Loyalty has been a key driver for the cruise business.
Once a cruise line has a customer on one of its ships, it has multiple opportunities to get them to come back. The most obvious one is offering onboard perks for booking the customer's next cruise while they're on the current one. These offers will generally include both onboard credit during that cruise and attractive pricing.
And, of course, once a cruise line has served customers the first time, it has their contact info and can market the idea of coming back to that audience. In addition, cruise lines uses loyalty programs to keep customers in the fold.
Royal Caribbean International (RCL), with its Crown & Anchor Society, slowly doles out perks as customers accrue more points. (A point equals one night in a regular double-occupancy cabin.) At the lower status levels, you get some small perks, and as you move up, the benefits become more meaningful.
Earn 80 points and you reach Diamond status, the first elite tier where you get meaningful benefits. These include access to a loyalty lounge that offers a light breakfast, 24/7 coffee from a fancy espresso machine, and appetizers/snacks in the early evening during happy hour.
Happy hour in the Diamond Lounge used to mean an open bar. That changed during the covid era because the cruise line did not want customers packing into the lounge. Now, Royal Caribbean offers Diamond members four free drink vouchers each day. Diamond+ members get 5, while Pinnacle members get 6.
These can be used for any added-fee beverage, not just alcohol, on the ship (or on CocoCay). You could redeem a voucher for a $3 bottle of water or a $14 mixed drink. That policy has led to problems as the cruise line, aiming to limit contact points due to covid, has stopped having passengers who have vouchers or a beverage package sign $0 receipts.
The lack of receipts. however, has caused some problems as well, and Royal Caribbean has taken a step to solve those issues.
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Royal Caribbean Makes a Voucher Change
The problem with the voucher system is that the cruise line does not issue physical certificates. Instead, your free drinks are on your SeaPass card -- your room key. That makes it easy for a bartender to use a voucher to pay for a lower-priced drink that you intended to pay for with a credit card, saving your voucher for something more expensive.
Royal Caribbean noted in an email to Crown & Anchor members that many visits to its customer-service desk were "related to beverage vouchers provided to our higher tiered Crown & Anchor Society members."
These highly valuable customers were seeing their vouchers applied for water, soda, coffee, or even beer and wine, when they had intended to save them for pricier drinks. To stop this, Royal Caribbean shared two key changes it put into place Nov. 4.
Effective on sailings starting this Friday, November 4, we’ll have all members sign their check when using any beverage vouchers. The benefit of doing this is twofold:
1. The receipt has a count of your vouchers to help you better track how many you have left. So if you’re a Diamond member, and you have 4 a day -- it may tell you 2 of 4 have been redeemed.
2. We noticed many beverage voucher disputes are related to use on a drink you did not want to use it on. For instance, you ordered a $3 coffee and we may have applied your voucher -- and you don’t learn about it until you’re at dinner, wanting that nice $13 cocktail and you’re out of vouchers.
This change, while it seems small, solves two problems.
First, no business wants its most loyal customers to be unhappy about anything (especially a free perk designed to make them happy). Second, the line at customer service can get long, and making a change that keeps people out of that line makes the experience easier for passengers with other customer-relations issues.
Royal Caribbean Leans on Its Loyal Customers
Loyalty drives repeat business. That was evident during comments Royal Caribbean CEO Jason Liberty made during the cruise line's second-quarter-earnings call.
"Global demand for travel is ramping up as consumers continue to shift spend to experiences," Liberty said.
"While this is good news to us as we are squarely in the experience business, the value proposition of cruise remains incredibly attractive, I would say too attractive.
"Our full addressable market is back and our brands are attracting new customers into our vacation ecosystem. As a result, guest mix for the quarter was equally distributed across loyalty, new to cruise, and new to our brand, similar to what we saw in 2019."
Rival cruise lines have clearly noticed how loyalty drives repeat business. Both MSC Cruises and Virgin Voyages -- two cruise lines trying to take market share in the U.S. -- match loyalty status with the more-established cruise lines. That means that first-time passengers on those lines are treated as elite if they have earned that status with another line.
