, when I say timing is important I specifically mean one should look to see what cruising regions are on sale in a given year. It changes often, year to year, so if you follow the industry trends instead of thinking where you want to go first you can save a lot of money. If you chose to see Alaska this year instead of Europe you may pay twice as much, but Alaska was dirt cheap in 2008 - so you would have already seen it.

So, here is the secret: The best approach to cruising is to grab a bargain when you see one. In my experience, if you do this for five years you are likely to cruise to a different region every year. Let the whims of nature decide where you are going to go and eventually you will see every cruise region you want to see.

Seasonal Timing Considerations

When it comes to time of year, the most expensive weeks are the Christmas and New Years holidays. The most expensive season for cruising is summer, when kids are on vacation. Yes, cruising is by far a family vacation, not a haven for singles, seniors or other tiny demographics as so often depicted in the media. The next most expensive period after summer is the winter season after the holidays. This is actually a very active period called "wave season." The cruise lines run sales because they know many east coast and midwesterners want to get out of the snow and visit the warm Caribbean.

The cheapest time of year to cruise is after summer vacation but before the holidays; September through mid-December when more people are pre-occupied with getting the kids settled in school, politic elections and the holidays. The cheapest weeks of the year to cruise, historically, are the two weeks before the Christmas vacation and the first week after the New Year's Eve cruise.

But once again, the main thing to remember about cruise bargains is this - be prepared to grab one when you see it, because it could go away very quickly. Yes, you want to consider a few things, first; "why is this cruise so cheap?" Is it for reasons that might mean it will get even cheaper, or is it because conditions are perfect right now? Signs that a cruise might get even cheaper would be continuing bad news about cruise prices in a certain region due to too much capacity, or the fact that the cruise you are looking at is still six months away. In that situation there is a good chance the cruise will get cheaper the week after final payment is due - usually 60 to 90 days ahead of the sailing date depending on the specific cruise. But you want to watch it. If it starts to go higher you may want to book it sooner rather than wait.

How do you figure out when final payment is due for a specific cruise? Go to the web site of the cruise line and search for the "cancellation policy." It will tell you when final payment is due according to length of the cruise. Final payment is due on the same day that the cancellation penalty period begins. However - you should wait at least 48 hours after the penalty period begins, because they will not drop prices until their "best price guarantee period" has lapsed. That period is 48 hours.

There is much more specific information about cruise line cancellation policies in the next chapter (5).

Last minute cruises - less than a month out; if the price is great and you want it, grab it. If that ship suddenly sells a number of cabins at bargain prices the fare you see could double the next day.

Next Cruise Tip >> 5. Discounts and Other Credits

Contents: 1. Selecting a Cruise Port 2. Related "Getting There" Costs 3. Picking Your First Cruise Ship 4. Timing Your Cruise Purchase to Save Money 5. Discounts and Other Credits 6. Cruise Ship Stateroom Selection 7. Saving Money During the Cruise 8. Shore Excursions and Tours 9. Seasickness and Health at Sea 10. Why Use a Cruise Travel Agent

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