Captain_Morgan
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Posts posted by Captain_Morgan
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7 hours ago, wowzz said:
I see the Chief Medical Officer today said that social distancing would need to be kept in place for at least the rest of this year. So, basically that's cruising out for 2020 (and probably the death knell for thousands of pubs, restaurants and cafes as well)
which Chief Medical Officer? Carnival Corp? P&O? UK? Link for reference?as for the mention of prices being higher for future cruises I don’t think it should come as any surprise given the number of future cruise credits being handed out. It should go without saying that if they’re handing out credits valuing on average 25% on top of what was paid that any future cruises will cost at least that much more.
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It’s a bit misleading to say Viking is the largest cruise line with 70+ ships when 90% of their ‘fleet’ are river boats that are only operational for half the year and not ships.
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Considering that Viking is heavily leveraged according to publicly available information I doubt very much that they will be buying any new ships any time soon let alone other companies.
Unless they get a massive cash infusion from the Saudis or Chinese (again) I doubt there will be nearly as much fleet growth as was originally planned. That of course goes for all brands with respect to adding new tonnage and if anything I expect to see a ‘slimming’ of the brands currently in operation as a means to cut and recoup costs long term.-
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10 hours ago, OnTheJourney said:
I agree...doesn't sound real encouraging to be pushing off to 90 days, though might they be going by what other lines are doing? I have no idea - having not looked into any of this yet. My TA has been having enough of a go-around with finding out info on whether we're getting FCC or a refund for a cruise (not with Viking) that had to be canceled last month.
I find it ironic that everything Viking does seems to be in spite of what other lines do...and they actively promote all of the aspects that set them apart! I guess when it comes to taking money they’re happy to have it 12 months in advance (unlike any other) but when it comes time to give it back they fall in line with the others in the stalling game...I get it, having funds on the balance sheet looks better than not, but I’m sure everyone else would agree in times like these having money in your own pocket looks even better!
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7 hours ago, Richard2 said:
I really find it odd that all the doom and gloom talk does not take into account the fact that Viking is Norwegian flagged. It is a great source of pride to Norway, a key long-term source of tourism, and Torstein Hagen is extremely well-positioned in Norwegian politics and banking. This is not an American company dealing the the politics of "bail-outs." No way Viking is disappearing.
I agree that there is a sense of pride within the country as it relates to Viking and its representation of Norway, etc but if Hagen was so well positioned so as to be on the receiving end of financial assistance, why didn’t he seek investment from within but instead went to China, America and Canada? I’m not saying that Viking is teetering on the edge but based on publicly available information it doesn’t sound as rosy and wonderful as some might like it to be, and I would think governments are more likely to bail out companies and industries that actually employ their own people en mass as opposed to well heeled businessmen living overseas. It makes me laugh when CEOs try to argue that the cruise industry employs so many people in ports, etc when the reality is those jobs are seasonal at best and many others (I.e. taxi drivers) would exist irrespective of the ships coming in for 8 hours a day whereas hotels for example employ far more people year.
Surely there’s going to be a very different cruising landscape as I have no doubt some of the bigger lines will come out ‘thinner’ as it relates to the number of ships in operation and I wouldn’t be surprised if others were either acquired by bigger corporations or shelved entirely.
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Interesting that the article doesn’t mention the other big brands along side of Carnival but instead specifically mentions Viking. Although all we have is speculation until the event happens or doesn’t, it has to be acknowledged that there’s likely more fact than fiction in this reporting.
If it comes to fruition and Viking does go down the road of offering junk bonds it would be a very clear signal that not all is rosy and financially secure, as has been very publicly referenced when it comes to Carnival. -
As much as we might want to get back to some semblance of normalcy, I think putting faith in a cruise line's ability to keep anyone 'safe' from a virus is just plain silly. I don't say that to be inflammatory but lets face facts and acknowledge that as an industry they can't even manage to keep Noro virus off their ships, and in many cases it is as transmissible if not more than the current plague we're facing albeit the current bug comes with much more severe potential outcomes.
It has to be accepted that this virus or any other virus doesn't acknowledge borders, genders, age, and certainly has shown no intention of just 'going away' like some politicians would of had the gullible masses believe. Add to the fact that there's likely a very good chance that restrictions will be put in place for those with pre-existing conditions and perhaps even at/over a specific age deemed by the experts as being more susceptible to contracting the virus and experiencing the most severe side effects.
The fact that Viking hasn't had any cases to date reported I would say is due larger to the fact they stopped trading when they did, and the fact that they only just completed their abbreviated world cruise was not due to their diligence in handling the crisis better than any other, it was due to circumstances and regulations imposed upon them by foreign ports and governments.
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1 hour ago, Dukefan said:
I believe you were the one that estimated Viking's debt to equity ratio as 0.73. and in another responding post another poster quoted from Moody's the debt to equality ratio's as follows:
Carnival Corp had a ratio of 0.38
Norwegian Cruise Line Holdings had a ratio of 0.93
Royal Caribbean had a ratio of 0.74
From this limited data in appears Carnival has significantly better debt to equity than any of the other cruise lines, Viking's debt to equity appears to be competitive with every other cruise line accept Carnival. However, the Carnival portfolio of companies has been hardiest hit of any of the companies by the negative publicity of this virus situation as they have had significantly more cases of the virus and deaths from the virus than all the other cruise companies put together. I believe this concern is one of the reasons behind Carnival's recent borrowing of approximately $5 billion which is not included in its debt to equity ratio above, Again, I'm still betting on Viking.
The data quoted is from open source information so its not like I've got inside knowledge of who's got what on/off their books.
That said, I believed Carnival raised the billions through a mix of debt and equity with the most recent sale of 8% to the Saudis which experts estimate puts them in the best position of the major players to weather the storm for the next 12-15 months with no revenue.
Of course with no publicly available information as it relates to Viking short of what Moody's has published its all a guessing game but their ratio is definitely better than Carnival's based on the information available. Will it change with prolonged cessation in cruising? I can't see how it wouldn't, as lets not forget Viking's grand ambitions to grab market share with all of their new builds which won't be happening any time soon I wouldn't think.
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1 hour ago, Britboys said:
The CDC and "Federal health officials" are only relevant to the USA, not the rest of the world. None of the P&O ships are due to sail for the USA until September. It will now be interesting to see if any of the big USA-based lines go ahead and cancel any cruises out of or into US ports up to 18th July...
Yes i realize that its only relevant to the USA; however, the initial cancellations of cruises were done so according to Ludlow based on recommendations made by the CDC, etc. Not to mention of course the fact that Carnival Corp is an American company so whatever decisions are being made re. cessation of cruising is coming from the top that much is for certain!
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I have absolutely no doubt that Viking's ships are more efficient than older models being run by the likes of Carnival, etc. but that said I can also say that Carnival owns the majority if not all of their ships outright which I don't think can be said for Viking, hence their heavily leveraged position as has been mentioned multiple times.
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43 minutes ago, Britboys said:
Can't see it having that much impact. The latest date on this order would be 18th July. Personally, I would be very surprised if we see any ships sailing before the Autumn.
If nothing else, I think it just hammers home the point that nothing will be happening before those 100 days are passed as the caveats for reducing it were listed as one of the following happening first:
1) Federal health officials determine COVID-19 is no longer a public health emergency,
2) CDC rescinds or modifies the order based on specific public health or "other consideration"
3) 100 days from the date of publication in the Federal Register.
Looking at the most recent numbers of positive cases being registered would indicate that option #1 in the US and UK is out of the question, and the same could be said for option #2 thus leaving option #3 as the most plausible.
The fact this is now officially public knowledge it does make me wonder why P&O are not just ripping off the bandage and letting people know that there will be no cruising for the next 100 days and they use this official word as the basis. Its always easier to make the situation seem bigger and then scale back than to constantly pick away at it bit by bit and in doing so piss off a considerable percentage of the public who are just waiting to the "i told you so" game.
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An important thing to remember as well when comparing mega ships (2500+ pax) to smaller ships (400-1000 pax) is that the mega ships don't rely on the fare to see them through as they're heavily invested in onboard revenues like bars, casinos, photos, shops, WiFi, etc.
Where the likes of Seabourn, Silversea and to a lesser extent Viking will 'struggle' is in convincing people to spend multiple thousands of dollars for an 'all inclusive or 'semi inclusive' cruise when the majority of people are hurting financially due to lost income or as a result of watching their retirement savings get flushed in the market.
An example of why the large lines will succeed is as follows based on very rough math estimates in a side by side comparison:
Ship #1 - Carnival Whatever holds 3000 passengers and does 7 day cruises with an average fare of $750 per person. While onboard those 7 days the average person then spends an additional $1000 on bars, casino, photos, shops, WiFi, tours, etc.
The crude math suggests that the fares alone will bring in approx. $2.25 million and the onboard spend another $3 million totaling approx. $5.25 million per cruise which when multiplied by 4 x 7 day cruises per month equals $21 million dollars per month for ONE ship, and this is no doubt on the low estimate side of things.
Now compare that to Viking, which based on their website offers the cheapest non re-positioning cruise for $5600 per person on the high end for a 13 night trip in the Caribbean with airfare included which the cruise line will have paid for. As there's virtually little additional onboard spend outside of a beverage package at $20 per day, that's an additional $260 for the cruise. So even if all 930 paid the price mentioned (and we know there's always people who get a discount or deal) that works out to just over $5 million dollars per cruise or $10 million per month.
Some might think $10+ million per month is nothing when comparing mega ships and the likes of Viking, but which line do you honestly think is going to bounce back the quickest and has the largest room to maneuver when it comes to cutting costs, reducing fare prices long term, and maintaining a level of service people are accustomed to? Carnival doesn't claim to be anything but 'fun ships' and as such they attract a particular demographic, whereas Viking has carved its own niche in appealing to a seemingly more mature demographic who aren't interested in the 'bells and whistles'. When you factor in the costs to operate at a seemingly higher standard with the current and future restrictions on cruising (i.e. latest CDC directive mentioning a further 100 day cessation of cruising) and its not going to land at the feet of some lines (Viking included) with a soft touch, but more of a resounding thud!
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37 minutes ago, DaveSJ711 said:
Rose colored glasses, indeed.
How does the cruise industry (including Viking) deal with stories like this? The word "deathtrap" stands out.
Denial....plain and simple....and when that doesn't work, try to change the narrative/focus
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Seems you answered your own question, assuming of course the thread title was meant to be a question?
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17 minutes ago, deec said:
"The CDC said the agency is also aware of 20 cruise ships at port or anchorage in the United States with known or suspected COVID-19 patients remain isolated on board the vessels. "
This was in the first article. I had NO idea there were ships, passengers and crew still with NOwhere to go? I do not know if this article has actual facts or not????
Suffice it to say the last thing any of the cruise lines WANT to do is admit they have cases onboard...that's not to say they don't HAVE to report, especially if they're hoping to get into a port to offload sick people. I've heard from friends who are working onboard one of the HAL ships at present who said they landed at least one crew member in Mexico who was positive, and there's dozens more with 'flu like' symptoms onboard. Of course due to the lack of comprehensive testing like you'd expect to have on land, it seems they're hoping its not the worst case scenario and are simply isolating and treating as they can.
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Can't help but wonder if this is going to have an impact and when....
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This is no doubt going to have an impact moving forward...
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3 minutes ago, simonpjd said:
We are booked on a cruise in mid June which has been tailored for us. So it is Southampton to Venice, disembark, transfer to Lake Garda for 4 days, transfer to Verona and get the train back to Victoria. So we have a P&O cruise,
North Italy hotel then train through 4 countries. So what are our chances . TBH I would rather the whole thing was cancelled and I fear it may be a battle getting a refund.
I don't have a crystal ball, but I would hazard a pretty good guess that Italy won't be accepting tourists anytime soon least of all northern Italy, not to mention with the current FCO advising against all but essential travel. That said, I think the consensus has been to wait for the companies (cruise, hotel, air) to cancel as there's a higher likelihood that you'll get a refund as opposed to a future credit should you take the initiative and cancel on your own.
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7 hours ago, Aus Traveller said:
I have to compliment Carnival and the other large cruise lines for the way they are looking after their passengers - paying for charter flights and other arrangements to get them home. Contrast this with the passengers on a small expedition ship that has been stuck of Uruguay for a couple of weeks. The tour operator (Scenic) has said that the passengers will have to pay $15,000 each to fly home and that amount is "under determined" which I take to mean that it could be higher.
Just to clarify a few things, Princess and HAL didn't pay for the charters out of the goodness of their hearts it was a condition given to them by the local authourities in Florida among others prior to gaining permission to dock. Furthermore, that came as a result of previous disastrous outcomes from passengers on other ships (i.e. Costa) who flew to America from Europe on charters and were then allowed to mix and mingle in airports and on commercial flights home.
Also, the story of the ship off the coast of Uruguay is found here (among other articles) where its stated the cost to fly the people home on charters would be approx. $9000 USD each, which is still a lot of money so not sure if your figure is in Australian Dollars?
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I think its fair to say its less about P&O's desire to resume operations and more about the ports/countries allowing ships to enter. Look at what's happening now in Florida where the likes of Princess and HAL have had a heck of a time getting their ships into a supposedly 'friendly' port due to having positive cases of COVID onboard, which one might think to be a more severe situation than the likes of Arcadia for example where its just people wanting/needing to finish their cruise.
If P&O continues to follow the guidance offered from the FCO there's no chance that cruises begin any time before the middle of summer, and even then I would imagine that there's going to be a large sense of caution with the general public on both sides (passengers and ports) until there's at the very least a proven vaccine. Could you imagine the headlines that would be caused if the first ship back in service from any line produces people with positive results for the virus....that would surely shut things down even longer and cause a deeper hole for the industry to crawl out of.
As for the comment about P&O delaying refunds in order to hang onto cash deposits, I think that's a little far fetched although the optics might seem to suggest it. Imagine what they're going through having to try and process countless refund requests on relatively short notice. If any company is using people's money to line their coffers I'd say its Viking who require passengers to pay in full in some cases up to 12 months prior to sailing!!!
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40 minutes ago, Heidi13 said:
He said the company is looking after the crew and they are.
While crews are now disembarking and returning home, if their home countries are accepting the return of citizens. Once they disembark they still receive 60% of their salary until the end of the current contract, when they start leave.
How many other cruise lines look after their employees like this? Don't know the answer, but my guess will most likely be close.
The crew on the Viking Sun, at least many of the Hotel crew, will disembark a few days after us and because the company is looking after them well, they are still happy, smiling and providing exceptional service.
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6 hours ago, Baron Barracuda said:
Not doubt Viking is experiencing sizable cash burn, however hard to draw comparisons between a line with 7 ships to CCL which has over 100. The CCL ships are also much larger and presumably costlier to maintain. Viking does have 76 river ships currently out of service but expect they require less maintenance than ocean going vessels.
Completely agree that its like comparing apples and oranges, but there still remains a sizable cash burn even with 7 ships when you consider that works out to about 3000 crew approximately onboard working full time and being paid, as well as a further 3000 at home approximately also receiving at least 50% of their salaries.
From what I've heard from friends and colleagues whom we've met over the years in the industry across the other brands it seems they're already downsizing their crew and cutting costs.
As for the river ships, I think they're used to laying them up as they're only a seasonal operation anyway but of course there's also an added cost there for prolonged lay up, not to mention if they're going to extend some kind of pay relief for those out of work there too.
One thing is for certain that there's no bottomless pit of cash within the industry and as has been mentioned elsewhere, it seems Viking's approach of taking full payment in advance has aided in the padding of their accounts, but I wonder how long before they sell of another piece of the pie like CCL did recently?!?
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17 minutes ago, Aiken375 said:
Using your source, I was able to glean the following regarding cash on hand as of 1/1/20:
Viking $1700 million (from Moody's)
CCL $518 million
NCL $253 million
RCCL $244 million
This would seem to put Viking in a much better position than the others.
Yes, the article in question (Moody's) referred to good cash balances of about $1.7 billion which is nothing to sneeze at for sure; however, it also said, "In the short run, Viking's credit profile will be dominated by the length of time that cruise operations continue to be highly disrupted and the resulting impacts on the company's cash consumption and its liquidity profile. The normal ongoing credit risks include Viking's high leverage which Moody's forecasts could approximate 6.0x at the end of 2021 assuming modest levels of EBITDA in 2020 and some recovery in 2021, but not back to the earnings generated in 2019. The company's credit profile is also constrained by its limited diversification both in terms of geography and customer base and the cyclicality, seasonality, and capital intensity inherent in the cruise industry."
Add to the equation the cost of building new ships (approx. $400 million apiece) which is no doubt insured to a large degree given the unforeseen delays, and the burn rate on operating costs (Carnival Corp. estimated costs being approx. $500 million per month) and the money will run out sooner rather than later I'm sure, hence the reason in the case of Carnival they had to raise nearly $5 billion to stay in business for the next 12-13 months.
If Carnival requires approx. $5 billion to keep their corporation afloat (pardon the pun) for 12 months working on a significantly reduced operating structure (i.e. ships parked with skeleton crews being paid a percentage of salaries) I imagine its going to cost Viking the majority of whatever cash reserves they have on hand to do the same.
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16 hours ago, Aiken375 said:
Thanks to whoever posted the info on the Forbes article. A very interesting read indeed! For those who don't want to take time to read it, here are some of my takeaways. Viking has 78 ships and 9000 employees. The company has a net worth of $3.4B, with $1.6 B in net revenue (updated data from Moody's indicates $2.0 B in net revenue for 12 months ending 9/30/19). Their debt was $2.5B per Forbes. That gives a debt to equity ratio of 0.73. Not sure what is normal in the cruise industry, but this seems quite high to me. Moody's lowered their credit rating on Viking March 30th from B1 to B2 (not sure what the full scale is).
Your thoughts?
Re. the debt to equity ratio, here is a snapshot for the main players in the industry to put things into perspective for the same period.
Carnival Corp had a ratio of 0.38
Norwegian Cruise Line Holdings had a ratio of 0.93
Royal Caribbean had a ratio of 0.74
source: https://www.macrotrends.net/stocks/charts/RCL/royal-caribbean-cruises/debt-equity-ratio
Bearing in mind of course that all of the above are publicly traded companies and they're much larger operations
When will the next shutdown extension be announced?
in P&O Cruises ( UK )
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Interesting to see they’ve been ‘late’ with announcing when all others cancelled till 30 June and now they’re going further than the rest by a full month...not sure the logic but at least it gives a realistic tone to things as opposed to the piece-meal approach