Possible Bankruptcy??

[voljeep]

2 hours ago, fishin' musician said:

If cruiselines were forced to incorporate in the US and thus be subject US taxes, labor and wage laws; cruising as we know it would not exist. I would expect perhaps a 10 fold increase in fare price??? Which would leave this style of vacation for only the extremely well-heeled. Would demand decrease to the point where you might have one ship a week leaving Miami or Fort Lauderdale?

 

Also realize that by US standards working 12 hour days for 8 months with no days off for a fraction of US minimum wage may be abhorred by many of us, but these jobs are in high demand in these people’s homeland and their families are quite well-off. I’ve talked to a few older cabin stewards who were putting their kids through medical and dental school.

 

Personally, I rather enjoy the current model that allows DW and I to take 2-3 cruises a year to destinations I could once only dream about!

 

3 minutes ago, nbsjcruiser said:

They dont pay payroll taxes on their employees who work on ships which is why they use flags of convenience to avoid all that bothersome stuff including workmen's compensation.  Not sure what you mean by "other taxes".

this was my response

[onboard2005]

I'm  a little disappointed right now. I think the cruise industry is going to be quite different in the future.  I sail solo and prices may go up.  I'm in the 70 yr old and over age restriction group, that may be permanent.  I think the time has come that the industry has gotten too big making all these larger ships.  I have a cruise for 2022 that only has a FCD on it. It doesn't look like I'll get to go if the age restriction stays in place. I have no health issues however, I  worked in a doctor's office and I know they won't want to be involved with those liabilities. Just have to wait it out and see.

[Coral]

2 minutes ago, onboard2005 said:

I'm  a little disappointed right now. I think the cruise industry is going to be quite different in the future.  I sail solo and prices may go up.  I'm in the 70 yr old and over age restriction group, that may be permanent.  I think the time has come that the industry has gotten too big making all these larger ships.  I have a cruise for 2022 that only has a FCD on it. It doesn't look like I'll get to go if the age restriction stays in place. I have no health issues however, I  worked in a doctor's office and I know they won't want to be involved with those liabilities. Just have to wait it out and see.

You may be surprised. I cruised after 9-11. I got a balcony on RCCL the first week of December for $700 (no single supplement) and upgraded to a full suite for $200 more. You may see single supplements return to 130%.

[npcl]

31 minutes ago, voljeep said:

Big corps don't pay income taxes - they pay tax attorneys  and CPA's to avoid/delay NOT EVADE ...

 

they do pay payroll taxes and other taxes

Actually they do.  The percentage varies, but in general they do pay taxes

 

The 379 profitable members of the Fortune 500 paid an effective federal tax rate of 11.3% last year

[onboard2005]

1 minute ago, Coral said:

You may be surprised. I cruised after 9-11. I got a balcony on RCCL the first week of December for $700 (no single supplement) and upgraded to a full suite for $200 more. You may see single supplements return to 130%.

You may be correct. 

It's the age restriction that I'm thinking about. I think doctors will have issues signing documents and even if they do there will probably be conditions set by the cruise lines regarding their ultimate responsibilities. There's another board on this topic so I won't go on about it here. 

[npcl]

7 hours ago, Coral said:

I disagree. Just 2 examples:

 

Cruise ships bring 1 billion to Seattle's economy.  https://www.seattlebusinessmag.com/tourismhospitality/seattles-1b-cruise-ship-industry-stung-princess-cruises-decision-suspend

I found this for Vancouver: The Vancouver cruise industry stimulates on average nearly $3 million in direct activity to the local economy for each ship that visits Canada Place, generates nearly 7,000 jobs across Canada and $300 million in wages, and contributes $840 million to national GDP.

https://www.portvancouver.com/news-and-media/news/2019-expected-to-bring-a-record-number-of-cruise-passengers-to-vancouver/ 

 

When I am in Alaska - I book private tours direct with the company. I know these individuals are locals. I eat at local restaurants. I know I am not alone. You are correct that some companies employ college students in Alaska. I am aware of many college students from the US go to Alaska for summer jobs. These are still Americans who are benefiting. I work in Education and know some of our students are from Alaska and they work in the Princess/HAL lodges in the summer when back home.

 

After I posted last night, I did a search and all of those "luxury mattresses" that Princess has "are made in the USA". 

Of course the Seattle article just happened to reference a CLIA study for the 1 billion figure.  

[nbsjcruiser]

1 hour ago, onboard2005 said:

You may be correct. 

It's the age restriction that I'm thinking about. I think doctors will have issues signing documents and even if they do there will probably be conditions set by the cruise lines regarding their ultimate responsibilities. There's another board on this topic so I won't go on about it here. 

 

1 hour ago, Coral said:

You may be surprised. I cruised after 9-11. I got a balcony on RCCL the first week of December for $700 (no single supplement) and upgraded to a full suite for $200 more. You may see single supplements return to 130%.

Oh there's going to be some great deals when the cruises open up again. The big difference of course is that this enemy is much more pervasive and hard to to fight. It wont be easily identified and has the ability to pop up anywhere at anytime. 911 was different in that regard. The US took the fight to them while the rest of the civilized world picked up and moved on after a short time. Unless a vaccine is found soon, cruising in the next year or so will be cheap, yes, but also risky. I think there will be great hesitation until this enemy is vanquished. A current example of trouble is the Zaandam. Right now there's 77 people on board who are ill. Flu? Covid-19? Nobody knows. This virus can live for 17 days so I have no idea how they're going to clean ships and ensure they dont become biological ticking time bombs. Once Covid-19 is licked then maybe things will return to normal but that's not going to happen overnight.

Edited March 25, 2020 by nbsjcruiser

[caribill]

10 hours ago, nbsjcruiser said:

They dont pay taxes anywhere in the world, why should any government bail them out?

 

For their fiscal year ending 11/20.19, CCL Corp paid $71 million in income taxes. That may not be as much as you think the company should have paid, but it is not $0 as you stated.

 

You can look on pages 20 and 21 in the 2019 Annual Report to read about the income taxes CCL Corp. is subject to in the USA, UK, Australia and Italy.

 

I suspect when you file your personal income taxes, you make an effort not to pay one cent more than is legally required. Why would you not expect any corporation to legally do the same?

[nbsjcruiser]

15 minutes ago, caribill said:

 

For their fiscal year ending 11/20.19, CCL Corp paid $71 million in income taxes. That may not be as much as you think the company should have paid, but it is not $0 as you stated.

 

You can look on pages 20 and 21 in the 2019 Annual Report to read about the income taxes CCL Corp. is subject to in the USA, UK, Australia and Italy.

 

I suspect when you file your personal income taxes, you make an effort not to pay one cent more than is legally required. Why would you not expect any corporation to legally do the same?

 

You're right, its not zero. I looked it up and according to this site: https://thehustle.co/the-economics-of-cruise-ships/

The average tax rate for a cruise line is 0.8%. So while $71M sounds like a lot, and it is to me and (I assume) you, its a drop in the bucket. Its so low it might as well be nothing. 

And yes, you're right I dont pay more than I have to but I'm not on the government's doorstep looking for a handout either. When large corporations are on bended knee, hat in their hands asking big government for a handout then its fair to ask questions. If they dont want a bailout, so be it but if they do then they should be held to some account for their future behaviour.

 

To me its comparable to companies like Dell. They moved most of their workforce to India, pay them a pittance and then have the audacity to turn around and ask the same people they screwed over to buy their product. I choose to support my local shops and tell companies like Dell to stuff it. 

Edited March 25, 2020 by nbsjcruiser

[npcl]

37 minutes ago, caribill said:

 

For their fiscal year ending 11/20.19, CCL Corp paid $71 million in income taxes. That may not be as much as you think the company should have paid, but it is not $0 as you stated.

 

You can look on pages 20 and 21 in the 2019 Annual Report to read about the income taxes CCL Corp. is subject to in the USA, UK, Australia and Italy.

 

I suspect when you file your personal income taxes, you make an effort not to pay one cent more than is legally required. Why would you not expect any corporation to legally do the same?

CCL effective tax rate world wide was 2.2% 2017  1.6% 2018   2.3% 2019

Pretty much the only income tax they pay in the US is related to the HAL and Princess Alaskan tour operations.  Most of the tax amount is paid to foreign governments, not US. With CCL it is because of their purchase an operation of UK, Australian, and Italian based cruise lines. Conditions of those acquisitions required leaving corporate structures in those countries.

[neverbeenhere]

Last time I checked, corporations only write the check. Consumers of their products pay the taxes. 

[npcl]

1 minute ago, bluesea321 said:

 

I know you don't disagree about the cruise lines, I have read your good posts on the subject.  My comments are meant to reinforce the position that the cruise lines are foreign entities that pay very low taxes worldwide and next to no US income taxes.  Since they choose to incorporate in places like Panama, and thus avail themselves of those countries laws, they should ask those countries for loans or guarantees to prevent a bankruptcy, not us.  US taxpayers should not be on the hook to rescue them.

The funny thing about this is if the cruise lines kept an amount equal to deposits in cash would have given them over 4 billion in cash) and/or if they had slowed down the mass race to build as many ships as possible, they would not have an problem weathering this.  The biggest cash drain they have is refunds on canceled cruises. Operational cost on idle ships they could have covered using revolving lines of credit with potentially renegotiating the terms and expiration dates of those.

[#55worktoplay]

On 3/24/2020 at 7:27 AM, nbsjcruiser said:

 

Of course you raise valid points but it shouldn't stop people asking questions about the behaviour of the cruise lines behaviour as it relates to taxes and bailouts. Look, I'm not an American so I have no dog in the fight when it comes to bailouts but if the federal government is handing out bailouts to cruise lines then it should come with some strings attached. Bring your ships back to the US, start paying taxes and you'll get your bailout otherwise see if Liberia or the Bahamas will bail you out.

 

In 2008 billions went to companies that later participated in massive stock buybacks and CEO pay raises while the employees paid the price and the taxpayers picked up the tab. Look at GM as a prime example. Took the bailout money and has been shutting down car plants and moving jobs to whatever country that will pay workers next to nothing while still producing cars to be sold in mainly North America. Yes GM paid the money back but thousands of their North American employees paid the ultimate price for the bailout anyway.

 

 I just think its time that businesses that use questionable practices to avoid taxes need to take a step back. Worry about your financial bottom line certainly but also take a long look at your moral practices at the same time. To be clear, they wont do that unless its insisted that they do.

I am not American either but agree 100% with this, there definitely should be strings attached and should have been with GM.  We are a GM family but PO’d about them moving the jobs from North America.
 

Yes there are many US employees that would benefit from a bailout but just imagine what all those tax dollars can bring. 

[caribill]

2 hours ago, nbsjcruiser said:

When large corporations are on bended knee, hat in their hands asking big government for a handout then its fair to ask questions.

 

2 hours ago, npcl said:

Oh I don't have any issue with them using the laws to their advantage.  Just as I don't think the US should provide them any money without putting substantial rules in place on the use of that money.  More so than for a US based company because they are not US based, not essential, actually probably one of the least essential businesses that exists.

 

1 hour ago, bluesea321 said:

 

when they come begging to us for money I would direct them to Panama, their country of incorporation. 

 

1 hour ago, bluesea321 said:

 

Since they choose to incorporate in places like Panama, and thus avail themselves of those countries laws, they should ask those countries for loans or guarantees to prevent a bankruptcy, not us.  US taxpayers should not be on the hook to rescue them.

 

So far I have not seen any source that says CCL Corp is actually requesting any monetary aid from the US Government.

 

If you have seen this, please point me to the source.

[npcl]

18 minutes ago, caribill said:

 

 

 

 

So far I have not seen any source that says CCL Corp is actually requesting any monetary aid from the US Government.

 

If you have seen this, please point me to the source.

Not publicly.  Of course this has a long way before it is over.

 

The following comment is why my trust in cruise lines is diminishing. The question is does he really believe that or are they that desperate.  This goes hand and hand with some of Norwegian's sales tactics.

 

https://www.fool.com/investing/2020/03/25/carnival-still-isnt-sure-if-it-will-continue-its-c.aspx

 

Carnival posted its statement that it wasn't yet sure if it would follow the other big cruise lines' leads one day after its CEO Arnold Donald argued on HBO's Axios that being on a cruise ship doesn't increase peoples' chance of infection:

"A cruise ship is not a theater. It is not an arena," he said. "It is more like Central Park. There's a lot of natural social distancing."

[Jim9310]

21 minutes ago, caribill said:

So far I have not seen any source that says CCL Corp is actually requesting any monetary aid from the US Government.

 

If you have seen this, please point me to the source.

 

Perhaps you'll find this article helpful---

https://www.thelivefeeds.com/trumps-long-standing-ties-to-cruise-industry-tested-by-coronavirus-pandemic/

[Aus Traveller]

25 minutes ago, caribill said:

So far I have not seen any source that says CCL Corp is actually requesting any monetary aid from the US Government.

 

If you have seen this, please point me to the source.

I would be interested to see this also.

[jwattle]

3 hours ago, npcl said:

The funny thing about this is if the cruise lines kept an amount equal to deposits in cash would have given them over 4 billion in cash) and/or if they had slowed down the mass race to build as many ships as possible, they would not have an problem weathering this.  The biggest cash drain they have is refunds on canceled cruises. Operational cost on idle ships they could have covered using revolving lines of credit with potentially renegotiating the terms and expiration dates of those.

Hindsight is such a nice gift

[Colo Cruiser]

24 minutes ago, jwattle said:

Hindsight is such a nice gift

I know right.   🙄

[Rancher Dave]

On 3/21/2020 at 7:52 PM, dns65 said:

 

From what I've read by financial experts, it's unlikely that Carnival Corp would go under as they apparently are in a better cash/debt situation than RCCL and NCL. 

I would think it would be more likely that Carnival would dissolve the brand and distribute the ships within their other lines due to the significant brand damage that has occurred to the Princess name.   

 

But realistically, can anyone predict anything that may happen over the next 6 months?  The world literally has been turned upside down and it only took 1 week to do it.  Our lives have been fundamentally changed for the short term.  Who knows if we'll even see the cruise lines return to operation this year if the situation gets much worse.  

They didn't disband Costa when their crazy captain crashed and sank a ship killing numerous passengers. I doubt Princess with a far stronger brand name would be split up. 

 

As for bankruptcy, a chapter 11 reorg is completely possible where the parent company emerges in some form as a cruise company once again. Things might be a bit different afterwards, but even if they do go that way, it's not as if the ship are poof gone forever.  Deposits might even be preserved on ongoing sailings to keep that business on the books. It is a matter of what gets negotiated and approved in a bankruptcy court.  Shareholders get wiped out, meaning that the execs all lose a bunch of their respective net worth.

[caribill]

4 hours ago, Jim9310 said:

 

Perhaps you'll find this article helpful---

https://www.thelivefeeds.com/trumps-long-standing-ties-to-cruise-industry-tested-by-coronavirus-pandemic/

 

Very helpful. It said:

 

"Carnival spokesman Roger Frizzell declined to comment on any discussions executives may have had with the White House, but said the company is not seeking a bailout."

 

[Cafedumonde]

Corporations don’t pay taxes, they just pass them on to the consumer.

 

Ronald Reagan put it best:
"Some say shift the tax burden to business and industry, but business doesn't pay taxes. Oh, don't get the wrong idea. Business is being taxed, so much so that we're being priced out of the world market. But business must pass its costs of operations--and that includes taxes--on to the customer in the price of the product. Only people pay taxes, all the taxes. Government just uses businesses in a kind of sneaky way to help collect the taxes. They're hidden in the price; we aren't aware of how much tax we actually pay."

[SinbadThePorter]

1 hour ago, Cafedumonde said:

But business must pass its costs of operations--and that includes taxes--on to the customer in the price of the product.

 

If that were true, when businesses get trillion dollar tax cuts, as they have done several times in the recent past, we should see the prices of goods and services fall a similar amount as a result.

 

I've never seen evidence to that effect. What you do see is increased corporate profits.

[Doubt It]

Cruising is receiving long overdue scrutiny due to this virus, excellent.

 

Cruising has changed into 2 segments - one segment caters to the vision of "Vegas at sea" (destinations are secondary) and the other are destination oriented (typically the smaller vessels premium and up, except Cunard).

 

I am in the destination oriented segment which is where I can and have substituted land based vacations for cruising and received a far better product than what cruising offers. Yes, it is more work to organize but the flow of benefits is simply amazing.

 

Another poster mentioned job losses in 3rd world areas; not my responsibility.  They can adapt to a capitalist model if they wish, up to them.

 

Cruising is a discretionary item and should not receive a single $ of support from the taxpayer.

 

 

[fishin' musician]

1 hour ago, Doubt It said:

Cruising is receiving long overdue scrutiny due to this virus, excellent.

 

Cruising has changed into 2 segments - one segment caters to the vision of "Vegas at sea" (destinations are secondary) and the other are destination oriented (typically the smaller vessels premium and up, except Cunard).

 

I am in the destination oriented segment which is where I can and have substituted land based vacations for cruising and received a far better product than what cruising offers. Yes, it is more work to organize but the flow of benefits is simply amazing.

 

Another poster mentioned job losses in 3rd world areas; not my responsibility.  They can adapt to a capitalist model if they wish, up to them.

 

Cruising is a discretionary item and should not receive a single $ of support from the taxpayer.

 

 

 

The two segments you describe do not necessarily separate brands as many lines have offerings in both segments.  Princess, RCL, X, and HAL often dedicate older ships for destination focused itineraries.

 

Oh, and I was the one mentioning 3rd world job losses.  WOW!  REALLY?