Share price drop

[wowzz]

28 minutes ago, Pentlands said:

There is a general fall in travel company shares. Look at Saga and see its 80% fall!!

 

Yes, but the fall in Saga shares is due to the performance of it's insurance business,  not the travel side of the company. 

[Pentlands]

It is also due to a fall in travel bookings, also look at TUI, Thomas Cooke and others. Perhaps Brexit, perhaps better weather in UK. Whatever PO is in common with other travel industries and falling, with little prospect of rising!

 

[kruzseeka]

8 hours ago, Pentlands said:

It is also due to a fall in travel bookings, also look at TUI, Thomas Cooke and others. Perhaps Brexit, perhaps better weather in UK. Whatever PO is in common with other travel industries and falling, with little prospect of rising!

 

^

I think there is a serious growing issue of filling all the ever larger cruise ships.   At some point, surely supply is likely to outstrip demand.  We see cabins offered at incredible prices compared with the past - you could argue that huge ships provide an economy of scale and therefore more competitive pricing but even so, late deals indicate unsold cabins and over capacity across the cruise industry.  Clearly companies are doing a hard sell on the concept of cruising to virgin cruisers - they have to increase their customer base but there has to be a point at which thus will tail off.  Once saturation point is reached, building more and more ships is surely questionable especially in the context of the other issues raised on this thread.

[terrierjohn]

On 6/21/2019 at 11:13 PM, Tommart said:

Brexit indeed:

 

One little-noticed culprit: Brexit.

The U.K.’s on-again-off-again exit from the European Union has rattled the region’s economy and put consumers there on edge. That makes it tougher for Carnival to attract local customers to those cruise routes.

 

Ah those Brexit dividends we keep getting promised by the Leave Liars.......

Not sure how Trumps decision on cruises to Cuba and Carnival Vista's 3 week unscheduled maintenance can be blamed on Brexit, but for those determined to thwart the exit vote I suppose it seems reasonable.

[terrierjohn]

9 minutes ago, kruzseeka said:

^

I think there is a serious growing issue of filling all the ever larger cruise ships.   At some point, surely supply is likely to outstrip demand.  We see cabins offered at incredible prices compared with the past - you could argue that huge ships provide an economy of scale and therefore more competitive pricing but even so, late deals indicate unsold cabins and over capacity across the cruise industry.  Clearly companies are doing a hard sell on the concept of cruising to virgin cruisers - they have to increase their customer base but there has to be a point at which thus will tail off.  Once saturation point is reached, building more and more ships is surely questionable especially in the context of the other issues raised on this thread.

Where are these major price reductions, I check the travel pages in the papers and don't see any fire sale prices? 

[kruzseeka]

43 minutes ago, terrierjohn said:

Where are these major price reductions, I check the travel pages in the papers and don't see any fire sale prices? 

For example, I saw a Cunard 14 day Iceland cruise recently starting at less than £1200 in September  - not typical Cunard price I think.  There's also a Med Oct cruise on Cunard at around £1250 for 14 nights.  Princess 14 nt starting price £1115 in August.  As is often posted on here cruise prices now are often no more than prices paid some considerable time ago. A check of the equivalent value of £1250 today compared with 2004 is £804.  I doubt Cunard were selling 14 night cruise at that price in 2004.  Certainly 15 years ago we were paying as much, often more than we do now - and in the context of inflation I think this represents a significant price drop.  

Edited June 23, 2019 by kruzseeka

[terrierjohn]

3 minutes ago, kruzseeka said:

For example, I saw a Cunard 14 day Iceland cruise recently starting at less than £1200 in September  - not typical Cunard price I think.  There's also a Med Oct cruise on Cunard at around £1250 for 14 nights.  Princess 14 nt starting price £1115 in August.  As is often posted on here cruise prices now are often no more than prices paid some considerable time ago.  Certainly 15 years ago we were paying as much, often more than we do now - and in the context of inflation I think this represents a significant price drop.  

I don't think that a little under £100 pppn for an inside cabin represents an INCREDIBLE price or anywhere near it.

[kruzseeka]

36 minutes ago, terrierjohn said:

I don't think that a little under £100 pppn for an inside cabin represents an INCREDIBLE price or anywhere near it.

 

1 hour ago, terrierjohn said:

Where are these major price reductions, I check the travel pages in the papers and don't see any fire sale prices? 

 

Since you want to engage in pedantics, my original comment was 'We see cabins offered at incredible prices compared with the past' - not about fire sales.  And to return to the main thrust of my point is that in comparison current prices are a lot cheaper and that continuing to build more and ever bigger ships may not be sustainable.  

[wowzz]

I always take these lead-in prices with a big pinch of salt. The prices are for the worst cabins in the ship. The price you will pay for a decent cabin will be nothing like the advertised price. 

[kruzseeka]

2 hours ago, wowzz said:

I always take these lead-in prices with a big pinch of salt. The prices are for the worst cabins in the ship. The price you will pay for a decent cabin will be nothing like the advertised price. 

 That's true even at launch.

[funinhounslow]

Sobering read about Carnival's woes in Europe, and it mentions over capacity in relation to the German cruise line Aida

 

https://apple.news/ApX9CZXz_RHKFeeyBI6r3jw

[daiB]

On 6/23/2019 at 2:21 PM, kruzseeka said:

 That's true even at launch.

 

???

 

Sorry don’t understand, as one who books on launch how can the lead prices not be the better cabins. At launch you can see the price of any cabin. I have booked at every launch for at least 10 year.

 

P&O’s prices still seem to be holding up despite today’s difficult conditions. As an example I am still amazed at how well Iona’s prices are holding up considering the same cruise is being offered over and over again.

[kruzseeka]

37 minutes ago, funinhounslow said:

Sobering read about Carnival's woes in Europe, and it mentions over capacity in relation to the German cruise line Aida

 

https://apple.news/ApX9CZXz_RHKFeeyBI6r3jw

 

That seems to be a fairly comprehensive review of the problems facing cruise operators.  You have to question building more and bigger ships - unless they are more economical and will replace mid-size ships.  

 

3 minutes ago, daiB said:

 

???

 

Sorry don’t understand, as one who books on launch how can the lead prices not be the better cabins. At launch you can see the price of any cabin. I have booked at every launch for at least 10 year.

 

P&O’s prices still seem to be holding up despite today’s difficult conditions. As an example I am still amazed at how well Iona’s prices are holding up considering the same cruise is being offered over and over again.

 

That response was to the reference to the lead-in prices being advertised would be for the cheapest and lowest grade cabins.  The poster was making the point that the prices I quoted as examples would be the cheapest fares available - as is the case at any time either at launch or last minute.  Price are 'from'.....£xxx  

[funinhounslow]

There is another thread running discussing the best way to buy Carnival shares with several posters suggesting now is a good time to buy in view of the recent share price drop and perk of "free" OBC for shareholders.

 

I have suggested that the OBC perk should not be a consideration when purchasing shares in especially in light of the gloom noted above but they aren't having it.

 

It seems that the OBC perk plays the same role as "free" drinks in a Vegas casino - the gambler waiting for his $5 beer while losing $25 hands at the blackjack table...

[davecttr]

11 minutes ago, funinhounslow said:

There is another thread running discussing the best way to buy Carnival shares with several posters suggesting now is a good time to buy in view of the recent share price drop and perk of "free" OBC for shareholders.

 

I have suggested that the OBC perk should not be a consideration when purchasing shares in especially in light of the gloom noted above but they aren't having it.

 

It seems that the OBC perk plays the same role as "free" drinks in a Vegas casino - the gambler waiting for his $5 beer while losing $25 hands at the blackjack table...

the OBC was the reason I bought my 100 shares and it has paid off handsomely over the years. I am close to covering the entire £2200 the shares cost. I also get quarterly tax paid dividends which increase every time the pound drops in value against the dollar. With only those dividends it is still a good investment. when I stop cruising I might sell the shares if I need the capital.

[terrierjohn]

1 hour ago, Harry Peterson said:

BARCLAYS FORECASTS ROUGH SEAS AHEAD FOR CARNIVAL

(Sharecast News) - Barclays has cut its recommendation for cruise operator Carnival over concerns earnings will continue to suffer from weak European demand.
Last week Carnival - which is dual-listed in New York and London - saw its share price slide after cutting its full-year profit forecasts. The company blamed Washington\'s surprise decision to ban cruises going to Cuba and weakening demand in Europe. Around 19% of Carnival\'s total passengers came from mainland Europe in 2018.

Taking over coverage of the UK listed stock, Barclays analyst Vicki Stern said: \"While we never like to be reactive to bad news that has already affected sentiment and the stock price, Carnival\'s challenges in Europe, which could continue into next year, make it difficult for us to justify a rating on par with Royal Caribbean Cruises and Norwegian Cruise Line Holdings, which face stronger growth catalysts.

\"With significantly lower yield growth expectations for 2019 and potentially 2020 versus that of Royal Caribbean Cruises and Norwegian Cruise Line Holdings, we believe that Carnival will continue to underperform.\"
 

 

For what it's worth...........

That's an interesting article HP but it hardly supports the over capacity claims as being the reason for the profits warning that some, including you, are claiming.  This analyst seems happy to stick with Royal Caribbean and NCL, even though they are equally culpable as regards building new capacity.

[funinhounslow]

I am talking about the decision to buy *today* despite assessments they the share will continue to underperform.

 

I don't quite understand the importance attached to OBC. To get any sort of return you have to book a two week cruise - at significant expense- to get £150.

 

If the price of your cabin changed by £150 (in either direction) just after booking, would you really be that bothered?

[terrierjohn]

12 minutes ago, davecttr said:

the OBC was the reason I bought my 100 shares and it has paid off handsomely over the years. I am close to covering the entire £2200 the shares cost. I also get quarterly tax paid dividends which increase every time the pound drops in value against the dollar. With only those dividends it is still a good investment. when I stop cruising I might sell the shares if I need the capital.

Whilst I would normally agree that buying shares just for the freebie perks is not a sensible option, I do agree with you Dave that in the case of Carnival it really is a no brainer for regular cruisers. I was fortunate to buy mine just after the Costa Concordia incident so they sit at much less than £2000 in my portfolio and, whilst I have not audited my returns it must amount to thousands with 7 years of dividends and at least 2 fourteen night cruises every year.

[Harry Peterson]

12 minutes ago, funinhounslow said:

I am talking about the decision to buy *today* despite assessments they the share will continue to underperform.

 

I don't quite understand the importance attached to OBC. To get any sort of return you have to book a two week cruise - at significant expense- to get £150.

 

If the price of your cabin changed by £150 (in either direction) just after booking, would you really be that bothered?

You’re right but you’ll never convince the diehards that buying shares just for the perks makes little sense.

 

There are some clear warnings for the future share price, and there may well be a buying opportunity. I doubt this is it though.

[funinhounslow]

1 minute ago, Harry Peterson said:

You’re right but you’ll never convince the diehards that buying shares just for the perks makes little sense.

 

There are some clear warnings for the future share price, and there may well be a buying opportunity. I doubt this is it though.

Well I think my point has been proven with the examples above of "staying at the table" when you've doubled your money rather than "cashing out". The cocktail waitress will be round again soon...

[BrianI]

The dividend on 100 shares is currently $200 per year which is around £160 at the current exchange rate. So you would get a total return of £310 which is around 8% on an investment of £3500. Where else can you get such a return. I agree that it is not worthwhile buying the shares if you only intend to do one cruise only but if you intend to do several in future, then it is a good investment.

If you cruise with a dollar based ship, such as Cunard or Princess, then you get $250 on a two week cruise. This is worth about £196 at current exchange rates.

 

Brian

[BrianI]

Fact sheet on Carnival PLC

 

https://www.hl.co.uk/shares/shares-search-results/c/carnival-plc-ordinary-usd1.66

 

Make your own mind up

 

Brian

[funinhounslow]

7 minutes ago, BrianI said:

The dividend on 100 shares is currently $200 per year which is around £160 at the current exchange rate. So you would get a total return of £310 which is around 8% on an investment of £3500. Where else can you get such a return. I agree that it is not worthwhile buying the shares if you only intend to do one cruise only but if you intend to do several in future, then it is a good investment.

If you cruise with a dollar based ship, such as Cunard or Princess, then you get $250 on a two week cruise. This is worth about £196 at current exchange rates.

 

Brian

 

Your figures are skewed because you are ignoring the significant cost of the two week cruise you need to purchase to get that "free" £150.

 

And when planning future holidays are you more inclined to book a Carnival cruise because of the "free" OBC rather than do something else?

 

When purchasing shares its usually a good idea to do a bit of research about the company you're considering buying. There is a lot of material about Carnival - can you find one that recommends they are currently a good buy in light of the OBC perk?

 

But my main point is this - if you purchased a two week cruise and the price changed  (up or down) by £150 the day after booking would you be remotely bothered? 

[BrianI]

24 minutes ago, funinhounslow said:

 

Your figures are skewed because you are ignoring the significant cost of the two week cruise you need to purchase to get that "free" £150.

 

And when planning future holidays are you more inclined to book a Carnival cruise because of the "free" OBC rather than do something else?

 

When purchasing shares its usually a good idea to do a bit of research about the company you're considering buying. There is a lot of material about Carnival - can you find one that recommends they are currently a good buy in light of the OBC perk?

 

But my main point is this - if you purchased a two week cruise and the price changed  (up or down) by £150 the day after booking would you be remotely bothered? 

See the fact sheet referenced in my post #50 where 4 of 5 brokers forecast Carnival as a strong buy. This is based on fundamentals not including OBC. 

 

I do not buy a cruise just for the OBC. I am going anyway so the extra OBC is just a bonus. 

 

Each person can make their own mind up and it may not be suitable for some who do not wish, or are unable, to commit a large sum of money

 

Brian

[Harry Peterson]

48 minutes ago, BrianI said:

The dividend on 100 shares is currently $200 per year which is around £160 at the current exchange rate. So you would get a total return of £310 which is around 8% on an investment of £3500. Where else can you get such a return. I agree that it is not worthwhile buying the shares if you only intend to do one cruise only but if you intend to do several in future, then it is a good investment.

If you cruise with a dollar based ship, such as Cunard or Princess, then you get $250 on a two week cruise. This is worth about £196 at current exchange rates.

 

Brian

That's fine, but it ignores the risk of capital loss.  By way of example, if you'd bought 100 shares last October when the price dropped to quite a low point and looked like a good time to buy, you'd have lost almost £800 in just eight months.

 

And if you chose to buy at the peak a few weeks earlier (bear in mind that at that point nobody knew it was a peak) the loss would be £1600 in 10 months.

 

Those losses dwarf any OBC, but that tends to get forgotten.

 

Nobody knows how the future will pan out, but the financial pundits such as Barclays take a pretty dim view. All sorts of reasons, including the Brexit catastrophe, but overcapacity certainly a factor, and the race to the bottom by cutting prices and quality. Do that too much, though, as arguably P&O has done, and you end up losing your higher spending, more profitable, customers and replacing them with the same number of less profitable ones.