The beginning of the end for cruise fuel surcharges?

The dreaded “s” word – surcharges – is back in the news, but this time cruisers have reason to be cheerful. On the face of it, at least.

With the price of oil now down to little more than US$60 a barrel – that’s half the price it was in July – cruise lines have taken their first steps to get rid of fuel surcharges.

US giant Carnival is being credited with having started the ball rolling, but it appears that the plaudits should actually go to Voyages of Discovery.

Vilified for having the highest fuel surcharge in the industry at a whopping £19 a day, I discovered this week that it quietly dropped them in the summer with immediate effect. Bookings now and for 2009 are guaranteed to be surcharge-free.

Sister company Swan Hellenic removed its surcharges last month, with a no-supplement guarantee in force until March 31, 2009.

Italian line MSC Cruises also has an early Christmas present for cruisers – as of November, the fuel surcharge has been dropped on all future bookings.

Unfortunately, if you were hoping to get something in this year’s Christmas stockings from any other cruise lines, you’ll be disappointed.

US cruising giant Carnival, which owns Cunard, Princess Cruises, P&O Cruises and Ocean Village, among other brands, is axing fuel surcharges on bookings made after October 31 2008 – but only for cruises in 2010.

Royal Caribbean Cruise Lines is also dropping fuel surcharges, this time on bookings made after November 10 this year, but likewise only for cruises taken on or after January 2010. The change affects Royal Caribbean International, Celebrity Cruises and Azamara Cruises, which are all owned by RCCL.

There is also a ray of hope to those who have booked a 2009 cruise on either a Carnival or RCCL ship, or who plan to book one for next year.

Both lines have drawn up guidelines whereby fuel supplements charged on 2009 bookings will be refunded if the oil price stays low. They are complicated so you’ll have to trust the lines to do the maths, but it is all to do with the price of oil staying at or below US$70 (Carnival) or US$65 (Royal Caribbean) for a certain number of days before your cruise.

Rather than cash, refunds will be made in the form of on-board credit, which I’ve no doubt will elicit complaints – in this economic climate it is nice to have some unexpected cash come your way – but it’s not such a bad thing. The credit will pay off the crew’s gratuities and could cover some of your bar bill. Either way, you are only spending money you didn’t expect to have anyway.

I admit to being pleasantly surprised that so many lines have dropped, or started to drop, their fuel surcharges, but it’s a shame that the domino effect that worked so well when the lines were putting up their surcharges is less effective when it comes to getting rid of the charge.

Fred Olsen Cruises Lines, a big favourite with older British cruisers, is still collecting £6 per person per night, or £84 over a two-week cruise. Norwegian Cruise Line continues to levy US$11 (£7.28) per person per night, and there are levies of US$8 (£5.30) on Disney Cruise Line and £3.50 on Star Clippers.

Any cause for cheer has also been knocked sideways with news that this Friday, at the same time as dropping fuel surcharges across its brands, Carnival is increasing cruise prices for, yes, you’ve guessed it, its 2010 sailings – the ones that should have benefited from an end to the fuel surcharge.

The cruise line has not said what those increases will be – and of course there is the bigger question of whether they will actually stick in the present economic climate – but I suspect what they are really doing is building the surcharge into the cost of the cruise, so it is presented as one price.

The timing of the announcement was not great, given that it was at the same time as telling the world that it was dropping fuel surcharges, but it’s a smart move.

The “s” word causes angst and upset, not so much because of the money – let’s face it, another £60 or so is not going to break the bank if you are already paying £1,500 for a cruise – but because it is shown as a separate charge. It’s like VAT, and no one likes to pay that.