SS/RCCL Finances: Improving, Options, Questions??!!

[rkacruiser]

3 hours ago, TLCOhio said:

Bank of America Corp. said this month that its private clients have an average of 63% of their portfolios dedicated to stocks—far more than after the 2008 financial crisis, when they had just 39% of their portfolios in stocks.”

 

Who are these clients?  What percentage of their clients are retirees?  If so, then their retirees are properly invested in the 60-40 percentages for clients of that type.  

 

1 hour ago, tgh said:

If everyone sat tight the carnage would be ameliorated

 

Amen!

 

8 hours ago, highplanesdrifters said:

I have become the passive investor that I used to make fun of.  It's wonderful.

 

Yes. It is.  Make investments in quality companies.  Hold.  Nibble, if one wants, to add to holdings.  Reinvestment of dividends and capital gains is a great gift an investor can receive.  Diversify one's investments among individual securities and mutual funds whose objectives differ.  

 

CCL and RCI will again return to profitability and dividends will return.  When?  How many times can I type this?  😀   My crystal ball has been in the repair shop since March, 2020.  Parts are not available.  Supply chain issues, I understand.  🤣

[highplanesdrifters]

20 hours ago, RetiredandTravel said:

We're going to get on Terry's bad list

 

Loved the 80's and 90's, my cholesterol peaked at 300.  Were you in NYC?  I don't reveal much personal info on the internet if you prefer not to say I understand.

 

What was cataclysmic was the financial engineering that created Mortgage Backed Security derivates like CMOS which became instrumental in creating the financial crises in 2008/09.  MBS CMO's were created to widen the appeal of MBS and improve margins as passthroughs bid/ask declined.  CMO's started ok with PACs & TAC's but evolved into wildly leveraged securities like the inverse floater.   The first large meltdown of MBS esoteric securities was in 1994 when Greenspan & Co tightened aggressively, the writing was on the wall.  In the late 90's early/mid 2000's firms that specialized in MBS derivates became extremely profitable and continued to leverage their balance sheet.  Cataclysmic may not be a strong enough word for what came next.

 

 

Terry: thanks for not putting us on a bad list. I am enjoying the thoughts and ideas people are putting forward.

R&T: I agree on personal info but can provide a little for context.  I spent a good part of my life as a FX trader on the CME and  then global trader/broker, Readers Digest version.

 

 MBS & CMOs: Let us not forget the AIG insurance on the third tier tranches of MBSs that blew up because the idiot who ran the desk didn't price in the appropriate risk. Of course no one was pricing in the appropriate risk.  I feel that this might have been the lynchpin. And why did folks default on that third tier?  They refinanced with low APR balloons. Their balloons had triggered and rates were ticking up.  Gas was reaching all time highs. Sound familiar? (cue Jaws music) Almost daily, my spouse and I discuss whether we will muddle through, blow up, or something in the middle. Today we are in  the muddle through camp. 

 

Greenspan: He put the market into chaos when he spoke the words "regrettable" and "irrational exuberance". Can you imagine what the algos would do with it?

 

Fibinacci: I get giddy when anyone uses that word.

 

Be well everyone and thanks for the civilized discussions.

[TLCOhio]

17 hours ago, tgh said:

History shows a self fulfilling prophecy in that the market actually

encourages folks to panic and get out.  If everyone sat tight the carnage would be ameliorated.  It's a banal but seminal truth… you have lost nothing until you sell.  Panic is a financial aphrodisiac it seems.

 

Appreciate these excellent insights and varied follow-ups regarding the financial markets.  Sadly, some in the field want people to keep buying, selling, panicking, etc.  The more trading, over and over, then . . . the more money is made via commissions and fees.  Long-term focus can and should be more reasonable as an objective, maybe?    

 

From a national financial news website this morning, they had this headline: “Why This Cruise Stock Analyst Is Cutting Price Targets Following Carnival Debt Offering” with these highlights: “Carnival Corp completed a much-needed $1 billion debt offering last week, and one Wall Street analyst said Monday that shareholders of Norwegian Cruise Line and Royal Caribbean Cruises should take notice.  The Cruise Stock Analyst: Bank of America analyst Andrew Didora issued the following changes to his price targets for cruise stocks:  Reiterated Neutral rating for Carnival, cut price target from $22 to $18.  Reiterated Neutral rating for Norwegian, cut price target from $25 to $20.  Reiterated Underperform rating for   Royal Caribbean, cut price target from $70 to $57.  The Cruise Stock Takeaways: After an extremely difficult few years, Didora said the cruise stocks now have a different set of financial challenges coming ahead in the form of debt maturities.  Carnival has $1.6 billion of maturities in 2022 and $2.9 billion in 2023. Royal Caribbean has $8.1 billion of principal payments due with $3.7 billion of notes, term loans and revolvers maturing in 2022 and 2023.”

 

Here is more: "Norwegian has $861 million in maturities through the end of 2022 and another $934 million in 2023.  Didora said the fact that Carnival completed its offering even though it has $7.2 billion in total liquidity is telling.  'We think this debt issuance at these levels of liquidity shows the refi needs of the cruise industry in the face of rising interest rates plus concerns around a spike in COVID cases (cruises still test),' Didora said.  Investors are still waiting to see when or if the cruise industry returns to its pre-pandemic levels. There may be significant long-term upside among cruise stocks, but at this point there is simply too much financial risk and business uncertainty for investors to feel confident about near-term upside."

 

Full story at:

https://markets.businessinsider.com/news/stocks/why-this-cruise-stock-analyst-is-cutting-price-targets-following-carnival-debt-offering-1031482285

 

THANKS!  Enjoy!  Terry in Ohio

 

Norway Coast/Fjords/Arctic Circle cruise from Copenhagen, July 2010, to the top of Europe. Scenic visuals with key tips. Live/blog at 244,326 views.

www.boards.cruisecritic.com/showthread.php?t=1227923

[Stumblefoot]

On 5/21/2022 at 8:07 AM, RetiredandTravel said:

Has there ever been any speculation of RCL selling Silversea?

I haven't heard any speculation other than Carnival is shopping Seabourn and supposedly the only interested party at this point is the Saudi Sovereign Wealth Fund.

RCL's -17% decline from last Friday's open has been fascinating to watch, as well as the fact it hit (didn't close though) the 61.8% Fibonacci retracement today that I previously mentioned.  Seems RCL's equity is spooked by CCL's recent debt offering. 

[TLCOhio]

14 minutes ago, Stumblefoot said:

I haven't heard any speculation other than Carnival is shopping Seabourn and supposedly the only interested party at this point is the Saudi Sovereign Wealth Fund.
RCL's -17% decline from last Friday's open has been fascinating to watch, as well as the fact it hit (didn't close though) the 61.8% Fibonacci retracement today that I previously mentioned.  Seems RCL's equity is spooked by CCL's recent debt offering. 

 

Sadly, today was another bad, BAD day for the cruise line company stocks.  How negative?  Double-digit drops and new lows during the most recent twelve months.  Have not heard anything about RCL selling Silversea.  Not sure the timing would be good right now.    

 

From the Wall Street Journal late this afternoon, below is their chart reflecting a 10.2% drop, going below $50 a share.  Carnival dropped 10.4%.  Norwegian was down 12.2%.  Overall, the market dropped, but not in that high of a negative category.  The previous recent RCL stock market low was $23.81 on March 18, 2020, when the cruise industry had to shut down totally.  

 

Where do they go  next and what is causing this negative trend?  Just debt load and/or overall negativity with the economy?

 

THANKS!  Enjoy!  Terry in Ohio

 

Sydney to NZ/Auckland Adventure, live/blog 2014 sampling/details with many exciting visuals and key highlights.  On page 23, post #571, see a complete index for all of the pictures, postings.  Now at 237,489 views.

www.boards.cruisecritic.com/showthread.php?t=1974139

 

[TLCOhio]

On 5/23/2022 at 12:01 PM, highplanesdrifters said:

Terry: thanks for not putting us on a bad list. I am enjoying the thoughts and ideas people are putting forward.  Be well everyone and thanks for the civilized discussions.

 

Appreciate these great comments and follow-up from highplanesdrifters.  Yes, having good discussions and excellent sharing works well, is nice, informative and helpful, etc.  Keep it up!! 

 

From the below-connected financial website, they had this headline: “Cruise stocks lead S&P declines as cost increases, capacity concerns build” with these highlights: “Cruise line stocks crashed on Tuesday afternoon as resurgent travel demand failed to obscure issues related to inflation and indebtedness.  While hopes of a return to pre-pandemic travel trends abounded in April, helping lift stocks like Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Holdings , the optimism may have been overstated.  All three stocks are among the top 5 largest decliners in the S&P 500 on Tuesday.  Analysts have noted that trends in terms of total passengers as pandemic restrictions roll back have not met previous estimates.  'With cumulative bookings for the back half of the year still in a deep hole [versus] comparable 2019 levels, most notably for the Caribbean, it will likely take continued significant discounting/promotions to get the back half of the year anywhere close to historical load factors,' Truist analyst C. Patrick Scholes wrote in a recent note to clients. 'Unless the 2023 pace reverses trend, we believe significant price/promotional activity will be needed to fill the ships, a similar scenario to what is occurring in 2022.'  He added that prices are 'nowhere near where cruise lines want them to be'  in context of rising food and fuel costs.”

 

Full story at:

https://seekingalpha.com/news/3842374-cruise-lines-lead-sp-declines-as-cost-increases-capacity-concerns-build

 

THANKS!  Enjoy!  Terry in Ohio 

 

Venice: Loving It & Why??!!  Is one of your future desires or past favorites? See these many visual samples for its great history and architecture.  This posting is now at 95,997 views.

http://boards.cruisecritic.com/showthread.php?t=1278226

[rkacruiser]

4 minutes ago, TLCOhio said:

'With cumulative bookings for the back half of the year still in a deep hole [versus] comparable 2019 levels, most notably for the Caribbean, 

 

Concerning, but with regard to the Caribbean, many of the ships are not in that region from June-September.  

[rkacruiser]

I read the rumor about CCL's considering selling Seabourn on the Seabourn Message Board a few minutes ago.  I am surprised if there is truth to this rumor.

 

In the 1980's, it was reported that Mr. Arison had a proposed "Tiffany Project" in mind.  This was reported to be an important goal that, I suppose, would help enhance CCL beyond the popular "Fun Ship" image that had developed.  The purchase of HAL was a first step towards that goal.  When CCL acquired Seabourn, in my thinking, Mr. Arison had reached his goal.  

 

If this rumor is in fact correct and there is a need to jettison Seabourn in order to preserve the company and its other holdings, there must be much gloom in the Executive Suites in an office building on NW 87th Street in Miami.  

 

But, then, I ask myself, what do I really know?  

[Stumblefoot]

5 hours ago, rkacruiser said:

I am surprised if there is truth to this rumor.

Prepare to be surprised.

[saminina]

8 hours ago, rkacruiser said:

But, then, I ask myself, what do I really know?  

 

For a change, I'll be a bit diplomatic and respond with no comment.

Will also refer you to post 826 on this thread.

The Arison days have passed.   He saved Seabourn and his son maintained it.  Seabourn under HAL management has been an engineered disaster.   Thru my eyes, Seabourn as part of CCL is about finished.  

 

But, then, I ask myself, what do I really know?

Edited May 25, 2022 by saminina
add engineered

[rkacruiser]

18 hours ago, saminina said:

Will also refer you to post 826 on this thread.

The Arison days have passed.

 

Thank you.  I re-read your post.  I don't agree that the Arison days have passed.  (But, what do I know?)  Micky remains as Chairman of the Board.  Yes, a new CEO ought to be given some liberty in how a company is operated.  But, isn't that CEO subject to the oversight--and approval of his/her work--by the Board?  

 

18 hours ago, saminina said:

Thru my eyes, Seabourn as part of CCL is about finished.  

 

 

Reading the initial brief comments of Host Dan after his just completed Seabourn Odyssey cruise, yes, I think you may be correct.  

I have never been a fan of the HAL-Princess-Seabourn amalgamation in Seattle.  The shuffling off into whatever new title that was created for him of Stein Kruse has been viewed as an unwise corporate decision by me.  He had the cruise related "smarts" of Kirk Lanterman that, for whatever reason, seemed to be increasingly unappreciated by the leadership of CCL.  

[TLCOhio]

Interesting comments and follow-ups about Seabourn.  Our first cruise was with them in 2006, Athens to Istanbul.  Super wonderful experience on one of their three "triplets".  Loved it so much, I was depressed as we were nearing the end of that adventure in Greek Isles and along the Turkish Coast.  Facing the reality that the sailing, food, service, etc., was going to end was very hard to accept and manage!!!

 

From the Wall Street Journal late this afternoon, I wanted to share some serious "GOOD NEWS".  Today the stock market signaled that the cruise companies are not going out of business.  Real positive news!!!!  Why?  Not totally certain. 

 

As shown below, Royal Caribbean was up, UP 8.7%.  Carnival rising 8.5% and Norwegian up a big 12.1%.   The overall S&P 500 was up 2.0%.  Clearly, these three cruise stocks were doing much better than average today.  

 

Maybe it was this Wall Street Journal story reflecting a consumer trend pattern with this headline: “American Shoppers Boost Retailers With Spending on Work Clothes, Discount Staples" with this sub-headline: "Macy’s, Dollar Tree report strong sales that bucked broader trends but warn inflation is changing consumer behavior.”

 

Here were their story highlights: “American shoppers boosted spending at department stores and discount chains, showing resilience amid inflationary pressures that have weighed on consumers and dented results at many big retail chains.  Macy’s and Dollar Tree reported strong sales increases in their most recent quarters. Those results came as shoppers spent more on clothing for work and special occasions. Another budget chain, Dollar General posted flat sales but raised its outlook for the full year, saying cash-strapped shoppers are gravitating to its stores more frequently.  The results, which sent shares of all three chains higher, ran counter to the performance of other large retailers such as Walmart Inc. and Target Corp., which last week reported steep profit declines as rising supply-chain, wage and inflation-related costs ate into earnings.”

 

Full story at:

https://www.wsj.com/articles/retailers-get-lift-from-resilient-shoppers-11653587396?mod=hp_lead_pos1 

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 69,859 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

 

From the Wall Street Journal, below is their chart for RCL and reflecting today's big jump UP!!:

(Open your screen/viewer wider to see this visual larger/better!)

[rkacruiser]

It's good news today; it's the end of the world tomorrow.  Interesting to read, but, I can't take most of these gyrations of the Market with much concern.  

 

I know what I am doing.  I know what I am owning.  It's these darn day traders that are, once again, providing more clouds in my crystal ball.  

 

An example:  Carnival Freedom has a funnel fire that causes her cruise to be canceled at Grand Turk.  Carnival Conquest's next cruise is canceled so that she can go to pick-up the guests and return them to Port Canaveral.  What does CCL's stock do?  It goes up.  It's totally illogical!  Bad news for a company is good news for its stock price?  

[Stumblefoot]

21 minutes ago, rkacruiser said:

Carnival Freedom has a funnel fire that causes her cruise to be canceled at Grand Turk.  Carnival Conquest's next cruise is canceled so that she can go to pick-up the guests and return them to Port Canaveral. 

And, here are pictures from our friend’s who are on board.  

 

 

CCL has been flying passengers back to the U.S. who wanted to leave, while other passengers have remained on the ship in Grand Turk for four days, enjoying extra vacation time as they await a ship to return them to the states.

 

[crusinbanjo]

12 hours ago, Stumblefoot said:

And, here are pictures from our friend’s who are on board.  

 

Ouch that had to hurt!

[TLCOhio]

On 5/28/2022 at 7:09 PM, Stumblefoot said:

And, here are pictures from our friend’s who are on board.   CCL has been flying passengers back to the U.S. who wanted to leave, while other passengers have remained on the ship in Grand Turk for four days, enjoying extra vacation time as they await a ship to return them to the states.

 

Appreciate these details and the pictures from that troubled Carnival ship.  WOW!!  That was a sad shocker for those doing a Caribbean cruise.  But, during the past week, it did not seem to affect their stock values.  

 

From the Wall Street Journal today, below are the stock charts for the three major cruise lines.  Last week, these three stock all hit their lows for the most recent 52-week period.  YES, later on Wednesday, Thursday and Friday, these stock did rebound, somewhat.  But, the Wall Street financial types still are not seeing a clear, fully-positive recovery path forward.  Right? Or, wrong?  

 

Adding to the complications might be ALL of the airline flight cancellations that happened this past Memorial Day holiday weekend.  Sure glad we were not flying over that challenged period.  While there were some weather issues, it seems that airlines, cruise lines, dining places, etc., etc., continue to have staffing challenges in seeking to get back to "normal".  

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 52,785 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

 

From the Wall Street Journal Tuesday morning, below are their charts for Royal Caribbean and the other two major cruise lines during the past week.  At the bottom, the chart reflect RCL for the past three years.  You can see the big, BIG drop in March 2020 as the Covid shut-down hit.  Then, these stock tried to recover, but kept having ups and downs.   Over and over, again.  To say it has been "rocky" is an understatement during the past two-plus years.  Right?:

(Open your screen/viewer wider to see this visual larger/better!)

 

 

 

[TLCOhio]

Below is a little more as to what happened with the passengers on that Carnival cruise having a fire challenge.  Some were happy, others not as quite as much.  

 

From Yahoo News and a Florida TV station yesterday, they had this headline: “‘We made it’: Passengers return to Port Canaveral after cruise ship catches fire” with these highlights: “Nearly 2,500 cruise passengers returned to Port Canaveral after a fire broke out on their ship.  A cloud of smoke poured out of the Carnival Freedom while it was docked at Grand Turk on Thursday.  Channel 9 spoke to some of the passengers as they disembarked the Carnival Conquest at Port Canaveral’s Terminal 6 on Monday morning.  Some were ecstatic to spend two extra days on vacation while others were just happy to be back on American soil.  Channel 9 found out that Carnival Freedom’s next two cruises out of Port Canaveral on June 2 and June 6 have been canceled.  As for the passengers, they all received cruise cash to use while onboard and every passenger was awarded 50% off their next Carnival cruise.”

 

Full story at:

https://news.yahoo.com/passengers-return-port-canaveral-cruise-092951242.html

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Exciting visual samples, tips, details, etc., for this scenic, historic location. Over 49,248 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

[TLCOhio]

From this financial website in late May, they had this headline: “Carnival Cruise Lines Presents Investors With a Clear Risk/Reward Scenario” with these highlights: “Investors in Carnival Cruise Lines must be wondering what they need to do to catch a break. A halting recovery in the cruise line industry is keeping CCL stock trading at 25-year lows. That’s not a misprint. Carnival hasn’t consistently traded at its current levels since 1996.  Carnival, along with the other major cruise lines were forecast to be slam dunk recovery stocks. No matter how individuals personally feel about cruising, there’s no doubt that’s it a popular vacation option. And the belief was that cruise lines would be major beneficiaries of pent-up demand for travel.  It hasn’t worked out that way. Like inflation expectations, the slump in cruise line business was expected to be transitory. The reality is that, like inflation, transitory is taking a lot longer than many people expect. That presents investors with an uncertain outlook and makes CCL stock a buy for only the most risk-tolerant investors.”

 

Here are some more important details: "Every major cruise line took on debt during the pandemic. None more than Carnival, which added $20 billion to its balance sheet. The cruise line reported $7.2 billion in liquidity when it reported earnings in March. That was down from $9.4 billion in the prior quarter.  Carnival now is expecting to have its full fleet back in operation this summer. It’s the only cruise line that can make that claim.
However, I can’t help but look at the company’s last earnings report in which the company posted a disappointing $1.6 billion in revenue. Not only did this miss analysts’ expectations for revenue of $2.3 billion, but it was a fraction of the $4.79 billion that the company posted in its last pre-pandemic quarter."

 

Full story at:

https://www.nasdaq.com/articles/carnival-cruise-lines-presents-investors-with-a-clear-risk-reward-scenario

 

THANKS!  Enjoy!  Terry in Ohio

 

Dubrovnik!  Nice visual samples, tips, details, etc., for this super scenic and historic location. Over 48,724 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

[Stumblefoot]

3 hours ago, TLCOhio said:

However, I can’t help but look at the company’s last earnings report in which the company posted a disappointing $1.6 billion in revenue. Not only did this miss analysts’ expectations for revenue of $2.3 billion, but it was a fraction of the $4.79 billion that the company posted in its last pre-pandemic quarter.

What I find remarkable is the fact that airlines have had such a great success during this same timeframe.  In fact, Delta Airlines upped their earnings guidance today stating this quarter’s revenues will be equal to the same quarter in 2019 and yet, available seat capacity is 18% less.  THAT is impressive!

[TLCOhio]

21 hours ago, Stumblefoot said:

What I find remarkable is the fact that airlines have had such a great success during this same timeframe.  In fact, Delta Airlines upped their earnings guidance today stating this quarter’s revenues will be equal to the same quarter in 2019 and yet, available seat capacity is 18% less.  THAT is impressive!

 

Great above comments and follow-up from our travel friend as to how the airlines (which got billions of dollars in Covid Federal recovery payments), have recovered back closer to "normal" and are now rolling up profits.  But, the cruise lines??  When and how?  

 

From MSN News and a financial website, they had this headline: “Royal Caribbean Makes a Huge Future Cruise Credit Change” with these highlights: “The pandemic has forced a level of fluidity on Royal Caribbean's decision-making process that once seemed impossible. As the cruise line was dealing with this challenging environment, it had to reassure its customers that booking was a safe option -- 'Cruise With Confidence.'  Royal Caribbean quietly ended Cruise With Confidence earlier this year, but many passengers were left with FCCs. Those cruise certificates had expiration dates.  That meant that some people held FCCs that might expire before they could use them. Now, Royal Caribbean has made a change to the program that many people holding credits will be thrilled with.  The company has seen the bigger picture and (likely) decided that goodwill mattered more than having to deal with not knowing when people would use their credits to book a cruise.  The cruise line has decided to have all FCCs issued between the start of the pandemic in 2020 and early 2022 not expire.  'As of June 1, 2022, Royal Caribbean announced that all unredeemed future cruise credits (FCC) offered under the Cruise with Confidence program will no longer expire.'  Prior to today's announcement, each credit had an expiration date when it had to be redeemed by, which gave some guests concern that they would lose out on the value of their money paid because they are unable or unwilling to cruise before the end of this year.  Royal Caribbean has not extended the redemption period for the extra 25% credit issued to people who had their cruises cancelled by the cruise line. Those credits will still expire at the original date.”

 

Very good PR and customer-friendly decision!!  Does this apply for all Silversea FCC's?

 

Full story at:

https://www.msn.com/en-us/travel/news/royal-caribbean-makes-a-change-passengers-will-love/ar-AAXYJgD?ocid=BingNewsSearch

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Many visuals, details from two visits in a city with great history, culture and architecture.  Now at 44,549 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

[cruiseej]

3 hours ago, TLCOhio said:

The company has seen the bigger picture and (likely) decided that goodwill mattered more than having to deal with not knowing when people would use their credits to book a cruise.

 

I could put a different spin on this. 😉 If the cruise line sticks with the original expiration date, many of the cabins on their cruises this year will be taken up with people using FCCs. that, in turn, reduces their ability to sell new bookings to customers on those cruises, so it actually hold back their revenue potential. So perhaps a bean counter decided that hard revenue now was more important than carrying the liability of unused FCCs into the future. 

 

3 hours ago, TLCOhio said:

Royal Caribbean has not extended the redemption period for the extra 25% credit issued to people who had their cruises cancelled by the cruise line. Those credits will still expire at the original date.

 

Well, if they were just trying to be "customer friendly", they wouldn't have added this important restriction. 😉 This enables them to write off all the "bonus" credits they awarded, and to reduce their liability to the actual amount customers prepaid. If the cruise line gets customers to retain only the 100% they originally paid, when customers decide to use that credit for 2023 or 2024 (or later) cruises, the customers will of course find that the cost of the cruise has gone up — so the cruise line will get an infusion of some additional revenue.

 

Overall, I see this as a win-win for the cruise line and customers. The cruise line relieves pressure from potentially unhappy customers by giving them longer to use up their credits, but they also get to write down a chunk of unpaid credits and to earn additional revenues as people use those credits and pay the difference in higher fares.

 

It will be interesting to see if any other cruise lines follow RCL on this, or at least give people an extra year or two to use their credits. 

[AmazedByCruising]

3 hours ago, cruiseej said:

If the cruise line sticks with the original expiration date, many of the cabins on their cruises this year will be taken up with people using FCCs. that, in turn, reduces their ability to sell new bookings to customers on those cruises, so it actually hold back their revenue potential. So perhaps a bean counter decided that hard revenue now was more important than carrying the liability of unused FCCs into the future

 

 

 

 I think FCCs shouldn't be valued as "debt", because people cannot turn FCC into actual money but need to sail, and are supposed to buy drinks and Tanzanite while doing so. It's more like a coupon, and you can insure against too many people actually using it. I wonder how much FCC that wasn't bought on a ship but was given away is actually used. I got an offer by the Casino once, but I'd need to fly to Miami and back from Holland to enjoy it. A sure bet to give me a present that I won't use. Also, people tend to have work that doesn't match the itineraries. And some of them are sick or die. It would be nice to see the Excel sheet showing FCC bought, FCC given (for a cancelled cruise, for gambling, for missed ports, for a burning ship), and FCC used. It wouldn't surprise me if the last column for "involuntary" FCC would show an actual used percentage of like 30%.

 

[Stumblefoot]

9 minutes ago, AmazedByCruising said:

It wouldn't surprise me if the last column for "involuntary" FCC would show an actual used percentage of like 30%.

I'd happily take the opposite side of your bet on a Silversea cruise.

[AmazedByCruising]

46 minutes ago, Stumblefoot said:

I'd happily take the opposite side of your bet on a Silversea cruise.

 

What exactly is the opposite bet?  At least 70% using their FCC?

It's not very fair to bet on a really small part of the market, but I'll take it for a nice bottle of wine. I guess these guests care even less about redeeming FCC and book a cruise when they feel like it and possibly their TA would notice that there's  FCC left to use.

[Stumblefoot]

27 minutes ago, AmazedByCruising said:

What exactly is the opposite bet?  At least 70% using their FCC?

HaHa, no.  You said 30%, so the opposite would be anything >30%.