Why Are Cruises So Cheap? 8 Reasons Prices Stay Low

Cruises can look suspiciously cheap. When your cabin, meals, entertainment and transport between destinations are all included, it’s easy to wonder how cruise lines can possibly make any money.

I’ve taken cruises costing less than £50 or $60 per night, and there are still some fantastic bargains if you know where to look. But cheap fares don’t necessarily mean cruise lines are losing money, because the price you pay to get onboard is only one part of how they make their money.

I’ve worked in the cruise industry since 2015 and regularly track the cheapest cruise deals, so I see these pricing patterns first-hand. If you’d like those deals sent straight to you, you can sign up for my weekly cruise deals here.

In this guide, I’ll explain exactly why cruises are so cheap and how the cruise industry makes the numbers work.

8 Reasons Why Cruises Are So Cheap

1. Economies of Scale

Cruise ships carry thousands of guests at a time, which allows them to achieve economies of scale. This means the average cost per passenger decreases as the number of passengers increases.

The biggest cruise ships carry over 6,000 people. With bulk purchasing available for everything from food and drinks to furniture and fuel, the price per guest can be much lower than in smaller establishments, such as hotels.

In fact, small cruise ships are usually much more expensive than larger ones.

Suggested read: Why Is American Cruise Lines So Expensive?

2. Inclusive Pricing

Many of the biggest costs of a holiday are included in your cruise fare, including your accommodation, meals in selected venues and most onboard entertainment. This can make a cruise look much cheaper than paying for hotels, meals and entertainment separately.

First-time cruisers often aren’t aware of exactly what’s included in a cruise. So make sure that you know, and beware of any hidden extras like port fees and taxes, gratuities and speciality dining.

Read more: 28 Hidden Costs of Cruising You Should Budget For

3. Off-Peak Deals

Cruise lines often offer significantly discounted rates during off-peak times to ensure their ships are fully booked. These deals can make cruising very affordable compared to other types of holidays.

Everyone wants to cruise when it’s sunny. So if you’re willing to travel when it’s cold, rainy, or even during hurricane season, you can cruise for a fraction of the price compared to the school holidays in summer.

Suggested read: What Is The Cheapest Month To Go On A Cruise?

4. Lower Labour Costs

Staffing a cruise ship can cost less than employing an equivalent workforce in a land-based hotel, particularly in countries such as the USA or UK.

Cruise ship crew work under maritime employment rules rather than simply following the minimum wage laws of the countries that passengers sail from. Pay varies considerably depending on the job, cruise line, nationality and employment contract, with international standards setting minimum protections for seafarers.

Crew members also typically receive accommodation and meals while working onboard, which means many of the everyday living costs they’d have at home aren’t incurred while they’re at sea.

Suggested read: How Much Do Cruise Ship Workers Make?

5. Onboard Spending

While the upfront cost of a cruise might be relatively low, cruise lines often make a significant amount of their profits from onboard spending on things like drinks, speciality dining, spa treatments, WiFi and casino gaming. This model allows them to keep ticket prices lower.

It’s perfectly possible to have no bill at the end of your cruise. But the fact of the matter is that most people will spend several hundred pounds or dollars on board during their cruise.

6. Accommodation Upgrades

The lowest prices that you see for cruises are usually for windowless inside cabins. But most cruise ship cabins actually have balconies, and people are willing to pay a lot more for that privilege.

Because almost every hotel room in the world comes with a window or balcony, people have come to expect that as a standard, and so they may be turned off by the idea of a windowless inside cabin.

At scenic destinations such as Norway or Alaska, people will often pay two or three times as much for a balcony compared to an inside cabin.

And when it comes to suites, the price can rise as high as ten times as much.

7. Cruise Lines Want to Fill Every Cabin

An empty cabin doesn’t just mean losing the cruise fare. It also means there’s nobody in that cabin buying drinks, booking excursions, visiting speciality restaurants or spending money in the casino and shops.

That’s why cruise lines may reduce fares when a particular sailing isn’t selling as well as expected. Getting another passenger onboard at a lower fare can still be more valuable than letting the cabin sail empty, especially when there’s a good chance they’ll spend more once they’re onboard.

This doesn’t mean last-minute cruises are always cheapest, though. With demand for cruising now very strong, popular ships and itineraries can actually become more expensive as the sailing date approaches.

Suggested read: How Late Can You Book A Last Minute Cruise?

8. Cutbacks

Keeping fares competitive while operating costs have risen has encouraged cruise lines to look for ways to become more efficient.

For example, you may no longer see chocolates on your pillows at night, you might not get towel animals, and you may be charged if you request a second lobster tail at dinner.

These changes aren’t huge. Who really needed the corner of their duvet turning over in the evening anyway? But small savings across thousands of passengers can add up to a significant reduction in operating costs.

Read more: 7 Cruise Cutbacks and Changes That Everyone Hates

How to Find Cheap Cruise Deals

Of course, not every cruise is cheap. Prices can vary hugely depending on the cruise line, ship, itinerary, cabin and when you book, so knowing where to look can make a big difference.

A good place to start is choosing the right cruise line. I’ve compared cruise prices while taking into account extras such as port fees, taxes and gratuities, as these aren’t always included in the headline fare.

Here are the cheapest cruise lines, in order. They’re not necessarily the best for everyone, but they can offer excellent value for money. Cheap certainly doesn’t have to mean nasty when it comes to cruising.

And if you want to hunt down the lowest fares yourself, take a look at my guide to How To Find Cheap Cruises for my tips on finding a bargain.

Related Topics

• The 7 Cheapest Cruise Lines (In Order)
• Why Are MSC Cruises So Cheap?
• How to Get Cheap Cruises: An Insider Guide