Is the era of amazing cruise deals coming to an end?

Are we in the waning days of the era of amazing cruise deals?

Some industry watchers are suggesting as much as the cruise industry’s rebound from a nearly three-year-long, COVID-19 pandemic-related downturn picks up steam.

After a prolonged period that saw some cruise lines discount heavily to fill ships, several Wall Street analysts have noted in recent weeks that rising occupancies on vessels have finally allowed cruise lines to begin raising average pricing above levels seen before the pandemic.

For more cruise news, guides and tips, sign up for TPG’s cruise newsletter.

The fourth quarter of 2022 “is the first quarter where we expect pricing to be up vs. 2019 levels,” Truist lodging and leisure analyst Patrick Scholes wrote in a research report this week. “Looking forward into 2023, barring unforeseen circumstances, we expect pricing to continue to accelerate vs. 2019’s comparable levels.”

For now, the fare increases that Scholes and others are seeing aren’t monumental in size. Scholes said he expected average pricing for major cruise lines to finish out the current quarter “up mid-single-digits,” percentage-wise — as compared to pricing in the fourth quarter of 2019.

Given that the cumulative inflation rate in the U.S. since 2019 has run around 17{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667}, as measured by the U.S. Bureau of Labor Statistics’ Consumer Price Index, that’s still a decline in prices in real terms.

Still, in just the last few weeks, some of the wildly low cruise fares that were available for last-minute sailings in October, November and December have disappeared.

Related: The ultimate guide to picking the right cruise line for you

Budget cruise leader Carnival Cruise Line, for instance, is no longer advertising last-minute space on four-night sailings for just $104, or just $26 a day, as it was in October. As of Wednesday, the lowest fares for four-night sailings available on Carnival’s website were $149 — or $37.25 a day.

While still a notably low price for a four-night getaway, that’s a 30{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} increase in starting fares in just a few weeks.

Similarly, Royal Caribbean, the world’s largest cruise line, on Wednesday was selling last-minute space on three-night sailings on its website starting at $123 — or $41 a day. Just a few weeks ago, the line was advertising three-night sailings as low as $99.

The higher pricing for last-minute space on ships in recent days is partly the result of the always-discounted fall cruise season coming to an end. The fall is offseason in the cruise world and always brings lower fares for cruises than other times of the year.

But the higher pricing is also the result of stronger demand for cruises that is letting cruise lines back off on heavy last-minute discounting to fill ships, cruise industry watchers suggest.

“While pricing still shows modest slippage as sailing dates get closer, slippage is far less than the ‘crash & burn’ price deceleration as sailing dates got closer that we observed for most of the year,” Scholes noted this week in his research report.

Royal Caribbean no longer is offering last-minute space on ships for under $100 a person. MICHEL VERDURE STUDIO/ROYAL CARIBBEAN

Scholes said the rising prices come amid a “sizable acceleration” of the pace of cruise bookings for the current quarter and first quarter of 2023 over the past eight weeks.

“This is in sharp contrast to the trend for most of the past year where bookings for the current quarter and [the first quarter of 2023] were extremely weak,” he said.

Cruise ship occupancies on the rise

The rising fares come as cruise ship occupancies continue to rebound from the unprecedently low levels seen in the wake of the industry’s COVID-19 pandemic shutdown.

Occupancy on Norwegian Cruise Line Holdings ships, for instance, rose to 82{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} during the three-month period that ended Oct. 31 — up from 65{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} in the three months before that — the line said earlier this month. Occupancy is continuing to rise in the current quarter.

“We expect load factors to continue improving sequentially to the mid-to-high 80{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} range in the [current quarter] … and the steady occupancy ramp-up is expected to continue until we reach historical 100{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667}-plus levels beginning in the second quarter of 2023,” Norwegian Cruise Line Holdings president and CEO Frank Del Rio said during a conference call with Wall Street analysts earlier this month.

Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

Del Rio’s comments came just days after Royal Caribbean Group chief financial officer Naftali Holtz told analysts the company expected occupancy levels to return to historical levels at the company’s brands by the spring.

Royal Caribbean Group is the parent company of Royal Caribbean, Celebrity Cruises and Silversea Cruises, and it’s also a part owner in German lines TUI Cruises and Hapag-Lloyd Cruises.

Holtz said Royal Caribbean Group ships finished the third quarter at a 96{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} occupancy level, which was up significantly from an 82{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} occupancy level in the second quarter but still below normal.

Royal Caribbean Group ships normally sail at more than 100{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667} occupancies — something possible when more than two people occupy a cabin.

Cruise pricing still low in relative terms

Even if starting rates for cruises rise in the coming months, cruise pricing still will be notably low as compared to the cost of vacationing on land.

As TPG has written about several times in recent months, hotels, resorts and airlines have been able to push up rates much faster than cruise lines over the past year as travel rebounds in the wake of the pandemic.

That’s made what has long been a notable differential between the cost of land vacations and the cost of cruise vacations even wider than it was before.

In a recent analysis, travel insurance comparison site insuremytrip.com pegged the differential at around 30{6932ee47e64f4ce8eedbbd5224581f6531cba18a35225771c06e4f1b3f0d9667}, noting that real-time data it had on what customers were paying showed the average land trip costing $6,426 — $1,469 more than the average cruise.

The bottom line: Cruises remain a great value. But if you’re in the market for a cruise, this may be a time when it pays to snag whatever deal you see now versus waiting for a better offer.

Planning a cruise? Start with these stories: