Carnival Increases Summer Fares Across the Board

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After last February's warning, Carnival Cruise lines today implemented an across-the-board price increase for summer sailings.

Fares for every voyage between June 3rd and August 24th swelled up to 5 percent, depending on departure date.

The fare hike comes in the wake of bookings at "unprecedented levels" as the economy begins to recover. "We're seeing significantly increased volume as consumers are taking advantage of the incredible value that a Carnival cruise provides," said Carnival President and CEO Gerry Cahill in a February press release.

Carnival spokesman Tim Gallagher told USA Today the company has "been raising prices through traditional yield management techniques." For example, an outside cabin on a seven-night voyage on the Carnival Splendor out of Los Angeles on July 18 was priced at only $909 per person on February 24th. Last week, the price rose 5 percent to $959 per cabin, and today the price jumped another 3 percent to $989.

In February, industry watchdog Cruise Critic predicted cruise prices would be on the rise this "Wave Season" because new ships are propelling price increases and "people who skipped their big vacation in 2009 are getting ready to hit the road again."

Carnival's price increase is sure to have a ripple effect across the cruise industry. Earlier this month, Norwegian Cruise Line announced they will be raising cruise prices 7 percent on April 2nd. In a press release from March 8th, the cruise line confirmed they had seen group business bookings increase nearly twofold. The company has also seen a very strong interest in its new ship, the Norwegian Epic, as well as the line's Hawaii-based ship, the Price of America.

According to Cruise Critic, as fares increase across the cruise industry, deals are also drying up. However, cruises still offer a "great value vacation" that includes accommodations, entertainment, and all-you-can-eat food. "Ultimately, cruise lines are trying to find that balance where their business can be profitable, but as many people as possible will be able to afford to cruise."
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