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Royal Caribbean in trouble


dougburns
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I noticed today that RCL is having to borrow $500 million in order to stay afloat and that the line has lost 50% of its value during this coronavirus mess. They have stated that they are going to make major cut backs in capital expenditures into 2021. I'm wondering how this is going to affect Silversea with the Moon and the Dawn.

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35 minutes ago, dougburns said:

I noticed today that RCL is having to borrow $500 million in order to stay afloat and that the line has lost 50% of its value during this coronavirus mess. They have stated that they are going to make major cut backs in capital expenditures into 2021. I'm wondering how this is going to affect Silversea with the Moon and the Dawn.

This is a crisis (of 9/11 proportions) for the cruise industry and only those with the strongest balance sheets will survive. The industry is highly leveraged and the funders will be taking a 'hit' in due course. Added to this with Italy (and therefore Fincantieri) in lockdown ships like the Silver Moon are liable to be delayed in delivery. Only time will tell.

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1 hour ago, dougburns said:

I noticed today that RCL is having to borrow $500 million in order to stay afloat and that the line has lost 50% of its value during this coronavirus mess. They have stated that they are going to make major cut backs in capital expenditures into 2021. I'm wondering how this is going to affect Silversea with the Moon and the Dawn.

As a loyal Silversea supporter for 23 years I felt the link up with a mass market line and a small ship luxury line was doomed from the start.We have witnessed on board our four cruises last summer the effect of staff shortages resulting from RCC cutbacks and sadly coronavirus may be a crisis too far for this unlikely merger to survive.Shame for all regular Silversea clients if this merger of mass market  and luxury leads to the demise of our favourite cruise line.

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It’s prudent for companies to raise cash whenever possible in times like these to load up on cash when you can get it, not when you need it.  As such. RCL’s $550 million boost to its credit capacity is merely to increase liquidity and effectively building up their war chest.

 

PhilpB, where have you read that SS’s ship builder is on lockdown?  All of our Italian contacts indicate work throughout the country continues apace.

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30 minutes ago, Stumblefoot said:

It’s prudent for companies to raise cash whenever possible in times like these to load up on cash when you can get it, not when you need it.  As such. RCL’s $550 million boost to its credit capacity is merely to increase liquidity and effectively building up their war chest.

 

PhilpB, where have you read that SS’s ship builder is on lockdown?  All of our Italian contacts indicate work throughout the country continues apace.

Of course, I may be wrong but I would imagine the lockdown will have huge implications for the supply chain of any major manufacturer.

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Basically, all of Italy is in lockdown and that was a good point about possible delays in getting the Moon into service. The increase in credit availability by RCL is not what was concerning me; it was the statement about cutting back on capital expenditures. I don't know whether the merger with RCL was a good idea for SS or not, but without it we wouldn't have the new ships, because SS didn't have the capital and SS might not have been able to weather the storm of this coronavirus mess without it. Because of the coronavirus mess in Italy the affect on SS is much different than 9/11 was. We all know this too shall pass just as MERS, SARS, ebola, etc. have, but we're certainly going to have a rocky time regarding cruising for the rest of this year. Fingers crossed that coronavirus will peter out sooner than later.

Edited by dougburns
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1 hour ago, brimary said:

We have witnessed on board our four cruises last summer the effect of staff shortages resulting from RCC cutbacks

 

I am not sure where you were looking but on all our cruises last year and this, more than 4,  we have never seen any cutbacks or any staff shortages in fact quite the opposite since RCL invested in SS

 

It is also a shame that you have not been supporting your favourite cruise since your last cruise in the middle of last year

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14 minutes ago, dougburns said:

The increase in credit availability by RCL is not what was concerning me; it was the statement about cutting back on capital expenditures.


I would imagine the reference to capital expenditures is going to impact future ships explicitly, i.e. those that are not fully financed.  I doubt the Moon or Dawn are at risk, but the newly announced ships without any indication of design, i.e. the new "Evolution Class" ships, are.  I doubt capex will come back before 2 - 4 years.

 

I would love to see RCL revenue planning relative to future bookings.  At yesterday’s industrials conference, United Airlines announced they are planning revenue decreases as follows: 

  1. March -70%
  2. April -70%
  3. May -70%
  4. June -60%
  5. July -40%
  6. August -40%
  7. September -30%
  8. October -30%
  9. November -20%
  10. December -20%

Those figures are much, much worse than 9/11 where peak to trough was -40%.

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Must admit, I'd not paid much attention to the completion of the Moon in Ancona and her maiden voyage which is no doubt on a tight schedule playing part of this.

 

I've virtually accepted my August cruise was unlikely, but hoped by November things will have calmed down. But if the Moon isn't complete, it would ordinarily be time to call it a day, but I'll hang in there in hope.

 

Let's all hope things turn the corner and the bottom of RCLs pockets not reached.

 

Must be an absolute logistical nightmare because its an almost impossible situation to plan until there's an upturn.

 

Fingers Crossed Silver Spirit was allowed into Cambodia to let guests off. I wonder what will happen to staff during all this?

 

 

 

 

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I really think that this subject heading is alarmist and misleading.  

 

Yes, the past weeks have been difficult for RCL, as they have been for airlines, hotel chains, other cruise lines, etc.  

 

The same subject line could be used for most of the cruise line forums on CC:  For Seabourn or Princess or HAL , “Carnival In Trouble”; for Norwegian, “Norwegian in Trouble,”. Etc.

 

I wonder if Silversea is fortunate to have the backing of RCL and whether,  if things/business/cancellations/etc. turn even worse,  Silversea would have been able to tough it out as an independent, family owned company. 

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2 hours ago, les37b said:

Fingers Crossed Silver Spirit was allowed into Cambodia to let guests off. I wonder what will happen to staff during all this?

 

Les, where you been?  😄  Just teasing you of course. 

 

Spirit decided to take a pass on Cambodia and was to disembark passengers today at Ho Chi Minh City.  But, from what I understand, late last night the Vietnamese government informed the Spirit's captain they would no longer be allowed to dock.  So, now the Spirit is heading to Manila, Phillipines.

 

28 minutes ago, Observer said:

I wonder if Silversea is fortunate to have the backing of RCL and whether,  if things/business/cancellations/etc. turn even worse,  Silversea would have been able to tough it out as an independent, family owned company. 

 

IMHO, SS is lucky to have RCL and their deep access to financial markets to maintain liquidity.  There is a reason SS started the 10% Early Booking Bonus discount program a few years ago... they needed cash on hand in order to secure financing for the Muse class ship build out.  Obviously, many, many passengers were more than willing to pre-pay in full their cruise fare, in some cases more than 2-years in advance of their voyage, for the 10% discount.

Now, even with RCL, I would expect the new "Evolution" class ship plans delayed.  And, while I can't imagine any risk stopping the launch of the Silver Origin, Silver Moon, and Silver Dawn since those constructions projects are well underway,  I wouldn't be surprised if they decided to postpone the conversion of Silver Wind into an expedition ship.

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9 minutes ago, Stumblefoot said:

 

Les, where you been?  😄  Just teasing you of course. 

 

Spirit decided to take a pass on Cambodia and was to disembark passengers today at Ho Chi Minh City.  But, from what I understand, late last night the Vietnamese government informed the Spirit's captain they would no longer be allowed to dock.  So, now the Spirit is heading to Manila, Phillipines.

 

Well I knew it was heading there and when I looked a couple of hours ago on Marine Traffic, the future route still showed Cambodia. I was surprised that HCMC was even mentioned as they've already been refused once. Manila also.

 

Are they able to refuel at sea?

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1 hour ago, Stumblefoot said:


Passengers have been informed that fuel is not a problem.  And, they have enough champagne, caviar, wine, and food to last for weeks.

 

Well let's hope they brought a larger size clothing with them! 

lol

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2 hours ago, Stumblefoot said:

 

 

Spirit decided to take a pass on Cambodia and was to disembark passengers today at Ho Chi Minh City.  But, from what I understand, late last night the Vietnamese government informed the Spirit's captain they would no longer be allowed to dock.  So, now the Spirit is heading to Manila, Phillipines.

I am really sorry to hear that. I’m not sure about the distance and fuel logistics but wonder they might have been better heading to Australia.

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Not sure about Royal but if you follow this morning's headlines:

 

Princess Cruises just announced they are stopping "Global Operations" for 60 days....no cruises for 2 months.

That would be "trouble". 

 

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On 3/11/2020 at 1:00 PM, Observer said:

 

I wonder if Silversea is fortunate to have the backing of RCL and whether,  if things/business/cancellations/etc. turn even worse,  Silversea would have been able to tough it out as an independent, family owned company. 

 

Silversea, on its own, would be bye bye today. 

It's been fun to watch the big three cruising stocks performance this week relative to one another.   They have performed in accordance to their debt/equity ratio every day of the week.  Carnival being least battered and NCL most.

 

 

 

 

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17 minutes ago, silkismom said:

Confused "cruises IN the United States"   international cruises will do their scheduled cruises. So does that mean cruises LEAVING from the US, even going international?  

I don't know and was thinking the same thing...…...why aren't they more clear with the presser?

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30 minutes ago, silkismom said:

So does that mean cruises LEAVING from the US, even going international?  

 

From what I understand, yes.  ALL cruises scheduled to depart from a U.S. port over the next 30-days will be cancelled and ALL cruises scheduled to arrive to a U.S. port will continue their voyages until they reach the U.S.

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Well, now I wonder if I am going to be getting back the 300.00 that was not included in my FCC the other day.

They are cancelling my cruise------I cancelled it on Wednesday.:classic_wacko:

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I am absolutely livid. 4 hrs ago I cancelled our cruise from Ft Lauderdale leaving on Monday. They must have known about this announcement. As a loyal customer I should have been told about this announcement and advised to hold off. 

 

I've emailed and asked that they consider treating me as if they had cancelled. We'll see what happens. 

 

4 hours. 4 hours! 

 

 https://www.cruisecritic.co.uk/news/5193/

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