Poor management of the triplets

[baytraller]

Lets place the reason for the sale of the triplets to Windstar where it belongs poor management .

When a business fails to make money , management must accept the responsibility .

After the introduction of the three larger ships , with newer and better on-board facilities , most existing passengers were prepared to pay higher prices to sail on these ships compared to the triplets. New Seabourn passengers selected the older triplets mainly because of the lower prices .

Management tried to keep the prices on the triplets high , but had to reduce prices significantly at the end to fill the ships , thus creating the 90 day club , which we are members. Just wait until

the last 90 days before embarkation date before booking for reduced prices. Every Seabourn cruise we have been passengers on has always cost less than $300 per day/person for Category A , A1 and A2 . We have cruised the Baltic , Mediterranean , Adriatic and Aegean on the triplets in May, July, August , September and October for over 100 days in the last 3 years. All the cruises were just wonderful , and the staff first class . As for the older ships , well for us this was not an issue , the cabins were still large , food great and fascinating ports . Management fail to accept that there were two Seabourn passenger groups with different priorities . They needed to separate the ships into two distinct groups . Lets hope Windstar will understand this and price and market accordingly . We hope Windstar keeps the triplets for the older and less active passengers . The new Seabourn ship will most-likely be 600 to 750 passengers , the current management seem only focused on larger ships and higher prices . Will we cruise on Seabourn or join Windstar in the future , that will depend on Windstar . The future Seabourn with the 3 larger ships and the new addition , will most likely fail if the management remains the same .

[wripro]

The new Seabourn ship will just as likely be 6000 to 7500 passengers as 600 to 750. In other words, no chance at all.

[sananda]

The new Seabourn ship will just as likely be 6000 to 7500 passengers as 600 to 750. In other words, no chance at all.

 

Why are you so certain of this?

 

I don't know if Carnival will authorize a new build for Seabourn this year. A lot depends on how Carnival's stock performs and what Seabourn's financials look like over the next 6 months. That said, let's look at the available evidence for building a larger ship.

 

1. In the press release and in a separate statement on Seabourn's website it was stated that if they placed an order to build a new ship this year they would build a single ship to replace the capacity of the 3 little sisters combined.

 

2. In the cruise ships of tomorrow display from last year there was a model of a HAL / Seabourn shared hull design configured for ~750 passengers. Shared hull designs can save enormous amounts of money.

 

3. Using Carnival's management philosophy, it's much easier to make money with a 450 passenger ship than a 208 passenger ship, likewise a 600 - 750 passenger ship is even more profitable.

 

4. Seabourn's competitors have ships of this size. Building a larger ship will allow Seabourn to catch up by offering amenities not currently available on Seabourn that its' competitors currently have.

 

5. With the current price of fuel, it is nearly impossible to make money on a 200 passenger ship unless you charge significantly more than Seabourn has charged the past few years.

 

What is the available evidence that Seabourn would build a modern 200 passenger ship? Only that certain very loyal customers would prefer they do so.

[Chairsin]

In the letter I received today( which I presume most others on this board have also received) from Richard Meadows it says"...it is likely that we will announce an order for a fourth ship of similar design* within the current fiscal year. The new ship will allow us to maintain much of our current guest capacity."

 

(* here he was referring to the Odyssey, Sojourn and Quest)

 

By my math, since he qualifies it as "much" of the current capacity, this suggests a ship with less than 624( 208 times 3) passengers.And I can't believe he would even mention the possibility of a new ship if it was not already virtually a done deal.

[sananda]

Chairsin - I got the same letter on Saturday and I agree with your interpretation. The letter was less ambiguous than the press release and statement on the website, but still rather vague. I guess Meadows would like a ship of similar design to the Odyssey. I wish he had said identical design or another ship of the Odyssey class. Similar design could mean a lot of different things, but he doesn't want something larger than the Odyssey, which is good.

 

For your information, the 10k filing for the 2012 annual report is out and as of January 22, 2013, Carnival has not committed to building a new ship for Seabourn (They show commitments for Princess, Aida, Holland America, etc.). I agree that he should not mention a new build unless it is a done deal. Hopefully, everything will be cleared up shortly.

[wripro]

The press release said nearly or virtually the same capacity of the triplets, not the exact capacity. By the time you add a new ship of 450 passengers, a bunch of new spa penthouses on all four ships which will add more berths you are not far from the 600 berths of the triplets.

[Roxburgh]

The press release said nearly or virtually the same capacity of the triplets, not the exact capacity. By the time you add a new ship of 450 passengers, a bunch of new spa penthouses on all four ships which will add more berths you are not far from the 600 berths of the triplets.

 

I agree. Given that the detailed design and blueprints for an Odyssey type ship already exist, that Mariotti have experience of building them and that they have been well received by guests, why would Seabourn opt for a new design and a new type of ship?

[sananda]

My primary concern is to maximize profits for Seabourn. From a logistical standpoint, another Odyssey class ship makes the most sense (easiest integration with current fleet) and the way Meadows talked up these ships, it seems that is what he is leaning towards. The financial case for a larger ship has already been made, but I am against this because of overcapacity for the fleet. My own preference would be another Odyssey class ship brought into service ~ a year after all three triplets are gone. Hopefully, that would create a shortage of berths for a short period and allow Seabourn to establish new higher rates fleetwide.

[Roxburgh]

My primary concern is to maximize profits for Seabourn. From a logistical standpoint, another Odyssey class ship makes the most sense (easiest integration with current fleet) and the way Meadows talked up these ships, it seems that is what he is leaning towards. The financial case for a larger ship has already been made, but I am against this because of overcapacity for the fleet. My own preference would be another Odyssey class ship brought into service ~ a year after all three triplets are gone. Hopefully, that would create a shortage of berths for a short period and allow Seabourn to establish new higher rates fleetwide.

 

Are you Micky Arison?

[sananda]

Are you Micky Arison?

No, but I have a substantial investment with Carnival. What's good for them is good for me, financially speaking.

[Emperor Norton]

No, but I have a substantial investment with Carnival. What's good for them is good for me, financially speaking.

 

In dividends or stock value?

[sananda]

In dividends or stock value?

 

I am not sure what you are asking. The stock currently pays a quarterly dividend of $0.25 per share.

[wripro]

I can't understand why anyone who is so concerned with maximizing profits for Seabourn would spend so much ti,me tearing it down.

[BUgrad]

Nothing has been stated about how wonderful it was to sail on the triplets. One of the most special evenings was aboard the Lengend with Eric laGrey and the rock the boat show. There was a congeniality that I do not feel could be present on a larger vessel. I have not sailed on the larger shps and recently have travelled on other lines because of tired itineraries. My next cruise is on Crystal. The itinerary is unusual and hopefully the food and service will surpass Seabourn. Seabourn, if you want me back you will have to find ports other than Livorno, Sorrento and Barcelona during the summer season. Australia might woo me.

[Naveron]

BUGrad you are so right! I LOVED our cruise with Eric and the Rock the Boat party in St. Barts and then the Caviar in the surf at Prickly Pear. I will remember these parties for a long time.

[Mr Luxury]

I can't understand why anyone who is so concerned with maximizing profits for Seabourn would spend so much ti,me tearing it down.

 

I thought about posting the exact same thing.:rolleyes:

[BUgrad]

Mr. Luxury, last year you advised me to stay at the Limewood and it truly was one of the highlights of my trip. We did a Silversea trip which was not up to the level of past trips. This year we will do Crystal. We start in Reykjavik. We have booked the Hilton. We are open to your suggestions for excursions prior to the cruise, dining and any other tidbit of information you care to pass our way.

[Mr Luxury]

Mr. Luxury, last year you advised me to stay at the Limewood and it truly was one of the highlights of my trip. We did a Silversea trip which was not up to the level of past trips. This year we will do Crystal. We start in Reykjavik. We have booked the Hilton. We are open to your suggestions for excursions prior to the cruise, dining and any other tidbit of information you care to pass our way.

 

I am afraid that I do not know Reykjavik at all well,but I did try the Crystal Serenity in August 2012 and found that for me it was a disaster.The only good thing was the Silk Road restaurant which was excellent.

[sananda]

I thought about posting the exact same thing.:rolleyes:

 

I should have phrased it differently. I am very concerned about maximizing Carnival's profits. With 6 ships, Seabourn's berths represent < 2% of Carnivals's total, so I am not too worried about Seabourn's impact on the bottom line. Obviously, I would like them to perform better so CCL stock price increases. I am not sure that Carnival is the best owner for Seabourn.

 

I do not believe that I am tearing Seabourn down. I have noticed that people that didn't enjoy their Seabourn cruise wander away from this board, whereas, there is a group of active posters that really enjoy Seabourn. So when a new person comes to this board asking for opinions, what they hear is overwhelmingly positive. Lot's of people do not like Seabourn. It's probably pointless posting here, but new people deserve to hear about Seabourn's problems as well.

 

Also Mr. Luxury, have you posted a review of your Crystal cruise? I am curious to hear what made it a disaster.

[Mr Luxury]

Yes I did post of my Crystal experience.

It's old news now.I ticked a box and do not need to return.

Been there done that.

[rols]

With respect I don't agree. If the little sisters were being filled at a severe discount every voyage because they couldn't command the same fares the newer, larger ships could, then the right thing to do is sell them and purchase what I'm sure will be another in the same series and make a better return off it. If I were Seabourn management I'd see the 90-day club as exactly the reason to get out of that business, seems like they were subsidising those ships or generating much lower returns off them.

 

We, or at least I, expecte a certain standard from Seabourn. I would think the smaller ships are more expensive to run on a per-passenger basis, if they were. at the same time, generating lower fares, then it's good business to sell them. The alternative would be a 2-tier Seabourn to make the economics work and nobody would want that. I'm happy Seabourn has stuck to the all-inclusive cruising plan and done what it takes to make money doing it. That means filling ships people want to travel on at a price they can give the full service too. It costs money to put on that level of service.

 

I don't think Seabourn will fail at all. Their new ships are, in my opinion, a huge success. They have made them bigger but lost very little of the charm. They have some economies of scale but, again in my opinion, have not lost the personal touch or the quality, something I'm afraid that Silversea blew with the Spirit.

 

Yes it was nice to always be able to find a Seabourn cruise on a little sister at a much lower rate than the new ships but that reflects customer choice and I don't see how the company could have continued doing that. I want Seabourn to be as profitable and strong as possible, I intend to cruise with them for many years. Quality costs.

 

I also hope that Windstar makes a success of the ships at whatever level of cost and service they pitch them, if they fit their customer profile and fill them, good for them.

[jpver]

Well I'm not convinced by the letter we received. It is a big mistake to go to bigger ships, while the succes is certainly the smaller ones.

Alternative to Seabourn are now:

- of course Windstar itself and the 3 sisters

- Compagnie du Ponant with the 3 ships of 264 passengers Boréal, Austral, Soléal and the Ponant with 64 passengers. Excellent but not a full "all inclusive".

- Seadream with approx 110 passengers (former Seabourn Goddesses) a full all inclusive, hower rather high fares

- special ships as the Star Clippers

[rols]

Well I'm not convinced by the letter we received. It is a big mistake to go to bigger ships, while the succes is certainly the smaller ones.

 

I'm interested why you say that. Seabourn's reputation was certainly built on the small ships and we have sailed them, that was our first Seabourn experience and we loved it. My impression, and I'm very happy to be corrected if wrong, is that Seabourn has had had to discount the smaller ships more than the larger ones in order to fill them and people are booking the bigger ships at higher per-passenger prices. That would make the larger ships more of a success at this point. I don't feel in the process that they tossed away the ideals of customer service or cut down on quality either.

 

If, as I've read in other threads or other parts of this one, little sister cruises were going for 300 per person per night, there's no way that covers the costs of the kind of cruise I expect from this line. If I ran that business I'd let go the piece I was subsidising and keep the piece which was making money.

 

We have our second big sister cruise in a few weeks. See how that goes, it went well last time. I feel that if you enjoy Seabourn's quality that you should want them to attract the per-passenger per-day cruise fare which allows them to provide that. My feeling is the little sisters no-longer were able to attract those fares and the bigger ships do, to the same discerning clientele.

 

I don't love that Seabourn has found a way to keep cruise fares higher and ships full whilst delivering the same service .. but I should .. if I want less from my cruises I can pay less and take what I get. We're on the ship in a few weeks, I expect it to be perfect.

[sananda]

...Seabourn has had had to discount the smaller ships more than the larger ones in order to fill them and people are booking the bigger ships at higher per-passenger prices. That would make the larger ships more of a success at this point.

 

If, as I've read in other threads or other parts of this one, little sister cruises were going for 300 per person per night, there's no way that covers the costs of the kind of cruise I expect from this line. If I ran that business I'd let go the piece I was subsidising and keep the piece which was making money.

 

One of the reasons the little sisters were let go en masse. If they were profitable, they would have been replaced more gradually. Also, people want balconies and there were none on the little sisters. Some have suggested the ships are in need of a major mechanical overhaul as well. The typical cruiser seems to value the added excitement, entertainment and choices available on larger ships.

 

I don't understand why Seabourn discounts their cabins so heavily. Premium suites on mass market lines are often more expensive than similar sized cabins with Seabourn. This makes no sense to me at all.

[Mr Luxury]

Interestingly enough the prices for 2014 summer cruises are a fair bit more compared with 2013 on the big and the small Seabourn ships.