Oil Hits 12 Month High Will Fuel Surcharges Return in 2010?
Yesterday evening while reading the newspaper I noticed that the price of a barrel of oil had surpassed 75 dollars per barrel. What this means is we are once again heading into the territory where the cruise lines start getting nervous about how much moolah it takes to fill up the tank. If you can remember back to early 2008, you know the price of a barrel of oil was skyrocketing and the cruise industry decided they weren’t going to foot the bill. So, they decided to pass the buck to the passengers in the form of a fuel surcharge. These fuel surcharges cost anywhere from 5 to 8.50 per day per person. The fuel surcharges were also capped at 70 dollars for most sailings. The decision was final and there was no getting around it. However, the surcharges were short lived because as we approached 2009 all of the fuel charges were eliminated.
Could the Fuel Surcharge Make a Comeback?
When the price of a barrel of oil plunged the cruise lines were very fast to respond by suspending the charges, but they weren’t eliminated. Knowing that its impossible to predict the future, the cruise lines left the door open for the return of the fuel surcharge. Most of the lines set a price at which they had the right to re-institute the surcharge. Norwegian Cruise Line and Royal Caribbean Cruises (parent company of Royal Caribbean, Celebrity and Azamara) set their trigger price at 65 dollars per barrel while Carnival Corporation (parent company of Holland America, Princess, Carnival, Cunard, Costa, and Seabourn ) set their trigger price a little higher at 70 dollars per barrel. As of Wednesday the price of a barrel of oil sits at 75 dollars per barrel. In other words, if the price of oils stays at these levels the fuel surcharge can be re-instituted at any time.
The reality is with the current levels of unemployment, (for many people) the money to spend on travel and leisure does not exist resulting in a soft travel and tourism sector. As you all know a soft travel and tourism sector combined with higher costs usually equals us getting screwed. While no cruise lines have publicly talked about fuel surcharges, supposedly the economy is on the upswing. The combination of that upswing and the higher price of oil will cause the price of real fuel to increase. If that increase happens I do expect the surcharge to return, especially with the level of unemployment which exists.
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[...] in October I wrote a blog entry about the return of the fuel surcharge, you can read it here. In that blog entry I speculated about whether or not cruise lines would once again begin charging [...]