Fixing Carnival Corp and its Brands

[cbr663]

Interesting article: http://abcnews.go.com/Travel/wireStory/man-charged-fixing-cruise-giant-carnival-24008443?singlePage=true

 

In its latest financial reports, Carnival reports that revenue is down and so is the number of passengers sailing on its brands. One thing that I have noticed is that while some of Carnival Corp's competitors appear to be introducing newer ships with many options, with over 100 ships in its inventory, it doesn't appear that Carnival Corp is investing in new ships. With a useful life of 30 years, Carnival should be introducing at least 3 new ships every year within its brands, yet we don't see much evidence of this.

[POA1]

Here's the order book, updated this week.

 

http://www.cybercruises.com/orderbook.htm

 

Even RCCL, with an aggressive build schedule isn't pumping out ships at the pace you prescribe. Their Celebrity brand has nothing on the books.

[Tonka's Skipper]

You cannot keep building ships with the cruise market down and reduced cruise prices...........especially Carnival Line it self, with some vessels and cruises at almost give away prices.

 

RCCL is also having problems, discounting prices, but they just cut steel for the next monster (Oasis) class vessel(the 3rd) and have ordered the 4th. I think thy are way to big, but they must have a market for them

 

NCL is building new ships but not trying to grow in size. That way they can still offer reduced prices and sell many cabins.

 

DCL keep selling at their price level (with few if any discounts) and still selling cabins and often sailing with fully loaded vessels. They have the Disney Magic and people flock to them.

 

Carnival Inc. are continuing to have their problems, I would not be surprised if the broke up and sold off lines or even reduced Carnival line vessel levels in a effort to get into a good profit zone again.

 

 

AKK

[SeaBands]

coming next year. Carnival is constantly updating their existing ships in all their lines. The 2 HAL ships going to P&O will be refitted. I sure don't want to sail on a ship with 5000 other people. And Norweigan's policies.

[Tonka's Skipper]

coming next year. Carnival is constantly updating their existing ships in all their lines. The 2 HAL ships going to P&O will be refitted. I sure don't want to sail on a ship with 5000 other people. And Norweigan's policies.

 

 

 

Refitting is fine to a point, but the age of the fleet will catch up sooner or later.

 

You kinda demonstrated my point, Hal is gaining 1 new vessel( 2 1/2 years away), but losing two older ones (the Statendam and another) to P O in he Australian trade. Even with refitting those vessels are nearing the end of 1st class cruise service and will likely be sold off within 10 years.

 

I would also point out that much of the Carnival line refitting is bringing their vessel up to codes and requirements that the vessel class and underwriters and governing agencies are requiring after all the issues over the years.

 

AKK

Edited June 5, 2014 by Tonka's Skipper

[sail7seas]

Is HAL's new Pinnacle Class Ship due to join the fleet in 2016 or 2015?

Edited June 5, 2014 by sail7seas

[sunsetbeachgal]

Princess, part of the Carnival family, brought out a large new ship last year, the Royal Princess and her sister ship the Regal Princess just entered service last month.

Edited June 5, 2014 by sunsetbeachgal

[cruz chic]

Is HAL's new Pinnacle Class Ship due to join the fleet in 2016 or 2015?

 

I thought it was Feb 2016. If it's coming out in 2015 that's new.

[iancal]

Not great for HAL. Their ships are older. And they are smaller-which apparently means not or not as profitable.

 

IF Carnival start cutting you can be sure that the first ships to go will be the older ones that have higher operational costs/higher emissions or require infusions of capital. It will include the ships that are loosing money, breaking even or those that are simply not meeting the minimum revenue and profit targets that are acceptable to Carnival Corp.

 

I have lived through/worked through a few downsizings and mergers etc. It gets brutal and the bean counters all have their pencils sharpened and their microscopes laser focussed.

Edited June 5, 2014 by iancal

[cbr663]

I think that the goal of having the brands work better together is a good one. A great start would be a standardized passenger reward program that would be recognized on all the brands. It's a little eye opening to read that the heads of the 10 brands had never sat together before.

[sail7seas]

It wasn't so long ago many here were saying what a good thing it was that Carnival let HAL run it's own cruise line without (much) interference. We thought it a good thing that all the years since Carnival Corp. bought HAL, HAL has been (mostly) allowed to run independently. That seems to have changed.

[Gail & Marty sailing away]

I am sure the there will be many changes ..

[Krazy Kruizers]

Carnival is definitely influencing HAL.

[PathfinderEss]

I would hope that they would still let each of Carnival's brands run their own programs but looks like as others have alluded to, that is going to change. To bad because as they grow closer together in style, what difference will it make who you chose to cruise on? Looks like the cruise industry is going to make that choice for us.:(

[VioletHorse]

I think that the goal of having the brands work better together is a good one. A great start would be a standardized passenger reward program that would be recognized on all the brands. It's a little eye opening to read that the heads of the 10 brands had never sat together before.

 

 

I'm guessing that if that happened, there would be a wholesale downgrading of perks for all loyalty levels on all Carnival Corps.' cruise lines. The current cruise line economic model is focused on cutting costs. It's highly unlikely that there would be an increase in the quality or quantity of loyalty perks, only an increase in the number of passengers eligible for those perks. That doesn't fit the cost cutting model unless perks are significantly decreased.

[POA1]

I would hope that they would still let each of Carnival's brands run their own programs but looks like as others have alluded to, that is going to change. To bad because as they grow closer together in style, what difference will it make who you chose to cruise on? Looks like the cruise industry is going to make that choice for us.:(

 

The article talked about purchasing efficiencies from consolidation of the buying of things like cleaning supplies.

 

But Carnival also needs to capitalize on its massive size. That means negotiating — for the first time — deals with one set of vendors for food, cleaning supplies and towels. A simple concept, but until Donald took over the 10 brand heads had never even met together.

 

The article also went on to say that the brands were king.

 

It's like no one reads their homework reading assignment anymore. :)

[iancal]

I have no doubt that if HAL's financial were in good shape and were meeting revenue and profit targets, Carnival would let HAL do it's own thing.

 

It is when targets are missed that I would expect Carnival to step in and 'help' HAL's management team get back on plan. This is a business.

Edited June 5, 2014 by iancal

[Germancruiser]

I really do hope that they stick with what set´s HAL apart ( for example the wrap round prommenade deck) in their newbuilts. Thats why moved from Celebrity to Carnival. When RCI got their behemots out which grew bigger and bigger I moved from them to Celebrity- now since they try to attract a " livlier group of passengers or try to get a lively atmosphere ( loud music , constant background music) I am trying HAL!

[barante]

On a recent HAL Amsterdam trans-Panama cruise, CD Gene Young referred publicly to something he said happened with HAL and Princess recently. I went to him later to ask for clarifications. He said Princess is now in the same division, under the thumb of HAL. He said this was because Princess was far less successful than HAL.

 

I found this kind of odd. I did a web search and, IIRC, found out that HAL/Princess are now operatively under P&O. This makes no sense to me.

 

Can anyone enlighten?

[sail7seas]

The President/CEO of HAL was named as head of a new grouping which includes Princess and HAL. I seem to think Seabourn is part of the group. Stein Kruse is now in charge of this new entity.

[POA1]

I found this kind of odd. I did a web search and, IIRC, found out that HAL/Princess are now operatively under P&O. This makes no sense to me.

 

Can anyone enlighten?

 

Structurally, Stein Kruse is CEO of the new Holland America Group, which will include oversight of Holland America Line, Seabourn, Princess Cruises, and Holland America & Princess Alaska land operations.

 

This all took place in 3Q 2013, if I remember correctly.

 

The Holland America Group operates 41 cruise ships with over 36,000 employees worldwide.

 

Kruse also replaced Micky Arison as chairman of the board of MANCO, the UK-based entity which oversees operations of Carnival Australia including P&O Cruises, the number one cruise line in the Australian market.

 

So you have two operating units headed by the same executive.

 

Make sense? (If this is hard to follow, go look at the structure of General Electric or AT&T. Your head will bulge at the sides before exploding.)

Edited June 6, 2014 by POA1

[sail7seas]

Many of the executives who manage HAL hold the same positions for Seabourn. When Seabourn closed it's Florida headquarters and moved into Elliott Avenue in Seattle (HAL building), the positions overlapped between the two cruise lines.

[PathfinderEss]

The article talked about purchasing efficiencies from consolidation of the buying of things like cleaning supplies.

 

 

 

The article also went on to say that the brands were king.

 

It's like no one reads their homework reading assignment anymore. :)

 

I'm sorry, I did my homework. My comment were like I said, what some of the other post had alluded to.

[POA1]

I'm sorry, I did my homework. My comment were like I said, what some of the other post had alluded to.

 

I was just trying to make a joke. Unsuccessfully, I see. :)

[kennicott]

I have no doubt that if HAL's financial were in good shape and were meeting revenue and profit targets, Carnival would let HAL do it's own thing.

 

It is when targets are missed that I would expect Carnival to step in and 'help' HAL's management team get back on plan. This is a business.

 

 

 

I find some of these posts a little peculiar when focusing on a perceived blemish in HAL's management and marketing strategy. When only 8 months ago it was widely publicized that CCC's, CEO, Donald instituted a massive reorganization which merged the upper hierarchy of Princess, HAL and Seabourn. Donald put the current CEO of HAL, Stein Kruse, in charge of this consolidation, as CEO of, get this, the new "Holland America Group". Guess Donald didn't get the message that Kruse was an abysmal failure taking HAL down the rat hole.

 

"The newly formed Holland America Group will include Princess Cruises in their portfolio of companies. The expanded division also includes Holland America Line, Seabourn Cruise Line and Holland America/Princess Alaska land operations. The new Holland America Group operates a combined total of 41 cruise ships with over 36,000 employees worldwide. Stein Kruse, currently president and CEO of Holland America Line, is being appointed CEO of the Holland America Group, adding to his current responsibilities of Holland America Line and Seabourn."

 

http://maritimematters.com/2013/11/executive-shuffles-at-princess-carnival-and-the-new-holland-america-group/