I heard a real quick discussion of whether the government should save the cruise industry

[Jim9310]

50 minutes ago, bobandsherry said:

So you are not one who harps on taxes, so my point was not addressed to you. But since you mentioned your criteria as being us based and majority of us employees, here's info for Eli Lilly. They are US but have more nonUS employees than US. So what's your take on that? And remember that they pay no US taxes.

Is Eli Lilly seeking a bailout?  Aren't they in the pharmaceutical business?

[chengkp75]

Okay, so neither GM nor Lilly will be able to apply for aid in this package.  But, just to put things in perspective, using your figures, GM has 47.8% US employees, Lilly has 32% US employees, and Carnival Cruise Line (not Carnival Corp) has 3900 shoreside employees (and to be charitable let's say they are all US employees), and 33,000 shipboard employees, for a 10.5% US employee ratio.

 

Though both GM and Lilly have a better standing in that they are US corporations.

Edited March 29, 2020 by chengkp75

[clo]

2 hours ago, ed01106 said:

Add to that, if Boeing was to disappear our ability to equip our air force in a time of war would be compromised.  If Carnival went bankrupt our our vacation options would be diminished.    

That was humor, right? 🙂

[ed01106]

53 minutes ago, clo said:

That was humor, right? 🙂

Not at all.  We are witnessing one of the major problems of a global economy and a lack of a robust manufacturing base.

 

We are dependent on other countries for much of our PPE.  The only major sneaker manufacturer with plants in the USA has switched production to masks, but we aren’t going to get PPE from Nike’s factories in China.  Car companies are going to make respirators but that is because they have factories in the USA. If we still had a garment industry we could use them to make PPE suits, but we don’t.  

 

Saving domestic manufacturing is more important than saving tourism. 

[clo]

4 minutes ago, ed01106 said:

Not at all.  We are witnessing one of the major problems of a global economy and a lack of a robust manufacturing base.

 

We are dependent on other countries for much of our PPE.  The only major sneaker manufacturer with plants in the USA has switched production to masks, but we aren’t going to get PPE from Nike’s factories in China.  Car companies are going to make respirators but that is because they have factories in the USA. If we still had a garment industry we could use them to make PPE suits, but we don’t.  

 

Saving domestic manufacturing is more important than saving tourism. 

I just meant that sentence 1 and sentence 2 were so disparate in context. 

[iancal]

You are so right.  Some American firms either have to go outside the country to find specialized tool and die makers or contract the jobs overseas.

[bobandsherry]

1 hour ago, chengkp75 said:

Okay, so neither GM nor Lilly will be able to apply for aid in this package.  But, just to put things in perspective, using your figures, GM has 47.8% US employees, Lilly has 32% US employees, and Carnival Cruise Line (not Carnival Corp) has 3900 shoreside employees (and to be charitable let's say they are all US employees), and 33,000 shipboard employees, for a 10.5% US employee ratio.

 

Though both GM and Lilly have a better standing in that they are US corporations.

Yes, great standings as neither pays anything is tax.  No idea what Lilly will apply for, but I'd wager that if you look there's already subsidies that they get. My point was, in response to the other poster, that there are many US corporations who have a much larger offshore presence.  And besides, they aren't paying taxes either. 

 

For GM, they filed BK and took a handout before. Left the US (let's call it like it is, we the tax payers) with an unpaid $11 BILLION.  And once again will now will be standing with their hand out again.  So, in your opinion,  leaving $11 BILLION unpaid and paying ZERO IN TAX is better standing than CCL? Um, OK, if you say so.  

[CruiserBruce]

As Amazon is talking about hiring 100K plus people in the very near future to handle the demand caused by the sheltering in place, I don't see them seeking any bailout.

[chengkp75]

1 hour ago, bobandsherry said:

Yes, great standings as neither pays anything is tax.  No idea what Lilly will apply for, but I'd wager that if you look there's already subsidies that they get. My point was, in response to the other poster, that there are many US corporations who have a much larger offshore presence.  And besides, they aren't paying taxes either. 

 

For GM, they filed BK and took a handout before. Left the US (let's call it like it is, we the tax payers) with an unpaid $11 BILLION.  And once again will now will be standing with their hand out again.  So, in your opinion,  leaving $11 BILLION unpaid and paying ZERO IN TAX is better standing than CCL? Um, OK, if you say so.  

Well, the $11 billion is not "unpaid" according to the terms of the bail out, it is merely that the government negotiators overestimated the share price of the new GM stock.  That is really on the government, not on GM.

[bobandsherry]

44 minutes ago, chengkp75 said:

Well, the $11 billion is not "unpaid" according to the terms of the bail out, it is merely that the government negotiators overestimated the share price of the new GM stock.  That is really on the government, not on GM.

You can say negotiators overestimated, the other view is GM under performed.  No matter how you cut it, the tax payers ate $11 billion as a result.  Just wait, they'll be standing at the gate asking for more as this drags out. Regardless.  My point was, and still is, there's a large # of people who just continue to ride the wave that no bailout for CCL due to not paying taxes.  I showed a large # of companies don't pay taxes and we'll most likely see them, like GM, with their hand out for a handout. 

 

Someone then mentioned that at least those are US companies and with US employees, and my point was, and still is, being US doesn't mean your physical presence is in the US, many US companies have very large offshore number of employees, exceeding that in the US.  

 

So not sure what point people are arguing.  A bail out, hand out or stimulus package only makes sense if the $$ returned by keeping the company a float (no pun intended) exceeds that of the amount of the aid offered.  There is more to what a company brings to the US economy than taxes, employees, there is also the $$$ spent on goods, materials and services as well as the $$ of revenue that they may create (for CCL, airfare, hotels, restaurants, theme parks, etc) by them operating within the US.

 

I'm done.  Everyone stay safe.  Just know that Trump now extending social distancing to April 30th, so won't be a great Easter as he had hoped.  And just shows things are not getting better.   

Edited March 29, 2020 by bobandsherry

[mnocket]

We all love to cruise and therefore want to see cruise lines survive this crisis.  That said, some oppose US bailouts of the industry because, among other reasons, they are incorporated elsewhere and do pay significant taxes to the US.  Others support bailouts because, among other reasons, they and their suppliers employ many Americans.  Where do you come out on this?

[navybankerteacher]

On 4/4/2020 at 2:02 PM, mnocket said:

We all love to cruise and therefore want to see cruise lines survive this crisis.  That said, some oppose US bailouts of the industry because, among other reasons, they are incorporated elsewhere and do pay significant taxes to the US.  Others support bailouts because, among other reasons, they and their suppliers employ many Americans.  Where do you come out on this?

We want CRUISING to survive.  The ships are there, and will be there, regardless of who owns them. If there is a demand for cruising, cruises will be offered.  The only question is: who will own the ships and offer the cruises.  A lot of people are going to lose a lot of money - through loss of income, loss of value of investments, loss of future business due to the disruptions, and - for those with funds - higher taxes to pay for all the expenses our government is assuming to help us get through the dual crisis (health and financial) we are facing.

 

Just why should US government funds so urgently needed at home be spent to assist foreign owners of businesses (which pay next to no taxes in the US and who largely employ nationals of other countries) which may be in trouble?

[iancal]

The first question might be should the Government bail out foreign companies?  Which is what most of the cruise lines are.

[njhorseman]

1 hour ago, iancal said:

The first question might be should the Government bail out foreign companies?  Which is what most of the cruise lines are.

That question has been beaten to death over the last couple of weeks. i don't see what raising it again is going to accomplish.

Don't forget that the question was settled by the recently passed bailout legislation. Cruise lines incorporated in foreign countries, as all the major cruise line are,  are not eligible for the bailout money. I haven't heard of any interest in changing that either. It's not as if anyone in Washington appears  interested in it.

Edited April 5, 2020 by njhorseman

[navybankerteacher]

On 3/29/2020 at 4:45 PM, bobandsherry said:

...

 

For GM, they filed BK and took a handout before. Left the US (let's call it like it is, we the tax payers) with an unpaid $11 BILLION.  And once again will now will be standing with their hand out again.  So, in your opinion,  leaving $11 BILLION unpaid and paying ZERO IN TAX is better standing than CCL? Um, OK, if you say so.  

You seem to ignore the fact that the GM and Chrysler bailouts saved many high-paid US jobs - and kept a significant industry in the US. It may or may not have been a good idea - but compared with the notion of bailing out foreign cruise line equity owners (which is the reason the auto company bailouts came under discussion) it made a whole lot more sense.

[drsel]

I think the cruise lines will survive without any help from the government, and sooner or later be back in business to feed our addiction.

[drsel]

They will ultimately recuperate and recover all the losses after this virus has done its course.

[navybankerteacher]

22 minutes ago, drsel said:

They will ultimately recuperate and recover all the losses after this virus has done its course.

Have you reason to think this?  To recuperate “AND RECOVER ALL THE LOSSES” would be lovely for the lines - but do you really believe that they will do better than everyone else — all of whom will have suffered varying degrees of loss, which they will not recover.   And this is while it is still uncertain that their large ships will ever sail full again, or even be permitted into many of the ports which previously attracted cruisers.

[drsel]

Have you reason to think this?  To recuperate “AND RECOVER ALL THE LOSSES” would be lovely for the lines - but do you really believe that they will do better than everyone else — all of whom will have suffered varying degrees of loss, which they will not recover.   And this is while it is still uncertain that their large ships will ever sail full again, or even be permitted into many of the ports which previously attracted cruisers.

Cruise lines will recover all the losses in time, maybe within 5 to 10 years.    

 

Remember the cruise line makes money out of every passenger in 10 different ways

 

1. Shore excursions (way overpriced)

2. Alcohol and Alcohol packages

3. Casino and bingo

4. Art auctions (experts will agree)

5. Specialty dining

6. Photos

7. Spa (best value massages in Pattaya)

8. Shops

9. Medical center

10. Future cruises. (yes, surprisingly the future cruise consultant couldn't match the online price i showed her on my mobile. Her Prices for the exact same date, same repo cruise across all cabin categories was 30-40% more)

 

 

 

 

 

 

 

 

 

[drsel]

yes you may say that they first need to fill the ships.

 

Agreed, and for that they will have to keep the cabin prices really low to attract potential cruisers.

 

And then they can make money out of each and every passenger in 10 different ways

 

No offence to any cruise line or cruiser

[pacruise804]

32 minutes ago, drsel said:

Cruise lines will recover all the losses in time, maybe within 5 to 10 years.    

 

Remember the cruise line makes money out of every passenger in 10 different ways

 

1. Shore excursions (way overpriced)

2. Alcohol and Alcohol packages

3. Casino and bingo

4. Art auctions (experts will agree)

5. Specialty dining

6. Photos

7. Spa (best value massages in Pattaya)

8. Shops

9. Medical center

10. Future cruises. (yes, surprisingly the future cruise consultant couldn't match the online price i showed her on my mobile. Her Prices for the exact same date, same repo cruise across all cabin categories was 30-40% more)

 

 

While what you listed may be profit centers (and you missed the arcade on family based ships and other pay activities like Escape Rooms on some ships), I would argue that many cruisers use few if any of your list.

 

1. We only take ship excursions if a comparable value (they do exist) vs. DIY.  Often we don't do any excursion and just explore on our own.

2. Lots of pax don't drink.  DH and I do, but often less than $300 combined for 7 days.

3-4. Have never spent money here.  Viking Ocean and perhaps other lines don't even have them.

6. Haven't purchased since our second cruise. (Another VO doesn't even have, not sure about other lines).

7. Never used pay services

8. Very minimal

9. Never used (and I guess the vast majority don't use)

10. Based on your context I assume you mean booking again onboard - another never used.

[drsel]

there are few like you who don't give much profit to the ship, but the average passenger spends around 400 dollars extra on a typical 7 night cruise

 

 

[drsel]

There are also some who spend 500 dollars only in the casino or only on alcohol

[navybankerteacher]

1 hour ago, drsel said:

Cruise lines will recover all the losses in time, maybe within 5 to 10 years.    

 

Remember the cruise line makes money out of every passenger in 10 different ways

 

1. Shore excursions (way overpriced)

2. Alcohol and Alcohol packages

3. Casino and bingo

4. Art auctions (experts will agree)

5. Specialty dining

6. Photos

7. Spa (best value massages in Pattaya)

8. Shops

9. Medical center

10. Future cruises. (yes, surprisingly the future cruise consultant couldn't match the online price i showed her on my mobile. Her Prices for the exact same date, same repo cruise across all cabin categories was 30-40% more)

 

 

 

 

 

 

 

 

 

Yes: “MAYBE”  - within five to ten years.   But as of now they are collectively in the hole to the extent of tens (perhaps by the time they book any new fares - hundreds) of millions of dollars.  Two hurdles remain to be overcome:

1)  they must start earning serious CURRENT revenue (folks cashing in FCC’s are not contributing current revenue) to cover fuel, maintenance, insurance, salaries, interest and maturing principal on existing debt (none of which expenses can be covered by issuing more FCC’s); 

 

and

 

2) they are able to fill their fleets of mega-ships which used to attract people who wanted to cruise - many of whom will have lost interest - and hope to be able to offer interesting itineraries in spite of the fact that a good number of ports will not welcome their ships.

 

Oh, the cruise business will very likely come back  - but quite possibly with a number of different lines - and probably in a different format.

[drsel]

The bottom line is that I wish cruise lines all the best and I hope and pray that they are back in business as soon as possible to feed our addiction