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Richard Fain - getting customers 'out of this used-car salesman mentality'

Royal Caribbean's Fain pledges end to last-minute discounting

In a policy shift aimed at protecting its pricing integrity, Royal Caribbean Cruises Ltd. is halting last-minute discounting, chairman and ceo Richard Fain said Monday.

This relates to the sharp price cuts 10, 20 or 30 days before sailing that are typically used to top up occupancy. The only exception will be on very short cruises, of two to four nights, when the consumer purchase decision is typically made closer to departure.

Fain told analysts on the company's first quarter earnings call that the policy had just started in March and the aim is to 'get our customers out of this used-car salesman mentality.'

Steep last-minute discounts upset loyal customers, cause headaches for travel agents and hurt brand integrity.

Fain said the new policy may have some short-term yield impact because a bit of revenue would be lost from not topping up occupancy, adding: 'It may take awhile for travel agents and consumers to understand just how serious we are.'

But, long-term, 'Everybody's going to find this to be a better, less disruptive way. It helps solidify the image of our branding. In the end, our branding drives pricing.'

When an analyst asked if competitors are likely to follow suit, Fain said: 'This is really important to strengthen our brand. We think this is going to help us out regardless of what anyone else does.'

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