The law, which takes effect July 1, makes it illegal for businesses, including cruise lines operating in the state, to advertise or list a price that doesn't include all fees and charges.
On the US market, most lines advertise a cruise fare that is separate from 'government fees and taxes.' While those fees are disclosed to the consumer, as mandated, they typically are not bundled into the advertised rate.
Depending on the destination and number of ports visited, such fees may add hundreds of dollars to the price.
Transparency
This is a transparency law, California Attorney General Rob Bonta said. 'The law is simple: the price you see is the price you pay.'
For cruisers, this could cause 'sticker shock' since the advertised rates will be higher.
The law doesn't target or even mention cruise lines but applies to all companies selling goods and services in California, from event tickets to hotels, restaurants and food delivery services, to name a few.
For the travel industry, this is complicated. Buying a cruise is not like going to a restaurant, where patrons buy the food in the place they're eating it. Lines and travel agencies typically sell nationally. Should they advertise one price in California and another elsewhere?
'This is a rumbling volcano,' said a source, given the complexities.
Seatrade Cruise News reached out to a number of cruise operators and retail groups for their strategies.
Carnival Corp.
'Carnival Corp. & plc has decided to take a uniform approach for its brands doing business in North America, so pricing is consistent no matter where guests are shopping,' a spokesperson said.
'Our total advertised price will now include all government-mandated taxes, fees and port expenses that we previously itemized separately for consumer awareness. While this is a California state law, we are making this change nationwide to ensure our advertised pricing is consistent no matter where guests shop for our cruises. Consumers and travel advisors will see the new advertised pricing starting on July 1.'
The company already notified travel advisor partners on April 17 about its plans to comply so they would have time to consider steps they need to take.
'Fortunately, despite how our prices will now be advertised, the total price guests pay today for our cruises has not changed — guests still get the same great value and affordable prices we’ve always provided,' Carnival said in a statement.
Royal Caribbean Group
Update: Royal Caribbean International and Celebrity Cruises will also be going to national uniform pricing, starting July 1, according to a spokesperson, who said this is for the ease of consumers and travel advisors.
Silversea Cruisea already advertises total pricing.
NCLH, MSC Cruises, Disney Cruise Line
A Norwegian Cruise Line Holdings spokesperson said the company is still evaluating the law and the effect it will have on the business.
MSC Cruises was not ready to comment and Disney Cruise Line did not immediately respond.
World Travel Holdings
World Travel Holdings, one of the most important cruise sellers, has been in conversations with the cruise lines and found they have different approaches.
'In some cases, cruise lines will apply it to all cruises sold in the US. In others, cruise lines may show pricing one way in California, and another for the remainder of the US,' according to Jamie Cash, SVP technology for World Travel Holdings. 'Once we have proper guidance, we will make the best decision for the customer experience.'
As to how travel advisors will address clients' potential 'sticker shock,' World Travel Holdings is currently working to identify the best way to handle this issue, according to Cash, 'but the strategy we choose will depend on what final decisions we hear from the cruise lines — specifically whether there will be a uniform price display shown in all markets, or whether there will be different price displays depending on the state.'
Will commissions now be paid based on the total price, so this effectively eliminates noncommissionable fares? 'Nothing we have heard so far would imply that the basis for commissions will change,' Cash said, adding 'there are still many specific details to work out, and we are in conversation with the cruise lines to address those specifics.'
Signature Travel Network
Another leading retail group, Signature Travel Network, has asked all preferred partners, including cruise lines, to share their plans for compliance by June 1.
After that, said Karryn Christopher, EVP marketing & preferred partnerships, Signature can talk about how the network is serving members and helping them prepare for when the law goes into effect.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
Add Seatrade Cruise News to your Google News feed.  |
