Cruise lines set the price of their cruises often years ahead of their departure, and in doing so they base the price on a reasonable assumption about what the running costs will be. This includes the ship crew, expedition staff, ship maintenance, food and provisions. However, the biggest running cost for any cruise is the fuel for the ship, and cruise lines base their costing on a barrel of fuel being under a certain price. For many years fuel has remained well under this level, however, in the last year the cost of fuel has risen by a great deal, just like it has for us at the petrol pumps. It is estimated that marine fuel has increased between 40 – 60%, and this means the cost of that fuel is now at a level where the cruise line is not able cover costs. At this point, a cruise line can add an extra charge to your booking, called a fuel surcharge. Fuel surcharges are set by the cruise line and not by us, however unfortunately we do have to pass on these surcharges to your booking.
Some cruise lines do hedge their fuel costs to prevent getting into this situation, however, most cruise lines can only afford to hedge fuel costs for a certain period, because of the high overall cost. To give you an idea, the cost of fuelling a single ship for an Antarctic season is around £3.5million, so there is only a very limited amount of cruise lines that can afford to pay this cost upfront. We have also been made aware of a number of fuel companies cancelling hedged agreements with cruise lines, because the base price has risen so acutely.
There are a number of cruise lines that have introduced fuel surcharges. Unfortunately, we never get any indication from any cruise lines if and when they are going to introduce a fuel surcharge. Even the contacts we work with at a cruise line are often not privy to this information, as it is normally taken at a very senior management level. This means we have absolutely no way of knowing if a cruise line is going to introduce a fuel surcharge, until they do so.
Fuel surcharges will be applied to all bookings on the cruise, so everyone will have to pay the same charge. For any future bookings on the same cruise, the cruise line will either increase the selling cost to reflect the fuel surcharge or keep the advertised price the same and advise people of the additional surcharge at the time of booking.
All cruise lines have it written into their terms and conditions that they can add a fuel surcharge to bookings, up to a certain level. Consequently, it is also written into our own Terms and Conditions at point A2.3. This means a fuel surcharge of between 2 – 10% of the overall cost of the holiday can be added to the cost of your booking and unfortunately in these situations, it is not cause to cancel the holiday without penalty. This means there is little choice but to pay the fuel surcharge or lose your deposit / monies paid, as per the standard cancellation conditions. If the fuel surcharge results in an overall increase of over 10% of your total holiday cost, then you would be able to cancel your holiday without penalty.
Cruise lines can add further fuel surcharges further down the line, but if the cost of the additional surcharges raises the original cost of your holiday by over 10%, then you will then have the option to cancel without penalty. It is not our expectation that cruise lines will add a fuel surcharge today, and then further surcharges down the line.
We understand an unexpected increase to the cost of your holiday will be of great concern to you. If you feel you are unable to pay the fuel surcharge, then please speak to us and we will work with you on any feasible solution to help you manage. Ultimately it is down to the cruise line to accept any proposed way of paying, but we will always do our best to get them to accept any proposal that is fair. In our experience, the fuel surcharge does have to be fully paid before the departure date of the cruise.
If you would like to look at changing the date of your cruise, then we will advise what options are available to you as the policy on this varies by cruise line. Any change of date is likely to be in line with the cruise lines' standard terms and conditions and may attract an admin fee. If a change is possible then the cruise you move to could also end up attracting a fuel surcharge at a later date, and so you may just find yourself in the same situation later down the line.
We can of course help you work out if paying the cancellation penalty and booking with another cruise line would work out in your interests overall. However, we have no way of knowing whether that other cruise line will then later introduce a fuel surcharge. So, you could end up paying to move over to another cruise line, and then find yourself in the same situation later down the line.
We understand that fuel surcharges are always very unwelcome news and we do not like having to contact clients in these situations. Please be assured that it is always a last resort decision by the cruise lines as well. We are here to help in any way that we can but please understand that this is a situation completely outside of our control. You can also find more information about fuel surcharges on ABTA's website if you'd like to read more.
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