Carnival Cruise Line's Loyalty Program Changes May Be A Costly Mistake

Forbes

19-06-2025

Carnival Cruise Line just made big changes to its loyalty program, moving from lifetime status to ... More just two years.
Carnival Cruise Line, part of the Carnival Corporation family of cruise brands, is conducting a huge, real-time experiment in customer loyalty. And, it's not going to be pretty.
The cruise line announced this week that it's scrapping its 13-year-old loyalty program in favor of a spend-based system that will require customers to shell out tens of thousands of dollars to maintain their elite status. Diamond members, the highest level in the program, will retain their status for six years. Then, the math becomes daunting: spend $33,334 every two years or lose your perks.
Carnival loyalists knew a change was coming. Speculation ranged from a modest increase in nights required to reach each level to status matching with Carnival brands like Princess and Cunard. Nobody expected such a dramatic set of changes.
The new policy is a fundamental shift from emotional loyalty to transactional loyalty. It's a transition from, 'We value your lifetime relationship with our brand,' to, 'What have you done for us in the last 24 months?'
Here's what Carnival got wrong from a behavioral standpoint: they're taking away something customers already own.
Under the old system, a cruiser who sailed frequently over many years earned lifetime Diamond status based on nights at sea. That status felt earned, permanent, and emotionally valuable. Behavioral economists call this the "endowment effect"—once we own something, losing it feels much worse than never having it at all.
Now Carnival is essentially telling these customers: "Thanks for your loyalty, but you need to pay up or lose what you've earned."
President Christine Duffy's rationale reveals the core problem: "When everyone is special, no one feels special." This has been a problem with lifetime status on cruise lines. But the solution to having too many loyal customers isn't to make loyalty harder (or impossible for some) to achieve. It's to create meaningful ways to recognize different types of value.
Here's what Carnival is really asking. To maintain Diamond status after their 'lifetime' status expires in 2032, customers need to earn 100,000 "stars" every two years at three stars per dollar spent. That's $33,334 in cruise spending every 24 months, or roughly $16,667 annually.
For context, a typical week-long Caribbean cruise for two in a balcony cabin runs about $2,000-4,000 total. To hit Diamond spending requirements, a couple would need to take premium suites on longer cruises, book more than a couple of trips per year, or spend massively on add-ons like specialty dining and excursions.
This fundamentally changes who can be "loyal" to Carnival. Frequency and long-term engagement no longer matter. It's all about 24-month spend.
Carnival justifies the change by comparing itself to airline loyalty programs, which reset annually. But this comparison misses a crucial difference: business necessity versus leisure choice.
Most elite status flyers are business travelers. They must fly regularly and often don't pay their own bills. Their loyalty is driven by route networks, alliances and codeshares, schedules, and corporate contracts. As airline loyalty became transactional by shifting from miles flown to dollars spent, emotional attachment to the airline, if any, faded away.
Cruise loyalty is entirely different. It's discretionary vacation spending driven by emotional connections to the experience, the brand, and, for some, the recognition that comes with status. When you make that recognition not only transactional but temporary, you risk severing the emotional bond entirely.
To further underscore the change to a transactional relationship, Carnival is eliminating many of the emotional touchpoints that made status feel special. Gone are the Gold pins, VIFP logo gifts, luggage tags, and other small but tangible symbols of achievement. These items cost Carnival little to produce but carried significant emotional weight for many recipients.
They replaced these with a complicated points system that feels more like a corporate credit card than a celebration of cruise enthusiasm. Indeed, spending on a Carnival-branded credit card is one way to earn status points.
Ten years ago, Delta Airlines switched to basing its Skymiles points on dollars spent instead of miles flown. United and American quickly followed suit. Will other cruise lines copy Carnival's plan? Or, will they see this move as a gaffe that opens the door to stealing some of Carnival's most loyal customers?
Notably, no other Carnival brand has announced a similar change. Perhaps Carnival wants to see what happens before adopting it corporate-wide.
Royal Caribbean Group and Norwegian Cruise Line Holdings are Carnival's biggest competitors. They could solve their own problem of increasing numbers of elite cruisers by following Carnival's lead. Or, they could view this as a rare opportunity to siphon off some of Carnival's highest value customers.
Royal Caribbean and Norwegian are the entry level brands closest in cost and demographics to Carnival. They could offer status matches to unhappy Carnival elite members, likely with less daunting requirements than Carnival's.
I'd also recommend the use emotional messaging emphasizing "true loyalty recognition." This will play well with customers who feel their loyalty hasn't been reciprocated by Carnival.
Even the airlines play this game. When Southwest Airlines infuriated customers by changing their free checked bag policy, Delta and American offered special status matches to attract Southwest's most elite flyers.
Every CMO with a loyalty program should be taking notes as this plays out. Carnival is essentially running a live experiment on several key questions:
Will customers pay to maintain status? Diamond members face a choice: dramatically increase spending or accept lower-tier treatment. How many will choose to spend versus switching to competitors? Or will they grit their teeth and keep sailing Carnival?
Does transactional loyalty create real loyalty? By shifting from time-based to spend-based qualification, Carnival is testing whether purchased loyalty can replace earned loyalty.
What happens when you break the loyalty contract? Customers invested years, even decades, building status under one set of rules. Changing those rules retroactively tests the limits of customer forgiveness.
Can you shrink your way to exclusivity? Rather than finding creative ways to serve more loyal customers, Carnival chose to reduce the number of people eligible for top-tier treatment. Will artificial scarcity create more value than broader recognition?
Carnival's changes don't take effect until June 2026. That's not that far off - many cruisers have already booked 2026 and 2027 cruises. Diamond members have special rules that may let them hang onto their status for longer. Perhaps not much will change right away. But, the real test is whether customers remain emotionally invested in the Carnival brand.
Loyalty programs aren't just about perks and points. They're about creating an emotional relationship that makes customers choose your brand even when competitors offer better deals. By making loyalty purely transactional, Carnival risks turning its most devoted customers into brand-agnostic comparison shoppers.
The next two years will tell us whether cruisers are willing to buy loyalty, or whether loyalty, once lost, is gone forever.