Seabourn and the current issues surrounding the Corona Virus

[Rambo_Trout]

7 minutes ago, HappyFeet13 said:

Thanks, Rambo_Trout.  Great explanation!

My Pleasure.

 

Regards, Kevin

[florisdekort]

6 hours ago, 3418ahl said:

Funny, when our Ovation cruise was cancelled, I booked a new cruise for August.  They managed to process my payment within 24 hours.  I decided that was to soon to cruise again and cancelled.  They have not managed to return my payment for eight days.

We were told by Seabourn on Friday that the current backlog for processing refunds to credit cards is 60 to 90 days. I don’t know if that is because they have to process so many or because they are out of cash. Or both. 

[teamflames]

2 hours ago, sleeper9 said:

The world is struggling with this awful pandemic.  Our health care systems are on the verge of being overwhelmed.  People are dying alone in ICUs, no friends or family allowed.  Businesses are shuttered and unemployment is ramping up to unheard of levels.  People suddenly without their paychecks can't make rent or afford their health insurance premiums.  The stresses on families and individuals is increasing daily.  People are worrying about their own health, the health of their children, their parents and grandparents.

 

What a nice break from reality to come to this forum and hear people stressing over whether they might have to settle for a 100% FCC, worrying if they may not get their refund in 2 weeks, but in 8-12 weeks, concerned that Seabourn isn't giving them the level of customer service they would like during this crisis.

 

I have an upcoming cruise, that yes I know will be cancelled.  Yes, they will get around to cancelling it, probably sooner than later.  Would I like the cash back in my account? Sure!  Might I receive a FCC instead? Very possibly.  What I don't plan to do is stress over it.  Seabourn is operating out of Seattle which means employees working from home.  Seabourn has safely gotten all of their passengers home, Covid-19 free.  Now they are dealing with the logistics of crew, ships, suppliers, and closed ports while the world around them changes by the hour. For the sake of all of the crew, the agents, the tour guides, the hotels, and the countless local economies they fuel around the world, I pray for their success in weathering this crisis. 

 

I suggest we all take a deep breath and relax.  In the mean time keep yourselves and your communities safe.  See if there is a way you can support your truly stressed and overworked health care providers.

 

I'm looking forward to raising a glass onboard a Seabourn ship in the future, hopefully the not too distant future.  Stay Safe!

 

 

 

It is possible to compartmentalise. My feeling on Covid19, healthcare, my family etc are different to what we discuss on here specific to Seabourn.

My views that Seabourn is delaying payment as a normal part of business to extend cash flow rather than simply because they are overwhelmed with manual processes is a completely separate issue with my thoughts on what is happening elsewhere.

I also suggest if you are looking for a positive break a bit thread about the virus is not the new to participate in. I can suggest the Seabourn sailors fb page, lots of positive posts on there from people reminiscing or sharing what they are up to at home. 

[tv24]

1 hour ago, florisdekort said:

We were told by Seabourn on Friday that the current backlog for processing refunds to credit cards is 60 to 90 days. I don’t know if that is because they have to process so many or because they are out of cash. Or both. 

Not good news, Floris, but thanks for passing it along.

[westmount]

Logic dictates that they are working on recapitalizing, and thus future cruise credits the only currency that will be coming shortly. If they were to file for protection, everyone will be happy with a future credit, as it is possible a new firm would not honour any past obligation. 
the ship builders are the ones in trouble, so I imagine their backers or nations will be front and Center in any bailout. If you have a crystal ball, just look where the jobs are located in the industry and you’ll see where the money will come from, it always does. Florida will pay, Italy will pay, Asian countries who citizens are major parts of the crews will pay.

the airlines started giving future credits for flights they canceled , see no reason the cruise lines don’t announce the same policy. Want to go sue the cruise line? Remember the flags they fly on the ships, there’s a reason for it. They are literally nations on their own, make their own rules and will survive.There  will be plenty of time to buy the stock, but if you want a good date, try the day the NBA announces play is restarting with a live crowd.

[cruiseej]

 

19 hours ago, 3418ahl said:

Funny, when our Ovation cruise was cancelled, I booked a new cruise for August.  They managed to process my payment within 24 hours.  I decided that was to soon to cruise again and cancelled.  They have not managed to return my payment for eight days.

 

13 hours ago, florisdekort said:

We were told by Seabourn on Friday that the current backlog for processing refunds to credit cards is 60 to 90 days. I don’t know if that is because they have to process so many or because they are out of cash. Or both. 

 

I think it's worth noting that there are significant differences in processing payments and refunds. Processing a payment is automatic or nearly so; just think about making any online purchase, where processing can be instantaneous. But refunds in most cases require some amount of manual processing. With large sums, you can be sure that refunds must be reviewed and approved by someone to make sure they're paying out the correct amount. Cruise cancellations are more complex, likely requiring a bit of manual review and processing. People make multiple payments, often via different credit cards. Credit cards which were charged, in some cases a year to two earlier, may have been closed or have new account numbers. Then there are travel agents who get paid commissions; TAs typically get paid after final payment but before cruising, so there's added accounting and tracking because those commissions paid need to be written off. Add to that that the policies for cruise cancellations have changed several times in terms of what is refundable and what is convertible to FCC, so automated rules in computer systems need to be revised or manually overridden. Some cancellations have excursions, pre- or post- hotels, and other paid extras which need to be voided.

 

In my business (which is nothing like cruises), processing refunds doesn't take long, but probably takes 3 to 5 times the amount of time and documentation than a sale does. I don't know the inner workings of a cruise line's systems, but I can understand that it takes much more human action and review to issue refunds than it does to process payments. And a cruise line like Seabourn probably had a handful of people who processed refunds, while now they suddenly have to process a hundred times more refunds than normal, so new staff need to be trained to do refunds while everyone is working from home. 

[Rambo_Trout]

16 hours ago, Robisan said:

 

This was published March 15th and may only reflect the view of the author (a Carnival shareholder) at this time, but it appears Motley Fool has changed their view.

 

Will Carnival Survive the COVID-19 Crash?

Mar 27, 2020 at 9:57AM

 

Conclusion:

 

Based on the obligations Carnival has ahead, it has a challenging future, and investors buying now may simply be buying a sinking ship. They should be on the lookout for better-positioned companies in the market.

 

More from the article:

 

Here are Carnival's debt maturities by year as of Nov. 30, 2019.  

Year -- Annual Debt Maturities

2020 -- $1.83 billion

2021 -- $1.92 billion

2022 -- $1.35 billion  

2023 -- $2.23 billion

2024 -- $680 million

Thereafter -- $3.63 billion

Total -- $11.63 billion

 

Since that November date, Carnival withdrew the remaining $2.8 billion of its $3.0 billion revolving credit facility, which expires in 2024, to bolster the $518 million in cash it had on the balance sheet.   What investors will want to note is the debt that's coming due in the next year while this crisis will be in effect.

 

~~~

 

According to its 2019 10-K, Carnival has committed $4.81 billion in 2020 to new ships, $3.62 billion in 2021, and a total of $14.53 billion in future orders. Management recently said there's $2.8 billion of liquidity available to fund ships this year and $5.9 billion for deliveries in 2021 and beyond. But there will still be a shortfall of about $2 billion this year alone.  

 

These new ships will not only result in cash outflows to complete and deliver, but they'll also increase operating costs just to keep them afloat. This is not a time when Carnival needs an expanding fleet.

 

~~~

 

Let's now focus on Carnival's cash situation in 2020 because ... the company is already in a difficult position.  

Item  -- Available (Obligations)

Cash (Nov. 30, 2019) -- $518 million

March 13, 2020, revolving credit drawdown -- $2.8 billion

New ship commitments -- ($4.8 billion)

New ship liquidity -- $2.8 billion

2020 debt maturities -- ($1.83 billion)

Total -- ($512 million)

 

That last line best explains why cash refunds haven't been forthcoming in a timely manner. The whole article is worth a read.

 

I think the niche Seabourn business unit is small enough (just five ships) and well positioned to be sold or spun off if Carnival doesn't survive, though it's also possible another line could acquire the ships for use under their brand.

 

Looking at the cruise industry at large, I just don't see how it resumes until there is a vaccine that has been fully implemented worldwide, which is unlikely to occur before mid-2021 at best. Testing alone won't solve the problem. Even if you can assure pax and crew are 100% negative at embarkation, every port call is an opportunity for infection. From the port's POV, every ship not tested immediately prior to arrival is a potential carrier. Finally, of course, you need pax willing to resume travel without fear of being stuck on a floating petri dish of disease. Absent near eradication it's hard to see how cruising as usual can resume.

 

 

Yes, Robisan,

 

I saw this one after I had posted.

 

I do honestly believe that Seabourn will survive, and Carnival too, although it may need a White Knight.

 

Their treatment of clients should have been a whole lot better, and I hope that they learn from this experience.

 

If one does not sail with Seabourn, who else meets or exceeds their cruising experience?

[zelker]

Not sure this has been mentioned previously but in this day and age of eliminating redundant positions within companies that "merge", wouldn't it make sense that since Princess, HAL, and Seabourn are all part of the Holland America Group of Carnival, that there is only one Accounting group that processes claims for all 3 lines?  (e.g., for sure there is only one Employment department that handles all 3 lines)  So if this is the case, one can only imagine the magnitude of cancellations this one Accounting group is dealing with at the moment.

 

Food for thought ……….

[SLSD]

12 hours ago, westmount said:

Logic dictates that they are working on recapitalizing, and thus future cruise credits the only currency that will be coming shortly. If they were to file for protection, everyone will be happy with a future credit, as it is possible a new firm would not honour any past obligation. 

My husband, the long time business bankruptcy lawyer says that it IS likely that a new buyer WOULD honor past obligations as goodwill would be a part of he value of the cruise line.  He says this based on a careers's worth of business cases.  

[Paulchili]

2 hours ago, SLSD said:

My husband, the long time business bankruptcy lawyer says that it IS likely that a new buyer WOULD honor past obligations as goodwill would be a part of he value of the cruise line.  He says this based on a careers's worth of business cases.  

Can we hold him to it and sue him if he is wrong? 😃

[SLSD]

6 hours ago, Paulchili said:

Can we hold him to it and sue him if he is wrong? 😃

Ha!  He is so happily retired by the way.  Unlike most lawyers who never want to retire, he is loving it.  I do miss discussing all the legal issues of his cases.  The situation of the cruise lines is most interesting--just from a business and financial point of view.  We would love to know who their lenders are.  My husband thinks they probably use asset based lenders.  

[Paulchili]

52 minutes ago, SLSD said:

He is so happily retired by the way.  

Ditto (although from a different profession) 🙂

[Rambo_Trout]

11 hours ago, SLSD said:

My husband, the long time business bankruptcy lawyer says that it IS likely that a new buyer WOULD honor past obligations as goodwill would be a part of he value of the cruise line.  He says this based on a careers's worth of business cases.  

 

I am sure that your husband is right.

I never knew about the benefits of owning Carnival Stock. If it falls again I'll get my 100 shares 🙂 .

[lydiamight]

All Seabourn Cruises cancelled for a further 30 days---just received the following email

Dear Seabourn Guest, The entire Seabourn team extends our well-wishes during these uncertain times. In response to the unpredictable circumstances evolving from the global spread of COVID-19, we have extended the voluntary pause of our global ship operations for an additional 30 days, which includes sailings scheduled to depart through May 14, 2020.This effectively cancels your booking: XXXXXX We realize you were looking forward to sailing with us and appreciate your disappointment at this news. The health and safety of all who travel with us is a top priority.  We are offering two choices of compensation for you to choose from: Option #1 – We would love to welcome you back on board a future Seabourn cruise under better circumstances. As an incentive to plan another voyage, you can choose to defer a refund and instead receive a future cruise credit for 125% of the base cruise fare paid, which can be applied toward any future cruise(s) through December 31, 2021.  Please note that Seabourn Flight Ease®, Seabourn pre- or post-cruise hotel packages or transfers, prepaid shore excursions and amenities purchased through Seabourn, and taxes, fees, and port expenses will be refunded to the original method of payment used for the original purchase. The terms and conditions of the Future Cruise Credit appear below. Option #2 – If you do not wish to receive the 125% future cruise credit, a 100% refund of all monies paid to Seabourn will be reimbursed to the original form of payment. This includes Seabourn Flight Ease air, Seabourn pre- or post-cruise hotel packages or transfers, prepaid shore excursions and amenities purchased through Seabourn, and taxes, fees, and port expenses.   We suggest that you contact your travel advisor to discuss these options. It is important to make your decision promptly. If you do not respond by June 1, 2020, you will be deemed to have elected a 125% future cruise credit as outlined in Option #1 above.  The internet portal for selecting the option you prefer is available at https://book2.seabourn.com/cp/.  If any portion of your travel was not booked through Seabourn, other booking and cancellation conditions and policies may apply. Most airlines and other travel-related services such as hotels, transportation, and tours are allowing refunds or waiving change fees due to the COVID-19 pandemic; please work directly with those operators regarding their charges. Please note that, due to the unprecedented volume of bookings impacted by cancellations that our team is managing, processing your election of Option 1 or 2 and your request for reimbursement may take up to 60 days as our team works through each booking. For more information on Seabourn's pause of global ship operations pause, please visit Seabourn's News page. Should you have any questions, please contact us at the appropriate office: Seattle Office (USD/CAD Currency): Contact us at 800-929-9391 or 206-626-9190 (local) We are available: Monday – Friday 6:00am to 5:00pm PST Saturday 6:00am - 3:30pm PST Sunday 6:00 am - 3:30pm PST Rotterdam Office (EUR Currency): Contact us at 00800 1872 1872  We are available Monday – Friday 9:00am to 6:00pm  Southampton Office (GBP Currency): Contact us at 0344 338 8615 We are available Monday – Friday 9:00am to 6:00pm Sydney Office (AUD Currency): Contact us at 1 300 987 323 We are available Monday – Friday 8:30am to 7:00pm March 26, 2020, 4:52 PM Again, we extend our most sincere apologies for this cancellation. Please know that we share your disappointment and we truly appreciate your patience and understanding of these exceptional circumstances that were beyond our control. We sincerely hope to have the opportunity to meet and exceed your expectations on board one of our ships in the near future. Kind regar

[Cantara24]

A heads up on this most recent Option 1 & 2 selection from the First cruise cancel letter of Mar 13/20.

 

If one did not respond to the option choice by Apr 1^st the default was automatic Option 2 (full refund).

 

This most recent if one does not respond the default is Option 1 (FCC) with statement it is “the higher value option”

 

Subtle but significant change.

Edited March 30, 2020 by Cantara24

[rols]

4 hours ago, Cantara24 said:

A heads up on this most recent Option 1 & 2 selection from the First cruise cancel letter of Mar 13/20.

 

If one did not respond to the option choice by Apr 1^st the default was automatic Option 2 (full refund).

 

This most recent if one does not respond the default is Option 1 (FCC) with statement it is “the higher value option”

 

Subtle but significant change.

Good spot. 

[JPH814]

8 hours ago, Rambo_Trout said:

 

I am sure that your husband is right.

I never knew about the benefits of owning Carnival Stock. If it falls again I'll get my 100 shares 🙂 .

I have held the stock for years.  100 shares bought for About $3000. I have easily gotten my $3000 back. 
But going forward, be careful - even at these discounted prices. There is no guarantee the OBC perk will continue.  

[HappyFeet13]

Ok. I think a good reason to keep the cruise industry from going bankrupt is that thousands of Americans have deposited 100’s of millions with cruise lines. They are all expecting their money back or a “future cruise credit”. If the cruise lines go bankrupt, they don’t get their money back, and there is no “future cruise”.  To me, it seems a good idea to lend them money to allow them to refund money to us,  and to stay in business to honor their future cruise promises. The fact that they have $50,000 of my money has nothing to do with my opinion😀

[Rambo_Trout]

If I read this correctly, Carnival are:

 

A) Raising up to $ 6 Billion

B) Suspending the Dividend

 

Carnival Corporation & plc Announces Offering of Common Stock

MIAMI, March 31, 2020 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK), the world's largest leisure travel company, today announced that Carnival Corporation (the "Corporation") has commenced an underwritten public offering of $1.25 billion of shares of common stock of the Corporation. The Corporation intends to grant the underwriters an option to purchase up to $187.5 million of additional shares. The Corporation expects to use the net proceeds from the offering for general corporate purposes.

The Corporation also announced by separate press release that it has commenced private offerings to eligible purchasers of $3 billion aggregate principal amount of first-priority senior secured notes due 2023 and $1.75 billion aggregate principal amount of senior convertible notes due 2023 (or up to $2.0125 billion aggregate principal amount if the initial purchasers exercise in full their option to purchase additional convertible notes). Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy the senior secured notes or the convertible notes. None of the closings of the offerings of shares of common stock, senior secured notes or convertible notes is conditioned upon the closing of any of the other offerings or vice versa.

 

Carnival Corporation & plc is hereby announcing that today it has commenced an underwritten public offering of shares of common stock of Carnival Corporation, suspending the payment of dividends on the common stock of Carnival Corporation and the ordinary shares of Carnival plc as well as updates to debt facilities, on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”).

 

Data obtained from:

 

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB0031215220GBGBXSET1.html

 

Regards,

 

Kevin

[westmount]

I've been reprimanded by cruise critic for making some political comments, which i apologize for. That said, Carnival is raising $6 billion, and warning that they really don't know when they will be sailing again. They put out comments that they were legally obliged to do telling everyone what we already knew. The world needs to be a safer place before they can get back out there, and it's just going to take a lot of time and money before that occurs. 

  We all love cruising, that's why we do it, and Seabourn will certainly be a survivor, although some brands might not. There's a class action lawsuit that was started here in Canada for airline passengers wanting cash refunds vs future credits, but the government ha so far backed the airlines. I also think the cruise lines will eventually announce the same thing, but time will tell. 

  My target date is still December 15th for the first cruise out, cross our fingers. 

 

[HappyFeet13]

Apology accepted🙂Here's the problem: They expect Covid19 to disappear during the Summer, and come back in the flu season next Fall. Experts are saying it is unlikely that they will have a Covid19 vaccine tested and approved before then, although they will surely have better, proven, treatments for it. The problem for cruise lines is that ships are floating petri dishes. Unless there is a vaccine developed before next Fall, I think cruise ships will be unable to have sufficient cruise destinations because most ports won't want them, and people will avoid travel on cruise ships because of the horror stories of what occurred this Fall. It will be quite a struggle, because a lot of cruise ports need the ships to come in to support their local economies. That will lead to some political turmoil at those cruise ports between those who want to allow cruise ships and those who don't.  Those things take time to resolve. That doesn't mean that cruise lines won't book and sell cruises for later this year and early next year...I think they will, because they need the money. But there remains the risk that they will cancel again. Can you imagine how hard it is for a cruise line to plan an entire cruise itinerary for each ship, starting from wherever the ships are when they begin service again...reassembling the crews...arranging for provisions and fuel...printing brochures...selling cruises... etc?  The logistical issues are staggering. I hope Carnival is able to sell their stock in the new offering, because it increases the chances that I'll get my money back from Seabourn, and it  keeps them alive, but I think it will be the Summer of 2021, at the earliest,  before the first ships sail again.  

[markham]

About Seabourn schedules in 2021, I have to think the next few/several months will see many changes from what we used to know. For example, they might furlough one or more of their ships to simplify planning and staffing relative to demand, and the politics and economics of it all.
 

Interesting times ahead... just imagine what cutbacks etc HAL and Princess will experience.

 

Happy and healthy sailing!

[westmount]

No crystal ball here,  but I’m guessing Princess will not survive , but I have been wrong before. I didn’t think Costa could survive their accident and they came out bigger. 
  Like every other business, there will be no climb like there was a crash. Even 

with a tremendous build up of demand, all the issues Happy feet mention for all businesses take time. 
  A lime like Crystal can recover quicker as they have only a couple ships , so assembling the team will be easier. 
seabourn will be fine, although I expect they”ll start off with the two larger ones firstly doing domestic cruises to start, and build up their routes as people come out from their caves once allowed. 
 The world needs a strong America in order to recover, and it looks like it’s going to be a tough grind getting out of this mess. I spent 18 days lost at sea, and was very lucky that the Seabourn staff made life wonderful for us on board, Australia let us disembark, and Flight’s we’re found home with no virus issues. 
  I gather most of us would have been happy to stay on the ship t that time, but all thrilled to be home no matter the quarantines. 
  Still waiting for a letter from Seabourn concerning the our lost cruise, I’m starting to get the feeling it’s never coming. 
 

[SLSD]

9 hours ago, HappyFeet13 said:

Here's the problem: They expect Covid19 to disappear during the Summer, and come back in the flu season next Fall.

The latest I have read/heard is that the current situation may persist through July.  

[SLSD]

6 hours ago, markham said:

About Seabourn schedules in 2021, I have to think the next few/several months will see many changes from what we used to know. For example, they might furlough one or more of their ships to simplify planning and staffing relative to demand, and the politics and economics of it all.
 

Interesting times ahead... just imagine what cutbacks etc HAL and Princess will experience.

 

Happy and healthy sailing!

Good to see you posting Markham.  You have been missed here.  I hope you will give us a review of your latest travels on Sojourn---before everything hit the fan.