ASA ruling on Royal Caribbean
Claims on www.royalcaribbean.co.uk, seen in June and July 2017, promoted cruises with travel dates in June 2018, based on an “Interior” room type.
Text on a page promoting a “12 night Northern Delights” cruise, seen on 20 June, stated “FROM £1,072* Per person based on 2 people sharing”. Further down the page, text stated, “Enjoy 20% Off Your Cruise Fare Plus Up To $500 Onboard Spend: from £1,072pp”.
Text on the same page, seen on 19 July stated, “FROM £1,037”, and, further down the page, “30% Off Your Cruise Fare & Free Wi-Fi PLUS Free Car Parking in Southampton: from £1,037pp”.
A page promoting a 14-night “Mediterranean Beaches” cruise, seen on 20 July, stated the cruise was available with “30% Off … from £1,198pp”. The same page, seen on 24 July, stated that the cruise was available “from £1,218pp”, again with “30% Off”. The same page seen later on the same day included the “30% Off” claim, but stated that the price was “from £1,249pp”.
A complainant challenged whether the “30% off” claims were misleading and could be substantiated.
RCL Cruises Ltd t/a Royal Caribbean said their pricing operated on the basis of dynamic pricing, which meant that prices changed regularly dependent on factors such as competitor pricing, market and trading conditions, stock availability and exchange rates, which they said was a practice used across the cruise industry. However, they said at all times their percentage discounts were genuine and were set against the currently available base reference price which might, on occasion, change over the course of a day due to dynamic pricing. In that regard, they stated in their offer terms and conditions that the 30% discount would be applied to the prevailing cruise fare. They said they did not inflate base prices in order to cover the cost of the discounts offered. They said to ensure accuracy for their consumers, their prices were updated and amended frequently on their website. Those changes could be made several times a day in order to reflect when prices changed and when cruises sold out at different price categories.
They said their base prices were genuine and the available discounts were applied to those base reference prices. They provided a selection of invoices that they said showed the base cruise fare and the billed fare with the appropriate discount applied.
Royal Caribbean said they stated on their website that their prices were “from” prices and that they were subject to change without notice. They said that the displayed price on the page that included the “20% off” claim was incorrect due to a technical error, and that they had taken steps to correct prior to the complaint having been raised with them. They believed their system had calculated a saving based on a ‘guarantee stateroom’ in error, which was excluded from the promotion. They said they had implemented various changes to avoid that error occurring again.
In relation to the page promoting the same “12 night Northern Delights” cruise but seen the following month with a “30% off” claim, they said the lowest price available to purchase a category 6V stateroom was £1,037 pp, and the ‘base reference’ price without the 30% saving was £1,481 pp.
Similarly, they said the page promoting a 14-night “Mediterranean Beaches” cruise, seen on 20 July was for a category 6V stateroom, and that the ‘original’ price was £1,712 pp. The stated price of £1,198 pp represented a 30% saving. They said when that room sold out, the next available lowest price was a category 4V stateroom, which was priced at £1,217 pp. They said the pricing changed when the category 6V staterooms sold out, which was on 23 July, and the website prices were updated accordingly. They said the price of the category 4V staterooms without the discount was £1,740 pp, and that the advertised price of £2,434 (or £1,217 each) therefore represented a 30% discount. Royal Caribbean said the same applied to the page seen on 24 July, also showing a price of £1,218 pp.
They said on 24 July, the base reference price increased to £1,784pp, meaning that a 30% discount would be £1,249 pp, as shown in the ad. They said there could be up to a one hour delay in those prices being shown after they were updated.
The complaint was upheld. The ASA considered consumers would understand the “30% off” claims to mean that by purchasing a cruise with the discount they would be making a genuine, meaningful saving. Further, the ASA considered that consumers would expect that the higher price was one at which tickets had actually been sold, and that the price would not increase as long as the “30% off” promotion lasted. While the ASA considered that consumers were generally aware that holiday pricing was fluid, and that some variation in price might occur for that type of product, in the context of a time-limited price promotion, and in the absence of further information about the basis of the savings claims, consumers would be unable to have an informed understanding of whether or not the discounted price constituted a genuine, meaningful saving.
The ASA noted there was no explanation in the ad of the ‘base reference price’ from which consumers could gain an understanding of the higher price being used as a reference for the discount. They, therefore, would be unable to make an informed decision. In any case, such a ‘base reference price’ was unlikely to have any meaning for consumers unless it was a genuine price that had actually been charged. The ASA noted the invoices provided by Royal Caribbean, and that they included references to a higher price labelled ‘Cruise Fare’. In all cases, however, that price had been discounted, and the ASA had not therefore seen any evidence to demonstrate that the higher prices were genuine. The prices, because of that, appeared to be notional prices and not ones that had actually been charged. Further, the ASA noted that the same cruise had been offered for two different prices with the same stated discount, so it appeared that the prices had increased during the sale.
Because the ASA considered that the discount would be understood by consumers to be based on a genuine price for the cruises, and the ASA did not consider the evidence showed that to be the case, the ASA therefore concluded that the ad was misleading.
[Source: ASA, 7 March 2018]