Will Carnival Cruise Line Walk Back Changes To Loyalty Program?

Last week, Carnival Cruise Line, part of Carnival Corporation & plc, announced it was scrapping its lifetime loyalty program and switching to one that rewards the amount spent on cruises over two years. Branded credit card spending will also accrue loyalty points. Long-time Carnival cruisers are furious, and have been expressing their views on every social media outlet. While Carnival certainly hasn’t said they would revise the new program, their brand ambassador John Heald posted a video hinting that the company had announced the changes early enough to make adjustments based on customer feedback. Let’s unpack the controversy sparked by Carnival’s announcement.

Why Did Carnival Scrap Lifetime Loyalty?

Simply put, Carnival had too many customers who had attained the top tiers of their loyalty program. Too many loyal customers sounds like a problem most companies would enjoy having, but delivering an elite experience for elite members is difficult when half the guests on a ship are elite. Elite benefits like free laundry and specialty dining meals cut into profit margins. Priority lines for debarkation and other services become as long as the regular ones.

Much like Social Security doomsayers, no doubt Carnival looked at forecasts for elite guest headcounts and they were only getting worse. Today, there are children and teens with elite status earned by cruising with their parents. They would have many decades of the highest level status ahead of them, joining the ranks with other cruisers achieving top tier status.

To forestall an increasingly average experience for its biggest spenders, Carnival adopted a plan loosely based on what most airlines do today. The latter no longer count miles flown, they count dollars spent. And, status resets every year, often with more challenging goals for each tier of benefits.

Carnival went with a two year reset, and to soften the blow is letting members retain their current status until mid-2028. Diamond members, the highest tier, retain their status until 2032. To retain that status, Diamond members will have to spend about $33,000 every two years.

How did Carnival Loyalty Members React?

Predictably, Carnival’s customers did not like the changes. Every social media channel blew up with almost universally negative comments. Here are a few from YouTube:

• @juanvazquez5670: “37 years 31 cruises gone down the drain. Felt that slap on the face. Carnival, I want to thank you for making my decision for me.”
• @Lilgreeenworm: “Carnival allowed me to earn my platinum status for a ‘lifetime’ I did not ask for it or negotiate for it. So when they cancel a ‘lifetime’ program with a spend money or lose it program in my mind they have lost integrity as a business… Take a hike Carnival.”
• @gtjgtj8334: “Carnival messed up big time…we are so hurt. I won’t let them do this to us again…we are leaving.”
• @TT-xj3si: “It took me 10 yrs, TEN YEARS to FINALLY make it to platinum and u mean to tell me come next year i lose my status 😤… 🤬🤬🤬🤬 i worked so hard to get here AND IM A SOLO SO I PAY DOUBLE.”
• @lawrencesnyder817: “18 years and 16 cruises and 164 sea days, through covid, the triumph…yeah we were loyal Fun ship cruisers..now its all about the premium experience.”
• @brianleblancart736: “The brand loyalty is now completely nonexistent. Also, the little quirks that Carnival has aren’t so cute to me anymore.”
• @donnashomin357: “I’ve been sailing with Carnival since 1981. I am Diamond. This is a spit in loyal customers face… I will be putting my money with other companies.”

The customers most upset are those who accumulated status over many years with at most one cruise per year. They will have no chance to retain what they thought was lifetime status unless they spend vastly more per year.

The IKEA Effect and Carnival’s Changes

As I noted in my earlier article, brand loyalty is emotional. Carnival is now treating it in a far more transactional way. And, of course, the “lifetime” promise has been broken. This all leads to long-time customers feeling betrayed.

Reading the commentary by long-time cruisers, I realized that the IKEA effect is coming into play as well. Research shows that when we build or create something, we value it more than we would otherwise value the same item.

Longtime cruisers have “built” their loyalty status over years, even decades. They track their progress through the tiers. Their cruise itineraries might even be changed by status considerations. If a cruiser is just two nights short of the next tier, they might well choose a slightly longer voyage or take an inexpensive three-day cruise.

When customers are actively participating in creating their loyalty status, having it yanked away hurts even more.

Will Carnival Budge?

It seems unlikely that Carnival will completely reverse course on these changes. The numbers make the old program unsustainable, and they are only going to get worse.

But, Carnival’s Brand Ambassador, John Heald, posted a video on Facebook suggesting that the company delayed starting the program until 2026 to allow time to assess how the program was being received. And, perhaps, fine tune it.

We announced this new program… a year before it comes into place… And the reason that we’ve announced it now is that we have a year to look at it, possibly, maybe fine tune it and change some things around… I do know that that is what I was told today by somebody at the very highest level…

Carnival has not yet responded to a request for comments.

How Carnival Can Prevent Further Damage

Carnival has damaged their relationship with their most loyal customers. Even if they suddenly grandfathered lifetime status for current elite members (which isn’t likely to happen), those members would still feel differently about the brand.

There are a few things that Carnival could have done from the outset, but even now might still help reduce the damage.

The most important thing is to recognize the emotional nature of brand loyalty. Sure, Diamond members enjoy the perks of their status, but the actual value of these perks isn’t that much. They enjoy being seen as Diamond members. Every time there’s an event, a special line, or some other perk, they are being told that their loyalty is appreciated and reciprocated. This is now being taken away.

So, Carnival should retain recognition of lifetime status. Make the benefits that aren’t financially or operationally sustainable available to the smaller group of high two-year spenders. But, let long-time customers feel seen. For example:

• Continue to give elite members pins and luggage tags.
• Recognize guests with the highest total nights at events.
• Give elite members a personalized door magnet.
• Put a welcome note from the Captain in their stateroom.
• Have staff occasionally say things like, “Thanks for being Diamond!” or, “You are at 237 nights with us as of today, congratulations!”
• Establish another aspirational tier, say, at 400 nights.

Even if it’s not feasible to offer expensive perks like free specialty dining, acknowledging the long-term loyalty of these customers will help keep them engaged with the brand.

I don’t expect big changes from Carnival, but I do think they will try to repair the damage and appease those customers with decades of loyalty.