Norwegian Cruise Line's sweeping reform of its
cancellation policies effective Jan. 1 will make them
tougher than other brands in the contemporary segment.
In one example, guests who book a seven-day or longer cruise
must now make final payment 90 days, rather than 75 days, in advance. If they
cancel after that, a penalty equal to 25% of the fare will apply if the
cancellation is made from 76 to 89 days before sailing. The penalties increase
to 50% when made from 61 to 75 days before sailing and 75% when made from 31 to
60 days before sailing, with complete loss of payment for cancellation within
30 days.
Currently, only guests who cancel within 14 days face
100% penalties.
Marsha Rosner, owner of Rosner Travel in Marietta, Ga.,
said she thought 90 days was too restrictive for many customers.
“They have to have
full payment so far in advance,” she said. “Three months ahead, some people
don’t even book a cruise that early. It means they’re going to have to pay the full
cruise, and if something happens they lose it all. That can have a negative
impact, especially if other cruise lines are only doing 75 days — unless this
is going to be a norm and other cruise lines are going to follow suit.”
The cancellation policies of other cruise lines vary, but
several in the contemporary segment, including Carnival Cruise Line, Royal
Caribbean International and MSC Cruises, require final payment 75 days out for
seven-day cruises.
And their terms remain looser. At Carnival, for example,
a guest canceling a seven-night Caribbean cruise from 56 to 75 days before
sailing loses only her deposit, not 25% of the fare.
Likewise at Royal, although the time frame is from 57 to
74 days.
Lindsay Hardy, owner of a Travel Leaders outlet in Palm
Coast, Fla., said she thought the new Norwegian policy would have little impact
on her clientele.
“We sell travel insurance to 90% of our clients,” Hardy
said. “Travel insurance covers these penalties.”
Hardy said the new policy is actually easier on agents in
one way because it extends the loss-of-full-fare period from 14 to 30 days.
Hardy said that if a client cancels in anything other than the full penalty
period, she has to file a commission-protection notice with the travel insurer.
“If they’re in a 100% penalty at 30 days and they cancel,
then I don’t have to go through all that extra paperwork to get my commission,”
she said. “So from an agent’s standpoint it’s actually a good thing. Our
commission’s protected for 30 days as opposed to 14 or 15 days.”
Norwegian Cruise Line President Andy Stuart said the
policy would prove to be a positive for travel agents.
“It commits bookings earlier on, protects agent
commissions earlier and minimizes cancellation space from going on sale close
to sailing,” he said. “This new policy will allow us to continue to further
drive our goal of maintaining pricing integrity.”
Hardy speculated that Norwegian under Frank Del Rio, who
was appointed CEO earlier this year, is adopting the cancellation policies in
effect at Oceania Cruises and Regent Seven Seas Cruises, which are also part of
Norwegian Cruise Line Holdings. Del Rio founded Oceania in 2002.
“I’m sure that’s where it came from,” Hardy said. “Those
companies have had a stiffer cancellation penalty phase for quite some time.”
At Oceania, a standard deposit is $750 on cruises of 15
nights or less, and guests pay a $250 administration fee for canceling from 90
to 120 days before sailing. The fee can be applied to a future cruise.
Final payment is due at 90 days, and cancellations made
76 to 90 days before sailing are penalized at 25% of the cruise fare, with the
other graduations corresponding to the schedule Norwegian will adopt as of Jan.
1.
Regent Seven Seas has one of the stricter cancellation
policies in the industry. On cruises of 15 days or less, it requires a deposit
equal to 15% of the cruise fare. Those canceling 90 to 120 days before sailing
lose that deposit.
The balance of the cancellation schedule follows the new
Norwegian policy.
Like many lines, Regent has a separate cancellation
schedule for longer-length cruises that requires more advance notice to win a
full refund. It also has a separate, higher-deposit requirement for the
inaugural season of its new Seven Seas Explorer due in July.
In the contemporary segment, there are easier
cancellation penalties for shorter cruises, generally less than six days,
although the standards vary line to line.
Under Norwegian’s current policy, cruises from one to
five days in length can be canceled 45 to 60 days prior to sailing with loss of
deposit, 30 to 44 days with a 50% penalty, 15 to 29 days with a 75% penalty and
14 days or less with full loss of the cruise fare.
Starting Jan. 1, the policy on cruises from one to six
days in length calls for loss of deposit for cancellations 57 to 75 days from
sailing, a 50% penalty from 30 to 56
days, a 75% penalty from 16 to 29 days and a 100% penalty at 15 days or
less.
Certain types of sailings or certain ships are exceptions
to the policy. For example, Norwegian’s high-end Haven Garden Villas and
Suites, and sailings around the Christmas and New Years holidays have stricter
requirements, as does Norwegian’s Pride of America, the only cruise ship in
Hawaii. Norwegian consolidated the Haven and holiday sailings into one category
in the schedule that starts Jan. 1.
Also there is a separate cancellation schedule that
applies to add-ons to the basic cruise or cruise tour.
If a guest, for example, cancels the air portion of a
cruise booking but not the cruise itself, there is a $100 fee if the
cancellation comes 76 to 89 days before cruise departure.
The cost gradually increases to 50% of the air fare from
61 to 75 days before sailing, 75% of the air fare from 31 to 60 days and the
entire cost of the ticket within 30 days of departure.