Sunday, March 13, 2016

Price discrimination in cruise lines

The major cruise lines are great at price discriminating - charging different prices to different consumers based on consumers' willingness-to-pay.  (See my previous post here for evidence.)  I went on a cruise over my spring break and on the first day, three couples were discussing the prices they paid:

Couple #1: Inside Room (which is least desirable).  The total price after taxes and fees was $1550.  This couple booked their trip just one week before the sail-away date.

Couple #2: Inside room.  The total price after taxes and fees was $2300.  This couple booked their trip four months ahead of time.  However, this couple also got a free beverage package (all alcoholic and non-alcoholic drinks free throughout the cruise) and several meals at "specialty restaurants".

Couple #3: Balcony room, $2900, booked 4 months ahead of time.  This couple also received the free beverage package and the free meal package.

Another interesting note - couple #2 called a few days before the cruise departed and upgraded to a balcony room for $300 more, making their price $2600 for the exact same package couple #3 received (for $2900).

Three couples and four different prices, all for the same trip.  The cruise lines are good at extracting as much as they can from their customers.

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