In January of 2016 at the age of 53 I retired from my job in corporate America and my wife and I now travel the world full-time. We feel that we are living a fantastic lifestyle for less than what a typical middle class lifestyle would cost in the United States. We do this by travelling primarily to countries where the cost of living is less than the USA and being creative in our travel methods and expenses. One method of travel that is a tremendous value is re-positioning cruises.
What is a re-positioning cruise? Cruise ship companies operate in many parts of the world. Seasonal weather makes certain locales desirable for only part of the year. For example, the Mediterranean is a popular cruise destination during the summer, but not many people want to cruise the Mediterranean in the winter. Rather than let a cruise ship sit idle in the Mediterranean for the summer, a company will move that ship to a locale that is desirable during the Mediterranean winter – the Caribbean, for example.
Rather than sail the ship empty across the Atlantic, cruise ship companies will offer very low rates on these cruises in order to offset some of their costs. For example, our first re-positioning cruise was in April of 2016 from Houston, Texas to Barcelona, Spain. This cruise took 16 days and an inside cabin could be purchased for $649 per person for the trip based on a minimum of two people in the cabin. With fees, taxes, gratuities, etc. the cost works out to $1010.21 per person or $126.28 per day total for two people. On average, this is less than it would cost you to live in the USA on a daily basis according to 2013 US Bureau of Labor and Statistics figures for the average married couple.
In many cases, the cost of the cruise is close to, or even less than a one-way airplane ticket to travel the same distance. At the same-time you get your major living costs, room and board, for “free” or very low cost if you consider the first portion of your cruise fee to be the alternative to buying a one-way airline ticket.
For us, the lifestyle we have chosen is to travel the world full-time with no home base. We sold all of our possessions except for some family keepsakes, photos and a little artwork. Right now they take up about half of a 5-foot by 5-foot storage locker. This is our only monthly cost other than our day to day living expenses. We don’t have a home or apartment back in the USA or Canada that we have to maintain.
Most people look at their living costs on a monthly or annual basis. We look at our average costs on a daily basis since we travel full-time. The typical working person in the USA or Canada gets paid on a monthly, or sometimes weekly basis. You pay many bills on a monthly basis, mortgage or rent, electricity, cable, phone, etc. Food is typically purchased on an ad hoc basis, say grocery shopping once a week or so. Meals eaten out might vary. Let’s work up a hypothetical example of what an average daily living cost for a couple in the USA would work out to just considering housing and food.
For illustration purposes let’s take a look at what a couple might spend on a daily basis for food and lodging. The US cost of living for a married couple in 2013 according to the US Bureau of Labor and Statistics is $66,793 per year. By this data, a family of two will spend $183 per day on total living expenses. Of this total $83 per day is for food and lodging according to the US Bureau of Labor and Statistics.
We took a cruise from Houston, TX USA to Barcelona, Spain on Norwegian Cruise Lines in April 2016 and it was the first cruise we had ever taken. For those of you unfamiliar with cruising here is the basic idea of what you get included in the price of a cruise:
- A room similar to a small hotel room – bed, toilet, sink, shower, closet, TV, coffee maker, small desk, mini-bar. Daily cleaning, linen change and nightly turn-down
- All the food you care to eat. Some sort of food is available 24 hours a day. On our cruise there was one restaurant open 24 hours. During breakfast and lunch there were about a half dozen restaurants ranging from an extensive buffet to four star sit down restaurants available. For dinner there are even more options.
- Exercise room, jogging track, sport courts – basketball, soccer, tennis
- Swimming pools, water slide and hot tubs
- Library, card rooms, sun decks and other public gathering places
- Nightly entertainment in a theater with acts like singers, variety shows, magic shows, comedians, etc.
- Daily activities such as trivia contests, cooking classes, lectures, etc.
- Live entertainment throughout the day and evening with live bands, singers, etc.
- Port stops – we made three stops on our cruise: Miami, St Thomas Virgin Islands, Funchal Maderia. Port stops are a key part of virtually all cruises. You have the opportunity to get off the ship in the morning and have to be back on later in the afternoon. For most typical cruises, port stops are a key part of the cruise. Re-positioning cruises have much more limited days in port.
So if you look at it just from a cost of living point of view, you have a place to sleep, lots of high quality food to eat plus plenty of activities and entertainment to keep you occupied.
Analysis from a cost approach – for us, we were looking for the least expensive way to get to Europe. Without a full-time residence, we need to have a place to sleep every night and food to eat every day. Since our time is our own, it doesn’t really matter to us how long it takes to get from Houston to Barcelona.
Cost of two one-way airline tickets from Houston to Barcelona – $830 each, $1660 per couple
Cost of cruise from Houston to Barcelona including all fees – $1010 each, $2020 per couple
The cost of the cruise for two is $360 more expensive than two one-way airline tickets from Houston to Barcelona. If we take away the cost of airline tickets from Houston to Barcelona from the cost of the cruise, this leaves $360 for 16 days’ worth of food and lodging. This works out to $22.53 per day for food and lodging for both of us! We have to eat and have to sleep somewhere! Can you think of anywhere else where you can stay in a nice hotel room and eat in 4 star restaurants every day for $22.53 per couple? Much less than the cost of $83 per day the average American couple spends for everyday food and lodging.
So for us, this is a fantastic value. We get from the USA to Spain and get to eat, sleep and get entertained for 17 days at $22.53 per day more than the equivalent cost if we flew from the USA to Spain.
Analysis from a value approach – as far as we know, we were probably the only people travelling on the cruise primarily as a means of transportation. Most of the people we talked to on the ship were taking the cruise strictly for the vacation experience. Some were staying a few days or weeks in Europe after completing the cruise and then flying back to wherever they are from. For these people the value of the cruise is the experience; hotel like room, food, entertainment, adventures at the port stops, etc.
Let’s look at the value of the re-positioning cruise from the viewpoint of a what the equivalent cost would be to go on vacation. What would be the equivalent value of the food, lodging, shows, entertainment, etc. if you had paid for a vacation to somewhere like Branson or Las Vegas.
Accommodations – the rooms on the ship are nice and include daily cleaning and an evening turndown service. On average they are smaller than a typical hotel room, but to rent a similar hotel room would typically cost $100-150 per night in most locations.
Food – there are a wide variety of options for dining on the ship. I know many people choose to eat at the buffet for all three meals. For us, we typically ate at a sit down restaurant for dinner every night. We had lunch at the buffet about half the time and only used a sit-down restaurant about three times for breakfast. There were five specialty restaurants on board the ship. These specialty restaurants have an additional charge but as a special promotion when we booked this cruise, we received a package that gave us 5 dinners at the specialty restaurants at no additional charge. The restaurants ranged from a steak house that would rival the quality of a Mortons, Japanese hibachi place similar to a Benihanas, Brazilian steakhouse like a Rodizio, a high end French and a high end Italian place.
The sit down, non-specialty restaurants that were included in the price of the cruise I would describe as 4 star. The tables all have table cloths. A variety of food is available on the menu: steak, prime rib, chicken cordon bleu, seafood, pasta, etc. A selection of appetizers, soups and salads and desert is always included. You can order as much as you want. For example, you could have an appetizer and soup and salad plus two entrees and a couple desserts if you really wanted to.
Entertainment – every day there are two showings of a 45 minute show. The shows we saw were good quality, the illusionist was definitely headliner Las Vegas quality and in fact has performed in Las Vegas. The rest of the entertainment was not quite to the level of a Las Vegas headliner, but something you might find off the strip in Las Vegas or in a place like Branson, MO.
In my estimation, if you were to create your own 16-day vacation on land in a place like Branson, MO or Las Vegas where you paid for a room, ate all meals in similar quality restaurants and paid for a nightly show I would estimate that you would spend $4216 for a similar experience not including the value of the transportation from Houston to Barcelona. You would only pay $2020 for the re-positioning cruise. That is a tremendous value for what you get!
For more detail on how I arrived at these figures, please see the spreadsheet at the end of this post.
Other considerations – we took the re-positioning cruise primarily because it was a low cost method of getting to Europe and at the same time gave us 16 days worth of food and lodging. We also wanted to give cruising a try. Although we enjoyed the cruise, taking a 5-14 day typical cruise purely for a vacation would not be our preferred method of travel or vacationing. For us that is just a matter of taste and preferences. Most of the people we met on the cruise were avid cruisers. One person we met was taking their 44th cruise. I would say about half the people we asked had taken 20 cruises or more.
However, cruising is not for everyone and even as a low cost method of travel as we used it for may have its drawbacks for some.
- Internet and phone access – if you can’t live without fast internet or are not willing to pay large sums of money for slow internet or expensive phone calls, you need to think twice. Satellite speed internet (meaning really slow) is available for a fee – $0.95 per minute if you buy it by the minute or $24.95 per day. Phone calls cost $4.99 per minute.
- Soft drinks, beer, wine and other alcoholic drinks – tea and coffee is included in your cruise package. At breakfast there is orange and apple juice and the rest of the day there is flavored water, lemonade and ice tea. Filtered water is available by the glass as well all day. However, after that everything costs money. Bottles of Pepsi products cost $2.95 each. Domestic beers are $6.50 each. Other alcoholic drinks range from $6.60 on up. You can purchase drink packages ranging from $7.95 per day for a refillable mug that gets you soft drinks to $79.99 per person per day plus 18% service charge for the unlimited alcoholic beverage package. So if you can’t live without daily soft drinks or alcoholic drinks, you can end up spending much more for your trip than we did.
- Limited TV viewing options – if you are going to spend a majority of your time watching TV, you may as well stay home. There is a TV in every stateroom but channels are limited. There is BBC World News, MSNBC, Fox News, CNBC so you can keep up with what is going on in the world. If you love soccer there are two sports channels that primarily show soccer. About three other channels periodically show American and British TV show reruns, recent movies and the occasional cartoon. But if you can’t live without watching your favorite American sports team live or can’t miss the next episode of The Bachelor live, you might experience a little stress.
- Plenty of other ways to spend money – there are many ways to spend money on the ship. Laundry is $20 per bag (we handwashed clothes throughout the trip). Spa services such as massage, botox, facials, etc. are available. Photographers will offer to take your picture multiple times throughout the trip at $15 per picture. There is a casino on board as well as almost daily bingo games. Special events such as a behind the scenes tour of the ship or dinner with the Captain cost extra as well. Most of the performers sell a book, CD or video An art gallery on board has multiple art auctions. (They even had some masters such as Picaso, Rembrant, etc. with prices up to $50k) So, if you get bored really easily or can’t resist the temptation to spend money, you could easily spend lots of money on all the extras on board.
- Cost of getting home – if you are not using the re-positioning cruise primarily for transportation like we did, you need to add the cost of getting home to your vacation cost.
For us, the re-positioning cruise was great! We got to Europe inexpensively, enjoyed someone making our bed every morning, ate extremely well at 4 and 5 star restaurants for 16 days straight and enjoyed a high quality 45 minute show every night. It was a tremendous value for us and will definitely do this again sometime as we travel from continent to continent.
Appendix – Assumptions for Value Analysis
Based on our experience on the 16-day cruise, I estimated how much it would have cost if we had eaten at similar quality restaurants, stayed in a similar quality hotel room and watched similar quality shows. We ate at a variety of the available restaurant options. For breakfast we ate at the buffet most of the time, but did go to a sit down restaurant four times. Lunch was probably half and half between the buffet and other restaurants. Almost all of our evening dinners were at service restaurants rather than the buffet.
Here are my estimates for what it would have cost to eat at a similar quality restaurant. I feel these are conservative estimates. They are based on the cost of an appetizer, main course, desert, ice-tea or lemonade, and coffee with each meal.
For entertainment, I estimated the cost of a ticket at $20 per person. Doing some research on off strip shows in Las Vegas and shows in Branson, MO, I found that tickets typically ran from $30-40 per ticket. I discounted this a little since the shows on our cruise were 45 minutes each, a little shorter than a typical show you would see in Las Vegas or Branson. I would have paid $50 per ticket or more for Magician/Illusionist and the finale show of the cruise – they were very high quality. A couple of shows I probably would have valued less than $20 simply because of my own personal tastes. Overall I averaged the estimated price to $20 per show per person.
There was a show each night of the 16 day cruise and a couple of “adult only late night shows” (don’t worry, nothing X-rated, just that some of the subject matter was not suitable for young children).