RIP: All-Inclusive Pricing
Seventeen years ago my wife, young daughter, and I went on a cruise to Mexico. The allure of the cruise was that it was “all-inclusive” and it lived up to the hype. Want lobster tails in your room at 2:00 AM? “No problem sir, be right there.” About the only things you had to pay for were the spa, the slot machines, and the shore excursions.
Fast forward to today. We just returned from a cruise all these years later and the changes were noticeable… and expensive. One of the main things that struck me as we looked at the prices for this cruise was that the ticket prices hadn’t really gone up much between our first cruise and this one. Honestly, it was less than 20% different, which doesn’t even cover cost increases over that same period of time. But I soon found out how they were able to do what they were doing. Although the cost to get on the ship was nearly the same, the price changes once onboard were significant.
You see, during our first cruise one of the things that amazed me, probably because I was a broke 20 something newlywed, was that everything was included. You would walk around the ship and everything from the coffee shop pastries to the pizza place were all included. Just stand in line, order what you want, and sit down and enjoy. Now what they do is different. While you still can technically take a cruise and only pay the ticket price, what you see is that the ships have been engineered to extract more money from the passengers at every turn.
The psychology of this “fee-based price increase” is really quite genius. For example, in my case had ticket prices been twice or three times more than they were all those years ago, I wouldn’t have gone at all. With a family of six, the price just to get on the ship was something that took some consideration. So the lower price got me on the ship with my entire family. But what we didn’t realize was that the “all-inclusive” model had been chipped away at over the past 17 years. Now that little card on your wrist that gets you on and off the ship was really more of a credit card. Want a donut from the coffee shop? No problem, swipe your card. Want sushi instead of the buffet? No problem, swipe your card.
Each decision was small and painless. A few bucks here for a donut, a souvenir there, a cute picture of the kids, a few video games in the arcade. Each time you gladly swiped your card knowing that it was something that you wanted that enhanced the experience.
Then came Saturday. Time to get off the ship and the realization that your final statement had a huge pile of expenses. Then the knowledge that if you had added those extras to the price of the tickets in the beginning to what was actually “included” you would never have gone in the first place.
Now the question is, was I mad? No. Was I upset? No. Will I leave a nasty review on Trip Advisor or Google? No. As I went through the list each and every decision was one I made, on purpose, that I was ultimately glad I did. I spent the money not because I had to, but because I wanted to.
The truth is, yes, I could have been on the boat and never spent a dime. There was no obligation or requirement. I could have skipped every single thing that we did that was extra. But we didn’t and that is the point.
The idea of “all-inclusive” is dying not only in the cruise ship industry but at every place that it has once existed. All-inclusive resorts now almost always have a “what’s included” and “what’s not” list, which is ironic considering the idea of “all-inclusive.” Everything from airlines and car rental companies to resorts and insurance plans are walking away from the idea that “our price includes everything”…. Everyone but motorcoach operators.
The motorcoach industry has, as long as I have been a part of it, had their “all-inclusive” price. With charter, it’s their daily rate. With line run, it’s the ticket price. In these prices, everything has been “included.” Now there are those who will say that’s not true, we have done things like charge for dropping off at the airport or tolls… but that is not what I am talking about here. In those cases, operators are passing on actual costs to the customer. Even fuel surcharges are not part of this equation. This is about giving people the ability to choose to spend more money when they book with you.
The cruise ship was a great example, as are airlines. They give us a pattern that we can follow. Want to get on the ship early or stay late? No problem… click here. Want someone to carry your bags on and off the ship? Click here. Trip insurance, cancelation protection, weather insurance… click here. The airlines are masters of this. Have legs with knees? Click here. Want to get on first so you have a place to put your bags…want a snack that isn’t a shot glass of Sprite and a mouth full of salted bread bits… click here.
We live in a world where customers have become conditioned to the idea of being able to spend money above and beyond the “cost” to get what they want. We also live in a world where consumers use price as a shopping criteria.
When I talk to operators I continually see people trying to hang on to the all-inclusive mentality while still battling to keep prices low. This does nothing for our businesses or our industry. We must look for ways that we can keep prices low but at the same time create ways for our passengers to pay us more for the things they want.
Welcome to our bus company. Here is our price. Want luggage service? Click here. Want onboard entertainment? Click here. Want to get on the bus first? Click here. Want to have snacks or water? Click here… It’s time we buried the idea of all-inclusive and started looking for more ways to let passengers willfully, gladly, pay us more for our services.