buckeyefrank

12 minutes ago, phoneman69 said:

That would make 2 of us as this is a reschedule from our May cruise. Airfares where right price at the time to make it worth while. Now just have to wait for the 90 day check in and hope enough of this mess is over and where allowed to cruise. Stay Safe

We were supposed to sail out of Tampa on Sunday but that was cancelled so we rebooked into this cruise.  We have another booked for June 5th on NCL that will guaranteed be cancelled.  Unfortunately it's my son's graduation present that he won't be getting.  We're going to add him to this one if we think it'll go.

We are going to be on this sailing as well, assuming it goes.  Will be sorely disappointed if it's cancelled.

Also waiting for June 5 cancellation to Bermuda 😞

16 hours ago, KateQ22003 said:

They aren't paying those things 120 days in advance.

No business holds onto 120+ days of operating cash.  NCL doesn't have a legal fiduciary duty with regards to payments received for future cruises.  When the cruise is paid for, cash is debited (and deposited into their operating account) and deferred revenue is credited.  That cash is utilized for normal business expenses and capital expenditures as management sees fit to spend it on.  When the cruise happens, they do a journal entry to debit deferred revenue and credit cruise revenue.  

It does not equate any way at all to a security deposit that is given for something like rent.  That is obligated to be returned at the end of the lease term and is legally required to be kept in a separate cash account to be returned at the end.  They are totally different legally.  I'm sorry but just because you don't like it, doesn't make it unethical.

20 hours ago, SeaShark said:

 

Except, of course, that the Federal Maritime Commission does impose financial responsibility requirements on cruise lines operating from US ports. Deposits are unearned income and are not revenue to the cruise line until such time as the cruise completes.

I understand that but these requirements are more like bank liquidity rules.  They would need a certain amount of cash and financial stability.  That doesn't mean they need to have the cash on hand for every single future cruise booked and paid for.

11 minutes ago, KateQ22003 said:

So you don't find it unethical for the cruise lines to have spent our money they haven't actually earned yet? I find that completely unethical.

Uhm.... no.  That's business.  How else are they going to pay for the ship, payroll, port fees, food, fuel?  They need those things to offer the cruise.  They don't have a fiduciary duty in a legal sense with the cash given.  It's not like a security deposit on a rental, which does carry fiduciary responsibility.

21 minutes ago, pokerpro5 said:

 

These are needless details which are pointless to debate, because there's no way for either of us to prove anything, without visibility into NCL's process.

 

Since we agree that the 90 day window is excessive, that's all that matters.  It is unethical for them to hold onto the money.  And again, if they simply can't refund the money, they should be giving huge incentives to those who agree not to take the refunds.

 

Instead, they are pulling dirty tricks to default the refunds into FCCs if people don't respond quickly enough, and they're marking cruise prices way up, so as to eat away the extra value people think they're getting with the 125-150% credits.  Oh, and the FCCs have an expiration date, which is absolutely horrendous.  They should be kissing people's feet for taking an FCC at this point, not trying to slap expiration dates on them.

 

Just absolutely entitled, dreadful handling of the loyal customer base.  And yes, I do realize it's industry-wide.  Still doesn't make it right.

Well then let's agree to disagree.  I never specifically said the 90 day window is excessive.  It is in normal circumstances but there are mitigating issues that might take that long, specifically having limited cash to give out.  I do not call it being unethical for a business to not do something they cannot do.  I'm very sensitive to naming things when the facts are not known.

8 minutes ago, pokerpro5 said:

When I said "no paperwork to compete", I didn't mean that absolutely zero papers would change hands.

 

This would not need "extensive testing" because there's no way $8 million could go out instead of $1200 if it's simply refund back what was paid.  Also, sanity checks could be put into the programming to not allow more than $X per ship or $Y per person to be refunded (something which wouldn't be exceeded in normal refunding).

 

I'm not saying this could be done in one day.  I'm saying it would be weeks at most, not months.

 

Are you trying to claim that NCL simply can't handle doing the refunds in less than 90 days, while every other travel industry can?  Come on, you can't be that gullible.

 

I don't understand the rest of the point you're making.  Yes, other industries also don't have enough cash on hand to do refunds.  Banks are a different story because those are FDIC insured, and people are made aware that money over the insurance amount could be lost.

 

Regardless, it is unethical for NCL to keep customer money to give themselves a short-term loan.  It is not their money to keep.  It needs to be refunded, and if they can't, then the ethical thing to do would be to give customers something OF VALUE for down the road, so they agree not to.  Here they are giving something worth very little -- 125-150% FCC with an expiration date, and are marking up prices on future cruises to further screw these people nice enough not to take refunds.  They're also trying to keep the money by requiring people to request the refund by a certain date a few weeks away, and then keeping the money for anyone who doesn't respond.

 

Again, highly highly unethical.

The $8 million in place of $1200 actually happened yesterday with the IRS payouts.  If it can happen with the IRS, something similar can happen with NCL.

My point with the banks is that even they do not have unlimited cash to payout.  If a customer comes in asking for a refund (withdrawal) and the bank is out of cash, they won't get it until the bank figures out how to get additional cash.  They could solicit other depositors, secure a loan against future income or apply for insurance proceeds.  Very similar to the options that NCL has.   

I am not saying that it should take 90 days normally to process a refund.  My point is simply that it's not EASY process for them to handle the huge amount of requests with limited staff.  Not to mention, they have to be prioritizing who to give refunds to with the limited cash they have, while the management tries to figure out how to secure additional cash to process the refunds.

I am going to be in the same boat when they cancel my June 5th cruise to Bermuda.  I am expecting that to happen any day now.  Again, I"m not being argumentative or disrespectful at all.  Just trying to point out that there is a lot more than right now to processing refunds than what generally would need to take place.

3 hours ago, pokerpro5 said:

I am a former systems programmer.

 

I can tell you that the refunds could all be completed in days, rather than weeks or months, if NCL wanted them to be.  It is extremely trivial to modify the system to do this (if the capability isn't already there, which it likely is!)

 

As has already been stated by others here, this is all done electronically, and does not require any form of paperwork.  I would be shocked the the system didn't already have the capability to do full ship refunds, such as in the case when a cruise is canceled due to weather or other issues.  If that's the case (which is very likely is), it would only be a matter of enabling full ship refunds for every ship which is cancelled, which honestly isn't that many.

 

Even modifying the system to account for the choice of FCC and refunds would not be particularly difficult or burdensome, and in fact a separate program could be written to access the billing/booking databases and automatically issue refunds for those who choose.

 

It seems obvious that NCL simply doesn't have the cash-on-hand to refund everyone, and that they also have far higher expenses than income at the moment (meaning that more money is not coming in).

 

The 90 day thing is a stall tactic, and is also a way to browbeat people into taking the FCC they may not otherwise want.

 

I've seen this occur before in a different industry.  As you can see from my screen name, I am a professional poker player.  Many online poker sites engage in similar tactics -- keeping only a fraction of deposited money on hand, assuming that it will never occur that everyone wants to cash out at once.  When they spend too much of the deposited money (which they shouldn't be spending in the first place), they start to have trouble processing the cashouts which come in, which then leads to bad word-of-mouth, which then causes more people to cash out, and all of a sudden there's a big problem.  At that point, we start hearing the same nonsense stories that we need to "wait 3 months for processing", as they scramble to come up with the money.  In most cases, they don't, and they simply disappear.

 

Be very wary of struggling businesses giving you cheery-sounding "check is in the mail" or "we're too busy, but we will get to your refund soon", stories.  It's usually much more of a dire situation than they're letting on.

 

If we trust NCL here, then we haven't learned a thing.

A couple things....    There ABSOLUTELY is paperwork to complete.  Whether that paperwork is electronic or physical paper doesn't matter.  There will be a lot of human intervention and any programming changes would need extensive testing before management would approve the use to make sure things like an $8m payment doesn't go out instead of a $1200 payment.  Paperwork is absolutely required and is going to be scrutinized intensely by their financial auditors.

You talk about the poker industry, but it is every industry and almost every business that doesn't have enough cash on hand to deal with something like this.  Do you realize that Banks in the US only have about 5% of the cash on hand that was deposited by customers?  When people lose confidence in the banks and they go withdraw their cash en mass, the banks are screwed.... actually this is what happened in the savings and loan crisis in the 80s and in 2008 in the financial meltdown.

1 hour ago, KateQ22003 said:

I am talking about the money that should be in a accrual account for these cruises, I'm not talking about cash on hand. My point is they can easily put money from one account to another. I don't have a clue what you are talking about "linked". I know my debits and credits, and also know how simple of a transaction it is to move money from one account to another. You act like the accounts live in separate countries or something.

I am totally confused by this post.  Just because a company has an accrual on the books doesn't mean they have the cash on hand to be able to pay it.  When a customer books and pays for a cruise, there is a debit to cash and a credit to prepaid revenue.  The prepaid revenue is the liability (accrual) account.  The cash is used to secure normal operating procedures such as fuel costs, payroll, food, insurance, etc.  Even though a purchase transaction hits both the cash and liability accounts, doesn't mean they work in coordination together.  Just because you have a number in the liability (accrual) or prepaid revenue account doesn't mean the cash is there to refund.  That's exactly why businesses go bankrupt....they have too many liabilities and not enough cash.  Just moving numbers from one accrual account to another doesn't produce cash either.  The only true "money" on the books is cash and cash equivalents.  The rest is just numbers on paper.

I'm not trying to argue with you.  As I've said before, I do think NCL is milking the clock a little bit, however; even if they weren't it would still take quite a bit of time.  There's a lot that has to go into issuing refunds from systems not set up to handle them.

3 hours ago, KateQ22003 said:

That's not what I said. I know they don't have the money; that's painfully clear with the games they are playing. My point was it's not some difficult "having to move money around from different accounts" that was mentioned as cause for delay in refunds. Accounting systems are very sophisticated, and can do that with a key stroke if necessary.

That's exactly what you said.  There is a huge difference between the liability and cash available.  Cash available is a debit on the balance sheet and the liability is a credit on the balance sheet.  Just because a booking affects both of these accounts, doesn't mean that they are forever linked. 

11 hours ago, mildew1951 said:

Interesting point of view. You are correct we had already spent the money and never expected to get it back because it was for the cruise fare. So using your analogy all we have lost is the enjoyment of our cruise, not money. Bizarre way to look at it but true.

it's technically called a sunk cost analysis and if more people entertained this line of thinking, their personal finances would be in better shape by making better personal finance decisions.

1 hour ago, manorf said:

What a load of rubbish.

1. They have plenty of staff from other support departments who could be transferred to the accounts / finance dept.

2. You ever sold on ebay? If an item you sold is out of stock / didn't arrive / broken / returned - you push 2 buttons and the buyer gets refunded to their original payment source.

Simples....

1  Not necessarily.  They are likely not going to trust people from other support departments to process credits

2  Apples to Oranges comparison.  Ebay's system is set up to handle refunds of that sort.  NCL is not.

I do believe all the major cruise lines are milking the clock to an extent, however; it is not just as easy as "pushing a button on a batch".  There is a lot of human interaction to get this done.

15 hours ago, seaman11 said:

thank you for a mature response, many have been harsh here at my optimism.    i booked an aug one with carnival as a backup. 

We have a trip on Carnival scheduled for the end of August.  I think it's more likely than not it will be cancelled unfortunately.  We have one booked in June on NCL for my son's graduation present.  That won't be happening along with his senior trip, graduation, prom, etc......   We were hoping to add him to our August trip but I don't think it's happening.  

31 minutes ago, sparks1093 said:

Someone still has to tell the computer to issue the refund, and I doubt that they have a program that allows them to just say "give everyone on sailing x a refund".

The staff they have is most likely very limited.  Yes NCL is a large corporation but their staff who processes refunds is probably less than 5 people total in the department on a 'normal' day.  For each cruise, they will need to match up the refund request from the client against their paid balance.  They will need to mark the account for a refund of the paid amounts.  The system will most likely generate a penalty for a portion or all of the cruise amount paid.  The NCL worker will then need to override that amount and get it into the batch for payment processing.  They then need to make sure that all cruisers on the specific sailing either have been given FCC or a refund.  

There is a LOT of human intervention that is needed to make sure refunds or FCC are correct.  FCC is much easier and faster because their system will certainly have the capability baked in to move payments to FCC.  Not so much for cash refunds within the penalty window.

27 minutes ago, mikes said:

Carnival canceled my cruise.  Paid the majority with Gift Cards.  Opted for the refund.  If they do file a reorganization....can the credit card I used to purchase the gift card(s) have a dispute filed?  Non-delivery of services or "defunct" gift card from my perspective and should be eligible for a dispute?

Usually you only have 45 days from purchase to file a dispute..  Some are 90 days.  If you're much past that there's very little chance the bank will even consider a dispute.  Not to mention, if Carnival does go into bankruptcy, any payments to customers and vendors would almost guaranteed stop until court proceedings occur.

1 hour ago, Jobeth66 said:

 

Did you read what the CDC says they have to have in place as 'precautions'?

 

Full medical facilities including PPE & ventilators on the ships.  Robust testing plans for passengers and crew, with weekly reporting to the CDC - we can't get everyone in the US tested at this point, where are the cruise lines going to get hundreds of thousands of tests?  Social distancing plans (on the pool deck?  In the buffet?  At the shows? At bars/lounges?).  Agreements in place with shoreside hospitals BEFORE any cruise to take any sick passengers that require hospitalization due to COVID-19 along with plans on how those patients will be transferred by commercial means (in other worse, you can't rely on the Coast Guard to evacuate them).  Which hospitals in Florida or NY or Seattle or anywhere else are going to agree in advance to take an unknown number of patients with an unknown prognosis from any number of ships that might be in port? 

 

Just don't see it happening.  The cruises that were ground zero for infections worldwide are under intense scrutiny.  No way they are allowed to start up operations anytime in the very near future.

I didn't say it was likely.  As a matter of fact I said the exact opposite.  My point was, saying cruises are suspended for 100 days is not the full story and is misleading.

18 minutes ago, CRAustin said:

CDC has extended no cruising for another 100 days from April 9th

Not necessarily true.  It will most likely be at least 100 days but the order issued said that cruising will be opened at the earlier of 100 days or when the cruiselines have precautions in place to prevent the spread / limit exposure.  I don't think it will happen before 100 days but it certainly could.

21 hours ago, susanf31 said:

No, absolutely not.  You could easily test negative because you are in the 2 week incubation period.  The tests also are not 100% accurate, so lots of false negatives and false positives are happening.  They aren't reliable and thinking that they are could lead to a ship-wide infectious catastrophe.

During the 2 week incubation period you mention, people are projecting the virus back into the atmosphere and surfaces.  Each different test protocol is based on a certain amount of virus in the testing sample.  We have no idea how sensitive the 5 minute tests are and how long it would take to register positive from exposure.  According to what I have heard they are much more accurate than the longer duration tests.  No test is 100% accurate so that's never going to happen.

I personally believe the 5 minute tests to opening a large majority of the US economy.  I work in a nursing home and really think we will open up our doors once we can get the 5 minute testing.  We could test every person through the door.

Unfortunately there is almost no chance a May 14th sailing will occur at this point.  We are on the June 5th sailing of the Gem to Bermuda and have been hopeful for a while we could get to go.  I think there's probably less than a 10% chance of us going in June.  We've rebooked an April Carnival cruise to the end of August and I think we have a fighting chance to be on that cruise.  It's all so disappointing because the cruise to Bermuda is my son's graduation present.  He will miss that, his senior prom, his senior trip and his graduation ceremony.  

I was originally under the assumption that May cruises would be happening but I don't see that occurring now.  We have a cruise booked in June for our son's graduation and that has little chance of happening.

We have another one booked in August on Carnival and still feel we have a fighting chance on that one.  One thing that isn't being given enough credit is the new 5 minute testing kit that was approved.  If they can make enough of these kits and get them distributed, places like nursing homes, hospitals and cruise lines would be able to use them prior to allowing access.  This would almost ensure that nobody onboard has the virus.  Ports of call would more readily open if they had this assurance as well.  Certainly could kick-start the cruise business back up.

25 minutes ago, GA Dave said:

Johnson & Johnson has said it will begin clinical trials of its vaccine by September of this year and will have the first batches available for emergency use by early next year.  They also said they have made capacity in their plants to produce one billion doses during the first half of 2021.  So, safe cruising may happen in the latter half of 2021.

Another company has already started clinical trials for a vaccine.  They started about a week ago.  I remember it was either a 2 or 3 step process.

I personally think this will die out and we'll never hear of it again.

22 hours ago, esm54687 said:

I'm a little frustrated that the cruise industry flags their ships in foreign countries to bypass taxes, labor laws, etc from the US but here they are getting my tax money instead of it going in my pocket where it should.

What taxes are the cruise ships not paying that they would be paying if flagged in the US?  The only benefit for a foreign flag is not having to pay employees based on US wage and hour laws.  The corporate headquarters are still based in the US, the US activities are still subject to US income taxes.  They continue to pay port fees and taxes for homeports in the US and the cruise industry employs something like 150,000 people in the US which are subject to employee wage and hour laws along with a high percentage being union employees.

4 hours ago, jimbo5544 said:

Interestingly, we got an email from NCL saying they are planning to sail 4/12.  Guess Carnival is not the only bad guy.... 

This would somewhat coincide with Trumps statement over the weekend that the prevention can't be worse than the virus itself.  He said he will take a hard look at the end of the 15 day quarantine (in about a week) to see if lifting restrictions makes sense.  I would still be surprised if April sailings occur TBH.  

4 hours ago, robsmom said:

Buying stock does not keep a company afloat.   NCL gets none of the money.    Buy stock if you think it is a good buy right now.  That is fine, but buying or not buying stock will not help the industry.  

Absolutely correct.  The only time buying a stock is helping the company, it's when buying an IPO (initial public offering).  All the other transactions are between other investors.

And RCCL cancels for 30 days too.  Carnival is the last man standing of the big boys.