Making Financial Headlines · Page 7
Cruise Lines Market Suites Costing Up to $25,000 a Night
· New York time
Cruise lines are pursuing luxury travelers with suites priced as high as $25,000 a night. CNBC toured the Regent Suite aboard Regent's Seven Seas Splendor, an offering priced at $15,000 a night. Those are different price points, although both can make a hotel minibar look like a public assistance program. The commercial strategy is premium segmentation: offering a particularly expensive experience to customers willing to pay for it. That does not mean cruise companies have abandoned mass-market passengers or that every luxury suite sells at its advertised price. A top-end offering demonstrates what a company markets, not the price sensitivity of every traveler. For a business assessment, the important questions extend beyond the spectacular nightly figure. Revenue depends on bookings and the terms of those bookings; profitability also depends on the cost of providing the service. A large price tag is a beginning for analysis, not its conclusion. The offerings nevertheless show how far the travel industry can stretch its product range. The same broad vacation category now accommodates radically different spending levels. At the upper end, the ocean view comes with a financial perspective of its own: the horizon remains complimentary, but almost everything surrounding the viewing experience has been carefully upgraded.
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