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Cruise lines adding more options, but at a cost

When clients ask Miami travel agent Ralph Santisteban what's included in the price of a cruise, he answers: "Before I tell you what is included, let me tell you what's not included, because that list is much smaller."

But as cruise lines diversify their offerings to attract guests, stay competitive and boost revenues, that list is getting longer.

Cruises are a great value for frugal travelers, the sales pitch goes, because you pay the fare up front and everything else — room, food, activities — is included.

Unless you want to watch a murder mystery show over lunch, that is. Or hit the spa or casino. Or drink alcohol, soda or a Starbucks cappuccino. From private-label beer to 24-hour pizza delivery to an increasing number of extra-charge restaurants, cruise lines are adding more choices than ever to attract customers.

And those options frequently come at an additional cost.

"Lines say they're trying to create new experiences for people," said Dan Askin, news editor of online cruise magazine Cruise Critic. "They need to charge appropriately to get back their money."

While many lines long have charged a nominal fee for dining outside in upscale specialty restaurants, the range of options is expanding as operators seek to draw more guests — and revenues — in a tight economy.

Mainstream cruise operators such as Carnival Cruise Lines, Royal Caribbean International and Norwegian Cruise Line say they would rather keep fares low and let customers decide where they'd like to splurge rather than include alcohol and fancy meals in the main ticket price.

And there are a host of new opportunities for splurging. The Disney Dream, Disney Cruise Line's newest ship, includes a $75-a-person gourmet restaurant (alcohol not included) called Remy.

And Celebrity Silhouette, which debuted this summer, offers new $149-a-sea-day cabanas in the Lawn Club area that previously held only grass, as well as an interactive grill. The price for that new restaurant has already increased from $30 to $40.

"What really is driving a lot of the things we do on board is our customers say they want variety and they want choice," said Lisa Bauer, senior vice president of hotel operations for Royal Caribbean International.

That cruise line's newest ship is the 5,400-passenger Allure of the Seas, which features 26 dining options. Of those, 12 come at an additional charge.

"By really letting the guest decide where they want to spend their money and by the fact that we offer the breadth of the opportunity that we do, I think that's the right mix," Bauer said.

An early pricing experiment quickly failed after Royal Caribbean introduced extra fees with its groundbreaking ice skating and rock climbing activities on Voyager of the Seas in 1999. The amenities stuck around; the charges were gone by the next year. Other extra-fee options on Allure range from a

Starbucks to cupcake shop to Chef's Table, a fine dining-and-drinking experience for $95 a person — an increase in recent months from $75.

"These things are kind of getting up there," said Miami cruise expert Stewart Chiron, CEO of cruiseguy.com — though because the price includes wine pairings, he still considers it to be a good value.

And while cruisers aren't required to visit any restaurant that costs extra dough, Chiron said," it allows passengers to have the vacation customized to their wants."

Bauer and other cruise executives are quick to note that the for-fee items can easily be replaced by free options.

That was convenient for 31-year-old Andrew Cano and his parents, who sailed on Allure of the Seas for its debut voyage from Port Everglades last year.

The Miami native and cruise veteran ate at extra-cost restaurants, comfortable with paying the $15-$20 surcharge in exchange for what he found a more pleasant dining experience than the buffet or main dining room.

His parents, on the other hand, are stalwart inclusionists who had to be tricked into eating at the specialty restaurants — at Cano's treat.

"They are still in the mindset that we've paid an all-inclusive price and we're getting an all-inclusive vacation," said Cano, a librarian who moved recently to Dallas. "Me and people younger than me really don't have that expectation."

Askin said that's the sentiment reflected on message boards on CruiseCritic.com.

"The old experienced cruisers who have watched this unfold, they're crying foul," he said. "But then new cruisers that I talk to, they don't mind so much. They see it as a nice option and they think, 'We don't have to pay for it if we don't want to."'

Even Carnival, which prides itself on affordability with a minimal number of for-fee restaurants, has moved beyond the traditional steakhouse that has been a standard. On its newest ship, Carnival Magic, the line added two new concepts: a pub with a private label beer and a la carte pricing for food, and a for-fee Italian restaurant.

"We try very hard not to nickel-and-dime and to make sure that these options that you have to pay for are few and far between," said Ruben Rodriguez, executive vice president for ship operations.

Rodriguez pointed out that there's no cover charge at the RedFrog Pub and bar fare costs just $3.33. The Italian restaurant, Cucina del Capitano, costs $10 for adults and $5 for kids — less than a comparable eatery on land.

While new ships often have the most variety in restaurants and entertainment, cruise lines are also retrofitting earlier ships to include some of the most popular features, including many moneymakers.

In a recent upgrade of Norwegian Dawn, the ship got a Brazilian steakhouse that costs an additional $20 and has been popular on the line's newest ship, Epic. Royal Caribbean is in the midst of a widespread enhancement program that will include retrofits on 18 ships, including some for-fee restaurants.

The push to broaden spending opportunities on board comes as cruise lines struggle to increase their revenues after a rough patch during the recession.

The world's two largest cruise ship companies, Carnival Corp. and Royal Caribbean Cruises, both saw net onboard revenue drop by 10 or more percent at the height of the recession in 2009, wrote UBS Investment Research cruise analyst Robin Farley in an industry outlook.

"2010 was a year of recovery for both major lines, after the industry hit a short-term trough, for both onboard and ticket yields," she wrote.

Onboard revenues are up in 2011 so far as well for Carnival, Royal Caribbean and NCL.

Cruise fares haven't budged much in years, said Norwegian Cruise Line CEO

Kevin Sheehan. And that has made onboard spending more important to the bottom line.

Sheehan said some passengers stick only to those items included in the fare, while others sock away money for extras such as gambling, spa treatments, shore excursions and drinks.

David Vargas, 24, is getting ready to sail on Allure later this month with his girlfriend. He expects to shell out for shore excursions and a specialty restaurant or two.

"My philosophy is that the little things do add up," said Vargas, who has a production company. "I'm going to try to be the most basic cruiser possible."

Santisteban said he sees it as his duty to education consumers about what to expect — and to assure them that they aren't being cheated.

"It's not that the cruise lines are giving less," he said. "The cruise lines are offering more."

———

SOME EXTRAS YOU CAN EXPECT TO PAY FOR ON A CRUISE

—24-hour pizza delivery: $5 on Norwegian Cruise Line ships

—Unlimited soda: $6.25 a day for adults on NCL, $6 on Carnival, $6 on Royal Caribbean

—Private "Alcove" lawn cabana: $99 for port days, $149 for sea days on the new Celebrity Silhouette

—10-ounce filet mignon: $14.95 in the regular dining room on Royal Caribbean

—Private-label beer: Carnival's ThirstyFrog Red $5.50, additional $4 for the souvenir pint glass

—Late-night child care: $13-$33 plus gratuity on Carnival Cruise Lines, depending on the program

—Gourmet meal: $75 per person at Remy aboard the Disney Dream

Copyright © 2014, The Baltimore Sun
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