Junk fee ban sparks price transparency wave for cruise fares

By Sally French | NerdWallet

Until recently, the upfront price of a cruise was often hardly reflective of the final price. That’s because hidden fees, such as port fees and taxes, on cruise lines lurked like unwelcome stowaways. However, a California junk fee law banishing these surprise charges went into effect July 1, and it’s changing how people nationwide see cruise fares displayed.

Under California Senate Bill 478, companies can no longer advertise one low cost for a product or service sold in California — only to impose additional or mandatory fees later. That’s impacted all sorts of aspects of travel, from resort fees to vacation rental cleaning fees to, yes, cruise fees.

“It’s much easier now to find a good deal on a cruise, rather than a deal that looks good until all the port charges and fees are added,” Aaron Saunders, an editor at Cruise Critic, said in an email.

Though the law is specific to California, many major cruise operators have recently adopted transparent pricing models that all U.S. shoppers can see. For example, as of July 1, Royal Caribbean, Carnival Cruise Line and Holland America began including all mandatory taxes, fees and port expenses in their U.S. price displays.

Why cruise prices have a new look nationwide

There are a couple of reasons why California’s law has impacted U.S. cruise purchases, no matter where they’re sailing.

Pressure to be more transparent

Politicians, travel industry groups and consumers have called for more price transparency for years. President Joe Biden is even leading the charge on a federal crackdown on junk fees.

Many travelers prefer transparent pricing, too. In response to a proposed Federal Trade Commission rule that would prohibit junk fees, over 12,000 people submitted public comments, dozens of which specifically referenced cruises. Multiple people shared examples where final cruise prices ended up being double the advertised amount.

Consistency can be more practical

The other possible reason the California law has had an impact on national cruise operations is practicality.

“Treating California differently than the rest of the United States could have created confusion and introduced unnecessary complexity,” according to an FAQ issued by Royal Caribbean Group on changes to advertised pricing.

Plus, consistency makes it easier for consumers to compare prices, no matter where they’re buying from.

“This way, whether you’re checking fares in California, or your friend is checking fares in Florida, you’ll both see consistent pricing across the board,” Saunders said.

Cruises aren’t actually more expensive than before

Cruises that switched to transparent pricing models may now appear more expensive at the outset than they used to be, but the final cost remains the same. Saunders said that so far, he hasn’t seen any cruises change prices.

Instead, the change is that travelers can now see the total cost upfront. This could reduce potential frustrations around hidden fees.

It could also allow cruisers to make more informed decisions when comparing cruise lines. In the past, one cruise line might choose to display these fees upfront while another might not, making it hard for shoppers to compare total costs.

Cruise fees aren’t gone completely

Transparent pricing or not, knowing exactly what’s included in your cruise before booking is important.

While most U.S. cruise lines now disclose mandatory fees, many still charge for certain nonessentials, such as specialty restaurants, entertainment, alcohol or Wi-Fi. And some of these a la carte charges are subject to dynamic pricing as well, meaning they might get more expensive if you wait to add them to your reservation.

It’s more common to see this pricing model across cruises that offer cheaper upfront fares. In contrast, upscale cruise providers tend to have the fewest extra fees.

But a la carte pricing isn’t necessarily a bad thing. If you’re seeking an alcohol-free vacation, or you enjoy the pause of notifications that comes with sailing through a cell service desert, then a cruise that charges extra for specialty drinks or Wi-Fi might be appealing. That way you’re not subsidizing services you won’t use.

Sally French writes for NerdWallet. Email: sfrench@nerdwallet.com. Twitter: @SAFmedia.

The article Junk Fee Ban Sparks Price Transparency Wave for Cruise Fares originally appeared on NerdWallet.