Thursday, October 15, 2015

Oceania Cruises - Yet Another Way To Improperly (And Maybe Unlawfully) Put Its Hand Into Your Pocket

I have always had problems with how Oceania Cruises (and its sister brand, Regent Seven Seas Cruises) has done business.  This time it is more than some of the more slick marketing practices that result in you paying more for your cruise than you should be as they convince you that you are getting a bargain (by, for example, telling you things are "free" when you are actually paying for them...and paying more than you would on pretty much any other cruise line).  This one is more serious.
Sometimes things happen and you have to cancel a cruise after final payment.  It is unfortunate and disappointing.  But when it happens those penalties kick in...and they do apply.  [Before you ask, this is not an issue that is resolved by the purchase of travel insurance.]  The issue here is how is Oceania applying them because it appears to me that what it is doing may well be illegal.


I have a client that needed to cancel their Oceania cruise when there was a fifty (50%) penalty. The math should be very easy.  But this is where Oceania Cruises is just "slick" or worse.  When calculating the "full fare" Oceania Cruises uses two (2) different formula (or, shall we say, definitions of "full fare") dependent on whether you are cancelling at a 100% penalty rate or something lower.  Huh?

Let's backup for a moment so this madness (and I am being kind) can make some sense.

Oceania's website states, "Cruise-related government fees and taxes are included"; clearly acknowledging that those dollars you paid over to Oceania Cruises towards governmental fees and taxes are not Oceania's money...ever...but are merely collected by Oceania Cruises to be paid to the various governments for each actual passenger visiting its port on that particular cruise.  We are talking collected taxes here for which Oceania is merely the legal safeguarder. 

Oceania Cruises is not, and never will be, the owner of those tax dollars.  It is similar to putting money into a trust account and it can only be used for its intended purpose. That is why if you ever skip a port (due to weather or otherwise) you will find a credit on your onboard account refunding the taxes and fees for that port back to you.

This is how Oceania rips you off and may well be acting unlawfully:
If you cancel at a 100% of the "full fare" penalty rate Oceania returns all of the governmental fees and taxes, but none of your cruise fare.
If you cancel your cruise at anything less than 100% Oceania only returns only a portion of the governmental taxes and fees along with remaining (unpenalized) cruise fare...but it tells you that it is properly keeping only a percentage of the "full fare".
You could say that Oceania is using two different definitions of "full fare" or you could say that Oceania is intentionally deceiving you into believing it can properly convert 50% of the taxes you paid into its own money...violating that trust.  I believe it is undeniably the latter.

Let me give you an example:

A couple books their cruise and each passenger (I can't call them guests on Oceania, that's for sure) has a cruise fare (after all discounts, credits, and whatever else Oceania markets) of $11,649.00, of which $355.00 are specifically designated as "Gov't Fees and Taxes" (which, by the way and logically, Oceania specifically does not pay commissions on...because it is not their money or part of the cruise fare).  They cancel when a 50% penalty applies.  The math would seem simple:

$11,649 - $355 = $11,294 x 50% penalty = $5,647 penalty. 

So the guest would receive a refund of 

$11,649 - $5,647 = $6,002 per person, or $12,002. Right?  

WRONG.  Oceania only uses that formula ONLY if there is a 100% penalty of the "full fare" because it knows that it cannot keep the taxes and fees it collected...and apparently it hasn't been successful in finding a way to hide those entrusted funds from the governmental agencies, the regulators or the passengers.

When the penalty is less than 100% Oceania Cruises redefines "full fare" and pockets the taxes rather than refunding them, so in this 50% penalty example Oceania calculates the refund differently:

$11,649 x 2 = $23,298 x 50% penalty = $11,649.  

So passengers that do not know they are to get the taxes they paid refunded it makes sense and to the uneducated it seems to be proper since.  However, by redefining "full fare" Oceania Cruises believes it has a literal "Safe Harbor" to convert your tax dollars into its profits.

By the way, Norwegian Cruise Lines does not play this game.  It is far more transparent in its dealings.  It's terms and conditions state "Fares do not include certain taxes, fees, port expenses and charges imposed by governmental or quasigovernmental authorities."  That leads me to believe this is another Frank Del Rio approach that I just have so much trouble with.

I firmly believe this is something the regulators need to scrutinize and you, the cruising public, should be aware of.

To me it is a shame.  Oceania Cruises has some wonderful and unique itineraries.  Its ships are attractive.  Its cuisine is quite good and its service staff work hard to please.

Why wouldn't Oceania Cruises simply want to treat its passengers with respect and fairly? It seems that it isn't about integrity.  It is about short term profits...whether obtained properly or not.

Something to think about when you book your next cruise.

If you want a travel agent that truly looks out for you and makes sure you know what you really need to know, give me a call at (877) 2GO LUXURY or email me at eric@goldringtravel.com.