RCL Stock

[At Sea At Peace]

A little carnage today hitting the current 52-week low.  RCL, NCLH and CCL all taking a beating. 

 

Appears to be related to comments referenced in an article from theStreet.

 

https://www.thestreet.com/investing/why-you-may-see-cheaper-royal-caribbean-carnival-cruises#:~:text=Cruise Lines May Need to,quoted the analyst as saying.

 

This particular sub-reference to a Travel Weekly quote is interesting and appears to run against the 'grain' of what the CEO's have been projecting about pricing.

 

Cruise Lines May Need to Lower Prices

 

Cruise lines -- Royal Caribbean and Carnival were not called out specifically -- "will have to lower prices in the second half of 2022 to fill ships because cumulative bookings are 'in a deep hole' compared with 2019 levels," Travel Weekly quoted the analyst as saying.

 

Travel Weekly notes 2023 prices might have to be discounted also to fill the ships (gives an advantage to NCL with its perceived higher percentage of coverage identified as 'luxury' cruises).

 

https://www.travelweekly.com/Cruise-Travel/Truist-Securities-report-falling-cruise-prices

 

2023 cruise prices could fall, too

 

Scholes wrote that 2023 pricing is holding for now, but that the new year is seven months away and current booking trends don't look good. He wrote that the booking pace for 2023 "continues to decelerate and is significantly below comparable 2019 levels." 

[Ptroxx]

30 minutes ago, At Sea At Peace said:

A little carnage today hitting the current 52-week low.  RCL, NCLH and CCL all taking a beating. 

 

Appears to be related to comments referenced in an article from theStreet.

 

https://www.thestreet.com/investing/why-you-may-see-cheaper-royal-caribbean-carnival-cruises#:~:text=Cruise Lines May Need to,quoted the analyst as saying.

 

This particular sub-reference to a Travel Weekly quote is interesting and appears to run against the 'grain' of what the CEO's have been projecting about pricing.

 

Cruise Lines May Need to Lower Prices

 

Cruise lines -- Royal Caribbean and Carnival were not called out specifically -- "will have to lower prices in the second half of 2022 to fill ships because cumulative bookings are 'in a deep hole' compared with 2019 levels," Travel Weekly quoted the analyst as saying.

 

Travel Weekly notes 2023 prices might have to be discounted also to fill the ships (gives an advantage to NCL with its perceived higher percentage of coverage identified as 'luxury' cruises).

 

https://www.travelweekly.com/Cruise-Travel/Truist-Securities-report-falling-cruise-prices

 

2023 cruise prices could fall, too

 

Scholes wrote that 2023 pricing is holding for now, but that the new year is seven months away and current booking trends don't look good. He wrote that the booking pace for 2023 "continues to decelerate and is significantly below comparable 2019 levels." 

almost time to buy the dip.   I missed the times when they were 7.00 and 20.00   

[BermudaBound2014]

 

44 minutes ago, Ptroxx said:

almost time to buy the dip.   I missed the times when they were 7.00 and 20.00   

 

Not yet, there is still lots of room below $50.

 

IMO this won't turn around until Covid quarantining is no longer common practice. 

 

Shorts still hold the winning hand. 

 

 

 

[grandgeezer]

31 minutes ago, BermudaBound2014 said:

 

 

Not yet, there is still lots of room below $50.

 

IMO this won't turn around until Covid quarantining is no longer common practice. 

 

Shorts still hold the winning hand. 

 

 

 

I think the current economy is a much bigger factor than Covid quarantine. Cruising is considered a luxury by most people’s standards. This is considered discretionary spending and is what most people cut back on when money gets tight. This could lead to cutting back on onboard spending, cut back on number of trips, or even stop cruises in altogether.

As far as cutting prices, they’ve held prices at a very high level through this whole mess, and I don’t know if a leopard can change it’s spots now.

 

[BermudaBound2014]

1 hour ago, grandgeezer said:

I think the current economy is a much bigger factor than Covid quarantine. Cruising is considered a luxury by most people’s standards. This is considered discretionary spending and is what most people cut back on when money gets tight. This could lead to cutting back on onboard spending, cut back on number of trips, or even stop cruises in altogether.

As far as cutting prices, they’ve held prices at a very high level through this whole mess, and I don’t know if a leopard can change it’s spots now.

 

 

I certainly don't disagree that the recession/depression is factoring into the tanking cruise stock. It's yet another nail in a very long list of very unfortunate circumstances. 

[Baron Barracuda]

Cruise lines initially enjoyed some pricing power after re-start.  They had fewer ships sailing and were limiting passenger loads.  There were also a large number of FCC's outstanding with limited expiration dates.  Now, as supply and demand approach equilibrium with all ships returning to service and load factors creeping back toward normal we'll see what level of pricing the market allows. 

[Morecruisesplz]

3 hours ago, ChC said:

I went back to RCL to take my first stake today since late 2021. As I said in my earlier post I was expecting it goes down around 50 and lower. My next planned purchase would be around 35 (also suggested in my pervious post).

 

I still see RCL has greater advantage against CCL. RCL has more mega ships. So if staff shortage becomes severe or long lasting problem, RCL can restrict capacity still be able to sell more cabins on a megaship. Whereas CCL's medium and big sized ship would have to block significantly number of cabins and make it really low capacity. The math is RCL's megaship would have more capacity and more staff members to start with. I won't go into details to explain why but I am sure many of you would either agree or disagree. 

 

What I found interesting is that almost all cruise lines are selling close-in sailing really cheaply, while kept price artificially high for cruise that are 3-8 months away. This reminds me of last year as well. I fully agree with some points made in the article cited by @At Sea At Peace, personally I don't know when this revenge travel trend would fade, but from the latest figure from British domestic travel demand, I would not rule out that the revenge travel on cruises are fading a bit. It is extremely difficult to forecast near future to mid term demand. So the pressure to sell cabins even cheaper nearer departure is high. 

 

We also see cruise lines trying to raise price on packages (drinks, speciality dining...) to compensate lower cabin fares. Carnival is charging delivery of daily programme (apparently). All these however may further alienate its loyal customers and depress sales. 

 

However, I do not agree that NCL will hold any better. What NCL's other brands is not really 'luxury-luxury' except Regent Seven Seas. Oceania is not so with its inside cabins and lower pricing point. If stock market crash really hard and we have a hard-landing, NCL may have a real hard time. For one thing, luxury goods holds well in recession, but luxury cruise line is not the same. First of all, people that seek luxury liners touring around the world may not feel safe to travel to exotic places. A luxury line takes people around Florida coast is not very attractive as many of the customer almost guaranteed to be able to purchase leisure crafts or owns few. Second, a hard landing affects anybody and everybody. A rich man will still buy luxury goods (watches, hand bags) to please his other half, but I doubt any rich people would please his/her other half by taking a luxury cruise in the remote African/Asian coast, except very few adventurous minded or cruise die hard. The demise of Crystal is a perfect example. 

 

So that goes back to my original assessment that RCL will be one of the fittest to survive. It will need to be smaller, possibly offload a few inefficient older ships. The stock price will take a further hit. But I still think it can do better than CCL. And NCL? It should call itself lucky if it is not bought by another company or going private. 

Let me know when it gets down to $25 again. Big improvements in staffing/service on non-mega ships will have to happen to keep their regular cruisers happy.

[Morecruisesplz]

3 hours ago, grandgeezer said:

As far as cutting prices, they’ve held prices at a very high level through this whole mess...

 

Except for all those buying at the low price, just after final payment when unsold cabins are returned by TAs. Lots of $50/night bargains out there!

[At Sea At Peace]

On 5/6/2022 at 1:10 PM, At Sea At Peace said:

 

Going forward, they are all in for a nasty ride after what hopefully will be a really decent summer.  

 

Over Supply and Under Demand with Supply Increasing

 

Inflationary Impact on Flying, Driving and/or Hotel Costs To and From a Cruise

 

Massive Inflationary Impact on Cost of Operations - Food and Supplies

 

Extraordinary Inflationary and Supply Stretched Cost of Diesel Fuel - 80,000 Gallons a Day (Large Ships) Depending on Diesel Fuel type (other CC members are more versed in such)

 

 

Looks like the omen not so good given the factors.

 

1 hour ago, Baron Barracuda said:

Cruise lines initially enjoyed some pricing power after re-start.  They had fewer ships sailing and were limiting passenger loads.  There were also a large number of FCC's outstanding with limited expiration dates.  

 

Yep.

 

1 hour ago, Baron Barracuda said:

Now, as supply and demand approach equilibrium with all ships returning to service and load factors creeping back toward normal we'll see what level of pricing the market allows. 

 

Again, back to the top to agree, there will be too much supply after the summer run; with an add that the summer run predicted includes late pricing reductions of some magnitude.  The demand isn't there.  Too many new ships in the blocks; all pre-pandemic perfectly fine business plans totally savaged by the realities of the pandemic, then geo-national conflict, add massive government spending and the resulting record inflation coupled with shortages.  Too much.  Rationing (either of purchase or of neo-alternatives in disguise aka # of days commuting limitations and the like) around the corner in the West.  Ugh (for equities).

 

The spreadsheets are being sharpened with the security interests in the holding companies, ships, islands and general unsecured creditors under the microscope.  I'm not really sure this will play out very cleanly.  The debt structures are so intricate and complex.

[BermudaBound2014]

Well, I've been suggesting Saudi's for nearly a year. Still just rumor but I'm betting Saudi's will be the proud owner of more than just Seabourn. There is just too much debt.

 

https://www.cruiseindustrynews.com/cruise-news/27561-report-carnival-corp-eyeing-seabourn-brand-sale-to-saudi-arabia.html

 

Carnival Corporation may be in discussions to sell ultra-luxury brand Seabourn to the Public Investment Fund of Saudi Arabia, according to a Tweet from CNBC reporter Seema Moody.

 

PS: I've also been saying to watch for MSC make a move on NCL. All just speculation of course, but sadly I've been bang on when it comes to cruise line stock. Shorts are still crushing it.

[neverbeenhere]

I need the June 1st opening share price. 

[Biker19]

Silversea Cruises is set to operate the Crystal Endeavor, as the luxury cruise line has acquired the 200-guest vessel, according to multiple industry sources.

 

In addition, Silversea has filed to trademark the name Silver Endeavor (and Silver Endeavour) on June 8 with the United States Patent and Trademark Office.

 

The ship is currently in Gibraltar and could sail for Silversea as soon as later this year following a rebrand, lining up with the 2022-2023 Antarctica season. 

 

The company had previously hinted at expedition newbuilds, and this ship enables the Royal Caribbean Group brand to add capacity quickly in key high-yielding Polar Regions such as Antarctica. 

 

After being delivered to Crystal Cruises from MV Werften in 2021, the luxury expedition ship completed an inaugural Iceland season and a handful of Antarctica cruises before Crystal wound down operations in early 2022.

 

Sources told Cruise Industry News that multiple cruise lines put in bids for the ship, including brands that were not in the expedition market.

 

Silversea Set to Acquire Crystal Endeavor - Cruise Industry News

 

Biker, who is surprised RCCL is spending money on new ships like this - must have gotten a deal.

 

BTW, the stock is below $40 for the first time in 2+ years.

[Jimbo]

3 minutes ago, Biker19 said:

Silversea Cruises is set to operate the Crystal Endeavor, as the luxury cruise line has acquired the 200-guest vessel, according to multiple industry sources.

 

In addition, Silversea has filed to trademark the name Silver Endeavor (and Silver Endeavour) on June 8 with the United States Patent and Trademark Office.

 

The ship is currently in Gibraltar and could sail for Silversea as soon as later this year following a rebrand, lining up with the 2022-2023 Antarctica season. 

 

The company had previously hinted at expedition newbuilds, and this ship enables the Royal Caribbean Group brand to add capacity quickly in key high-yielding Polar Regions such as Antarctica. 

 

After being delivered to Crystal Cruises from MV Werften in 2021, the luxury expedition ship completed an inaugural Iceland season and a handful of Antarctica cruises before Crystal wound down operations in early 2022.

 

Sources told Cruise Industry News that multiple cruise lines put in bids for the ship, including brands that were not in the expedition market.

 

Silversea Set to Acquire Crystal Endeavor - Cruise Industry News

 

Biker, who is surprised RCCL is spending money on new ships like this - must have gotten a deal.

 

BTW, the stock is below $40 for the first time in 2+ years.

Probably won't be long now until OBC for having a 100 Shares is no longer offered by Royal when booking a cruise.

[exm]

Absolutely fantastic stock (price) to invest in.

[Ocean Boy]

1 hour ago, Jimbo said:

Probably won't be long now until OBC for having a 100 Shares is no longer offered by Royal when booking a cruise.

And why do you say that?

[BermudaBound2014]

I closed all my RCL shorts a few weeks ago. While profitable for me, ultimately I closed them too soon.  I didn't see this drop coming. But at under $40 with a new purchase? I'm thinking of jumping in long. 

Edited June 14, 2022 by BermudaBound2014

[Jimbo]

42 minutes ago, Ocean Boy said:

And why do you say that?

Just think, the times are of changing.

[John&LaLa]

On 5/24/2022 at 5:04 PM, ChC said:

 

yeah I agree with you totally here. Look at the sad situation of Spectrum of the Seas (nowhere to go), and the sudden increase of Med capacity by Wonder of the Seas (which was destined to Chinese market). Supply is up and in some market is exceeding historical availability highs. 

 

 

No increase in the Med because of Wonder. She was a replacement for Allure.

 

And Allure is well booked in the Caribbean 

[Morecruisesplz]

1 hour ago, exm said:

Absolutely fantastic stock (price) to invest in.

Waiting for $25 again. 

[John&LaLa]

2 hours ago, Jimbo said:

Probably won't be long now until OBC for having a 100 Shares is no longer offered by Royal when booking a cruise.

 

We get a $1000 discount for 100 shares on the World Cruise. Cash, not OBC.

[Jimbo]

30 minutes ago, John&LaLa said:

 

We get a $1000 discount for 100 shares on the World Cruise. Cash, not OBC.

Think I would like buy 3 legs get  the 4th leg free better. 🙂

[bruzin_for_a_cruizin]

I'm long on 200 shares at an avg. cost of $79. I'm tempted to transfer some more cash to my trading account to buy up more and DCA down, but I just know if I do that, the stock will drop even lower!

[At Sea At Peace]

48 minutes ago, fredmdcruisers said:

Waiting for $25 again. 

 

Well, that's interesting.

 

Back in 2020 when RCL touched $23.81 there was 236,547,842 shares outstanding and $12,163,846,000 in Shareholder's Equity (a 'book value' per share of $51.42).  Yet, the shares traded at 46% of book value.

 

Now, as of the recent quarter, RCL is $39.49, we have 282,973,716 shares outstanding and $3,988,928,000 in Shareholder's Equity (a 'book value' per share of $14.10).  Yet, the shares are trading at 280% times book value.

 

Make any sense?

 

The cruise industry, as currently composed, will look a lot different going forward.

[Jimbo]

8 minutes ago, At Sea At Peace said:

 

Well, that's interesting.

 

Back in 2020 when RCL touched $23.81 there was 236,547,842 shares outstanding and $12,163,846,000 in Shareholder's Equity (a 'book value' per share of $51.42).  Yet, the shares traded at 46% of book value.

 

Now, as of the recent quarter, RCL is $39.49, we have 282,973,716 shares outstanding and $3,988,928,000 in Shareholder's Equity (a 'book value' per share of $14.10).  Yet, the shares are trading at 280% times book value.

 

Make any sense?

 

The cruise industry, as currently composed, will look a lot different going forward.

What do you think about NCLH, buy now or wait for it to go even lower?

[Ocean Boy]

3 hours ago, bruzin_for_a_cruizin said:

I'm long on 200 shares at an avg. cost of $79. I'm tempted to transfer some more cash to my trading account to buy up more and DCA down, but I just know if I do that, the stock will drop even lower!

Then could you please hurry up and do it, I'm tired of waiting for the drop.😁