Apollo preparing for Exit?

At the end of 2011 Prestige cruise holdings (including Regent) will be four years old.Majority owner is Apollo.Most Venture capital or financial buyers look to exit at around 5 years by a trade Sale,market floatation (no pun intended),or by churning to another financial owner.

Am I alone in noticing changes to the business policies of Regent which are typical of a business planning for exit?

1 New customers valued more highly than loyalists

For example: Hiking prices to the early bookers and regulars followed by frenzied discounting to maxamise revenues.

For example: Creating a premium class to extract even more revenue from loyalists.

2Capital programmes slashed.

Example:What happened to Regents new ship?

3Operating Cost reductions

Example Serving Italian sparkling wine and calling it Champagne

4Failing to communicate for fear of damaging reputation.

Example Recent Voyager delay in UK port.

Its now about 11 months since my last cruise on Mariner (trying Seabourn in a couple of weeks)so I maybe off beam but interested in poster views.

While I have been quite critical of how Regent is being run lately, I'm not sure that I see things as you do.

1. After doing rearch last night, I actually believe the story of why the Voyager was delayed in Southampton. The communication was poor (not the Captain's accent -- the timing of the announcements).

2. I suspect that long time customers are costing Prestige Cruise Holdings too much money. From what I can see, all the luxury lines are looking for new customers (younger) but are going about it in different ways.

3. We have been on Silversea twice in the last six months. Long time customers talk about how many cut-backs there has been in wine and in some food offerings. This may be a response to the difficult economy and out of sight fuel prices.

4. Regent has always advertised a glass of champagne when you board. I cannot recall receiving a glass of "champagne" -- when boarding.

I have one concern -- different than yours. With the exception of Mark Conroy, there is little expertise in the area of luxury cruising in top management (Frank Del Rio's "baby" is Oceania and he has never stepped foot on a luxury ship that he didn't own). The second in command was President of Oceania. With the policy changes, it appears that no one is really listening to Mark Conroy.

I understand that the person who used to be in charge of the loyalty program for Regent is now with Silversea (along with other former Regent management personnel). It appears that Silversea is becoming more like Regent was (but has a ways to go) and Regent is turning into an all-inclusive version of Oceania.

Maybe it would be a good thing is Regent was sold:confused:

I would not be surprised if Regent is sold. If so, I hope previous owner, Carlson I believe, buys Regent!

Carlson is BIG in "hospitality" business.

I too hope it gets sold. Of course, at this point, operations are so intertwined with Oceania, they'd probably get sold together.

The steps adoctor has listed appear to be more characteristic of a company trying to respond to a changing business environment brought about by difficult economic conditions worldwide. Lets be honest, economic times are not the same as they were several years ago, future expectations are cloudy and a company this isn't attempting to adapt is very likely going out of business. While old time Regent travelers may not like the changes that are being implemented, I think we could all agree that most companies are now having to operate in a more efficient manner as well as strive to find new ways to attract additional customers.

It remains to be seen if present and future policy changes help or hurt the long time operation and profitability of Regent. I for one hope they are pushing all the right buttons.

At the end of 2011 Prestige cruise holdings (including Regent) will be four years old.Majority owner is Apollo.Most Venture capital or financial buyers look to exit at around 5 years by a trade Sale,market floatation (no pun intended),or by churning to another financial owner.

Am I alone in noticing changes to the business policies of Regent which are typical of a business planning for exit?

 

1 New customers valued more highly than loyalists

For example: Hiking prices to the early bookers and regulars followed by frenzied discounting to maxamise revenues.

For example: Creating a premium class to extract even more revenue from loyalists.

2Capital programmes slashed.

Example:What happened to Regents new ship?

3Operating Cost reductions

Example Serving Italian sparkling wine and calling it Champagne

4Failing to communicate for fear of damaging reputation.

Example Recent Voyager delay in UK port.

 

Its now about 11 months since my last cruise on Mariner (trying Seabourn in a couple of weeks)so I maybe off beam but interested in poster views.

I don't beleive that the "changes" outlined above really are changes. Pricing has always been fluid to try to get maximum revenue. Why should it be otherwise?

As far as we know Regent's new ship is still in the planning satage. What evidence is there to suggest otherwise. If it is halted it will be because of the economic downturn and the difficulty of filling new builds.

There has been no change in the policy of serving sparkling wine on embarkation. It happened on my first cruise to Alaska some years ago. But champagne, not sparkling wine, is served about the ship in my experience.

It is a bit weak to suggest that,because there was a communication problenm on Voyager, the line is likely to be sold

I can't imagine that a stand alone luxury cruise line would be an attractive purchase in the current economy. Perhaps one of the two big, deep pockets corporate lines would be interested but I really can't see it happening.

Interesting thread, to which I'll add a couple of random contributions.

Most Americans are accustomed to the usage of the word "champagne" to describe any sparkling white wine in the familiar-shaped bottle. Of course it's misleading insofar as European wine regulations are concerned, and you won't find American producers of sparklers describing themselves as "Champagne," but I find that usually our European friends take a bit more umbrage at this usage of the word than do most Americans. And, to be sure, I've tasted many a non-Champagne sparkling wine that I thought much better than some produced in the French region of that name.

There was a note in the financial press a few weeks ago that PCH was out testing the market for a flotation of junk bonds (rates at the time were at historic lows). This would be consistent with the idea that a new ship is still in Regent's future -- possibly to coincide with retirement of the Navigator from the fleet?

As to a possible sale or public offering -- seems unlikely at this juncture for the economy, although PCH is clearly being positioned as a freestanding cruise operator such that, with a solid revenue base, it could be sold off to another, larger cruise operator who could hope to squeeze out some more profit by consolidating some marketing and non-passenger facing operating and provisioning expenses.

There's always Carnival but they already have Seabourn so unlikely to want another luxury line.

Since we've been told that Regent reads and pays attention to the posts on Cruise Critic, all they have to do is follow this thread and they will know exactly how to proceed.. :D:D

Not uncommon that a consortium could come in and buy PCH from Apollo. Could totally rebrand all the ships between the holdings. I would not be surprised if FDR headed up something like that

Most Americans are accustomed to the usage of the word "champagne" to describe any sparkling white wine in the familiar-shaped bottle.

 

Of course it's misleading insofar as European wine regulations are concerned, and you won't find American producers of sparklers describing themselves as "Champagne," but I find that usually our European friends take a bit more umbrage at this usage of the word than do most Americans. And, to be sure, I've tasted many a non-Champagne sparkling wine that I thought much better than some produced in the French region of that name.

You beat me to the punch on this. I've wanted to say this a few times when feeling the outrage here regarding the "misleading" advertising, but I always seem to forget. Still, Regent should be more precise I suppose. . . this Regent group is a tough crowd. ;)

There's always Carnival but they already have Seabourn so unlikely to want another luxury line.

Ha! Have to laugh at this. I've heard from an executive in the cruise industry (not Carnival) that Seabourn has never been profitable. This person, with tongue firmly implanted in cheek, said that "Seabourn is more like a private country club for Carnival board members and executives. . .many times the voyages are filled with 'non-paying customers.'" Went on to say, "I mean, if you were on the board at Carnival, would you rather take your freebies on Carnival, or Seabourn?" :p

I figured he had a point.

Obviously this is all over my head. I have nothing to add to this thread other than a little light humor. ;)

Another point of view for Apollo selling Regent; sincerely doubt that Apollo would sell only Regent. Prestige recently moved a lot of Regent's staff to Miami to be co-located with Oceania. Some of the home office departments service both Regent and Oceania such as destinations and the phone bank. Trying to sell only Regent just doesn't make sense with the recent changes.

Now that isn't to say that Apollo might just sell Prestige Holdings which would include both regent and Oceania. The two cruise lines are simply too intermingled at this time to allow either to be sold and then operated separately.

Last I heard, although I can't provide a documented source, is that PCH was considering an IPO, not a sale. Makes sense to me, and I'll be one of the first in line to buy some.

Don- i saw the same bit yesterday about an IPO but cannot recall where.

Don- i saw the same bit yesterday about an IPO but cannot recall where.

Here 'tis....

http://www.bizjournals.com/southflorida/blog/cruise_industry_report/2010/03/cruise_industry_sails_towards_ipos.html

It is all economics.

First the small ship are not profitable any more. First they are old and upkeep is costly if they go with bigger ships the profit margin is higher. That is why you see no one building them any more

Second they always say if crude goes above 70.00 per barrel there will be fuel charge. Well it is way above that mark you see any fuel charges ??

The food is always going to be talked about But it is very subjective so really that is not a issue .

The wine I can not comment about as we do not drink, Wine that is the Martinis are always Absolute

They are trying to attract new customers and if they have never sailed on a luxury before would they know that the food has changed or the wine is different All they would know that it is way above any main stream cruise line they have been on the past

On Wind Star They have never been profitable look how many people have tried to make it work. People that cruise a lot do not want short cruises. It is a very small section of the public that would take a cruise on a sailing vessel.

Every that posts here has been on luxury in the past most likely many times so you seen the changes . But for the new clients there is no change . They have to get new clients.

Here 'tis....

 

http://www.bizjournals.com/southflorida/blog/cruise_industry_report/2010/03/cruise_industry_sails_towards_ipos.html

Reading some of the comments in that article appear to show it to be about six month old and not necessarily the current plan. Since it is about six months old and includes the Regent junk bond comments and nothing has occurred as yet toward either plan, wondering what the current management plan is??

The fact that the economy is stagnant at best and there is so much over capacity in the premium/luxury market (many are offering incredible deals--see Crystal's "pay for new pax" deal as well as Oceania's "65% off" sales) mitigates against anything but a distress sale at this point.

It is all economics.

 

First the small ship are not profitable any more. First they are old and upkeep is costly if they go with bigger ships the profit margin is higher. That is why you see no one building them any more

 

Second they always say if crude goes above 70.00 per barrel there will be fuel charge. Well it is way above that mark you see any fuel charges ??

 

They are trying to attract new customers and if they have never sailed on a luxury before would they know that the food has changed or the wine is different All they would know that it is way above any main stream cruise line they have been on the past

 

Every that posts here has been on luxury in the past most likely many times so you seen the changes . But for the new clients there is no change . They have to get new clients.

When fuel charges were added a few years ago, the cruise lines ended up having to refund the charges when the fuel prices dropped. Rather than go through that again, I assume that the fuel charges have been added into the price of the cruise. Just guessing:confused:

I agree that the luxury cruise lines are doing whatever they can to attract new cutomers. However, Regent claims to have 100,000 "regular" customers (I believe that is the number Mark Conroy uses).. . . what is suppose to happen to them? Do they not want our $$$$?

Yes -- food is subjective, but top quality food vs. mediocre food is fairly noticeable by most passenges (not suggesting that Regent's food is mediocre). The same holds true for the lower calibre of wines on some luxury ships. IMO, you don't have to be new to cruising to be able to judge the food/wine (which is why I drink Grey Goose and Chopin martini's -- they are the same everywhere:))

When fuel charges were added a few years ago, the cruise lines ended up having to refund the charges when the fuel prices dropped. Rather than go through that again, I assume that the fuel charges have been added into the price of the cruise. Just guessing:confused:

 

Yes there are as people seem to be ok with a price increase but that added after they pay in full upsets most people

 

 

I agree that the luxury cruise lines are doing whatever they can to attract new cutomers. However, Regent claims to have 100,000 "regular" customers (I believe that is the number Mark Conroy uses).. . . what is suppose to happen to them? Do they not want our $$$$?

 

Yes they want the old customer BUT remember that customer do get old and stop cruising so they have to attract new customers Holland learned there lesson

 

Yes -- food is subjective, but top quality food vs. mediocre food is fairly noticeable by most passenges (not suggesting that Regent's food is mediocre). The same holds true for the lower calibre of wines on some luxury ships. IMO, you don't have to be new to cruising to be able to judge the food/wine (which is why I drink Grey Goose and Chopin martini's -- they are the same everywhere:))

I meant new customer who come from RCI and Holland and other would really not know if the food was not the same as before they would think it is great BUT I have read people say the food is bad so I just go and try as it can not be that bad

And ye you are right the Martinis are always the same as Grey Goose is always the same be it Carnival Or Regent

As we say There's no absolutes in life - only vodka.

It is all economics.

 

They are trying to attract new customers and if they have never sailed on a luxury before would they know that the food has changed or the wine is different All they would know that it is way above any main stream cruise line they have been on the past

 

Every that posts here has been on luxury in the past most likely many times so you seen the changes . But for the new clients there is no change . They have to get new clients.

I think you might be onto something...makes sense to me - new passengers see a big contrast but in a positive way whereas repeaters see decline

Re: issue of fuel surcharge - we just recently looked pricing to do another Alaska cruise in 2012 and for same category cabin, the fares have increased by $1,000 -$1,300 - perhaps that is the fuel increase?

I think you might be onto something...makes sense to me - new passengers see a big contrast but in a positive way whereas repeaters see decline

 

When we did the Whisper it was the first time we have ever done a luxury cruise as we have only done the main stream ones and even did Oceania . The difference was unbelievable had to get used to the differences .The food and the help and the non paying for liquor was great But now it will be hard going back to the non luxury ones.

Nothing to do with Vodka I'm afraid but another characteristic of a corporation preparing for a sale or IPO is a sudden increase in the profiling of that company's leadership.

See seperate post regarding Frank Del Rio article in NY times

Nothing to do with Vodka I'm afraid but another characteristic of a corporation preparing for a sale or IPO is a sudden increase in the profiling of that company's leadership.

See seperate post regarding Frank Del Rio article in NY times

Can't argue with what you wrote and I'm not an expert on IPO's but, the recent significant discounts and significant number of e-mails and sending of brochures can't be something that potential investors would look favorabibly on.

Also the significant number of passengers complaining about poor service, surly waiters, overpriced excursions, lack of service from destinations and other current issues certainly aren't good new for a potential sail or IPO. In addition, some recent comments about Regent cutting back on staff, services, food, etc. are the signs of a sinking ship and not what one would expect a company posturing for sale or IPO would be doing.

The next few months are going to be very interesting for both Regent and Oceania as well as Prestige Holdings. Would hope by the end of this year we would know what direction they are going. Don't think any of us can be sure of their direction and sometimes it appears they don't know what direction they are going either.

Another thought, while other Luxury lines are also having sales, probably due to the economy, seems like Regent and Oceania are doing the most advertising and deepest discounts which has to indicate the ships are sailing less than full, at least for a lot of their itineraries.