Pride of America, some realities

[Seanote]

I've been away from NCL for 5 years now, so I am a little rusty on the exact economics, but let me point out that I don't believe NCL is making a killing on the POA. When the Norwegian Sky was sailing from PR to the Caribbean, a typical balcony cabin was $600-700 for a week. Move the same ship to Hawaii, flag it US, and the cabin price goes to $2000-2400 (this was the price back in 2004, so there has been little or no price increase in 9 years). And yet, the last year that NCL had 3 US flag ships in Hawaii, they lost $174 million, just on the US flag operation. Check the price that other cruise lines charge for their 14 day cruises from the West Coast to Hawaii. Nearly what NCL charges for 7 days. Don't you think that NCL would lower prices if they could to keep the competition out? During the first two years of the US flag operation, they had no competition, but when the other lines started sailing from the West Coast, cabin prices dropped dramatically, causing the loss in revenues.

 

A large part of the price increase for NCL will be due to the requirement that went into effect last year that requires ships operating in the US Emissions Control Area (200 miles from any coast, including around the Hawaiian Islands) to burn fuel with a significantly reduced sulfur content. Current world standard allows ships to burn 3.5% sulfur fuel, but the US ECA requirements is for 1% sulfur fuel. This fuel is more expensive than the 3.5% sulfur fuel. And in 2015, the requirement goes to 0.1% sulfur, which effectively eliminates the traditional heavy fuel oil that the ships burn, in favor of marine diesel oil. MDO is nearly 3 times as expensive as the heavy fuel, so the fuel portion of the cruise ticket price will go up accordingly. Why is this affecting the NCL Hawaiian ship so much more than anyone else? She sails exclusively in the US ECA, so will be on the expensive fuel 100% of the time. Cruises commencing from the West Coast must be on low sulfur fuel until 200 miles off the coast, then they can switch back to the cheaper fuel, until they approach the Hawaiian Islands, when they will switch back to low sulfur fuel. This means that nearly 2/3 to 3/4 of their fuel can be the cheaper high sulfur fuel.

 

I still have friends working on the POA, and I haven't heard any rumors to the effect of bringing another ship back to Hawaii. That's not to say it won't happen, but with the cost of reflagging, crew cost, and the pressure on cabin prices from the international ships from the West Coast, I don't believe it will happen. Even the POA will remain right where she is, up until the time NCL pulls the plug on US flag operations completely, due to the financing legislation that happened in order to get her into the trade in the first place.

 

Of course, as others have said, with "poor" service and high prices, people will vote with their pocketbooks, and go elsewhere. This is the problem that NCL has faced since the beginning.

 

A round trip Hawaii cruise from the West Coast travels over 5000 miles. The POA only runs a few hundred miles at low speeds on its trip around the islands. How can you insinuate that the competition has a distinct advantage on fuel costs? The POA spends the majority of its week supplying hotel load only.

 

Yes, the low sulphur fuel costs more but only about 10% more. I cannot make your math work showing NCL having a disadvantage while currently charging twice the competition's prices. You used to be able to get a Hawaii cruise for $800 per person when NCL was running three ships. This was unprofitable, no doubt. The ticket prices have TRIPLED since then.

 

I am not making this up. NCL has indicted the record profitability in the liner notes of their financial statements.

[tip]

I can only comment about our experience on the POA in Sept 2012. I found nothing major to complain about. The crew were friendly and helpful. Frankly it was no worse and no better than the experience I have had on internationally crewed ships - which is to say overall - pretty good.

 

We too cruised on the POA in September of 2012 and I would agree with the above.

[sparks1093]

It just wasn't the subservient ma'am / sir service you get from the international crew.

 

In reading many reviews this seems to be the unspoken undercurrent in those reviews which complain about the service.

[chengkp75]

A round trip Hawaii cruise from the West Coast travels over 5000 miles. The POA only runs a few hundred miles at low speeds on its trip around the islands. How can you insinuate that the competition has a distinct advantage on fuel costs? The POA spends the majority of its week supplying hotel load only.

 

Yes, the low sulphur fuel costs more but only about 10% more. I cannot make your math work showing NCL having a disadvantage while currently charging twice the competition's prices. You used to be able to get a Hawaii cruise for $800 per person when NCL was running three ships. This was unprofitable, no doubt. The ticket prices have TRIPLED since then.

 

I am not making this up. NCL has indicted the record profitability in the liner notes of their financial statements.

 

Did a little research last night/this morning. Balcony cabin prices for the POA as listed on NCL's website remain in the $2200-2600 range until 2016. Not sure where you got the $5500 price.

 

It is true that in the 2006-2007 time frame, cabin prices could be bought for $800 per person. However, you are mixing purchase price with "list price". Most CC members know that the actual cost of a ticket will vary sharply from the "list price" (what is posted on the company's website when the sailing first becomes available). This is due to the desire of all cruise lines to sail full. The closer to sailing, the unfilled cabins start seeing discounts. At the time you are referring to, the "list price" of a balcony cabin was still in the $2200-2400 range, so prices have actually been stagnant for nearly a decade. I doubt that many lines, or even NCL in different markets can make that claim.

At the time you refer to, NCL had tripled its cabin inventory in Hawaii in two years. (A mistake in my opinion, but I believe it was driven by the special legislation granted for financing the POA). During the last year we had 3 ships running in Hawaii, the other cruise lines, collectively, had increased their cabin inventory in Hawaii by 500%. This is an unprecedented influx to any market for the cruise industry. This of course, resulted in oversupply and the resultant drop in cabin prices.

 

If the cabins these days are mainly going for list price, then I think it's great, because it means the market has stabilized.

 

I skimmed a couple of NCL quarterly and annual reports, and didn't see any specific mention of the POA and its profitability (I may have missed it). Was this record profitability versus the NCL international fleet, or the industry as a whole? (I doubt seriously this would be true) Or was it a record for the Hawaiian operation. Given that the ships lost millions of dollars for years, any profit at all could be claimed to shareholders as a record.

 

Now on to fuel. Yes, the ships running from the WC will burn more fuel, and the total fuel cost of the cruise compared to a strictly Hawaiian cruise will be more. Fuel cost is the single largest component of ticket price. My point, and what I said in earlier posts is that even given 3-4 times the fuel cost that a WC cruise has, they offer a cruise twice as long for the same price that NCL does. Why? The fuel savings of not transiting back and forth to the WC is lost in crew cost. US crew costs are 3-4 times international crew costs. Added to this is the major cost difference between foreign flag ships and US flag ships: insurance. When an international crewmember is sick or injured, their contract ends (pay stops), they are sent to their home country, and told to contact the manning agency when they are well. US crew will normally be given "maintenance and cure" until fit to work, and the company fully expects the mariner to sue for full wages for the time out of work, and for pain and suffering, etc.

 

Now here are some current bunker fuel prices:

 

Los Angeles: High sulfur 380 fuel: $600/mt

Low sulfur 380 fuel: $700-800/mt

Marine Gas Oil: $1000/mt

 

Fuel prices in Honolulu are difficult to track, as there is only one supplier of IF380 bunker fuel there, Tesoro, but based on my experience from a few years back, it normally cost $150-200/mt more than WC fuel.

 

So, for a WC cruise, at least 3/4 of their fuel consumption is $600/mt high sulfur fuel, and 1/4 low sulfur fuel at $700-800/mt.

 

The POA, which will burn about 1/4 the fuel that the WC cruise burns, must burn low sulfur fuel at $850-1000/mt. That brings the fuel cost to around 40% of the WC cruise, not the 25% based on fuel consumption.

 

As I was answering your claim that ticket prices were doubling next year (and I couldn't find that), I said that in 2015, the POA will be required to burn strictly Marine Gas Oil, which in Honolulu is going for $1200/mt, so their fuel cost per ton is double what the WC cruise spends, as they will still be allowed to burn low sulfur bunker oil when outside the US ECA (90% of their steaming time), and only burn MGO when in the ECA. The WC cruise fuel COST would only rise 10-15%, while POA's would nearly double. This would be the economic factor that would drive ticket prices up, if in fact they did go up.

 

Are you really saying that NCL is so stupid as to double ticket prices when the competition can offer a cruise that is twice as long for half the price? Cabin prices are set based on operating cost and an "industry standard" profit margin. Set a price with too low a margin, and you give money away to the competition, since once your ship is full, you cannot grab any more market share to make up for lower profit margin. Set a price too high, and the competition will take the bookings away.

 

My main point has always been that US crew costs are so much higher, that even burning 3-4 times as much fuel, and paying crew costs for twice as long a cruise, and food costs for twice as long a cruise, still are only just offset.

[mdvlprof]

I'd love to do HI cruise. US crew - yay. But DS can't fly, and NCLA doesn't come to mainland. So I'll have to cruise another line when I do HI.

Edited May 28, 2013 by mdvlprof

[Seanote]

Did a little research last night/this morning. Balcony cabin prices for the POA as listed on NCL's website remain in the $2200-2600 range until 2016. Not sure where you got the $5500 price.

From NCL’s web site.

 

7-Day Hawaii Round-trip Honolulu

Ship:Pride of America

Embarkation port:Honolulu

Embarkation:Apr 19, 2014

Disembarkation:Apr 26, 2014

Ports of call:Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail 307153922078

Total Price: $5,484.38

USD5484.38

Number of guests:2

Stateroom type:B1

Stateroom: 9702

 

I skimmed a couple of NCL quarterly and annual reports, and didn't see any specific mention of the POA and its profitability (I may have missed it). Was this record profitability versus the NCL international fleet, or the industry as a whole? (I doubt seriously this would be true) Or was it a record for the Hawaiian operation. Given that the ships lost millions of dollars for years, any profit at all could be claimed to shareholders as a record.

NCL’s financials:

“repositioning two of the line’s Hawaii based ships, which had a significant impact on the profitability of the business”

 

“Beginning in early 2008, we reduced our capacity in the Hawaii market, re-flagging and relocating two of three ships, which significantly reduced crew payroll expenses aboard those ships creating substantial margin expansion.”

 

Interesting quotes from Kevin:

"It's doing well. I see us being here forever, personally," Sheehan said in an interview last week during his first trip to Hawaii since joining NCL.

Looking ahead, "way out in the future," he could see the company committing to a second ship deployed here. But not yet, not in this economy.” From:http://www.mauinews.com/page/content.detail/id/517405/NCL-extends--deployment--of-one-ship.html

 

Are you really saying that NCL is so stupid as to double ticket prices when the competition can offer a cruise that is twice as long for half the price? Cabin prices are set based on operating cost and an "industry standard" profit margin. Set a price with too low a margin, and you give money away to the competition, since once your ship is full, you cannot grab any more market share to make up for lower profit margin. Set a price too high, and the competition will take the bookings away.

Cabin prices are based upon supply and demand. Economics 101. The obscenely low prices from 2008-2009 were a result of excess supply. Now there is excess demand. The cometition is charging half the price of the POA because that is all they can get to fill the ship. It has nothing to do with the expensive payroll of operating a US flagged ship. The current POA high prices are result of demand; people are paying these prices. If the ship was not selling out due to lack of demand, you would see heavy discounting. Look at the sailing prices six weeks from now—definitely way inside of final payment.

 

7-Day Hawaii Round-trip Honolulu

Ship: Pride of America

Embarkation port: Honolulu

Embarkation: Jul 13, 2013

Disembarkation: Jul 20, 2013

Ports of call: Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail 307139422038

Total Price: $6,213.62

USD6213.62

Number of guests: 2

Stateroom type: B1

[chengkp75]

From NCL’s web site.

 

7-Day Hawaii Round-trip Honolulu

Ship:Pride of America

Embarkation port:Honolulu

Embarkation:Apr 19, 2014

Disembarkation:Apr 26, 2014

Ports of call:Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail 307153922078

Total Price: $5,484.38

USD5484.38

Number of guests:2

Stateroom type:B1

Stateroom: 9702

 

NCL’s financials:

“repositioning two of the line’s Hawaii based ships, which had a significant impact on the profitability of the business”

 

“Beginning in early 2008, we reduced our capacity in the Hawaii market, re-flagging and relocating two of three ships, which significantly reduced crew payroll expenses aboard those ships creating substantial margin expansion.”

 

Interesting quotes from Kevin:

"It's doing well. I see us being here forever, personally," Sheehan said in an interview last week during his first trip to Hawaii since joining NCL.

Looking ahead, "way out in the future," he could see the company committing to a second ship deployed here. But not yet, not in this economy.” From:http://www.mauinews.com/page/content.detail/id/517405/NCL-extends--deployment--of-one-ship.html

 

Cabin prices are based upon supply and demand. Economics 101. The obscenely low prices from 2008-2009 were a result of excess supply. Now there is excess demand. The cometition is charging half the price of the POA because that is all they can get to fill the ship. It has nothing to do with the expensive payroll of operating a US flagged ship. The current POA high prices are result of demand; people are paying these prices. If the ship was not selling out due to lack of demand, you would see heavy discounting. Look at the sailing prices six weeks from now—definitely way inside of final payment.

 

7-Day Hawaii Round-trip Honolulu

Ship: Pride of America

Embarkation port: Honolulu

Embarkation: Jul 13, 2013

Disembarkation: Jul 20, 2013

Ports of call: Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail 307139422038

Total Price: $6,213.62

USD6213.62

Number of guests: 2

Stateroom type: B1

 

Okay, you are quoting per cabin prices, not per person, which is what I was using. I don't believe you could ever get a cabin for $800, what I saw was $800 per person.

 

Then you use the comments about moving ships away from Hawaii improving the profitability of the company as a justification that they are making excess profit in Hawaii? If you have 3 ships that are losing money, and you can take two of them to a market where they will make money, and you're only losing money on one ship, yeah, that increases your profitability.

 

Also, see where Sheehan stated that reflagging the vessels "significantly decreased crew payroll expenses" creating profit. Lets see, the Aloha goes from charging (using your example) $800 a week for a Hawaii cruise, and loses millions, to the Sky and charging $450 for 3 days (lets say $900 per week) in the Bahamas, and it is making money, and you tell me it has nothing to do with crew cost?

 

And the WC cruises I quoted were on a per person basis, so they are close to the $5500 per cabin price you are talking about.

 

Again, Sheehan's quote about a second ship, they will be in Hawaii for a long time, due to the legislative nature of their financing. However, his "looking far down the road" is several years from now, and no one can say what can happen in that time.

 

Yes, you would see heavy discounting if the ships were not full, but then the ship would start to lose money again, if it is in fact making money at all. The original business plan of the Genting group (previous owners of NCL through Star Cruises) was that if the ships only broke even they would be satisfied, as their main intention was real estate aquisition (golf courses, tour buses, helicopter tours) in Hawaii, and were using the ships as "loss leaders" to keep from experiencing the PR backlash that the Japanese experienced back in the 90's when they were buying up Hawaii.

[Seanote]

Okay, you are quoting per cabin prices, not per person, which is what I was using. I don't believe you could ever get a cabin for $800, what I saw was $800 per person.

 

Then you use the comments about moving ships away from Hawaii improving the profitability of the company as a justification that they are making excess profit in Hawaii? If you have 3 ships that are losing money, and you can take two of them to a market where they will make money, and you're only losing money on one ship, yeah, that increases your profitability.

 

Also, see where Sheehan stated that reflagging the vessels "significantly decreased crew payroll expenses" creating profit. Lets see, the Aloha goes from charging (using your example) $800 a week for a Hawaii cruise, and loses millions, to the Sky and charging $450 for 3 days (lets say $900 per week) in the Bahamas, and it is making money, and you tell me it has nothing to do with crew cost?

 

And the WC cruises I quoted were on a per person basis, so they are close to the $5500 per cabin price you are talking about.

 

Again, Sheehan's quote about a second ship, they will be in Hawaii for a long time, due to the legislative nature of their financing. However, his "looking far down the road" is several years from now, and no one can say what can happen in that time.

 

Yes, you would see heavy discounting if the ships were not full, but then the ship would start to lose money again, if it is in fact making money at all. The original business plan of the Genting group (previous owners of NCL through Star Cruises) was that if the ships only broke even they would be satisfied, as their main intention was real estate aquisition (golf courses, tour buses, helicopter tours) in Hawaii, and were using the ships as "loss leaders" to keep from experiencing the PR backlash that the Japanese experienced back in the 90's when they were buying up Hawaii.

 

I think our discussion has lost a bit of focus. I went back and re-read the posts. Please correct me if I’m off base here, but from the summation of your points, it appears that you are indicating or insinuation that, on a current basis, NCL’s Hawaii operations are unprofitable, minimally profitable, or may not be profitable in the future—it is tough to determine your actual argument.

 

However, all of the information that I am aware of and able to locate indicates the opposite, although some of the information is circumstantial.

1. Due to the ill-advised decisions of previous management, NCL tried to run three ships in Hawaii and this led to service issues and a huge loss on operations.

2. NCL removed two ships in 2008 and by their own words, turned Hawaii operations profitable. “NCL said in a statement that the Hawaii operations are now profitable and is “extremely pleased with the performance of Pride of America and remains committed to operating seven-day interisland cruises in Hawaii.” From http://www.bizjournals.com/pacific/stories/2008/11/17/daily11.html (this is in November 2008).

3. In 2008, a cabin could be had for $800 per person for the week. In 2011, we paid $1300 per person for a balcony. Current pricing indicates $2000-$3000 per person indicating strong demand, little or no discounting, sold out ships and top-line revenues that are between 150% and 275% higher than when the operation was first reported profitable (based on the numbers presented herein).

4. I cannot argue that crew costs are much higher with the US operation; however, I believe the arrangement NCL made with the government in 2008 allowed them to bring aboard some international crew to work in “non-technical” positions—such as the laundry and the deck department—reducing this expense liability.

5. NCL is able to reap double the pricing of the competition. To wit: The April 19, 2014 sailing for the POA listed in my earlier post with a cost of $5484/week is $392 PPPD (I’m not writing out the math). The April 19, 2014 sailing of the Star Princess 15-day LA to HI is $2,599 PP for a balcony or $173 PPPD! And Princess’s fuel expense for this 5000 mile trip running at WOT for 10 days of the voyage has to be substantially more the NCL’s—despite NCL paying a higher rate per MT.

 

If, by NCL’s own admission that they were profitable in 2008 with 2008 pricing, a reasonable person may conclude that with 2013 pricing, NCL is making a killing.

[Zeno]

I am not sure what the profitability of POA has to do with one's enjoying the cruise.

 

I feel I got what I paid for (a cruise wholly within Hawaii, seeing more of Hawaii

than other cruise lines offer). I am not interested in days-at-sea. My goal was days-in Hawaii and seeing as-much-of-Hawaii as I could within a given time frame without having to change hotels frequently. So I was happy. It all depends on what YOU want out of the vacation. If NCL makes money off my preferences - then fine for them. They are charging what people will pay.

[chengkp75]

I think our discussion has lost a bit of focus. I went back and re-read the posts. Please correct me if I’m off base here, but from the summation of your points, it appears that you are indicating or insinuation that, on a current basis, NCL’s Hawaii operations are unprofitable, minimally profitable, or may not be profitable in the future—it is tough to determine your actual argument.

 

However, all of the information that I am aware of and able to locate indicates the opposite, although some of the information is circumstantial.

1. Due to the ill-advised decisions of previous management, NCL tried to run three ships in Hawaii and this led to service issues and a huge loss on operations.

2. NCL removed two ships in 2008 and by their own words, turned Hawaii operations profitable. “NCL said in a statement that the Hawaii operations are now profitable and is “extremely pleased with the performance of Pride of America and remains committed to operating seven-day interisland cruises in Hawaii.” From http://www.bizjournals.com/pacific/stories/2008/11/17/daily11.html (this is in November 2008).

3. In 2008, a cabin could be had for $800 per person for the week. In 2011, we paid $1300 per person for a balcony. Current pricing indicates $2000-$3000 per person indicating strong demand, little or no discounting, sold out ships and top-line revenues that are between 150% and 275% higher than when the operation was first reported profitable (based on the numbers presented herein).

4. I cannot argue that crew costs are much higher with the US operation; however, I believe the arrangement NCL made with the government in 2008 allowed them to bring aboard some international crew to work in “non-technical” positions—such as the laundry and the deck department—reducing this expense liability.

5. NCL is able to reap double the pricing of the competition. To wit: The April 19, 2014 sailing for the POA listed in my earlier post with a cost of $5484/week is $392 PPPD (I’m not writing out the math). The April 19, 2014 sailing of the Star Princess 15-day LA to HI is $2,599 PP for a balcony or $173 PPPD! And Princess’s fuel expense for this 5000 mile trip running at WOT for 10 days of the voyage has to be substantially more the NCL’s—despite NCL paying a higher rate per MT.

 

If, by NCL’s own admission that they were profitable in 2008 with 2008 pricing, a reasonable person may conclude that with 2013 pricing, NCL is making a killing.

 

What I am saying is that I believe the Hawaiian operation to be minimally profitable at present, and that further price hikes will be caused by fuel costs, not a desire for excessive profits.

 

Please note that when you say that a cabin "could be had for $800pp", that not all cabins went for this price, but many went for the list price, and many at an average between the list price and $800. I knew at the time that there were deep discounts available, but would regularly hear passengers complaining about paying $2000pp back in 2004. So, even if the average price for all cabins was $1400 pp, the increase in cabin price is not as great as you make it.

 

The NRAC (Non-Resident Alien Crew) that NCL was allowed to bring in, doesn't change crew cost at all. I believe I explained in an earlier post about these crew, but here's a short version. Only 25% of unlicensed crew members (anyone who is not a deck or engine officer) can be non-US citizens. In the past, these had to have green card status (resident alien). The NRAC legislation allowed NCL to bring in as many NRAC crew as the wanted, but the total of non-US citizens could still not exceed 25%. These personnel were limited to supervisors in the hotel department, whose experience could be mined to train the US crew. Further, due to US labor laws, and the fact that nearly all crew on the POA are union labor, the NRAC crew are paid at the same pay rate as US crew holding the same position. Therefore, the NRAC crew did not change crew cost, they were just a means of bringing cruise ship experience to the US crew.

 

I believe that I mentioned in earlier post that some of my engine department crew when I ran the international crew, had an overtime rate (for any hours in excess of 8 hours/day, and in the US is normally 125-150% of the straight hourly rate, was $2.35 an hour. This same position with the US crew had a straight hourly rate of $8.50. So, just in wages, the crew cost would be 4 times higher, and then you have to add in the health insurance and credentialing cost to have every crew member carry a mariner's document, and the cost continues to rise.

 

Fuel is the single largest item in operating cost, for every vessel other than POA, where crew cost rivaled or exceeded fuel cost, even for the other two US flag ships.

 

Why do you believe there is that much more demand for the Hawaiian only itinerary, over the WC to Hawaii itinerary? When you add in the airfare difference (from the EC to Hawaii is nearly double EC to WC), it makes the WC to Hawaii trip a no brainer from a cost basis. Why are so many people willing to pay twice as much, and get half as much, when there are alternatives. Why are the WC cruises only charging "what they can get" to fill their ships, when it is a much cheaper alternative to NCL?

 

Further, sea days are gold to cruise companies. The profit in a cruise is not in the cabin ticket price (overhead eats that up), but in onboard revenue (casinos, beverages, etc). One note we always made during the weekly revenue meetings on the Aloha was that we wished we could have a sea day, as that would help our revenue.

 

As stated in earlier posts, food and beverage cost is higher in Hawaii (just ask anyone who has lived there), since nearly everything has to be shipped in. Don't you think that if the Hawaiian operation was such a money making operation, that NCL would trumpet this in their financial reports, as a sign of how well management is doing?

 

Sorry, I feel that the Hawaiian operation has always been more expensive to operate, continues to be more expensive to operate, and will always be more expensive to operate than any other cruise market.

[brettsmom2004]

We cruised POA in 2007, had a wonderful time. We do not like sea days, so the NCL cruise was the best choice for us. The islands were/are beautiful and everything we expected them to be. The ship, crew, entertainment, food was excellent in our book, no problems whatsoever. The cost was well worth it for us.

 

We liked it so much we went again in 2012, but because of a medical emergency we had to leave the ship before she sailed. The attention the crew and medical crew gave to us was unsurpassed in quality. Very professional in every way.

 

We rebooked for 2014 but my friend is still having medical issues and wants to be all clear for the next POA cruise. We cancelled the 2014 and are going to rebook for 2016 as having her procedures are strengthening her veins, the more procedures, the better she will be by 2016...we are looking forward for this next cruise...we love POA and Hawaii!

 

~L~

[Seanote]

Why do you believe there is that much more demand for the Hawaiian only itinerary, over the WC to Hawaii itinerary? When you add in the airfare difference (from the EC to Hawaii is nearly double EC to WC), it makes the WC to Hawaii trip a no brainer from a cost basis. Why are so many people willing to pay twice as much, and get half as much, when there are alternatives. Why are the WC cruises only charging "what they can get" to fill their ships, when it is a much cheaper alternative to NCL?

 

Further, sea days are gold to cruise companies. The profit in a cruise is not in the cabin ticket price (overhead eats that up), but in onboard revenue (casinos, beverages, etc). One note we always made during the weekly revenue meetings on the Aloha was that we wished we could have a sea day, as that would help our revenue.

 

As stated in earlier posts, food and beverage cost is higher in Hawaii (just ask anyone who has lived there), since nearly everything has to be shipped in. Don't you think that if the Hawaiian operation was such a money making operation, that NCL would trumpet this in their financial reports, as a sign of how well management is doing?

 

Sorry, I feel that the Hawaiian operation has always been more expensive to operate, continues to be more expensive to operate, and will always be more expensive to operate than any other cruise market.

 

Thanks for the clarification of the NRAC crew. I do not disagree that the Hawaiian operation just may be the most expensive operation of the mass-market cruise lines (there are small American flagged cruise lines such as American Cruise Lines that have to contend with US regulation as well).

I do surmise that there is more demand for the Hawaii only itinerary. The reason is time. The target customer is middleclass couples and families that do not have 15 days (consecutive) of free time and vacation leave. If they did, some fear being away from work for long periods in a recessionary environment. Also, some/most wouldn’t want to use their limited vacation time on nine days at sea and a stop in Ensenada (I am in this group and would prefer to use that time for another cruise or spending more time in Hawaii.) As NCL is now proving, people will trade money for time, or so it appears.

[chengkp75]

Thanks for the clarification of the NRAC crew. I do not disagree that the Hawaiian operation just may be the most expensive operation of the mass-market cruise lines (there are small American flagged cruise lines such as American Cruise Lines that have to contend with US regulation as well).

I do surmise that there is more demand for the Hawaii only itinerary. The reason is time. The target customer is middleclass couples and families that do not have 15 days (consecutive) of free time and vacation leave. If they did, some fear being away from work for long periods in a recessionary environment. Also, some/most wouldn’t want to use their limited vacation time on nine days at sea and a stop in Ensenada (I am in this group and would prefer to use that time for another cruise or spending more time in Hawaii.) As NCL is now proving, people will trade money for time, or so it appears.

 

Its true that there is a different demographic between the 7 day cruises and the 14+ day cruises. It is the only thing that is keeping the POA around, despite what Kevin Sheehan says.

 

In my opinion, NCL does not do enough in its advertising to stress the fact that the islands are the attraction, not the ship. I feel that they also missed the boat in not pushing their golf package enough. You could get 5 rounds of golf at 5 PGA premier courses, with club rentals, cart, transfers to/from ship for $1000.

 

I had hoped to find a job at NCL where I could spend the last 10-12 years of my career, and retire. Unfortunately, the Hawaiian operation was plagued by bad luck (POA sinking in Germany) and poor personnel policies. In Scandinavian countries, there is a "marine electrical engineer" who works on ships maintaining electrical equipment, and has gone to maritime college and received an engineering degree with an electrical specialty. We normally had 3 onboard, one for elevators, one for galley equipment, and one for engine room equipment. When the US flag operation started, NCL hired some senior marine engineers, and we tried to educate them about US maritime labor. We do not have a license for a marine electrical engineer, and we warned them about advertising for an "electrical engineer" (job title onboard). They proceeded to disregard us, and hired an electrical engineer who works in an office designing electrical systems for buildings. After the $8-10,000 training and credentialing process, he was let go after 5 days as unsuitable for the job as he had never worked with his hands before.

 

The hotel staff problems were worse. They never disabused potential employees from their notion of sitting on deck drinking Mai Tai's in Hawaii, when the reality was a 10 hour day, seven days a week, and then returning to an 8'x12' cabin shared with three other people. The turnover problems and the lack of training and experience were completely the company's fault, not the employees.

 

If NCL had stressed how much better trained the officers and crew were, and how much more stringent the regulations were on US ships, it might have helped fuel some "buy local" sentiment for the ships, and saved some jobs.

 

Oh, well. I've moved on to different ships and different oceans, and only have 6 years to retirement!

[ljwayt]

I have read the thread here on fuel prices, crew prices, etc, none of that matters to me. I know that in April 2010, I took my parents on a cruise for their 50th wedding anniversary and for 3 of us it cost $2800 for a balcony cabin, 10th floor I think. I'd love to go again, but now for 3 people in a balcony cabin, it's over $4500. that's a ridiculous price increase. I don't know what's causing it, but I do know that by the time you add on airfare from Atlanta, and excursions on the cruise, you are pushing $10K for a cruise.

 

I can stay in a hotel on the beach for much less than that. We have been back to Hawaii 4 times since the cruise, 3 times to Oahu and once to the Big island and not ONE of the vacations cost us even close to $10K, including airfare, hotel, rental car, food, etc. We even went at Christmas in Dec 12, when everything is more expensive. My dad is retired Military and we do have the privilege of staying at the Hale Koa, which is much cheaper than normal Waikiki hotels, but still, almost $10K for a 7 day cruise? that's crazy.

 

We went on the NCL EPIC out of Barcelona and with airfare, extra days in Barcelona and cruise it wasn't as much as it would have been to go to Hawaii on the POA. I hope they are filling the ship, it would be a shame to have a few pay so much more because they can't fill it, but I won't be going again, much more price effective to do Hawaii on my own.

 

Actually, just did a check for week of Aug 17, supposed to be a Hot deal! $5300! simply outrageous!

 

7-Day Hawaii Round-trip Honolulu

 

Ship: Pride of America

Embarkation port: Honolulu

Embarkation: Aug 31, 2013

Disembarkation: Sep 7, 2013

Ports of call: Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail

Total Price: $5,364.28

Number of guests: 3

Stateroom type: BA

Edited June 12, 2013 by ljwayt
added Info

[chengkp75]

I have read the thread here on fuel prices, crew prices, etc, none of that matters to me. I know that in April 2010, I took my parents on a cruise for their 50th wedding anniversary and for 3 of us it cost $2800 for a balcony cabin, 10th floor I think. I'd love to go again, but now for 3 people in a balcony cabin, it's over $4500. that's a ridiculous price increase. I don't know what's causing it, but I do know that by the time you add on airfare from Atlanta, and excursions on the cruise, you are pushing $10K for a cruise.

 

I can stay in a hotel on the beach for much less than that. We have been back to Hawaii 4 times since the cruise, 3 times to Oahu and once to the Big island and not ONE of the vacations cost us even close to $10K, including airfare, hotel, rental car, food, etc. We even went at Christmas in Dec 12, when everything is more expensive. My dad is retired Military and we do have the privilege of staying at the Hale Koa, which is much cheaper than normal Waikiki hotels, but still, almost $10K for a 7 day cruise? that's crazy.

 

We went on the NCL EPIC out of Barcelona and with airfare, extra days in Barcelona and cruise it wasn't as much as it would have been to go to Hawaii on the POA. I hope they are filling the ship, it would be a shame to have a few pay so much more because they can't fill it, but I won't be going again, much more price effective to do Hawaii on my own.

 

Actually, just did a check for week of Aug 17, supposed to be a Hot deal! $5300! simply outrageous!

 

7-Day Hawaii Round-trip Honolulu

 

Ship: Pride of America

Embarkation port: Honolulu

Embarkation: Aug 31, 2013

Disembarkation: Sep 7, 2013

Ports of call: Honolulu; Maui (Kahului); Hilo; Kona; Kauai

View itinerary detail

Total Price: $5,364.28

Number of guests: 3

Stateroom type: BA

 

And Princess and RCI are charging $4700-5200 for a 10-12 day cruise around the same time. My point is that it costs so much more for the US flag operations than the foreign flag ships. If NCL was keeping the price artificially high, then the 10 day RCI (pretty similar cruise demographics) would undersell them, and RCI would get the full ships. This even given NCL's advantage of smaller fuel consumption.

 

I don't believe the "ticket", or original price of the cabins has increased all that much since 2004. What has changed is supply (3 ships down to 1 ship) has decreased, and demand has gone up. If NCL was not filling the ships, the price of a cabin would drop. Remember, the cruise lines' philosophy is to sail full, not because they make money on the ticket price, but because they want the onboard revenue. Cabin prices basically cover the ship's overhead, regardless of where it is sailing. Prices remain more stable in places like the Caribbean because there is basically an oversupply of cabins (and while this has been reduced in the last couple years, with lines pulling out of Europe, the capacity in a proven destination like the Caribbean will increase again.

 

I have no doubt that you can vacation in Hawaii for less than the POA price, but the point is, what is the market bearing? Hawaii has always been a more expensive cruise, whether US flag or foreign.

[kcfoxy]

We just came back from POA cruise last week of April into first week of May and were told the ship continued to be 'at or near sellout' every week.

 

Great cruise, by the way, service overall quite attentive and I reviewed it from a disabled pax viewpoint...4.5 out of 5 stars :p

[suzyed]

chengkp

Thank you for posting this! I think it will keep the perspective of what American wages and Hawaiian foodstuffs cost in relation to the cost of a very interesting cruise. As well as the cost of the Coast Guard training certificates for crew members.

 

I have not done a HI itinerary, but my parents have and it was a 15-day out of the Port of Los Angeles (basically a trans-Pacific with Hawaii thrown in). I asked how it was and they enjoyed and then I asked what islands they did, I can't remember now which ones they said, and there was no overnight stay anywhere. I think NCLA has a great product, and wish that people would realize that the U.S. Flagged vessel is a different product from the ones that are flagged in the Bahamas.

 

 

Your comment about support locally is very well put! T

And then a different product than Alaska, Caribbean or the Med etc. Thanks goodness they all have their very own "personality"!

Edited June 13, 2013 by suzyed

[CactusFlower527]

I think it all depends on what you want out of your vacation or cruise experience. Right now, I have no desire to sail out of the USA ------------ that may change one day but for now. A lot of people are shocked to see what 4 of us are paying to sail on POA .. the suite is $10k for the week ... + airfare, hotel in Honolulu beforehand, and rental cars.. not to mention tours & shore excursions. We are not rich people, we've been saving for this for a LONG time I am happy for people who can do Hawaii for less. More power to you. I want to do Hawaii on a cruise ship :)

[Socref124]

I hope NCL does not change the itinerary for the POA.

We sailed on the NCL Star in 2003 which had to make a stop at Fanning Island to satisfy the Jones Act. While Fanning Island was a nice stop, I would prefer more time in the Hawaiian Islands and the overnight stops that they currently have on POA. Our plan now, is to sail on the POA in Feb of 2015.:D

Thanks to the OP for pointing out a lot of things that most of us were unaware of.

[Socref124]

I don't believe the "ticket", or original price of the cabins has increased all that much since 2004.

 

You are correct. The prices now are slightly higher than what we paid in 2003:). They do jump up for 2015 more than they have risen in the last 10 years.:(

[soakedbythesea]

Do you think it was helpful for PoA crew morale that a $500,000+ settlement was paid for overtime, etc. last year? Maybe some fairness that they wanted came through because of the complaining they did before.

Most of what I read on the various boards and reviews indicates that the service charge accessed to each pax is not just for room service and dining like most other ships, but is distributed to crew members around the ship. If the food and service are as bad as we have been warned, maybe those of us who want better service might want to have the service charge removed from our statements and pay gratuities directly to those deserving. Guess we'll decide in January on how it goes.:confused:

Over the past several years we have noticed throughout the cruise industry many changes, like no assistant cabin attendants and more cabins to care, even delivering room service orders. Pay restaurants now are replacing full service ones that were included and menus back down on more expensive cuts. Although Celebrity was impressive.

So, it seems they will eventually go to buffets only for no add'l $ and maybe just do room service once a day and have places people can get their own ice. We are a self-service nation for many things now. Fun?

 

As a former NCL senior engineering officer, having worked on the Pride of Aloha from 2004-08, and keeping the hope of a US flag cruise industry alive, I watch these boards for reviews of NCL's only remaining US flag ship, and it bothers me.

 

Yes, the same complaints are noted that we had back when the project started in 2004, the staff constantly complain to the guests about overwork, and under pay, they aren't as service oriented at the international crew, and just aren't friendly. I get that, and I'm not going to excuse that, it should have gotten better by now.

 

What I want to do is to point out some of the differences between the Pride of America, and EVERY OTHER deep water cruise ship in the world, and what makes those differences.

 

As a US flag vessel, US federal law (not Hawaiian labor laws as I saw mentioned in one review), require that all crew members be either US citizens, or have a "green card".

 

I just read a review today where the reviewer had talked to hotel staff, and was appalled that they were making less than $8/hour, but then stated that the crew was definitely less cordial or helpful than the international staff. I worked with the international staff on the Sky before the reflagging, and I can tell you that I had journeymen ship fitters whose OVERTIME rates were $10/hour. Some jobs paid less than $2/hour. That is one reason the cost of the cruise is so high, and why NCL cannot raise their rates, since they are competing with crews on other lines that make 30% of their wage. If they paid a "fair" US wage, no one would buy the tickets.

 

On internationally crewed ships, only the deck and engine departments are credentialled mariners. Howeve, the USCG requires that all crew who are assigned an emergency station (like all the hotel staff that you see at the muster drill, that is their emergency station) must have a Merchant Mariners Credential, and a TWIC (Transport Workers Identification Card). These cost the employee several hundred dollars to get, and require a full background check. It also requires safety training at USCG certified training centers, and by the time a new employee is ready to walk up the gangway the first time, he/she has cost NCL over $8000.

 

On internationally crewed ships, the staff and crew sign a contract with the company for employment, usually 10 months long. During the time of that contract, if they decide to quit, they cannot just walk off the ship and get a plane back to the Phillipines or wherever. US crew, since the ship is always in US ports, can quit at any time, and the company then needs to find a credentialled, available replacement crewmember.

 

That is tough, as there is no pool of credentialled US cruise ship staff just waiting around for a job, unlike in the Phillipines, where one call to a staffing agency can have an experienced cabin steward on a flight the next day. You can't keep extra crew onboard, as there is no cabin space for them, and no lifeboat space either.

 

Yes, as one reviewer stated, most crew cabins are smaller than the infamously small NCL guest cabins, and there are 3-4 crew in that room, for a full contract. (US hotel staff contracts are normally 4 months on, 1 month off). But that is typical of all cruise ships. However, most of the US crew have never had to share a room before, and it causes some discontent.

 

Getting away from the staff and crew, fuel and food costs for the Pride of America are significantly greater than other ships cruising the Hawaiian islands. Why? Because those other ships always call at a West Coast port, where fuel and food are less expensive than that which is transported to the islands. Fuel costs are in the quarter of a million dollars a week range, and I know that we would load 6-8 tractor-trailers of food every week.

 

Even things like the Christmas trees and Poinsettias on the Christmas cruise had to be flown in.

 

Again, I'm not trying to be a "cheerleader" for NCL, just hoping that people will take their "support local" philosophy with them when they cruise, and understand why things are not the same on the PoA.

 

I'd love to hear comments about the PoA experience from some of you, and it may help, as I know that management reviews these boards as well.

 

My hope is that NCL can make the PoA into a uniquely American cruising experience, one that is both enjoyable and showcases the best that America has to offer.

[Kwaj girl]

You are asking for input - in our experience, POA is akin to staying at a Holiday Inn and eating at Chili's. the best part of our cruise was the staff at the Champagne Bar.

[3onTour]

I think it all depends on what you want out of your vacation or cruise experience. Right now, I have no desire to sail out of the USA ------------ that may change one day but for now. A lot of people are shocked to see what 4 of us are paying to sail on POA .. the suite is $10k for the week ... + airfare, hotel in Honolulu beforehand, and rental cars.. not to mention tours & shore excursions. We are not rich people, we've been saving for this for a LONG time I am happy for people who can do Hawaii for less. More power to you. I want to do Hawaii on a cruise ship :)

 

Ditto & AMEN! Literally in the same boat! Expensive, yes! But saved two years to take this trip with my entire immediate family including, DH (celebrating his 2 year birthday after heart transplant), children & 2 DGD's. This makes it priceless for me! Can't take it with me and I prefer to enjoy it "with" them as to the alternative.

Besides, currently POA has a lock on visiting multiple Hawaiian islands in 7 days. Will I do this every other year, No! But for this trip, it meets our needs.

 

 

Sent using the Cruise Critic forums app

[chengkp75]

Do you think it was helpful for PoA crew morale that a $500,000+ settlement was paid for overtime, etc. last year? Maybe some fairness that they wanted came through because of the complaining they did before.

Most of what I read on the various boards and reviews indicates that the service charge accessed to each pax is not just for room service and dining like most other ships, but is distributed to crew members around the ship. If the food and service are as bad as we have been warned, maybe those of us who want better service might want to have the service charge removed from our statements and pay gratuities directly to those deserving. Guess we'll decide in January on how it goes.:confused:

Over the past several years we have noticed throughout the cruise industry many changes, like no assistant cabin attendants and more cabins to care, even delivering room service orders. Pay restaurants now are replacing full service ones that were included and menus back down on more expensive cuts. Although Celebrity was impressive.

So, it seems they will eventually go to buffets only for no add'l $ and maybe just do room service once a day and have places people can get their own ice. We are a self-service nation for many things now. Fun?

 

Hadn't seen that (been away on a ship), and glad that it happened, but somewhat surprised at the findings. Unlike the international crews, the hotel crew on POA are unionized, so their collective bargaining agreement pretty much trumps federal overtime laws, if the agreement limits the amount of overtime. All US maritime unions specifically call out safety drills as not payable as overtime. There was also a big hoop-de-do back in 2006 when NCL installed time clocks around the ship, and they were recording work hours this way. Wonder if supervisors were telling crew not to clock in for turn-around day? We had auditors out from corporate back then about the amount of overtime, a lot of which was caused by the time clocks. Due to collective bargaining agreements, sometimes if a crew clocked in 5 minutes early, they were paid a full hour.

 

Can't say that the crew doesn't deserve a pay increase, its been a long time coming. Most of the hotel crew could make more money, and be home every night, flipping burgers at McD's. Hopefully, this will solve some more of the problems the ship has had over the years.