Posted by: cruise2 | 7 December, 2010

On Board Revenue

through the courtesy of Mark Tre

A circular sent by Britain’s "Daily Mail" to potential advertisers last week made an interesting revelation. According to a survey of "Mail" readers who go on cruises, they spent on average £722 per person on board ship. At to-day’s rate of exchange that’s about $1,155 each.

This seems to contradict the general rule of thumb these days, however, that 25% of the cost of a cruise is in spent on board. If this were true, the corresponding ticket price to go with a $1,150 on board spend would be $3,450. The "Mail," however would only say that it’s readers on average spend in excess of £1,000 (about $1,600) or less than half this level.

Has the “Daily Mail" made an error or is there something some of the cruise lines would rather not tell us once they have attracted their customers on board? The lines have never paid more attention to increasing on board revenue.

On one of the top lines, for example, there is now an Onboard Revenue Manager who reports to the Hotel Director, and through a dotted line to the shore-based Manager of Onboard Revenue. Reporting to the Onboard Revenue Manager are the managers of the casino, art auctions, shore excursions, golf, aquapunture, photos, the spa, computing, florist, port shopping and desktop publishing, with another dotted line extending down to the laundry master, activities manager and bar manager, the latter for revenue purposes only.

The Onboard Revenue Manager is responsible to "optimize on board revenue generation by analyzing financial data and developing cross-marketing and sales strategies." Working with set revenue targets, the task is then to increase onboard revenue by increasing "guest participation" – what one cruise line calls their "guest experience." Nothing could be clearer – we are all "consumers." But it does make one feel a bit creepy to think that whenever a crew member looks at you they may only see dollar signs.

Whatever happened to the good old purser?

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  1. All you have to do to find the answer to this is to look at the published annual financials of the cruise lines – think you may find that a major cruise group will get 40+% of its revenues (and greater percentage than that of its profits as the markup is greater) from on ‘board revenue’ including the sale of shore tours

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