All the cruise lines are looking for more money

[Quo Vadis?]

Did Royal just mortgage the Celebrity S-class to get loan extensions?

https://www.cruiseindustrynews.com/cruise-news/22829-royal-caribbean-and-norwegian-hunting-for-money.html

https://www.cruiseindustrynews.com/cruise-news/22835-royal-caribbean-works-financing-options-on-5-ships-for-250-million.html

[TeeRick]

4 minutes ago, Argo. said:

Did Royal just mortgage the Celebrity S-class to get loan extensions?

https://www.cruiseindustrynews.com/cruise-news/22829-royal-caribbean-and-norwegian-hunting-for-money.html

https://www.cruiseindustrynews.com/cruise-news/22835-royal-caribbean-works-financing-options-on-5-ships-for-250-million.html

I think they continue to refinance current debt to reduce cash flow and need new cash infusions to continue to operate every month with zero income.  The cruise industry is in very serious trouble.  From some of the discussions here on CC, I'm not sure how many members grasp the gravity of the industry's financial situation.

[PTC DAWG]

The travel and entertainment industry is up against it big time right now...

[Cruising89143]

It’s not just the cruise industry. Airlines, hotels, car rental agencies, amusement parks and the list goes on. Many will not survive this. We will see many ship orders delayed or canceled outright. I think the four big cruise lines (RCL, NCL, MSC and Carnival) will survive because the banks do not want these newer financed ships so they will continue to work with them. 
 

It’s going to to a bumpy ride for at least the remainder of 2020. We may see ships returning but it will be a small amount with limited passenger count. I also see the cruises as short cruises to start. 

[crusinthrough]

13 hours ago, TeeRick said:

I think they continue to refinance current debt to reduce cash flow and need new cash infusions to continue to operate every month with zero income.  

There is revenue from new bookings and cruse planner purchases. Albeit, not as much income if ships were sailings.

A good way to increase income is to lower cruise prices and items in the cruise planner.  If people believe  there is a sale and they are getting a bargain money will be spent.  Removing NRD was a good move  in the right direction.  

[WNcruiser]

As soon as they are cleared to sail they will be getting money from me! 🙂 I am ready to go anytime this year and hope they at least offer some Caribbean itineraries in the fall. 
 

I am happy to support Celebrity as much as I can after all the great memories they have provided me. 

[wrk2cruise]

The way I read it the lender modified the agreement so they could take advantage of the debt holiday they were offering on other ships.  I thought Reflection was under this type of agreement already.

[Mojogurued]

5 hours ago, WNcruiser said:

As soon as they are cleared to sail they will be getting money from me! 🙂 I am ready to go anytime this year and hope they at least offer some Caribbean itineraries in the fall. 
 

I am happy to support Celebrity as much as I can after all the great memories they have provided me. 

 

Same I'm just waiting for the official clear from the CDC and I smell a B2B coming my way.

[Georgia_Peaches]

Makes sense to leverage Celebrity...cut off an arm to save the body.  I hope it doesn't come to that.  I read that the deal CCL struck with the Saudis will keep them afloat for more than a year with no revenue.  I'm sure all the lines are scrambling for something similar.  What will it do to the price of cruising when it resumes?

[Jeremiah1212]

9 minutes ago, Georgia_Peaches said:

Makes sense to leverage Celebrity...cut off an arm to save the body.  I hope it doesn't come to that. 

 

It's not really leveraging Celebrity as a brand. They have essentially just deferred payments. Quantum of the Seas, Anthem of the Seas and Spectrum of the Seas are under the same agreement along with Reflection, Eclipse, Equinox, Solstice and Silhouette. Since a cruise ship itself has very little value is a busted market, it's in the bank's best interest to allow them some breathing room.

[Georgia_Peaches]

2 minutes ago, Jeremiah1212 said:

 

It's not really leveraging Celebrity as a brand. They have essentially just deferred payments. Quantum of the Seas, Anthem of the Seas and Spectrum of the Seas are under the same agreement along with Reflection, Eclipse, Equinox, Solstice and Silhouette. Since a cruise ship itself has very little value is a busted market, it's in the bank's best interest to allow them some breathing room.

Makes sense.  Thank you.  ☺️

[TeeRick]

9 hours ago, crusinthrough said:

There is revenue from new bookings and cruse planner purchases. Albeit, not as much income if ships were sailings.

A good way to increase income is to lower cruise prices and items in the cruise planner.  If people believe  there is a sale and they are getting a bargain money will be spent.  Removing NRD was a good move  in the right direction.  

Perhaps a few people will spend.  I think not enough to make any meaningful difference right now.  I am in wait and see mode at this point and would not let them sit on even more of my money.

[shipshape sam]

23 hours ago, cruisingator2 said:

It’s not just the cruise industry. Airlines, hotels, car rental agencies, amusement parks and the list goes on. Many will not survive this. We will see many ship orders delayed or canceled outright. I think the four big cruise lines (RCL, NCL, MSC and Carnival) will survive because the banks do not want these newer financed ships so they will continue to work with them. 
 

It’s going to to a bumpy ride for at least the remainder of 2020. We may see ships returning but it will be a small amount with limited passenger count. I also see the cruises as short cruises to start. 

Good point about initial sailings being short.  I think that would make sense.  I also see cruise companies limiting passengers at first too.  Maybe also limiting those passengers that fit the vulnerable definition in case there is an issue.

[RICCruisers]

I’m trying to figure out why several people have posted in various threads that they think X will return to sailing with short cruises and a limited number of passengers. As far as I can tell X and all cruise companies have planned itineraries that have passengers booked for the next two years. Are you suggesting that they will cancel those cruises and create new, shorter itineraries and try to sell them with a 30 day lead time?  I came up with 30 days based on how X had been handling their cruise cancellation policy over the past two decisions to cancel their cruises. 

 

The way way it stands today X plans to restart sailing on June 12th I believe. I’m not sure they will hit that date, but if they do aren’t all of their ships already scheduled to board passengers sometime shortly after that day?  

 

Please explain to to me how you think they will be able to start with those short cruises with limited passengers on board. 

 

Thanks

[az_tchr]

RICruisers - do you think Celebrity really thinks they can resume a full schedule in June?  Partial?  Or are they trying to handle the customer service nightmare by lowering the curve and pushing out refunds over a longer period of time?

The latter is the reason.

Shorter cruises?  That one is easy.  Florida has lots of customers and 3 or 4 day short cruises would only require 1 or 2 ports.

As for financing. . . . when the last several ships were purchased there was a clause that offered Celebrity an option to defer delivery and/or payments cor up to 1 year.  They are simply exercising an option available to them.  Good business.

[RICCruisers]

az_tchr,  No I don’t believe X will begin cruising on June 12. My question was to the posters that have indicated they thought X would start with short cruises with limited passengers. X has all of their ships committed to cruise sometime this summer or fall with thousands of people hoping their cruise takes place. In order to implement what the posters are proposing of short cruises with limited passengers X would need to cancel those cruises to create new itineraries and then fill the ships (even limited capacity) quickly. I guess there are enough folks close by in Florida to buy in as guinea pigs to try and be the first post corona cruisers, but that still leaves out the people who paid to be on those ships when the new short cruises take place. Maybe the posters suggesting the short cruises feel it would take more than 3 or 4 days for the virus to show up and as long as they are off the ship by then all will be well   

 

We have cancelled a Sept B2B in Europe that we booked almost a year ago because we wanted to get in the refund queue before more cruises were cancelled. We are holding on to our January 2021 Caribbean hoping that will still happen. 

 

I dont believe I mentioned any about financing in my post. 

Edited April 26, 2020 by RICCruisers
Added comment

[paulh84]

3 hours ago, RICCruisers said:

I’m trying to figure out why several people have posted in various threads that they think X will return to sailing with short cruises and a limited number of passengers. As far as I can tell X and all cruise companies have planned itineraries that have passengers booked for the next two years. Are you suggesting that they will cancel those cruises and create new, shorter itineraries and try to sell them with a 30 day lead time?  I came up with 30 days based on how X had been handling their cruise cancellation policy over the past two decisions to cancel their cruises. 

 

The way way it stands today X plans to restart sailing on June 12th I believe. I’m not sure they will hit that date, but if they do aren’t all of their ships already scheduled to board passengers sometime shortly after that day?  

 

Please explain to to me how you think they will be able to start with those short cruises with limited passengers on board. 

 

Thanks

There are numerous ships that just left Florida and the Bamahas in the past few days to sail crew back home to places are far as Asia. I think that paints a pretty clear picture as to when cruise lines think they make resume service. It’s definitely not June. 
 

When cruises do resume, I don’t think any cruise or itinerary is immune to substantial changes. Even cruises into 2021 and 2022. It’s very likely some ships will never return to service, some will be in long term storage and itineraries will change and adjust all in an attempt to create some semblance of a right-sized operation. Some ports will be closed for a long time, others may have restrictions that make them too restrictive to visit. 

[madmacs]

I agree about the financial position of cruise lines - it is all about cash at the moment, Fire sales of shares like Carnival,  deferring debt payments, trying to persuade customers to take FCCs. Their first aim is survival.

As to cruises, I can only speak from a European perspective, or perhaps now British. It seems likely that most countries will restrict entrance for months to come. It is reported that the UK government will effectively be seeking to quarantine arrivals for fourteen days. so if Brits cruised we would be locked away for fourteen days on our return, having had five weeks of that so far it is not an appealing prospect. Italy and Spain are reputedly closing their tourist industries this year.

If the above happens then there will be no European cruise season, so it may be that the cruise lines will seek to generate cash by short Caribbean cruises as has been suggested. They need to generate cash however they can,

 

[yorky]

16 minutes ago, madmacs said:

I agree about the financial position of cruise lines - it is all about cash at the moment, Fire sales of shares like Carnival,  deferring debt payments, trying to persuade customers to take FCCs. Their first aim is survival.

As to cruises, I can only speak from a European perspective, or perhaps now British. It seems likely that most countries will restrict entrance for months to come. It is reported that the UK government will effectively be seeking to quarantine arrivals for fourteen days. so if Brits cruised we would be locked away for fourteen days on our return, having had five weeks of that so far it is not an appealing prospect. Italy and Spain are reputedly closing their tourist industries this year.

If the above happens then there will be no European cruise season, so it may be that the cruise lines will seek to generate cash by short Caribbean cruises as has been suggested. They need to generate cash however they can,

 

My view is Europe is out this year but Caribbean cruises could be an option in the autumn. They will certainly try to go ahead with Asia at the start of next year.

[ipeeinthepool]

11 hours ago, RICCruisers said:

I’m trying to figure out why several people have posted in various threads that they think X will return to sailing with short cruises and a limited number of passengers. As far as I can tell X and all cruise companies have planned itineraries that have passengers booked for the next two years. Are you suggesting that they will cancel those cruises and create new, shorter itineraries and try to sell them with a 30 day lead time?  I came up with 30 days based on how X had been handling their cruise cancellation policy over the past two decisions to cancel their cruises. 

 

My guess is that they will restart with 7 day cruises first with only a couple of ports and more sea days.   There will lots of additional expense involved with more passenger checks and they won't be as interested in that expense for a shorter cruise.   I think they will likely start with existing 7-day sailings to the Bahamas and/or Mexico.   In addition I would be surprised if they do cancel a lot of existing reservations on the cruises to reduce passenger count.  I expect reduced seating capacity in the MDR and the buffet to increase social distancing and perhaps always using the MDR and buffet for dinner.  Maybe the buffet for dinner becomes the new location for select dining without the self-serve dinner option and the MDR is all fixed time dining.  Perhaps it's also the end of shared tables in the MDR.  They need to find a plan to reduce the seating density in the dining rooms and minimize close interactions between passengers.  This may also eliminate seats at the bars. 

 

They may also limit the initial cruises out of Florida to US passengers to minimize the travel concerns and they may need to quarantine and test the crew before they start to work on-board.

 

There will need to be a new normal.

Edited April 27, 2020 by ipeeinthepool

[Vagabond Knight]

On 4/25/2020 at 10:50 AM, cruisingator2 said:

It’s not just the cruise industry. Airlines, hotels, car rental agencies, amusement parks and the list goes on.

 

There are a number of articles out there that predict that the Disney parks may not re-open until 2021, though Disney's official take on it is merely "undetermined" at this point.  Should that happen, the ripple affect in central Florida will be extreme.  Though there are many other things to do in the area, most are "secondary," with the primary draw for most visitors being the theme parks.  Many, many hotels, resorts, restaurants, rental car and other transportation services, and even businesses like convenience stores, gas stations and pharmacies in the Orlando area were built/opened because of the parks and depend upon the strong tourist traffic that the theme parks bring.  Then there's the loss of all the tourism taxes that normally flow money towards roadwork and even education.

[Baron Barracuda]

On 4/26/2020 at 8:28 AM, Georgia_Peaches said:

 I read that the deal CCL struck with the Saudis will keep them afloat for more than a year with no revenue.  I'm sure all the lines are scrambling for something similar.  What will it do to the price of cruising when it resumes?

 

Saudi purchases were open market transactions.  Carnival received NO new cash.

[Baron Barracuda]

Cruise lines currently have ships transporting furloughed crew back home to Philippines, Indonesia, China, etc. leaving most ships with skeleton crews.  For cruising to resume ships will need to staff up again.  Tough logistical task with airlines flying limited international schedules.  

[phoenix_dream]

19 hours ago, RICCruisers said:

I’m trying to figure out why several people have posted in various threads that they think X will return to sailing with short cruises and a limited number of passengers. As far as I can tell X and all cruise companies have planned itineraries that have passengers booked for the next two years. Are you suggesting that they will cancel those cruises and create new, shorter itineraries and try to sell them with a 30 day lead time?  I came up with 30 days based on how X had been handling their cruise cancellation policy over the past two decisions to cancel their cruises. 

 

The way way it stands today X plans to restart sailing on June 12th I believe. I’m not sure they will hit that date, but if they do aren’t all of their ships already scheduled to board passengers sometime shortly after that day?  

 

Please explain to to me how you think they will be able to start with those short cruises with limited passengers on board. 

 

Thanks

No one can say for sure, but there are certainly ways they could do it.  They could shorten the planned cruises, revising itineraries as  needed, and cancelling some (half?) of the reservations.  Of course it would not be easy.  But the facts of the matter are - will they have a choice??   I think situations will dictate the need to make these modifications.  Even if the CDC allows cruising, I suspect they will enforce significant changes which the cruise lines will struggle to meet at all, and certainly not with full ships.  And then there's the very real scenario where ports will just not allow cruise ships to dock.  So a 10 night cruise might become a 4 or 5 night cruise to nowhere, or to one or two ports.  Do I think they will be sailing many, many short cruises in place of the currently planned ones?  No but I do suspect when they begin again they will begin that way.

 

IMHO they know in their heart of hearts there is no way they will be able to sail in mid-June, but they can't afford to take that big a hit to their finances by cancelling more until they have to.

[shipshape sam]

If I were the Cruise companies, I would be doing lots of things to gain access to cash, slow down need for cash as no matter what they think they have in the form of cash and projected cash burn, things change.  

 

Just today, I read about part of the food chain breaking down.  How that plays out is not fully clear.  

 

So........I am sure they want to open up as soon as possible and I hope they can start limited sailings this summer, but I think late fall is more likely.