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Perfect Day at CocoCay used to be like any other cruise line private island. Reached via tender ship, it was a beach with bars that served a barbecue lunch.

That was before Royal Caribbean opted to invest $250 million to not only remodel the island, but also change the definition of what a cruise line private island would be.

Perfect Day at CocoCay is no longer a lazy beach day experience. You can, of course, have a lovely quiet beach day there, but there’s also so much else to do.

As part of the original renovations the cruise line added:

The largest pool in the Caribbean
A massive added-fee waterpark
The Beach Club, an upscale added-fee destination with its own pool and private beach area
Hideaway Beach, an extra-charge adults-only beach area with a heated pool, elevated food, and a DJ
More food options (included)

CocoCay has become the benchmark, and both Royal Caribbean (RCL) and Carnival Cruise Line have massive private island and private destination plans to give passengers experiences that essentially serve as an extension of the ship.

TravelHost Come Cruise With Me writer Alisha dos Santos joined Dan Kline on TheStreet Smarts podcast to discuss whether the cruise lines were making the right choices.

Listen to every episode of TheStreet Smarts podcast.

Carnival’s Celebration Key borrowed heavily from Perfect Day at CocoCay.

Image source&colon; Carnival Cruise Line

Perfect Day at CocoCay changed the game

Transcript:

Daniel Kline: I want to move on. You are listening to the Street Smarts Podcast. I am Dan Kline, joined by Alisha Dos Santos from TravelHost.com, as well as my cousin (and TheStreet writer) Cody Kline.

Our next topic today is going to be in the travel space. So as most of you know, I cruise a lot. I spend about half of my time at sea, and a lot of that time is with Royal Caribbean and Celebrity, both of which stop at CocoCay, the beautiful Royal Caribbean private island that kind of reset the deck.

It has a giant pool. It has an adults-only area. It has a beach club that costs hundreds of dollars.

That’s absolutely fabulous. Carnival just built a sort of rival to that. We won’t call it a dupe.

They’re very similar, but it’s a Celebration Key and that just opened. I got to be there Saturday. And then both cruise lines are operating or opening sort of like a mini destination.

Royal Caribbean is opening in Nassau, essentially a beach day. And the idea is you will pay money, whereas their full-on beaches are free.

Celebration Cay or Coco Cay are included for most of the items. These will be paid experiences at ports where you might’ve been going to Margaritaville or Cozumel, which you’re gonna go to Mr. Sancho’s or one of the other paid beach clubs there. Alicia, there’s billions of dollars being spent here.

This is at the expense of going to smaller, more interesting ports. And it’s in line with the sort of mega ship trend. Are they making the right move?

Are Royal Caribbean, Carnival, Celebrity making the right moves and going so heavy on “our mega ship is going to take you to our island. And it’s kind of just gonna be an extension of the ship.”

Dos Santos: I think they are making the right call from a revenue perspective. You can’t deny how popular these destinations are. Royal Caribbean’s Coco Cay is their top-rated destination.

And even though there’s like this growing trend where people want more authentic travel experiences, I want that myself. The numbers show that people love Coco Cay, people love these private resort-style destinations, and the cruise lines can keep the passengers in their bubble during that time. So they’re spending money when they would be spending in one of these other ports like Nassau.

They’re then spending the add-on money they might spend in a port of call in the Royal Caribbean or the Carnival destination. So they can make up the money that they’re investing on those destinations.

Royal Caribbean and Carnival need these ports

Daniel Kline: The reality is if you’re on an Oasis Class ship, I forget the name of the class for the Carnival Celebration, which I’ll be on in a couple of weeks stopping at Celebration Key. But the biggest classes, the Icon Class, the upcoming Ace Class for Carnival, those ships cannot stop at small ports. There is a limit to where they can stop, and passengers don’t like to tender.

So they’re not likely to stop at Grand Cayman or someplace where you probably have to get in a little boat to get there. It takes time, it’s slow. So really, if your ship has to stop at Nassau, and Cody, you’ve been to Nassau many times.

Our family has gone to the Atlantis. Nassau is a little sketchy. It’s not the greatest downtown.

It’s safe-ish…but there’s not that much to do. There’s a bunch of shops that sell mostly actual knockoffs.

You know, if you want really fake Supreme clothes or things like that, you can get them at Nassau. If you want a purse that’s Louis Vuitton, you can probably get that there. Yeah, there’s a Starbucks, there’s beaches you can walk to.

But most people are going to the Atlantis, which might cost you $300 a person. While Caribbean is opening a beach club there, that’s gonna cost you $150, $160. I think it takes something that, in my opinion, was a stay on the boat port or Cozumel, where I would spend $100 to go to a pretty mediocre…

Sorry, Mr. Sanchos, but the ocean’s not that nice. The pool’s just okay. The food’s not bad.

I feel like Royal Caribbean is probably gonna do this better and that I’ll feel better about my $160 than I might’ve felt about the $80 or $90 I was spending someplace else. Am I reading that wrong?

Dos Santos: I think that’s true. I think that most people are looking for those resort experiences in a port. But if you’re looking for something more authentic, if you wanna go on an excursion to the national park that’s in the Bahamas, on Grand Bahama at the same island as Celebration Cay, you can do that on your own by visiting Freeport, or you can take a cruise line excursion.

You have those options, but you can actually save money if you’re willing to do the work to do it on your own and plan that yourself. But most people look for the simple, what’s easier. So it makes sense.

Royal Caribbean building a new type of cruise destination

Daniel Kline: I think it’s important to recognize that on the Perfect Days and at Celebration Cay and Carnival has Half Moon Cay, which is a more traditional, just a beach. There are added fee experiences. You pay to go to the adults-only area.

Royal, all the food is included in the free areas. Carnival, you get one free meal, then you pay as you go. Drinks, Royal, they’re included if you have a drink package.

Carnival, they’re not. So there’s little differences, but these are generally included experiences. You can go to the beach and have a wonderful day at the pool, the beach, do all sorts of things, and they don’t cost extra.

These sort of newer beach club destinations that Royal is developing, these will be paid days. Now, the nice thing about that is because they’re paid, that will limit how many people are there. So when they open in Nassau, it might be a pretty penny, but it’s probably gonna be a pretty high-end day.

I found that Hideaway Beach, the adults-only area at Coco Cay, never comes close to selling out. So it’s a really good experience where it’s easy to get a chair, the food lines aren’t bad, the bar lines aren’t bad.