How cruise-and-stay packages can save you money
Holidays combining a sailing with other elements like hotel stays, train journeys and excursions can offer sensational value. Here's why.
Ever wondered why a cruise package with several hotel stays can cost little more – and sometimes the same or even less – than the sailing alone?
The answer lies in the different fares cruise lines make available to travel agents and tour operators.
To simplify matters, travel companies can act as agents for the cruise line (i.e. resellers) or tour operators.
In the first scenario, travel companies will sell sailings (usually cruise-only or fly/cruise) at prices set by the cruise lines and keep a commission for themselves.
For tour operators, lines offer cheaper net fares and allow tour operators to build their own packages and set the markups, as long as they follow a few rules (more on this later).
How cruise fares work
At this point, you may ask, why are commission fares even a thing?
If net fares allow travel companies to set the prices that they feel are the best, why not let the invisible hand of the market do its thing?
If you are a cruise line, you might worry that letting individual players set prices could lead to a race to the bottom.
Companies can start competing to be a pound or two cheaper than each other until margins are wiped out.
Commission fares bring an element of order to the market, allowing cruise lines some control over how their products are sold.
Most consumer goods have recommended retail prices for the same reason.
As mentioned, net fares give travel companies more pricing freedom if they follow some rules.
These rules usually require tour operators to build packages that include more than the basic air, transfers and cruise elements.
Think Med cruise with three nights in Rome before departure, a Rocky Mountaineer train trip before an Alaska sailing, or a transatlantic voyage sandwiched by stays in Barcelona and Barbados.
Why cruise-and-stay packages can mean better deals
Net fares have two main advantages for cruise lines.
First, letting tour operators build and sell land-and-sea packages can broaden the appeal of cruises; they act as a gateway to cruising.
When considering your first cruise, you take less risk by booking a holiday where the cruise is only part of the trip.
The second benefit of net fares (and the most important for deals) is to allow discreet discounting.
Lines do not like to be seen slashing prices, but discounts are easy for consumers to track on simple cruise-only and fly/cruise products.
But discounts on complex multi-element packages often unique to individual tour operators are almost impossible to spot.
The value of cruise-and-stay packages
While net fares are a major reason cruise-and-stay packages are great value, other factors exist.
Tour operators will also have relationships with airlines, hotel chains and other providers.
They may have negotiated discounted rates on rooms, seats, excursions and experiences that they can combine with the cruise fare.
They can also create packages using low-cost flights, something that cruise lines might not want to do.
Finally, because they can choose their markup on the cruise fare, tour operators can decide to sacrifice margin to create wow prices to attract customers.
These factors combine and can make a holiday, including flights, a cruise and stays in two hotels, cost very little more than a fly/cruise package.
Cruise-and-stay packages and financial protection
When booking a cruise, check who is responsible for the financial protection of your holiday.
When booking with a travel agent (i.e. a reseller), the cruise line should ultimately be responsible for your trip. If the flights are cancelled, the line must find a solution.
On the other hand, tour operators essentially buy the cruise from the line, package it and sell it, becoming liable for protecting consumers.
This is nothing to worry about: the UK has robust financial protection schemes in ATOL and ABTA.
Whether you book through a travel agent or an operator, there will be someone to help in times of crisis or step in to resolve any issues like flight cancellations.
All agents in the UK are legally required to be ATOL bonded, meaning financial protection is incorporated for packages.
But you must be clear about who to contact should anything go wrong.
Are cruise-and-stay packages better?
It depends on what type of cruiser you are.
If you just fancy a week around the Med and have been to Barcelona several times before, starting your trip with three nights in the Spanish city might not make sense.
And you can also find discounts and great prices on fly/cruises. Cruise-and-stay packages are not always the best value.
Overall, do some research, check prices and book the trip that makes the most sense for you.
