MercoPress. South Atlantic News Agency

Cruise Costs to Increase Due To Rise in Fuel Costs

British holidaymakers wanting to go on a cruise are going to have to shortly pay more as UK based operators announced they are set to begin charging fuel supplements.

Voyages of Discovery, Swan Hellenic and Cruise and Maritime Voyages are to increase the cost of their cruises by £4 per passenger per day for all bookings made after April 30, June 22 and February 1 respectively, although existing bookings will not be affected. All three lines blamed the increase on rising oil prices.

The fuel supplement will be capped at £100 per person for those travelling with Cruise and Maritime and at £152 for those with Voyages of Discovery and Swan Hellenic.

A spokesman for All Leisure Holidays, which owns Voyages of Discovery and Swan Hellenic, said: “A number of other cruise companies introduced a fuel supplement in 2010, while we have endeavoured to delay this increase for as long as possible.”

P&O Cruises, Cunard and Fred Olsen all introduced fuel supplements in December, although no American-based lines have done so yet.

The price of a barrel of Brent crude oil has risen to more than $90 (£57) – from less than $50 (£31) a barrel last spring.

A spokesman for Cruise and Maritime Voyages said the decision to impose a surcharge had been made “reluctantly” and that passengers would be refunded should the price of a barrel of oil fall below $75 (£47).

If oil prices return to the levels of 2008, when a barrel of Brent crude rose to more than $140 (£88), further increases are likely. Fred Olsen's supplement reached £6 per passenger per day in July 2008.

P&O and Cunard currently charge £4 per passenger per day, with a cap of £150 per person, while Fred Olsen charges a supplement of 5.5 per cent of the total fare, with no cap.

Paul Green, the head of communications at Saga, said fuel supplements were “destroying consumer confidence”. Saga Cruises has promised not to introduce them.

“If you run a business properly, you should not have to resort to such measures,” he said. “Companies can hedge their fuel purchases and should be able to price their products accordingly. It is unfair on passengers, and doubly unfair if these companies have already hedged their fuel anyway.”

Fred Olsen's policy in particular has been criticised. Passengers booking a cabin on board the line's Black Watch for a 106-night round-the-world cruise, currently priced at £9,499 per person, will pay an additional £522.45. Should the cruise go on sale at a discounted price, passengers paying less for their reservation will also pay a smaller supplement – even though they are using the same amount of fuel. Meanwhile, passengers in more expensive cabins will contribute more to the cost of fuel.

Fred Olsen has also introduced a retrospective fuel surcharge on existing bookings of 4.5 per cent of the total fare.

A statement from Fred Olsen said that its operating costs had risen by 6.5 per cent since its brochure was published in September.

Nigel Lingard, the company's marketing director, said that the majority of cruise lines, including Fred Olsen, did not hedge their fuel purchases. “We review our policy on surcharges and supplements on a monthly basis,” he added.

The cost of cruising may rise even further next year with the introduction of environmental regulations designed to reduce harmful emissions from ships.

New rulings will mean that cruise lines have to cut the level of sulphur in their fuel when they are within 200 miles of shore: from the 4.5 per cent currently permitted to 1 per cent by 2012 and to 0.1 per cent by 2015.

It has been estimated that using low-sulphur fuels could cost some vessels an extra £10,000 a day. (The Telegraph)