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Heymarco

RCI bankruptcy possibility - deposits and FCCs

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If they were going to go bankrupt (assuming they could use U.S. laws somehow) now might be a good time since their stock has already taken a big hit. They could slip it in, do some reorganizing, and continue business as usual.  It might not be so much the end of them as just smart business.

Of course, I don't know what kind of bankruptcy laws Liberia has these days.  Much of their debt may be U.S. based though.

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16 hours ago, Heymarco said:

Just read an article saying Royal has a very good chance of going bankrupt (source may not be best but still raises good questions). I know if this happens, there may not be enough money to go around to return future cruise deposits. Anyone else concerned? Also does cruise insurance cover provider bankruptcy?

 

https://www.ccn.com/the-u-s-stock-market-crash-will-bankrupt-these-3-companies/

I’m really sorry, but this is utter rubbish.  The OP mentions In their post that article is not from the best source.  You may as well also write “if we get hit by a large asteroid, Royal Caribbean will go bankrupt, we’ll have another ice age, and most of us will die.”  Hyperbole aside, everyone should apply themselves to being calm and letting this thing pass.  I’m looking forward to returning to my next cruises on Royal (hopefully in August and October).  On another note, if more frightful people cancel, I might just get me a great free upgrade!

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Posted (edited)
1 hour ago, teacherman said:

Did not the today's President say "let Detroit go bankrupt" back in 2008 when he was not the President but commenting on everything that President was doing?  (I do know that Mr. Romney said it) Bankruptcy means re-organizing the business and usually it is the creditors and lower paid workers that take the hit.  I think the President (this one) knows how all of that stuff works.🤔🤔

Detroit did end up filing Bankruptcy,. Was right choice, actually had no choice... And actually to your quote:   During the first presidential debate in Hempstead, New York, Mitt Romney defended his position on the Detroit auto industry bailout, which President Obama has said was, "Let Detroit go bankrupt."

Edited by ONECRUISER

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8 hours ago, LXA350 said:

At this stage I highly doubt to see RCL go bankrupt, they are together with Carnival the bigest and most successfull players in the industry. The company needs to be setup stable enough to survive a very bad year, obviously if you would have this repeat again in the near future they would be at very high risk to go bankrupt, but one storm in many years they should be able to make it through.

 

Companies such as Norwegian and possibly MSC would be more at risk, although MSC's main business is Cargo shipping but I am not following on how successfull this part of them is.

 MSC  Shipping is the 2nd largest shipping company behind Maersk Lines

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17 hours ago, Heymarco said:

Just read an article saying Royal has a very good chance of going bankrupt (source may not be best but still raises good questions). I know if this happens, there may not be enough money to go around to return future cruise deposits. Anyone else concerned? Also does cruise insurance cover provider bankruptcy?

 

https://www.ccn.com/the-u-s-stock-market-crash-will-bankrupt-these-3-companies/

In looking at this article it says "Advertisement" at the bottom.  I take that very lightly as I do all of the sponsored ones on other sites.

 

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43 minutes ago, Tony O said:

 MSC  Shipping is the 2nd largest shipping company behind Maersk Lines

Except shipping industry is also not doing that well because of economic slow down everywhere.

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2 hours ago, LMaxwell said:

............The name brand Princess is Toxic Waste.  Any "Name Brand" will be in the American public's mind.  

 

Not necessarily true. A major airline can fly a perfectly good airplane into a mountain side and the American public soon forgets about it! 

 

 

1 hour ago, A&L_Ont said:

.....I think that would also bring about mandatory tips being paid in the cruise fare. Which I am good with. 

 

 

 

1 hour ago, LMaxwell said:

No tipping mentioned in here 🙂 

 

But I will say this; if I ever set foot back on a cruise ship I am wearing absolutely whatever I want to the dining room and they'll thank me doubly 🙂 🙂 🙂

So he can't bring up tipping and it's ok for you to bring up attire for the dining room? :classic_rolleyes:

Bye, bye.

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While the government will bail out the major US air carriers (needed for business travel, DOD, Military, etc.) I doubt they would bail out a cruise line. In the big picture they don't employ many US citizens and overall are no-essential for National security.

 

That said, I doubt the cruise industry will entirely collapse.  It didn't after September 11th or the 2007-8 recession, and this is the same idea.

 

What I see is just like with airlines, the cruise lines will cancel the bottom 30% of cruises based on profitability.  They will lay off human capital as needed, and lower fares to entice bookings for a cash infusion. Ships will sail full as a result.  They will sell off older ships, mothball maybe a couple of the larger/newer ones for the time being, and generally do what they can to achieve the highest amount of incoming cash with the lowest amount of "waste".  In this case waste is a ship sailing not completely full.  They will likely offer the best "deals" to people they can see have a history of high bar tabs and casino spend, because those are the true profit centers--as opposed to people who come on-board and other than the pre-paid gratuities, spend not a dime on board.

 

 

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1 hour ago, teacherman said:

I believe GM and Chrysler filed bankruptcy.  Ford did not.


This is correct.  Regions Bank was the only major bank to not take a bail out as well.

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1 minute ago, ducklite said:

 I doubt they would bail out a cruise line. In the big picture they don't employ many US citizens and overall are no-essential for National security.

 

 

 

 

They don't? Do you know how much stuff cruise lines buy from US suppliers year round? And then there are economic spin offs associated with local taxes, hotels, restaurants,  airlines, taxi and travel industry retailers that employ many American workers. 

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I no I get a full refund by my credit card for the FCC if they go bust for not receiving goods/service

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Barrons (a normally rational business publication) ran a piece this weekend on the cruise lines.  Don't recall seeing the word "bankruptcy".  Worst projected outcomes appeared to be reduction / elimination of dividend and capital expenses.  Very surprised to read CCL has $2.8B in untapped credit lines and we know RCCI just added $550MM.

 

https://www.barrons.com/articles/batten-the-hatches-cruise-line-investors-the-industry-faces-a-tough-but-surmountable-slog-51584113133?mod=past_editions

 

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Bankruptcy doesn’t necessarily mean going out of business. Let them dig their selves out of the hole like most of the business here do. If we are going to help someone, let’s help the ones who actually pay taxes here. The cruise lines have enough assets, by either using them for collateral or selling them, to keep going. I think I read that RCL just secured a $550,000,000 line of credit to do as such.

I read that, in 2018, 55.4% of all ocean cruising involved North America so if they can’t find a way to work things out here,  too bad.

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4 hours ago, cruisinfanatic said:

Royal is not going bankrupt because of a few months of bad business and I haven't heard a single analyst worth his salt that implied that. In a year all will be back to normal and the stock doubles or more easy

Some think going bankrupt would be the end of the company. WRONG!

I seem to remember you implying that I was wrong when I said I didn't think the stock was even close to bottoming out when it was down 50% from its high.

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1 hour ago, ReneeFLL said:

So he can't bring up tipping and it's ok for you to bring up attire for the dining room? :classic_rolleyes:

Bye, bye.


I could be wrong but I believe he was joking.

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5 hours ago, LMaxwell said:

 

Do you know who is not likely to book a cruise AT ALL, EVER? A TON of people who were always on the fence about cruising; especially the under 30 set that still viewed it as for the newly wed and nearly dead crowd.  The name brand Princess is Toxic Waste.  Any "Name Brand" will be in the American public's mind.  

You know what I haven't seen posted lately? When someone would get upset with RCI about some issue and say they were going to try some other cruise line or other type of vacation and then someone else would post the obligatory... there are plenty of people to take your place, don't let the door hit you in the a$$.

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1 hour ago, ReneeFLL said:

 

 

Not necessarily true. A major airline can fly a perfectly good airplane into a mountain side and the American public soon forgets about it! 

 

 

 

So he can't bring up tipping and it's ok for you to bring up attire for the dining room? :classic_rolleyes:

Bye, bye.

4 smiley faces and you can't take a joke.  Jeez. 

 

Take your snotty "bye bye" and use it elsewhere, I'm staying. 

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15 minutes ago, Ocean Boy said:

You know what I haven't seen posted lately? When someone would get upset with RCI about some issue and say they were going to try some other cruise line or other type of vacation and then someone else would post the obligatory... there are plenty of people to take your place, don't let the door hit you in the a$$.

 

On Social media people are asking to start a money collection for the crew and some guy said "I have to feed my family and hoping I still get to work" and the cruise loyalists attacked him for not caring about the crew as well as RCI does.  

 

huh? 

 

Why are so many people so personally identified with their vacation provider? 

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1 hour ago, sfaaa said:

They don't? Do you know how much stuff cruise lines buy from US suppliers year round? And then there are economic spin offs associated with local taxes, hotels, restaurants,  airlines, taxi and travel industry retailers that employ many American workers. 

 

As I said, in the big picture.

 

In the big picture they buy a lot less and employ a lot fewer and purchase a lot less from US sources than health systems,  companies like Microsoft and Amazon, universities, companies that have Federal mandates to "Buy American" such as public transit systems, the Big 5 consulting companies, companies like GE and Boeing, even FedEx and UPS.  Simply put, they aren't as essential overall to the US economy as you might think they are.  

Cruise lines have no bearing on public health and welfare, military and domestic security, and transportation and logistics.  Those are things this country needs to function.  Cruise lines are not in those categories and are disposable in the big picture.  Jobs are going to be lost in many industries, but the losses will be heavier in sectors that provide wants over needs. 

 

 

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4 minutes ago, LMaxwell said:

 

On Social media people are asking to start a money collection for the crew and some guy said "I have to feed my family and hoping I still get to work" and the cruise loyalists attacked him for not caring about the crew as well as RCI does.  

 

huh? 

 

Why are so many people so personally identified with their vacation provider? 


I agree.  And I think the people who are battening down their financial hatches are wise to do so.

 

I remember the names of three people ever who were crew on a ship I've sailed on, including a Captain.  I tipped them well and moved on, just like they did.  If someone has a personal enough connection with a  crew member that they have their home address and phone number, sure, check on them to see if they need anything.  But don't kid yourself in thinking you are anything more than an ATM to the vast majority of crew members you've encountered.

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Filing bankruptcy for reorganization is not same as going out of business. It may or may not happen in the case of the cruise lines mentioned in this thread..

 

In any case your FCC while at risk, in practical terms, will be safe. So should be your loyalty points.

What may happen is that cruise lines may return with limited schedule and may not offer an itin. that you may be interested in. 

Unfortunately premium offered by Cruise lines is not enough to forgo cash. But if you take 3-4 cruises a year with the same cruise line, then it make sense to take up FCC. For the rest of the people, fair advice would be to take the cash.

 

Some kind of help from US Govt to cruise line industry is inevitable.  Not because they represent an important integral to American society industry (like Banking and Auto) but Trump seem to be eager to help them based on his recent utterances. The fact that they dont pay taxes will come into the picture only to the extent some liberal politicians will object.

 

Cruise line industry adopting US laws is actually viable (just look at the case of NCL in Hawaii with POA) but unlikely to happen. 

 

To answer OP:

- 99% probability that your FCC are secure (irrespective of bankruptcy/bailout happening or not)

- If you are very frequent cruiser with the same cruise line then taking FCC make sense

- For the rest, FCC option does not offer enough premium to justify taking it. Cash is advisable option

 

 

 

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3 hours ago, sfaaa said:

They don't? Do you know how much stuff cruise lines buy from US suppliers year round? And then there are economic spin offs associated with local taxes, hotels, restaurants,  airlines, taxi and travel industry retailers that employ many American workers. 

 

Upcoming recession is going to affect a lot of companies in various industries.

People are going to lose their jobs (even when indirectly employed by supplier/vendor)

 

If rational thinking prevail (and it is in short supply lately), cruise line industry is way down the totem pole for the critical importance to the country. (as CC members our own preferences notwithstanding)

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2 hours ago, LMaxwell said:

4 smiley faces and you can't take a joke.  Jeez. 

 

Take your snotty "bye bye" and use it elsewhere, I'm staying. 

 

:classic_biggrin: :classic_biggrin: :classic_biggrin:

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22 hours ago, teacherman said:

I believe GM and Chrysler filed bankruptcy.  Ford did not.

 

and they did eventually pay back the gov't.  was a good decision.

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