Carnival Levies Fuel Surcharge on Cruise Passengers

Citing a 50 percent increase in fuel costs over the past seven months, Carnival Corp. said all its North American brands will charge cruise guests a fuel supplement of $5 per person per day. The surcharge will be in effect for all new and existing bookings for cruises departing on or after February 1 and will be limited to $70 per person per voyage. Carnival said the charge will apply only to the first and second guests in any stateroom, meaning the extra fee won't be charged, for example, for kids staying with parents in the same cabin. Still, the $140 additional charge per couple could potentially have an impact on sales by agents to budget-conscious consumers.

The surcharge applies to voyages of Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Princess Cruises and Seabourn Cruise Line. Carnival Corp. Chairman and CEO Micky Arison said the line held off implementing a surcharge as long as possible, but the spike in fuel prices has dramatically affected the company's operating costs. Carnival Corp.'s fuel prices alone have increased 140 percent over the last three years, he said.

In a letter sent to travel agents Wednesday, Jack Anderson, executive director of Carnival Corp., explained the reasoning behind the move. "Implementing this fuel supplement was a difficult decision," Anderson said, "but one that we feel was necessary in today's challenging economic environment."

Earlier this year, Carnival added a similar supplement to its European brands. "We hoped to avoid a similar supplement for our North American brands but with the price of oil approaching $100 a barrel, this is no longer possible," emphasized Arison, who stressed that even with the surcharge, consumers will only pay one-third of the company's year-over-year fuel cost increases. Arison said the line hopes that someday, lower fuel prices will allow the company to discontinue the surcharge.

For existing reservations, travel agents will receive $10 per booking in administrative compensation for notifying their clients of the new fuel supplement and collecting the additional funds. More information will be available on the line's web sites and through marketing materials. (SY & DE)