Officials at Norway’s famed coastal voyage Hurtigruten were being hit by a wave of criticism on Monday over how they set their fares. Passengers from abroad have been charged much more than Norwegians, especially those buying tickets shortly before departure, and tourism experts fear the practice will worsen Norway’s reputation for high prices.
It took a couple of Americans with some knowledge of Norwegian to discover the sharp difference in fares quoted on Hurtigruten’s US website and its website in Norway (hurtigruten.no), reported Norwegian Broadcasting (NRK). Mary and Everan Chaffee discovered that if they ordered their tickets through the Norwegian website, they’d only have to pay roughly half the fare that was quoted on the website aimed at the US market.
“We wonder how long Hurtigruten has been getting away with this,” the Chaffees told NRK.
A question of integrity
They just sailed on Hurtigruten’s vessel MS Richard With from Ålesund to Bergen while on their honeymoon. They enjoyed the short cruise and praised both the service and the views along the way.
If they hadn’t had some Norwegian roots, though, and learned a bit of the language, their honeymoon cruise would have been much more expensive. After perusing the Norwegian website for Hurtigruten, translating some of its contents and comparing fares quoted on the US site, the difference in fares for the same voyage became startlingly apparent.
“When it costs nearly twice as much for us as it does for Norwegians, it raises questions about the company’s integrity,” the Chaffees told NRK, which then did some price comparisons of its own. While the Chaffees are far from the only foreign tourists who have been charged more for a Hurtigruten voyage than Norwegians, the price differences between the Norwegian and American websites were the biggest.
US fares 77 percent higher
The average fare for the cheapest available tickets for one person in a cabin for two between September 13 and September 30 for a voyage between Ålesund and Kirkenes, for example, was the equivalent of NOK 1,470 on Hurtigruten’s US website. That’s 77 percent more than the fare charged for the same voyage sold via the Norwegian website, which was NOK 830.
Tickets sold via Hurtigruten’s German, French and international websites cost around 50 percent more than on the Norwegian website, while British passengers came out a bit better. Fares charged via Hurtigruten’s British website (hurtigruten.co.uk) were around 44 percent more than on the Norwegian site.
Fares quoted for a full voyage from Kirkenes in the north to Bergen in the south during the same last two weeks of September show that an American couple sharing a double cabin would have to pay as much as NOK 13,000 (around USD 1,600) more via Hurtigruten’s US website than a couple ordering their tickets through the Norwegian website would pay for the same cruise. NRK stressed that the comparisons only applied to the cheapest available tickets, suggesting that fare differences can be even higher for premium cabins. NRK was unable to compare fares charged during the high summer season, which just ended.
Hurtigruten confirmed that NRK’s calculations were representative of the overall fare differences between the shipping line’s various websites. The company caught criticism a few years ago over fare differences as well, but attributed them to a “special campaign” directed at Norwegians. Now the company is citing a combination of currency exchange rate fluctuations and a weak Norwegian krone, along with different campaigns directed at different markets.
Stein Lillebo, communications chief for Hurtigruten, told NRK that the shipping line’s management said there were three main reasons for the fare differences. “We generate a large portion of our revenue from the international markets and price our fares in the local currency,” Lillebo told NRK. “That means that when the Norwegian krone weakens, like it has recently, the fares charged abroad will rise.”
He admitted that can’t explain a 77 percent difference in fares, and went on to refer to various country-by-country campaigns. Breakfast is not included in fares charged through the Norwegian website, for example, but is on other websites. “We also have a ’30-day rule,’ as we call it internally, which offers a discount for travel booked less than 30 days before departure,” Lillebo added. “This is an incentive to get more guests to travel as departures approach, and we offer that only in the Nordic market.” An additional fee charged for single travelers using a double cabin can also be waived, pushing fares quoted on the Norwegian site even lower. “That makes up quite a large part of the fare differences you’re seeing here,” Lillebo said.
Asked why passengers from abroad weren’t offered the same “incentives,” Hurtigruten’s spokesman claimed it was because the vast majority of those traveling on the shorter distances (like Ålesund to Bergen) come from the Nordic countries. He admitted it was also “easier” for Hurtigruten to “stimulate them” to take short voyages close to departure dates. “There are very few people in the US who would latch onto a two-day voyage because of a discount of a few hundred kroner,” he claimed.
Amazed they ‘dare’ to differentiate
Critics weren’t buying his explanation. Trond Blindheim of Kristiania College in Oslo and an expert on marketing commuication and consumer behaviour, thinks the fare differences are surprisingly large. “That they dare to do this at all!” Blindheim exclaimed to NRK. “I don’t think a host should handle his guests like this, and think this will spread quickly within Hurtigruten’s core markets.”
Blindheim said the practice can clearly hurt Hurtigruten’s reputation and that of other players in the Norwegian tourism industry. “Hurtigruten is probably Norway’s best travel product,” he told NRK. “Their practice will prompt many to wonder if this is what all tourism industry players are doing in Norway. It’s not good.”
The irony is that Norwegians often are the ones charged more for everything from airline tickets to rental cars by other international players. Airlines, for example, have a history of charging higher fares for an Oslo-London-Oslo round-trip ticket than a London-Oslo-London, because the Norwegian market traditionally has shown a higher willingness to pay more than the British market. Lillebo of Hurtigruten himself told NRK that “it wasn’t too long ago” that the shipping line was criticized for charging Norwegians more than foreign tourists, when the Norwegian krone was very strong.
Jo Gjedrem, head of transport issues for Norway’s consumer ombud (Forbrukerombudet), said Hurtigruten’s fare differences don’t break any laws “but they can well be seen as speculative by consumers when they become aware of them.” He hailed “some clever American consumers” for exposing the fare differences: “Most other tourists don’t conduct such surveys.” He said his agency has received no complaints about Hurtigruten’s practice, but that may be because it caters to Norwegians who come out ahead in this case. Gjedrem also noted that the EU is working to regulate so-called “geo-blocking,” used by some players to prevent foreign tourists from gaining access to lower prices for locals.
Britt Dalland, sales and marketing director for travel industry organization Fjord Norge told NRK that American tourists are viewed as having among the highest willingness to pay more for travel than other tourists. “But we don’t actively advise (travel industry players) to charge higher prices in some markets than in others,” she insisted. “There are probably some who operate with tactical pricing, but it’s not something special in the travel business that they adjust for various levels of payment willingness.”
Norway’s national travel employers’ organzation NHO Reiseliv wouldn’t comment, saying only that individual member companies must answer for their fare-setting.
After NRK literally broadcast Hurtigruten’s fare differences on Monday, the coastal voyage company that’s recently been reporting some of its best financial results ever said it would probably re-evaluate its fare policies. “If we had seen that fares are viewed as high abroad, we would have seen a need to adjust them downwards,” Lillebo told NRK. “We haven’t done that yet, but if we look into the crystal ball, there is reason to believe that globalized trade will become so extensive that prices will become the same for all markets. We see that everyone will need to even out prices when trading patterns are globalized.” He suggested so-called “30-day rule,” at least, looks likely to be introduced in all markets, not just the Nordic.