Do you know that a youth hostel is cheaper than the Hilton? The question is, who is most likely going to Paris? The backpacker who usually starts his European adventure in London, or the middle aged couple whose kids have left school and have always wanted a second honeymoon plus a handful of business people?
Stop arguing costs, they're not your problem. Start explaining and showing why someone should pay that little bit more for superior product. It's the little things that make the difference. Having a bulkhead between cabins and galleys, getting someone walk up and down the aisle every twenty minutes with water or wine (I wish). Not having someone with their smelly feet on the seat. Some people don't want to stay in a "Flagg". I haven't seen BMW go broke yet, or better still AUDI (and they're a nicely dressed up VW). Costs are always relevant to doing business but if the cost gets a greater return then you're in front. We have to compete with other full service providers and make a point of difference over low cost carriers, the costs aren't the only thing that counts. We can't all become a captive audience to their mantra. Rant over.