Royal Caribbean Cruises Ltd. continues to put off buying new ships

[bajathree]

At Royal Caribbean Cruises, Chief Financial Officer Brian Rice says the company has put off buying a new ship since the recession began. It has "been a little unusual to go that long now," he says. Mr. Rice says the Miami-based cruise operator has slowed capital expenditures while waiting for a more robust upturn. New cruise ships cost between $750 million and $1.4 billion, which the company is reluctant to spend, even though Mr. Rice admits that ships cost less right now. "There is a premium being placed on ensuring whatever you do doesn't hurt your balance sheet too much and put you in a compromising position," he says

 

Full article http://online.wsj.com/article/SB10001424052748704029304575526453455495706.html?ru=yahoo&mod=yahoo_hs

[DarthGrady]

Sir...does this mean that Ann-Margaret's not coming?

[FLACRUISER99]

Sir...does this mean that Ann-Margaret's not coming?

Huh???

[melbur]

there's that "robust" term again - ;)

[MCC retired]

I guess that RCI doesn't believe the announcement that this Recession is over either .;)

[DarthGrady]

Huh???

 

Sorry, my movie quotes occasionally delve into the totally obscure.

[golfer1966]

They dont need any new ships just yet. With the Oasis and Allure, they have to be hurting for money. I love RCI dont get me wrong, but I think they got in over their heads with these two ships. Sure they are nice, but RCI made cutbacks to help fund these ships that they may not have had to otherwise. Some call it nickel and diming the passemgers, but it all adds up. I hope they lay off th enew ships for awhile and maybe bring back some things they got rid of or now charge for. Just a thought...;)

[bajathree]

I guess that RCI doesn't believe the announcement that this Recession is over either .;)

 

There not stupid....after all their corporate offices are sitting in recession central.....I laugh when I hear people posting about how things are improving:rolleyes:....just come down to FL....you will be put back into reality REAL FAST;)

[CarpeCerevisi]

Sir...does this mean that Ann-Margaret's not coming?

 

Sorry, my movie quotes occasionally delve into the totally obscure.

 

Full Metal Jacket - Private Joker on hearing about the Tet Offensive.

[The Big Booper]

Full Metal Jacket - Private Joker on hearing about the Tet Offensive.

 

Gotta keep Grady on this side of the fence, one of the best obscure movie references ever!

[Scotty G]

Full article http://online.wsj.com/article/SB10001424052748704029304575526453455495706.html?ru=yahoo&mod=yahoo_hs

There is no new news here. This is in keeping with the feedback to us from RCL. Doesn't mean that a new ship isn't being planned.

[negc]

Full article http://online.wsj.com/article/SB10001424052748704029304575526453455495706.html?ru=yahoo&mod=yahoo_hs

Isn't that basically what many of us have been saying whenever rumors of new builds are spread by wait staff, ship's captains, and other "in the know" shipboard experts? There are still many good years left in even the oldest ships in their fleet and it seems wise to defer contracts for new ships until the economy is on a firm footing. In many parts of the country the recession seems to be over but even there most companies are sitting on their money and neither hiring nor expanding.

[LBcruzman]

I guess that RCI doesn't believe the announcement that this Recession is over either .;)

Well the stock market believes that the recession is over. For those that held on and didn't sell when the market crashed in '08, things are good, real good. That old axiom "buy low, sell high" is good advice. Unfortunately when the market crashed in '08 so many people got scared and cashed in. So many bought at the highs and sold (or even HAD to sell) at the lows. Very unfortunate for them.

 

Last month, the stock market posted it's best September in 70 years! October is usually the worst month for stocks and this month is showing an exception. The market is UP!!!

 

Looking back over the past 100 years the second half of a U.S. Presidents term, (third and fourth year) are usually stock market rallys. So the current uptick in the market seems to be setting the stage for exactly that.

 

With that said, I cashed out my RCL holdings today. I bought most of my shares at under $10 per share and I have made enough now to pay for quite a few cruises. Once I triple my investment, I am ready to sell. Especially since the P/E for RCL is approaching 20. I may buy in again if it goes lower again. For Royal Caribbean and all it's investors I hope it doesn't do that and just continues to go up. I made my money on it and am now cashing out. There are so many other stocks I am interested in buying that are due for a rally. So good luck to all investors!

[LBcruzman]

There not stupid....after all their corporate offices are sitting in recession central.....I laugh when I hear people posting about how things are improving:rolleyes:....just come down to FL....you will be put back into reality REAL FAST;)

Well, Florida, California, Michigan, Ohio, Arizona and other states (especially in the Real Estate Market) may remain in a recession for some time. For Florida and California especially, the inane increase in real estate prices in the 2000's (until the bubble burst) is the reason. Many of us in the U.S. never saw that real estate bubble in our areas and though the market is still flat (mainly from tight credit) prices are stable.

 

Unfortunately about 10-15% of Americans will remain in the Great Depression for years while the rest of the U.S. goes about life in the recovery. One needs a higher level of education and enough street smarts not to get into debt to survive in this economy. That is just a reality. For those that are doing well, cash is King and prices on many things are a bargain. Good luck to all in this economy.

[LBcruzman]

They dont need any new ships just yet. With the Oasis and Allure, they have to be hurting for money.. ;)

 

I beg to differ. During peak months (Summer and Holidays) Oasis is attracting mainly NEW cruisers to RCL and many First time cruisers. That is exactly what they want and need to prosper in the future. Most people in the world have never cruised. That is the market RCL and other lines are going after. Thus the cuts in Loyalty benefits already made and soon to come. Seasoned cruisers spend less on board and get discounts for booking. First time cruisers are blind to discounts, have no expectations and buy everything in sight. They are the customers RCL and other lines are really after. And the market is wide open. And the Oasis and the Allure are the ships that are attracting these new customers.

 

Was the timing off for these ships? Sure, who knew when they were ordered that the U.S and World would go into a Great Recession? But in the recovery, ahhh.... they will be cash cows. And the more they slash the fares after final payment, the more the NEW cruisers will book at "such a deal" and run up their seapass cards.

 

Those older ships? Some, like Monarch and Majesty will soon be sold or end up on Asian itineraries.

[UNV-IT!!!]

im waiting for that new rccl ship with condo's. you can call me SOLD!;)

[Mark_K]

Sir...does this mean that Ann-Margaret's not coming?

Nor Ann-Margret.

[bajathree]

im waiting for that new rccl ship with condo's. you can call me SOLD!;)

 

Maybe they can take one of the dozens of empty condo buildings sitting in Miami that went into foreclosure and lay one on it's side and sell it off as a ship:p

[Ocean Boy]

I beg to differ. During peak months (Summer and Holidays) Oasis is attracting mainly NEW cruisers to RCL and many First time cruisers. That is exactly what they want and need to prosper in the future. Most people in the world have never cruised. That is the market RCL and other lines are going after. Thus the cuts in Loyalty benefits already made and soon to come. Seasoned cruisers spend less on board and get discounts for booking. First time cruisers are blind to discounts, have no expectations and buy everything in sight. They are the customers RCL and other lines are really after. And the market is wide open. And the Oasis and the Allure are the ships that are attracting these new customers.

 

Was the timing off for these ships? Sure, who knew when they were ordered that the U.S and World would go into a Great Recession? But in the recovery, ahhh.... they will be cash cows. And the more they slash the fares after final payment, the more the NEW cruisers will book at "such a deal" and run up their seapass cards.

 

Those older ships? Some, like Monarch and Majesty will soon be sold or end up on Asian itineraries.

 

There are also trade offs with those new cruisers and the long timers. Many of those new cruisers will be one time wonders. That is not how cruise ships get filled up in th long run.

 

As for the stock market, the run up in gold prices says plenty. There are still a lot of skiddish people around.

[orville99]

Interesting article, especially since the CEO of Carnival was on CNBC yesterday announcing that Carnival has 11 new ships across its brands in the pipeline for delivery by 2014. RCI has at least one, possibly two Celebrity ships under construction at Meyer-Werft, and Disney has one floating out in two weeks, and another already being built at the same yard for delivery in 2012.

 

My vote is for RCI over-extending itself on Allure and Oasis, and not a representaion of the industry or the economy.

[negc]

There are also trade offs with those new cruisers and the long timers. Many of those new cruisers will be one time wonders. That is not how cruise ships get filled up in th long run.

 

As for the stock market, the run up in gold prices says plenty. There are still a lot of skiddish people around.

 

They need to achieve a balance. Attracting and holding onto new cruisers is essential if they are to continue to be successful and profitable. While many of those new cruisers may be, in your term, "one time wonders", many more will be hooked as we were and they are the future of the industry. At the same time they need to make brand loyalty a valuable commodity. It doesn't have to be an "either or" situation.

[marci22]

I thought the main reason for building Oasis and Allure was to be able to operate more efficiently rather than just adding more capacity so I wouldn't expect them to continue building ships at the rate they did in the past.

[erbunny]

I think they will keep Monarch and Majesty as long as they are making a profit on their shorter cruises. As they are more affordable, they are often the entry into cruising for people who may not be ready to make the big splurge the larger ships require. I know that is how we got started, and now we are looking into 2 week Panama cruising !!

[golfer1966]

I beg to differ. During peak months (Summer and Holidays) Oasis is attracting mainly NEW cruisers to RCL and many First time cruisers. That is exactly what they want and need to prosper in the future. Most people in the world have never cruised. That is the market RCL and other lines are going after. Thus the cuts in Loyalty benefits already made and soon to come. Seasoned cruisers spend less on board and get discounts for booking. First time cruisers are blind to discounts, have no expectations and buy everything in sight. They are the customers RCL and other lines are really after. And the market is wide open. And the Oasis and the Allure are the ships that are attracting these new customers.

 

Was the timing off for these ships? Sure, who knew when they were ordered that the U.S and World would go into a Great Recession? But in the recovery, ahhh.... they will be cash cows. And the more they slash the fares after final payment, the more the NEW cruisers will book at "such a deal" and run up their seapass cards.

 

Those older ships? Some, like Monarch and Majesty will soon be sold or end up on Asian itineraries.

 

 

We for sure have differences in opinions on this.;) If they only sell out during peak months, that has to be a problem for them financially. They need to be selling out all year to make money, plus the cabins are allot more money than the rest of the fleet. I know its because its new, but the real cash cow in the Majesty. I know what your saying about them getting rid of it, but if you look at it like this....the Majesty must be paid for, its usally full all year long and its less expensive to cruise. So, to me, I think they make good money with the Majesty and Monarch, so I bet they dont get rid of them anytime soon. If you think its the new cruisers spending the money on the ship, you need to talk to my wife, and we're Diamond Plus. :D

[Ocean Boy]

They need to achieve a balance. Attracting and holding onto new cruisers is essential if they are to continue to be successful and profitable. While many of those new cruisers may be, in your term, "one time wonders", many more will be hooked as we were and they are the future of the industry. At the same time they need to make brand loyalty a valuable commodity. It doesn't have to be an "either or" situation.

 

I completely agree with you. It just seems that so often we read posts here about how important the new cruiser is with disregard for just how important the repeat cruisers are also. That was my point. We may not spend as much on board for some of the "trinkets" since we already have them as the new folks but we sure do fill up plently of the cabins.