Cruise Contract Terminology for Groups
Contract terms for groups vary from cruise line to cruise line but most of the terms are fairly standard within the cruising industry. Below are some typical terms that you can expect to see in group cruise agreements.
Accommodations & Pricing
This section outlines the total number of rooms held for the group in each pricing category and is traditionally shown on a double occupancy basis as room rates are usually quoted per person on a double occupancy basis. Single occupancy rates and/or restrictions are also usually defined here.
Third and Fourth Guests
Most ships offer specific room accommodations that can hold a third and/or fourth guest (triple/quad occupancy). This option is not available throughout the ship, as the cruise line must meet safety regulations for the accommodation of additional guests.
A reduced cruise fare applies for third and/or fourth guests in a cabin which varies by cruise line, sailing, and age of guest. Infants’ and children’s rates are substantially less than those for adults.
The scheduled itinerary for the group is typically shown on group agreements. However, cruise lines consistently include language advising that planned departure and arrival times are not guaranteed and any part of the itinerary is subject to change due to weather conditions, navigational and/or safety issues, etc.
The itinerary is not negotiable for groups unless they are chartering a full ship with adequate lead time to secure alternative port arrangements. Major deviations from planned itineraries are the exception and not the rule. Cruise lines sometimes charge an additional fee for to customize the standard itinerary for full-ship charters.
This section of the contract outlines the negotiated amenities for the group, such as a cocktail reception, a welcome amenity in each room when guests arrive, etc., as well as any applicable terms related to the negotiated amenities, such as a minimum number of group guests.
Cruises offer standard inclusions for all guests, such as all meals, buffets and snacks served in the ship’s main dining venues; a variety of daily activities and events, as well as nightly entertainment. For groups, private use of public area facilities/lounges and audio-visual equipment can be reserved without a rental fee on most cruise lines (based on availability), as well as coffee breaks which typically have only a minimal set-up fee for private events.
Governmental Taxes & Fees
There are various taxes and fees associated with cruises that vary by cruise line, how many ports of call the cruise has, by the cruise destination, etc. These taxes and fees are in addition to the quoted cruise fare, are subject to change until the day of sailing and are not considered negotiable.
Gratuities for services by certain shipboard staff, (typically your stateroom steward and dining room head waiter, waiter and assistant waiter), are charged as a flat amount per day per guest and are required to be prepaid in advance of the sailing along with accommodation and taxes/fees. The amounts charged can vary by cruise line and are higher for suites vs. non-suite room accommodations.
Full payment for all rooms, taxes/fees, shipboard gratuities and requested amenities with a cost is required prior to sailing for cruise programs. A payment schedule is included in each group agreement and can vary by cruise line as well as by the size of the group and/or the number of nights of the sailing. Cruise lines usually have set standards regarding the payment schedule dates and amounts due, but some cruise lines are willing to make minor adjustments to accommodate particular needs on a case-by-case basis.
Attrition and Cancellation Policies
This section outlines the applicable attrition (group size reduction) and cancellation policies which vary across cruise lines. These policies are usually based on the cruise line’s historical data and trends across all of its ships and destinations and vary based on the size of the group, the length of the cruise and/or the itinerary destination and are all related to the date of room release request. Attrition is usually outlined on an incremental basis with a certain amount of reduction permitted without a fee and a flat or percentage-based fee assessed for rooms released above the permitted number.
Force majeure literally means “greater force” and is often used in contracts to excuse a party from liability if some unforeseen event beyond the control of that party prevents it from performing its obligations under the contract. Many cruise lines include force majeure language in their contracts, but a few, intentionally, do not.
The cruise lines that do not include force majeure language in their contracts prefer to deal with any such circumstance on a case-by-case basis. The cruise lines who do include such language use it to outline the limitation of the cruise line’s liability if the cruise were to be cancelled or altered due to circumstances beyond the cruise line’s control and the applicable remedy for any such occurrence, which is generally limited to a refund of monies paid as of the date of cancellation. This is a very sensitive area of contracts and as an industry standard, the industry’s major cruise lines are not willing to make the language reciprocal.
As is standard with agreements of all kinds, most contracts indicate the state or location of the issuer’s corporate headquarters as the state by which the agreement shall be governed; and the state of jurisdiction is rarely negotiable.
Passage Ticket Contract
Each cruise line has its own standard passage ticket contract (called by different names by different lines), which outlines the rights, responsibilities and limitation of liability between the cruise line and the individual traveler. This is much like the fine print on the back of an airline ticket, and applies to all individual guests sailing on any of the cruise line’s vessels.
This contract is separate and apart from the group agreement. It is often referred to and incorporated into the agreement as an understanding of the applicable terms by the group’s individual guests and is rarely, if ever, negotiable. Whether or not it is incorporated into the group agreement, it is a required part of the individual traveler’s document packet and serves as the terms and conditions of the traveler’s cruise passage.
Loss of Onboard Revenue
What helps keep cruise fares very affordable is that a portion of the cruise lines’ revenue projections are based on the products and services that shipboard guests purchase aboard the ship, such as bar service, shore excursions, photographs, spa/salon services, etc. When the cruise line reserves a block of rooms for a group, they are anticipating that a high majority of the rooms will be on a double occupancy basis.
When a group has a high percentage of single occupancy rooms, many cruise lines will assess a surcharge to offset the reduction of revenue that will be earned during the sailing. The amount of this surcharge can vary greatly, but usually averages $45 to $50 per day per single occupancy stateroom and is in addition to the applicable single occupancy accommodation fare.
Similarly, if an organization with a full-ship charter expects to bring aboard less than full capacity, a loss of onboard revenue for the difference between the actual number of guests sailing and the stated occupancy requirement is often charged. Specific utilization expectations for a group or full-ship charter should be discussed during the proposal stage in order to negotiate the best terms for the organization.