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Sunday, March 7, 2010

the oasis of the seas


Cruise analyst: Oasis of the Seas pricing is coming down (sort of)The sky high fares that Royal Caribbean has been commanding for voyages on Oasis of the Seas are, finally, beginning to come down to Earth. Just don't expect a bargain.

In a research note released Thursday, Wall Street analyst Matthew Jacob of Majestic Research said inside cabins for Oasis sailings in the second quarter of 2010 are selling for a 77% premium, on average, to those on other Royal Caribbean ships. While still huge, that's down significantly from the 112% premium Royal Caribbean has been getting for inside cabins on Oasis during the first quarter.

Inside cabins for the initial sailings of the ship in the fourth quarter of last year sold at a stratospheric 142% premium to those on other Royal Caribbean ships, according to Majestic data. But as Jacob notes, "the first few sailings of any new ship tend to be priced at a significant premium relative to later sailings."

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Majestic Research maintains a proprietary database on cruise pricing that includes information on nearly every sailing on every Royal Caribbean ship. As part of the series, the firm tracks pricing for multiple cabin categories on a daily basis beginning 270 days prior to sailings.

The Majestic data show Royal Caribbean is getting the highest premiums for Oasis' inside cabins -- a factor, no doubt, of the relatively small number of inside cabins on the ship. While the line is getting a 77% premium for Oasis' inside cabins in the second quarter, for instance, it only is getting a 60% premium for oceanview cabins during the same period, according to the Majestic data. Oasis' balcony cabins, meanwhile, are commanding a premium of just 32% over the rest of the Royal Caribbean fleet for the second quarter, the firm says.

Jacob says he expects Oasis to continue to generate strong premiums throughout most of 2010, but the trend in pricing for the ship is clear. "We expect Oasis' premiums to drop significantly over time, as we have seen with other recent new ship introductions."

Jacob says Wall Street may be over-estimating how well Royal Caribbean will do in the second quarter, noting that excluding Oasis the company's net yields -- a measure of how much the company makes per cabin -- could be down for the period as the much-anticipated ship steals business from its sisters.

"It appears that Oasis is cannibalizing the rest of RCL's fleet," Jacob says, citing the firm's data. "Most telling is the impact to (Royal Caribbean's) Freedom class and (sister line Celebrity Cruises') Solstice class ships, which have seen their premiums decline significantly since the launch of Oasis."

Jacob says Royal Caribbean's three Freedom class ships have had their premium versus the rest of the fleet shrink to 12% for the second quarter of 2010 as compared to 27% during the third quarter of 2009 — the last full quarter prior to the launch of Oasis.

Cruise Loggers, are you waiting for lower prices to book Oasis? Have you already tried the ship? Share your thoughts below.

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