People have died. People are sick (including one person I know). And here in my home port of Seattle, the epicenter of the coronavirus outbreak in the United States, schools are closed until at least April 27th, thousands of people are working from home while many others have been laid off, and businesses are shuttering. These are difficult and strange times. Having a cruise cancelled is small potatoes. I get that. Still though…
My first of three booked cruises, set to sail on April 11th, has officially been cancelled. I’m nearly certain the second one, scheduled to call in Victoria in May, will be too (due to Canada barring all cruise ships from docking there until July). And the third one set to visit Alaska from Seattle on July 2 is more questionable than my skills as a temporary homeschool mom:
Many of us are in this same position, with one or more cruises already cancelled or bracing ourselves for when our cruise invariably gets cancelled by the cruise line. And we’re faced with some difficult choices. So, what do we do?
Cruise lines that have cancelled sailings are generally giving customers two options: a full refund of your cruise fare (along with taxes, fees, and packages and excursions booked through the ship) OR future cruise credit (usually a percentage amount above what you originally paid for the base fare, the most common currently being 125%). Some lines are also offering onboard credit to those who elect the future cruise credit option. Here’s what’s being offered (as of March 15, 2020) by line:
Many are wondering if it makes more sense to take the full refund or the future cruise credit. While every situation is different, here are 5 questions to consider before you decide:
It may help to calculate the return on your investment (ROI) should you elect to take the future cruise credit along with any additional incentives. Here’s how to do that using my cancelled cruise as an example:
Step 1: Determine your base cruise fare. Do not include any taxes, fees (including port fees) or extra packages or excursions you purchased as all of that will likely be refunded to you regardless of which option you pick. My base cruise fare was $789.
Step 2: Calculate your total incentive amount. This should include any percentage above 100% the cruise line is offering you in future cruise credit PLUS any onboard credit or the value of any additional incentives they are including (free drink packages, airfare, etc).
Holland America offered me 125% of my original base cruise fare plus $250 onboard credit. So:
$789 X .25 = $197.25 (this accounts for the extra 25% of my base cruise fare being offered as future cruise credit).
$197.25 + $250 = $447.25 (the extra 25% of the base cruise fair plus the $250 of onboard credit I was offered). My total incentive amount is: $447.25.
Step 3: Calculate your total returned amount. Add together your original base cruise fare and your total incentive amount. Here’s how I calculated mine:
$789 (my original base fare) + 447.25 (total incentive amount) = $1236.25.
Step 4: Calculate your return on investment (ROI). Total Returned Amount minus Base Cruise Fare divided by Base Cruise Fare = ROI
So for me it was $1236.25 – $789 / $789 = 56.7%
While my ROI would be nearly impossible to top through any other means, there are some additional factors I need to consider before deciding to opt for the future cruise credit.
Having loads of future cruise credit won’t do you any good if you won’t have the time off to use it. Check the time restrictions specified by your particular cruise line and make sure you’ll be available to sail within them.
You might also be in a higher risk group for suffering serious symptoms of coronavirus and unsure on when it will be safe for you to cruise or fly again. Because this is such a huge unknown right now, you may be better off taking the refund and cruising again when you’re sure it’s safe.
I follow cruise prices more obsessively (and annoyingly, I’m told) than my shadow chases me around in full sun. And sadly, many prices are going up, in some cases considerably. The reality is that cruise lines now have mass numbers of people locked into having to book future cruises and the prices seem to reflect that. If future cruises are costlier, even factoring in your incentive amount, you may opt for receiving a full refund and waiting for prices to come down before you cruise again.
Small business owners, hourly service employees, those taking unpaid time off work to care for children out of school, and those who are ill or caring for someone who is ill may be suffering the financial toll of the coronavirus. If you need cash for other necessities, having money tied up in a future cruise isn’t a viable option. Opt for the full refund.
Perhaps you’re a shareholder and have a personal stake in the financial health of the cruise line. Or you’re just a cruise lover (or fanatic like me) and want to do what you can to help the industry. The best thing you can do is continue to cruise. Consider taking the future cruise credit and booking additional cruises on top of what you’ve already paid for.
Considering the high return on investment I’ll receive by electing to take Holland America’s offer of future cruise and onboard credit and my flexibility and ability to take advantage of lower last minute cruise fares from my home city of Seattle, I’m electing to forfeit a full refund in favor of future cruise/onboard credit. I’m following the situation here in Seattle and around the country very closely and I’m eager to get back to cruising as soon as possible. Whatever you decide in these difficult and uncertain times, I hope I’ll see you back on a cruise in the not-to-distant future when life is back to normal and Corona is paired with a lime instead of a mask. And with that…
Class Dismissed.
Homework: suffering from cruise withdrawals or looking for something fun to do with the kids while schools are closed? Try making a classic cruise dessert, Carnival’s Melting Chocolate Cake! Go here for the recipe and detailed instructions.
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