Cruise Lines Imposing Stiffer Cancellation Penalties

Revisions to Carnival Cruise Lines’ cancellation policies that take effect Jan. 30, 2012 are the latest in a gradual move by cruise lines to impose stiffer penalties further out in the sales cycle.
Cruise line cancellation policies have remained fairly consistent for several years, with the severest penalties applied to cancellations on long cruises, on itineraries to exotic destinations, and on bookings canceled close to departure date. But over the past two years some lines have quietly tweaked their policies. They’ve lengthened the number of days out from sailings when the strictest penalties apply and, in some cases, increased the size of the penalty, sometimes doubling it. To be fair, most lines have not made wholesale changes. Taken together, the changes to cancellation policies reflect cruise line efforts to boost revenues on all fronts. The stiffer penalties have a favorable effect on revenues in two ways. Longer penalty periods encourage cancellations earlier in the sales cycle, and that improves a cruise line’s chances of re-selling cancelled space. Of course higher penalties also allow cruise lines to retain a bigger share of the sale price on canceled bookings.