Bailout for Cruise Companies

[HicksRA]

3 hours ago, Iamcruzin said:

 I fly to Florida the same day and don't spend a dime other than transportation to the ship so I'm not contributing to the economy in the Sunshine State. If cruising went away for good there would be more land trips to these port states generating even more revenue especially for the state of Florida who has the most to lose.  New York could stand to lose a few tourists but will probably attract even more. Here in NY the MTA who provides public transportation via buses, subway, the Long Island Railroad and Metro-North are also seeking a bailout . I'm not on board with this either but they are entitled to receive it more than the cruise industry.

Actually, you are contributing to the economy in the Sunshine State. Royal’s corporate office is in Florida. The fuel to fill the ship is purchased in Florida. The supplies loaded onto the ship are purchased in Florida. The shuttle from the airport to the ship is paid to a Florida company and Florida employees. The porters and teamsters who load the ship are paid Florida employees. And the list goes on.....

[gold]

Trump already said the cruise industry would get a bailout. Airlines, Cruises, Hotels, Small Businesses...those were some he specifically mentioned in one of the press conferences in the past day or so.
 
No matter what your opinion is of politics, bailouts, etc, there is no way that cruise prices don't go up as a result of this. Once things go back to some semblance of normal operations, prices will go up. They will have massive losses to recoup, and if there are strings attached to a bailout such as paying US Taxes, no matter which way you slice it, cruising will get more expensive.

I agree prices will go up but I don’t believe in the short term cruising will be on everybody’s list. Then when there is no demand prices will come down


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[npcl]

5 hours ago, jrapps said:

Trump already said the cruise industry would get a bailout. Airlines, Cruises, Hotels, Small Businesses...those were some he specifically mentioned in one of the press conferences in the past day or so.

 

No matter what your opinion is of politics, bailouts, etc, there is no way that cruise prices don't go up as a result of this. Once things go back to some semblance of normal operations, prices will go up. They will have massive losses to recoup, and if there are strings attached to a bailout such as paying US Taxes, no matter which way you slice it, cruising will get more expensive.

While Trump is including cruise lines in his comments, they are not mentioned in comments coming from Congress.  Do you really think that he will go to the mat for the cruise lines?

 

In my view any aid to the cruise lines should be as a lender of last resort, which would be provided in line with a restructuring of those businesses similar to that with AIG.  Basically the shareholders, including those held by management, would be wiped, the government and the debt holders would get shares in the restructured companies.  That would keep the lines running, provide the US will all of the benefits as far as suppliers, the businesses around the ports etc.  But to get that the companies current shareholders would lose.  Such a deal would also prevent the company from paying executives bonuses, wipe out their options and stock holdings, and prevent future stock buybacks.  I would also require that companies keep cash on had at least equal to the level of customer deposits, instead of in this situation where the deposits were 10X the amount of cash on hand

[rtazz17]

1 hour ago, ONECRUISER said:

Carnival has offered up older ships few times for things like Workers after Katrina... Cant see them used as Hospitals, not set up right. Cost more get them that way then just build Temp Buildings

Or use the empty hotels. Already there and much much better access.

[npcl]

4 hours ago, leen50 said:

We live 3+ hours from Galveston & cruise often In Feb. my DS & BIL flew in from Long Island, NY to cruise w/us. They took an Uber to LaGuardia & S.W. airlines to Houston. We stayed in a Hotel with them, ate at restaurants, bought gas, paid for port parking, took a tour in Galveston etc. Without having a cruise, we would have done none of these things (all in America).

The American businesses in port cities is suffering as a result.

Not looking to start a 'fight'. It's just my opinion.

Most of the embarkation ports are in major tourist areas.  While the loss of cruisers might result in a drop of business, it will not be that much of a loss.  Especially if the companies are restructured and don't actually go away.

 

If they went away the biggest loser would be the port itself and the city that owns it, more so than the businesses that cater to other tourists as well as cruisers. Many of which come to the port and leave the same day the cruise leaves and returns.

[Ourusualbeach]

38 minutes ago, jndsilver31 said:

cruise ships cant be register in the usa because our laws require a ship to be built in the usa if it us yo be register in the usa. this is also true for container ships. but the cruise lines are incorporated in the usa, so in fact they are american companies.

The cruise lines are not incorporated in the US.  

 

Royal is incorporated in Liberia

https://www.google.ca/search?q=where+is+royal+caribbean+incorporated&ie=UTF-8&oe=UTF-8&hl=en-ca&client=safari

 

Carnival is incorporated in Panama

https://carnivalsustainability.com/cruising/about-carnival-corp-plc/

 

[Searanger]

So Carnival (just by example) did 21 Billion in sales last year with a net income of 3 Billion.  So that's 1.75 Billion in lost sales if they are closed down for a month.  Sorry, but if they make 3 Billion in profits then they should easily ride out the shutdown.  Not even taking into account (Fuel, Food, Wage savings)  It will just be a bad year not a extinction level event.  NO BAILOUT REQUIRED

[Ourusualbeach]

6 minutes ago, Searanger said:

So Carnival (just by example) did 21 Billion in sales last year with a net income of 3 Billion.  So that's 1.75 Billion in lost sales if they are closed down for a month.  Sorry, but if they make 3 Billion in profits then they should easily ride out the shutdown.  Not even taking into account (Fuel, Food, Wage savings)  It will just be a bad year not a extinction level event.  NO BAILOUT REQUIRED

Profits and cash flow are two entirely different things. 

[TwoMisfits]

13 minutes ago, Searanger said:

So Carnival (just by example) did 21 Billion in sales last year with a net income of 3 Billion.  So that's 1.75 Billion in lost sales if they are closed down for a month.  Sorry, but if they make 3 Billion in profits then they should easily ride out the shutdown.  Not even taking into account (Fuel, Food, Wage savings)  It will just be a bad year not a extinction level event.  NO BAILOUT REQUIRED

 

See, this is exactly why I said Carnival's offer was the win/win...and anything else is probably doomed to fail.

 

And as for a lot of folks who thinks Carnival's offer is worthless, that's not thinking in Italy's terms.  Even if it's limited, the ship could give the area the possibility of treating folks that would automatically get turned away as either not serious enough, able to be delayed, or too expensive/labor intensive to help.

 

Like concussion patients needing to stay overnight for observation.

Blocked bile duct and routine gall bladder surgeries who need the overnight stay (or two).

Ob-gyn simple cases for births.

Knee replacements, hip replacements, carpel tunnel surgeries.

Skin cancer removals.

 

Lots of folks need the hospitals, but don't NEED the hospitals...but having a hospital like environment free of Covid would be great for them...b/c do you want to wait and endure weeks of agony from gallstones...or do you want the surgery done in a safe environment now?

Edited March 20, 2020 by TwoMisfits

[mugtech]

Thing is if I don't get on a cruise ship or an airplane but rather tour in the USA then 100% of my spending is in the USA.  Hard to do better than that.  Glad we have our lifetime national parks passes.  Don't need a note from my doctor to get into the parks.

[npcl]

43 minutes ago, Searanger said:

So Carnival (just by example) did 21 Billion in sales last year with a net income of 3 Billion.  So that's 1.75 Billion in lost sales if they are closed down for a month.  Sorry, but if they make 3 Billion in profits then they should easily ride out the shutdown.  Not even taking into account (Fuel, Food, Wage savings)  It will just be a bad year not a extinction level event.  NO BAILOUT REQUIRED

Except from their last 10k  CCL had 9 billion in current liabilities, including 4.5 billion is customer deposits, yet only 518 million in cash.  They do have a 3 billion line of credit that they have already drawn down.  Key is keeping as much of the customer deposits as possible, thus the push for giving back FCC's instead of cash refund.

 

Their survival depends upon their ability to borrow lots of money until they can start up again.

Edited March 20, 2020 by npcl

[A&L_Ont]

5 hours ago, BND said:

The article the OP posted is just an opinion piece.

 

And in true CC fashion everyone shall give their opinion. 

 

4 hours ago, LMaxwell said:

Why is everyone acting like cruise lines are offering use of ships to the US govt for free?  There will be a charter contract just like any time a cruise line has provided beds. 

 

4 hours ago, FLACRUISER99 said:

You have proof of this? 

 

FLACruiser I would suspect that there is a contract, as nothing is free.  I'm not sure if we can find it yet.

 

That is what CCL did Hurricane Katrina.

https://www.nytimes.com/2005/09/16/us/nationalspecial/cruise-ships-spurned-by-evacuees-are-home-to-displaced.html

 

There is also a more recent situation where Carnival did this for St Croix.

https://www.cruiselawnews.com/2018/01/articles/taxes/fema-agreed-to-pay-carnival-74700000-for-charter-of-carnival-fascination/

 

 

 

[steveru621]

I hate the word bailout.

 

In 2008 the banks did not get a bailout of free cash.  They were forced to take money that had to be repaid with interest.

 

The government can borrow money at less than 2%.  I suspect almost every industry will be offered low interest rate loans.  Yes some will get tax breaks.  Very few industries will actually get cash that does not have to be repaid.

 

Citizens will probably get a one time check, but don't forget it was your money to begin with and it will cost you far more in taxes to pay interest on the debt in the long run.

[leen50]

1 hour ago, npcl said:

Most of the embarkation ports are in major tourist areas.  While the loss of cruisers might result in a drop of business, it will not be that much of a loss.  Especially if the companies are restructured and don't actually go away.

 

If they went away the biggest loser would be the port itself and the city that owns it, more so than the businesses that cater to other tourists as well as cruisers. Many of which come to the port and leave the same day the cruise leaves and returns.

I cannot quote $'s but I watch the Galveston Webcams a lot. Galveston is the 4th busiest Cruise Port in the US. But it is about 1 hour from the heart of Houston. With restaurants, bars, museums & tourist attractions closed, it's empty. Just watch the cams. Streets are relatively empty. 5 large year round ships + 1 more during the holiday season do make an impact.

[NavyCruiser]

4 hours ago, mugtech said:

Don't need a note from my doctor to get into the parks.

 

Not yet, but it's coming...

PETA is working to ban humans from entering parks, so as to not infect the poor animals there....

[ONECRUISER]

5 hours ago, TwoMisfits said:

 

See, this is exactly why I said Carnival's offer was the win/win...and anything else is probably doomed to fail.

 

And as for a lot of folks who thinks Carnival's offer is worthless, that's not thinking in Italy's terms.  Even if it's limited, the ship could give the area the possibility of treating folks that would automatically get turned away as either not serious enough, able to be delayed, or too expensive/labor intensive to help.

 

Like concussion patients needing to stay overnight for observation.

Blocked bile duct and routine gall bladder surgeries who need the overnight stay (or two).

Ob-gyn simple cases for births.

Knee replacements, hip replacements, carpel tunnel surgeries.

Skin cancer removals.

 

Lots of folks need the hospitals, but don't NEED the hospitals...but having a hospital like environment free of Covid would be great for them...b/c do you want to wait and endure weeks of agony from gallstones...or do you want the surgery done in a safe environment now?

Not going happen. You'd still have set up ships with all Med a Hospital needs. Plus these ships arent free, Carnival would charge for their use as in past, Katrina for one. Cheaper have Temp Hospital on shore

[compman9]

I own a British based company, but spend lost of money in Florida whenever I visit - Would the American government like to bail me out during this crisis

 

Cruise companies dodge the taxes small businesses have to pay by registering abroad. Americans even have to pay taxes on the profit of houses they sell, even if they are abroad!

 

I can't believe so many are defending the practices of tax dodging billion pound industries - They have abused the system long enough and it won't take long for others to replace them

 

If they go bust and the people running their shady operations lose their multi-million pound pay packets, tough

[RKHOOKER]

I have no issues with governments bailing out any business, BUT, the bailout MUST come with one condition, the CEO/Directors/Management all have their yearly salary including bonuses capped at 10 times the current median salary for the basic worker for a 3 year period.

[mugtech]

1 hour ago, RKHOOKER said:

I have no issues with governments bailing out any business, BUT, the bailout MUST come with one condition, the CEO/Directors/Management all have their yearly salary including bonuses capped at 10 times the current median salary for the basic worker for a 3 year period.

Never happen

[Iamcruzin]

16 hours ago, leen50 said:

The ripples are far reaching, new clothes, mani/pedi, dog sitters, baby sitters on & on.

You do realize that people do these things for land vacations as well?  Not everyone goes on a cruise vacation as a matter of fact we have alternated between cruising and land vacations over the years. When we choose a land vacation we spend more money supporting the local business than when we cruise.

[BND]

11 hours ago, steveru621 said:

I hate the word bailout.

 

In 2008 the banks did not get a bailout of free cash.  They were forced to take money that had to be repaid with interest.

 

The government can borrow money at less than 2%.  I suspect almost every industry will be offered low interest rate loans.  Yes some will get tax breaks.  Very few industries will actually get cash that does not have to be repaid.

 

Citizens will probably get a one time check, but don't forget it was your money to begin with and it will cost you far more in taxes to pay interest on the debt in the long run.

Most citizens will get a check.  My DH and I won't based on the thresholds and max out.  Our oldest son won't either-he's single.  Our youngest son and his wife will but that's because she doesn't work full time and they fall just under the max income so they won't get much.  Fortunately, we have plenty of savings and our oldest son does too.  Youngest doesn't have as much, but all are currently working.  So, we're not getting a check, but we will be paying for it, just like we pay for every "free" thing people think they get.

[drsel]

Which countries are giving cheques to all the citizens

[20165]

2 hours ago, Iamcruzin said:

You do realize that people do these things for land vacations as well?  Not everyone goes on a cruise vacation as a matter of fact we have alternated between cruising and land vacations over the years. When we choose a land vacation we spend more money supporting the local business than when we cruise.

Well said.  I like cruising over land based vacations, but not at a significantly higher price.  Demand will drive the price and like someone else said on this tread, people probably arent going to be beating down the cruise lines doors for their vacations in the near term so im not sure raising their prices will help with that.  I have a FCC and we are not even considering rebooking until probably this time next year.

[rtazz17]

1 hour ago, BND said:

Most citizens will get a check.  My DH and I won't based on the thresholds and max out.  Our oldest son won't either-he's single.  Our youngest son and his wife will but that's because she doesn't work full time and they fall just under the max income so they won't get much.  Fortunately, we have plenty of savings and our oldest son does too.  Youngest doesn't have as much, but all are currently working.  So, we're not getting a check, but we will be paying for it, just like we pay for every "free" thing people think they get.

Amazing how everyone has a crystal ball... people know how long the cruiselines will be paused,people know the exact amount of money they will or wont get. Smh.... the guessing has to stop... people read and assume its gospel... you dont know anything,only what youve heard and purged back out.

[time4u2go]

15 hours ago, HicksRA said:

Actually, you are contributing to the economy in the Sunshine State. Royal’s corporate office is in Florida. The fuel to fill the ship is purchased in Florida. The supplies loaded onto the ship are purchased in Florida. The shuttle from the airport to the ship is paid to a Florida company and Florida employees. The porters and teamsters who load the ship are paid Florida employees. And the list goes on.....

Also if they flew to/from a Florida airport, their airline ticket included fees that support that airport.