Cruises: How to Value Onboard Credit

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motorcyclesarecool
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Cruises: How to Value Onboard Credit

Post by motorcyclesarecool » Sun Apr 15, 2018 6:56 pm

I’ve taken my family on a Disney Cruise, and it was really, really nice. At the time, everywhere I shopped offered an identical fare for the identical cabin category, but competed with each other by offering onboard credits. The biggest onboard credit from the highest rated travel agent won.

Now I’m looking at a sailing on Royal Caribbean. I’m having to reckon with varying fares and varying onboard credit amounts being offered by the competing agencies. In my mind, a dollar off the fare is worth more to me than a dollar of onboard credit, but I’m not sure how to value them rationally relative to each other...

Vendor A:
$3155 w/ $50 onboard credit

Vendor B:
$2946 $0 onboard credit

Vendor C:
$3155 w/ $245 onboard credit

All quotes for the same category of cabin, and the same sailing.

We don’t gamble, and we only drink alcohol once in a blue moon. I want to choose Vendor B, but a visceral part of me feels like Vendor C would put me $36 ahead... What am I not seeing here?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

letsgobobby
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Re: Cruises: How to Value Onboard Credit

Post by letsgobobby » Sun Apr 15, 2018 7:02 pm

Can they be applied to gratuities?

bradpevans
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Re: Cruises: How to Value Onboard Credit

Post by bradpevans » Sun Apr 15, 2018 7:08 pm

motorcyclesarecool wrote:
Sun Apr 15, 2018 6:56 pm
I’ve taken my family on a Disney Cruise, and it was really, really nice. At the time, everywhere I shopped offered an identical fare for the identical cabin category, but competed with each other by offering onboard credits. The biggest onboard credit from the highest rated travel agent won.

Now I’m looking at a sailing on Royal Caribbean. I’m having to reckon with varying fares and varying onboard credit amounts being offered by the competing agencies. In my mind, a dollar off the fare is worth more to me than a dollar of onboard credit, but I’m not sure how to value them rationally relative to each other...

Vendor A:
$3155 w/ $50 onboard credit

Vendor B:
$2946 $0 onboard credit

Vendor C:
$3155 w/ $245 onboard credit

All quotes for the same category of cabin, and the same sailing.

We don’t gamble, and we only drink alcohol once in a blue moon. I want to choose Vendor B, but a visceral part of me feels like Vendor C would put me $36 ahead... What am I not seeing here?
Would you have a $245 bill usually? There’s your answer

The cost to the cruise is < 245 of course. For a big drinker it is $36 better. I think fir you it is not

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David Jay
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Re: Cruises: How to Value Onboard Credit

Post by David Jay » Sun Apr 15, 2018 7:09 pm

letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

PaunchyPirate
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Re: Cruises: How to Value Onboard Credit

Post by PaunchyPirate » Sun Apr 15, 2018 7:23 pm

The answer is entirely dependent on how much you will spend while on board. OBC is worthless unless you have something that you will actually spend it on -- ship stores, drinks, specialty dining restaurants, daily gratuities, additional optional tipping, shore excursions, BINGO, etc.

letsgobobby
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Re: Cruises: How to Value Onboard Credit

Post by letsgobobby » Sun Apr 15, 2018 7:28 pm

PaunchyPirate wrote:
Sun Apr 15, 2018 7:23 pm
The answer is entirely dependent on how much you will spend while on board. OBC is worthless unless you have something that you will actually spend it on -- ship stores, drinks, specialty dining restaurants, daily gratuities, additional optional tipping, shore excursions, BINGO, etc.
One would be a real schlemiel if one withheld the daily gratuities.
Last edited by letsgobobby on Sun Apr 15, 2018 8:19 pm, edited 1 time in total.

motorcyclesarecool
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Re: Cruises: How to Value Onboard Credit

Post by motorcyclesarecool » Sun Apr 15, 2018 7:30 pm

David Jay wrote:
Sun Apr 15, 2018 7:09 pm
letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
I’ve forgotten... are gratuities based on a percentage of the fare, or a fixed amount per person/cabin?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

mogg
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Re: Cruises: How to Value Onboard Credit

Post by mogg » Sun Apr 15, 2018 7:30 pm

On Holland America, OBC can be used for casino credits, which can be cashed out without gambling.

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whodidntante
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Re: Cruises: How to Value Onboard Credit

Post by whodidntante » Sun Apr 15, 2018 7:37 pm

I've never been on a cruise, but some considerations are:
- what are the situations you would not get the value you expect, and how likely are those situations? This could be total loss even, for example, what happens if you don't go?
- would you spend the money if you didn't have the on board credit?

But I also think $245 is a small amount of money that you'll have no trouble spending unless it doesn't cover the things you want to do.

delamer
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Re: Cruises: How to Value Onboard Credit

Post by delamer » Sun Apr 15, 2018 7:43 pm

The type of onboard credits we had on our last cruise, with NCL, could not be used for the daily gratuity or in the casino. Anything else was fair game. We waited to book one of our excursions onboard so we could use the credits.

According to the ship’s front desk, there was another type of credits that could be used for the daily gratuity (along with other expenses).

And on another cruise with Celebrity, we could use the credits for the daily gratuity plus other things.

My point being that you need to understand what categories your credit can be spent on and then compare that to your expected spending in those categories.

delamer
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Re: Cruises: How to Value Onboard Credit

Post by delamer » Sun Apr 15, 2018 7:44 pm

motorcyclesarecool wrote:
Sun Apr 15, 2018 7:30 pm
David Jay wrote:
Sun Apr 15, 2018 7:09 pm
letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
I’ve forgotten... are gratuities based on a percentage of the fare, or a fixed amount per person/cabin?

The daily gratuities are billed as fixed per person.

motorcyclesarecool
Posts: 339
Joined: Sun Dec 14, 2014 7:39 am

Re: Cruises: How to Value Onboard Credit

Post by motorcyclesarecool » Sun Apr 15, 2018 7:45 pm

delamer wrote:
Sun Apr 15, 2018 7:44 pm
motorcyclesarecool wrote:
Sun Apr 15, 2018 7:30 pm
David Jay wrote:
Sun Apr 15, 2018 7:09 pm
letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
I’ve forgotten... are gratuities based on a percentage of the fare, or a fixed amount per person/cabin?
The daily gratuities are billed as fixed per person.
How very regressive and gratuitous.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

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whodidntante
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Re: Cruises: How to Value Onboard Credit

Post by whodidntante » Sun Apr 15, 2018 7:51 pm

mogg wrote:
Sun Apr 15, 2018 7:30 pm
On Holland America, OBC can be used for casino credits, which can be cashed out without gambling.
Interesting. Can I buy 50 grand of on board credit with my credit card? LOL

motorcyclesarecool
Posts: 339
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Re: Cruises: How to Value Onboard Credit

Post by motorcyclesarecool » Sun Apr 15, 2018 7:54 pm

whodidntante wrote:
Sun Apr 15, 2018 7:51 pm
mogg wrote:
Sun Apr 15, 2018 7:30 pm
On Holland America, OBC can be used for casino credits, which can be cashed out without gambling.
Interesting. Can I buy 50 grand of on board credit with my credit card? LOL
Looking for some free spend?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Gill
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Location: Florida

Re: Cruises: How to Value Onboard Credit

Post by Gill » Sun Apr 15, 2018 8:15 pm

motorcyclesarecool wrote:
Sun Apr 15, 2018 7:45 pm
delamer wrote:
Sun Apr 15, 2018 7:44 pm
motorcyclesarecool wrote:
Sun Apr 15, 2018 7:30 pm
David Jay wrote:
Sun Apr 15, 2018 7:09 pm
letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
I’ve forgotten... are gratuities based on a percentage of the fare, or a fixed amount per person/cabin?
The daily gratuities are billed as fixed per person.
How very regressive and gratuitous.
Although certain cabins have a higher rate, usually the suites.
Gill

ZinCO
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Re: Cruises: How to Value Onboard Credit

Post by ZinCO » Sun Apr 15, 2018 8:39 pm

motorcyclesarecool wrote:
Sun Apr 15, 2018 7:54 pm
whodidntante wrote:
Sun Apr 15, 2018 7:51 pm
mogg wrote:
Sun Apr 15, 2018 7:30 pm
On Holland America, OBC can be used for casino credits, which can be cashed out without gambling.
Interesting. Can I buy 50 grand of on board credit with my credit card? LOL
Looking for some free spend?
It is reasonably well known that on some cruise lines, you can buy casino credit with a CC and have it code as "travel", sometimes even without any fee. Then you can simply cash out and redeposit in the bank once you are on shore. Biggest problem is having to carry the cash (and potentially bring it through customs, if re-entering the country with over $10k).

lazydavid
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Re: Cruises: How to Value Onboard Credit

Post by lazydavid » Sun Apr 15, 2018 9:22 pm

Clearly option A's a loser, because option C is the same upfront price with 5x the OBC. So it's just a matter of figuring out if there is $245 or more worth of things not included in the stateroom fee that you would purchase. For the cruise we're going on this year, we've already spent well more than that on dining/drink packages and an excursion, so that would make option C a no brainer for us. If you don't drink, want to eat in the MDR or Windjammer for every meal and don't want to do any excursions or buy anything in the shops, then option B becomes more attractive.

motorcyclesarecool
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Re: Cruises: How to Value Onboard Credit

Post by motorcyclesarecool » Sun Apr 15, 2018 9:27 pm

ZinCO wrote:
Sun Apr 15, 2018 8:39 pm
Biggest problem is having to carry the cash (and potentially bring it through customs, if re-entering the country with over $10k).
Just make sure it is declared, and no harm, no foul.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Shallowpockets
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Re: Cruises: How to Value Onboard Credit

Post by Shallowpockets » Sun Apr 15, 2018 9:43 pm

You have a $209 upfront better price between B and C. So the real problem here is reduced to a $41 consideration for onboard credits.
If you take the deal with $245 credit you will be roaming the ship looking at how to apply that to your best advantage. A sort of manufactured spending.
So, $41. There is your dilemma. Peanuts.

letsgobobby
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Re: Cruises: How to Value Onboard Credit

Post by letsgobobby » Sun Apr 15, 2018 10:12 pm

Shallowpockets wrote:
Sun Apr 15, 2018 9:43 pm
You have a $209 upfront better price between B and C. So the real problem here is reduced to a $41 consideration for onboard credits.
If you take the deal with $245 credit you will be roaming the ship looking at how to apply that to your best advantage. A sort of manufactured spending.
So, $41. There is your dilemma. Peanuts.
As I've tried to hint at several times, gratuities are additional and customary and in most cases, OBC can be used against them. Thus unless you plan to be an incredible cheapskate, the OBC is the better deal.

investorpeter
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Re: Cruises: How to Value Onboard Credit

Post by investorpeter » Sun Apr 15, 2018 10:24 pm

OBC given by Costco are supposedly refundable by check if unused.

MJS
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Re: Cruises: How to Value Onboard Credit

Post by MJS » Sun Apr 15, 2018 10:32 pm

Holland America has always refunded unexpended OBC to my credit card. CostCo has [historically] provided more OBC than other travel agencies/cruise lines ... and will match your best price for the cabin.

ralph124cf
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Re: Cruises: How to Value Onboard Credit

Post by ralph124cf » Sun Apr 15, 2018 10:35 pm

Option B would definitely win for me.

Will you be buying trip cancellation insurance? Frequently there are breakpoints every thousand or five hundred dollars, so you could save a significant amount if you are already planning to buy the insurance.

If not buying the insurance, and you must cancel, then you have lost $209 less per person. If you bought option C, you would lose the $3,155, and never get to use the onboard credit.

Ralph

quantAndHold
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Re: Cruises: How to Value Onboard Credit

Post by quantAndHold » Mon Apr 16, 2018 12:27 am

Gratuities will run more than $245, won’t they?

lazydavid
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Re: Cruises: How to Value Onboard Credit

Post by lazydavid » Mon Apr 16, 2018 4:54 am

Shallowpockets wrote:
Sun Apr 15, 2018 9:43 pm
You have a $209 upfront better price between B and C. So the real problem here is reduced to a $41 consideration for onboard credits.
If you take the deal with $245 credit you will be roaming the ship looking at how to apply that to your best advantage. A sort of manufactured spending.
So, $41. There is your dilemma. Peanuts.
You don't have to run around the ship. Though the word "onboard" is right there in the name, you don't have to actually spend it while physically present on the ship. We spent the entirety of the OBC for our cruise this coming July ($200 per cabin, $400 total) several months ago. The drink package alone exceeded that amount, even though we waited for a sale ($47/day vs. standard price of $55/day).

denovo
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Re: Cruises: How to Value Onboard Credit

Post by denovo » Mon Apr 16, 2018 5:21 am

motorcyclesarecool wrote:
Sun Apr 15, 2018 6:56 pm
I’ve taken my family on a Disney Cruise, and it was really, really nice. At the time, everywhere I shopped offered an identical fare for the identical cabin category, but competed with each other by offering onboard credits. The biggest onboard credit from the highest rated travel agent won.

Now I’m looking at a sailing on Royal Caribbean. I’m having to reckon with varying fares and varying onboard credit amounts being offered by the competing agencies. In my mind, a dollar off the fare is worth more to me than a dollar of onboard credit, but I’m not sure how to value them rationally relative to each other...

Vendor A:
$3155 w/ $50 onboard credit

Vendor B:
$2946 $0 onboard credit

Vendor C:
$3155 w/ $245 onboard credit

All quotes for the same category of cabin, and the same sailing.

We don’t gamble, and we only drink alcohol once in a blue moon. I want to choose Vendor B, but a visceral part of me feels like Vendor C would put me $36 ahead... What am I not seeing here?

Have you tried getting Costco pricing on cruises?
"Don't trust everything you read on the Internet"- Abraham Lincoln

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David Jay
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Re: Cruises: How to Value Onboard Credit

Post by David Jay » Mon Apr 16, 2018 7:48 am

motorcyclesarecool wrote:
Sun Apr 15, 2018 7:45 pm
delamer wrote:
Sun Apr 15, 2018 7:44 pm
motorcyclesarecool wrote:
Sun Apr 15, 2018 7:30 pm
David Jay wrote:
Sun Apr 15, 2018 7:09 pm
letsgobobby wrote:
Sun Apr 15, 2018 7:02 pm
Can they be applied to gratuities?
On RC, yes. We applied onboard credits to gratuities in January.
I’ve forgotten... are gratuities based on a percentage of the fare, or a fixed amount per person/cabin?
The daily gratuities are billed as fixed per person.
How very regressive and gratuitous.
There's a bit of progressivity - suites have a higher gratuity than standard cabins on most lines.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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David Jay
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Re: Cruises: How to Value Onboard Credit

Post by David Jay » Mon Apr 16, 2018 7:53 am

delamer wrote:
Sun Apr 15, 2018 7:43 pm
And on another cruise with Celebrity, we could use the credits for the daily gratuity plus other things.
Celebrity is the "up-market" Royal Caribbean brand, so I would expect policies to be the similar.

Taking a Princess cruise this fall - gratuities can't be paid with OBC. So it is a company-by-company thing.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

delamer
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Re: Cruises: How to Value Onboard Credit

Post by delamer » Mon Apr 16, 2018 10:07 am

David Jay wrote:
Mon Apr 16, 2018 7:53 am
delamer wrote:
Sun Apr 15, 2018 7:43 pm
And on another cruise with Celebrity, we could use the credits for the daily gratuity plus other things.
Celebrity is the "up-market" Royal Caribbean brand, so I would expect policies to be the similar.

Taking a Princess cruise this fall - gratuities can't be paid with OBC. So it is a company-by-company thing.
As I said earlier, NCL told us that there is more than one type of credit on their ships.

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dm200
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Re: Cruises: How to Value Onboard Credit

Post by dm200 » Mon Apr 16, 2018 10:14 am

It was also our experience on two Bermuda cruises that, after booking, they upgraded our cabin - at no added charge. I guess the cruise line had more demand for the lower priced cabins and bumped us to sell cabins at a lower price to fill up the ship.

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