Carnival to add $5/pp/pd Fuel Surcharge

MIAMI - Carnival Corp., the world's largest cruise operator, said
Wednesday it will apply a fuel surcharge of $5 per person per day for
its North American brands due to continuing rising fuel prices.

Carnival Chairman and Chief Executive Micky Arison said in a statement
that the supplement is necessary because rising fuel prices are
affecting the company's operating costs.

Carnival saw a 140 percent increase in the price it pays for fuel over
the last three years, with the cost climbing 50 percent over the past
seven months.

The surcharge only applies to the first and second guests in a
stateroom and will not exceed $70 per person per trip, the company
said. It will be effective on all bookings for voyages departing on or
after Feb. 1, 2008 on brands including Carnival Cruise Lines, Costa
Cruises, Cunard Line, Holland America Line, Princess Cruises and The
Yachts of Seabourn.

For existing reservations, travel agents will receive $10 per booking
in administrative compensation for telling their clients about the
surcharge and collecting the additional funds.

The fuel supplement will result in customers paying about one-third of
Carnival's year-over-year fuel cost increases over the first six
months of the fiscal year, according to Arison.

Carnival said it implemented a fuel supplement for its European brands
earlier in the year.

wrote in message
ups.com...
MIAMI - Carnival Corp., the world's largest cruise operator, said
Wednesday it will apply a fuel surcharge of $5 per person per day for
its North American brands due to continuing rising fuel prices.

Carnival Chairman and Chief Executive Micky Arison said in a statement
that the supplement is necessary because rising fuel prices are
affecting the company's operating costs.

Carnival saw a 140 percent increase in the price it pays for fuel over
the last three years, with the cost climbing 50 percent over the past
seven months.

The surcharge only applies to the first and second guests in a
stateroom and will not exceed $70 per person per trip, the company
said. It will be effective on all bookings for voyages departing on or
after Feb. 1, 2008 on brands including Carnival Cruise Lines, Costa
Cruises, Cunard Line, Holland America Line, Princess Cruises and The
Yachts of Seabourn.


I guess I must be dumber than dirt but I don't understand the concept of a
"surcharge".

If I won a factory that makes widgets and the cost of electricity goes up, I
raise the selling price of the widgets to cover the increased overhead.

If I own a restaurant and the price of beef goes up, I raise the prices on
the menu to cover the increase.

The cost of fuel is a part of the overhead of running a cruise line. If the
cost goes up, raise your prices to cover the increase.

This should be simple economics. Increase of overhead means an increase in
selling price. What am I missing?


--
George Leppla http://www.CruiseMaster.com

January 20, 2008 - GGC2008 - http://cruisemaster.com/adventure.htm
October 26, 2008 Sleazy 5 http://www.cruisemaster.com/sleazy5.htm

In article ,
"George Leppla" wrote:

This should be simple economics. Increase of overhead means an increase in
selling price. What am I missing?

With the other things, the prices can go up because the short times
between when something reaches inventory and the time you actually buy
it. Since cruiselines book so far in advance, they have to come up with
a way to shaft... er recoup.. changes that occur in the interim. Think
of this surcharge as the equivalent of the local grocery deciding to
charge you a couple extra cents for the cost of transporting that
hamburger you bought two weeks ago.

"Kurt Ullman" wrote

This should be simple economics. Increase of overhead means an increase
in
selling price. What am I missing?

With the other things, the prices can go up because the short times
between when something reaches inventory and the time you actually buy
it. Since cruiselines book so far in advance, they have to come up with
a way to shaft... er recoup.. changes that occur in the interim. Think
of this surcharge as the equivalent of the local grocery deciding to
charge you a couple extra cents for the cost of transporting that
hamburger you bought two weeks ago.

That makes sense except that I know that Carnival Corp. buys fuel on future
contracts. The fuel they are using now was contracted for months ago and
the fuel they will be using next year (at least the first six +/- months)
has probably already been negotiated.

Meanwhile, in October, Carnival Corp increased it's dividend to stock
holders by 14%.

"Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) has announced
that it has increased its dividend 14 percent to $0.40 per share. This
marks the sixth increase in the past three years, with Carnival's
dividend more than tripling during that time period."


With an additional $70 per cabin on every 7 day sailing..... I'm thinking it
is a good time to be holding Carnival stock.


--
George Leppla http://www.CruiseMaster.com

January 20, 2008 - GGC2008 - http://cruisemaster.com/adventure.htm
October 26, 2008 Sleazy 5 http://www.cruisemaster.com/sleazy5.htm

Kurt Ullman wrote:
In article ,
"George Leppla" wrote:

This should be simple economics. Increase of overhead means an increase in
selling price. What am I missing?

With the other things, the prices can go up because the short times
between when something reaches inventory and the time you actually buy
it. Since cruiselines book so far in advance, they have to come up with
a way to shaft... er recoup.. changes that occur in the interim. Think
of this surcharge as the equivalent of the local grocery deciding to
charge you a couple extra cents for the cost of transporting that
hamburger you bought two weeks ago.

It's all B.S. This is the same as the "energy surcharges" and "resort
surcharges" tacked on by hotels - it's all just extra profit. If
Carnival executives didn't factor volatile fuel prices into their
original pricing structure, then they would be fired for dereliction of
duty. Of course had fuel unexpectedly doubled in price, that would be
one thing, but we're talking about the typical dollars-per-barrel
fluctuations in this case.

Of course I don't fault them for doing this, because after all, their
job is to increase shareholder value, and if they can do that by tacking
on surcharges and raising drink prices and selling "art", and customers
continue to buy, then they are doing their jobs. If that bother you as
a customer, buy their stock instead of their products.

--

- RODNEY

On 11/7/2007 12:05 PM George Leppla plucked Senior Frog's Magic Twanger
and said:
wrote in message
ups.com...

MIAMI - Carnival Corp., the world's largest cruise operator, said
Wednesday it will apply a fuel surcharge of $5 per person per day for
its North American brands due to continuing rising fuel prices.

Carnival Chairman and Chief Executive Micky Arison said in a statement
that the supplement is necessary because rising fuel prices are
affecting the company's operating costs.

Carnival saw a 140 percent increase in the price it pays for fuel over
the last three years, with the cost climbing 50 percent over the past
seven months.

The surcharge only applies to the first and second guests in a
stateroom and will not exceed $70 per person per trip, the company
said. It will be effective on all bookings for voyages departing on or
after Feb. 1, 2008 on brands including Carnival Cruise Lines, Costa
Cruises, Cunard Line, Holland America Line, Princess Cruises and The
Yachts of Seabourn.



I guess I must be dumber than dirt but I don't understand the concept of a
"surcharge".

If I won a factory that makes widgets and the cost of electricity goes up, I
raise the selling price of the widgets to cover the increased overhead.

If I own a restaurant and the price of beef goes up, I raise the prices on
the menu to cover the increase.

The cost of fuel is a part of the overhead of running a cruise line. If the
cost goes up, raise your prices to cover the increase.

This should be simple economics. Increase of overhead means an increase in
selling price. What am I missing?



The Surcharge: It's a carry over from Reagan era Voodoo Economics.

--
________
To email me, Edit "blog" from my email address.
Brian M. Kochera
"Some mistakes are too much fun to only make once!"
View My Web Page: http://home.earthlink.net/~brian1951

"Lab Dog Lover" wrote in message
...
On 11/7/2007 12:05 PM George Leppla plucked Senior Frog's Magic Twanger
and said:
wrote in message
ups.com...

MIAMI - Carnival Corp., the world's largest cruise operator, said
Wednesday it will apply a fuel surcharge of $5 per person per day for
its North American brands due to continuing rising fuel prices.

Carnival Chairman and Chief Executive Micky Arison said in a statement
that the supplement is necessary because rising fuel prices are
affecting the company's operating costs.

Carnival saw a 140 percent increase in the price it pays for fuel over
the last three years, with the cost climbing 50 percent over the past
seven months.

The surcharge only applies to the first and second guests in a
stateroom and will not exceed $70 per person per trip, the company
said. It will be effective on all bookings for voyages departing on or
after Feb. 1, 2008 on brands including Carnival Cruise Lines, Costa
Cruises, Cunard Line, Holland America Line, Princess Cruises and The
Yachts of Seabourn.



To me, a surcharge is a way to undo a deal without the original purchaser
having nothing to say and having no chance to undo the deal themselves.

A surcharge means that you pay let's say $1,000pp for a 10-day cruise. Now
you are paying $1,050pp and have nothing to say about it.
Guess what would happen when your final payment is due if you decided to
deduct $5 per person per day and pay them only a total of $950pp.
Yeah, you got it. No cruise.
Gotta love big business squashing the little guy again.

In article ,
Lab Dog Lover wrote:

The Surcharge: It's a carry over from Reagan era Voodoo Economics.

The most recent surcharge at least on taxes was during the Clinton
years. Can't find any indication of their use during the Reagan era.
Would you care to point it out.

wrote:


The surcharge only applies to the first and second guests in a
stateroom and will not exceed $70 per person per trip, the company
said. It will be effective on all bookings for voyages departing on or
after Feb. 1, 2008 on brands including Carnival Cruise Lines, Costa
Cruises, Cunard Line, Holland America Line, Princess Cruises and The
Yachts of Seabourn.


It looks like we dodged the bullet on this, with our 1/13 HAL 2-weeker.

Let's say a typical ship has 3000 passengers and is booked for a 7-day
trip. That's 7*3000*5, or $105,000 in additional revenue they get.
Should they just raise prices, they'd have to pay a commission. Does
anyone know how much fuel a 3000 guest ship goes through on a typical
7-day Caribbean cruise? I've seen the number in old cruise bulletins on
the last day, but don't recall the amount. Let's run the numbers on this.
--
---Nonnymus---
No matter how large your boat,
the person you are talking with will
have a close friend with a larger one.
---Observation by my son

Not to be left behind:


Regent Seven Seas Cruises will implement a fuel surcharge of $7.50 per
person per day for all 2008 bookings that are not paid in full by Dec.
1. Original pricing for 2008 cruises allowed for an increase in fuel
prices, but not nearly to the extent of current levels, the company
said in a statement. "At the time we developed and finalized the
pricing of our 2008 programs, the cost of a barrel of crude oil was in
the $50-$60 range," the company said. "The first week of November when
we imposed the fuel surcharge, we saw a barrel of oil exceed $95. This
has been a significant change which we did not anticipate and it will
impact our operating expense." At this time, Regent said there is no
plan to assess a fuel surcharge on remaining 2007 cruises, nor on 2009
cruises.




"OK. Who says $10.00? DO I hear $10.00???


Steve-----time to hear from RCI & NCL