What do you think will happen in Hawaii if NCL is gone?

[Firepath]

With NCL being the only line currently with a Hawaii only itinerary, what do you think will happen if they are out of the picture? No more 7 day islands only cruise or would someone else be allowed to take over that route? It seems quite popular.

Edited May 6, 2020 by Firepath

[casofilia]

@Firepath

 

With NCL being the only line currently with a Hawaii only itinerary, what do you think will happen if they are out of the picture?

 

Be positive, NCL will NOT go under if we all keep supporting them.

[bonvoyagie]

I also do not believe that NCL will go under - that said, the POA could be sold to another US operation - perhaps American Cruise Lines or Un Cruises would be interested in taking over that operation.

[don't-use-real-name]

It is too lucrative a market to go unused unsold un anything.

With or formerly pre C19 travel the tourists coming from Japan would keep anything afloat.

Hawaii is not only a winter destination but also a summer one which is more busy than the winter.

Winter to avoid the cold and the summer to get away from the oppressive heat that is getting

globally worse.

 

Another cruise line could pick up the financial pieces and parts of bankruptcy -

Even a Hotel could entertain a package of ground hotel and hotel at sea under one name -

 

Basically the POA would be the prime plumb pick of bankruptcy holdings !

 

AND it is way too early to predict the demise of NCL

 

Tough times in troubled waters with a dose of virus keeping things in a state of quarantine

but this too will come to pass.

[Newleno]

, some investor would just take over pride of america, that market and the private island are the 2 best assets the company has.

[chengkp75]

I really doubt that any other cruise line would want to take over the headaches of US flag operation, when it can be done at less cost via foreign flag operation from the West Coast.  POA, while frequently being touted as the largest revenue earner for NCL, also has the highest costs, and is only marginally profitable.  Most studies show that operating a US flag cargo ship is 2.7 times as expensive as a flag of convenience, and that crew cost is about 5.3 times an international crew.  That is for a 20-25 man cargo ship.  Expand that to the 900+ crew on the POA.

Edited May 6, 2020 by chengkp75

[mking8288]

Chief ... by definitions, the operating costs to run the POA will most definitely, go even higher when inter-island cruising is permitted and clear to resume ... with enhanced cleaning & infection control measures, as well as universal precaution steps required.  

 

From a risk assessment standpoint, exposure to the highly infectious Covid-19 (with "non-verified" reports of the deadier mutant virus strains spreading in the US) shouldn't be taken lightly with guests going ashore almost on a daily basis, unless community infection is clearly under control and well managed. Just my opinions, of course. 

[chengkp75]

41 minutes ago, mking8288 said:

Chief ... by definitions, the operating costs to run the POA will most definitely, go even higher when inter-island cruising is permitted and clear to resume ... with enhanced cleaning & infection control measures, as well as universal precaution steps required.  

 

From a risk assessment standpoint, exposure to the highly infectious Covid-19 (with "non-verified" reports of the deadier mutant virus strains spreading in the US) shouldn't be taken lightly with guests going ashore almost on a daily basis, unless community infection is clearly under control and well managed. Just my opinions, of course. 

Yes, I was talking about "normal" operation, as if Carnival or RCI took over the ship and route a year ago.  Costs for the covid pandemic will strike all lines almost universally, regardless of flag or itinerary.

[joeyancho]

9 hours ago, don't-use-real-name said:

It is too lucrative a market to go unused unsold un anything.

With or formerly pre C19 travel the tourists coming from Japan would keep anything afloat.

Hawaii is not only a winter destination but also a summer one which is more busy than the winter.

Winter to avoid the cold and the summer to get away from the oppressive heat that is getting

globally worse.

 

Another cruise line could pick up the financial pieces and parts of bankruptcy -

Even a Hotel could entertain a package of ground hotel and hotel at sea under one name -

 

Basically the POA would be the prime plumb pick of bankruptcy holdings !

 

AND it is way too early to predict the demise of NCL

 

Tough times in troubled waters with a dose of virus keeping things in a state of quarantine

but this too will come to pass.

Its already has come to pass

Edited May 7, 2020 by joeyancho

[datolim]

3 hours ago, chengkp75 said:

I really doubt that any other cruise line would want to take over the headaches of US flag operation, when it can be done at less cost via foreign flag operation from the West Coast.  POA, while frequently being touted as the largest revenue earner for NCL, also has the highest costs, and is only marginally profitable.  Most studies show that operating a US flag cargo ship is 2.7 times as expensive as a flag of convenience, and that crew cost is about 5.3 times an international crew.  That is for a 20-25 man cargo ship.  Expand that to the 900+ crew on the POA.

Chief I agree with you on this one.

To put it in the right perspective I need to go back to the formation of POA years ago.Then you can draw your own conclusions.

 

When Genting HK first offered 50% of NCL to Leon Black of Apollo management, Black took one look at POA and he won't touch it.  It is not only that every crew has to qualify as a seaman. It is the US labour laws, US pay,  and the trade unions. Crew on other non US ships are presently working 70 to 80 hours a week, 7 days a week. Last I heard only Disney pay overtime if crew work more than 70 hours per week. Their crew pay is based on the per capital GDP of their home country. So that is why the crew are mostly all from third world countries like Philippines, Indonesia and India. Their pay is a tiny fraction of the US pay. And they can be made to sweat for their pay.  

Then there is the issue for US flag carriers. Ships flagged in third world countries have minimal inspection, regulations and compliance costs. 

When Black bought in he was given control of NCL. Later NCL agreed to absorb POA into the company. I don't know how and how much Genting is made to bare the cost to NCL there.

[chengkp75]

5 minutes ago, datolim said:

Crew on other non US ships are presently working 70 to 80 hours a week, 7 days a week. Last I heard only Disney pay overtime if crew work more than 70 hours per week

Crew on cruise ships, like nearly every ship, work about 84 hours a week, even the POA crew.  Now, while the international crew are not directly "paid overtime", their compensation package is set up to cover this.  What I mean is that the MLC 2006 labor convention and the ILO set a minimum wage for seafarers, which is currently $618/month, based on a 40 hour work week.  That comes to about $3.60/hour.  Hours worked in excess of 40/week are paid at 125% of the base wage, or about $4.50/hour.  So, if a crew member works 84 hours per week (12 hours/day), then they are entitled to a minimum of $1470/month (rough numbers).  Now, their compensation as outlined in their contract will more likely, for a cabin steward or waiter in the DSC pool, say their compensation is $250 salary, and $1250 DSC contribution, and will not mention hourly rates, but the hourly rate is how it is calculated.  This is the minimum wage set by law, and that's not a bad wage for the home countries of most of the crew.  Now, wages can be higher than this, and there is some wage discrimination based on national origin, but not by much.  And, while, as I said above, US crew cost can be about 5 times more than international wages, that doesn't quite equate to a "tiny fraction".  Not sure what you mean when you say "NCL agreed to absorb POA into the company".  POA, is owned by a US subsidiary of NCL called NCL America, and always has been.

[datolim]

3 hours ago, chengkp75 said:

Crew on cruise ships, like nearly every ship, work about 84 hours a week, even the POA crew.  Now, while the international crew are not directly "paid overtime", their compensation package is set up to cover this.  What I mean is that the MLC 2006 labor convention and the ILO set a minimum wage for seafarers, which is currently $618/month, based on a 40 hour work week.  That comes to about $3.60/hour.  Hours worked in excess of 40/week are paid at 125% of the base wage, or about $4.50/hour.  So, if a crew member works 84 hours per week (12 hours/day), then they are entitled to a minimum of $1470/month (rough numbers).  Now, their compensation as outlined in their contract will more likely, for a cabin steward or waiter in the DSC pool, say their compensation is $250 salary, and $1250 DSC contribution, and will not mention hourly rates, but the hourly rate is how it is calculated.  This is the minimum wage set by law, and that's not a bad wage for the home countries of most of the crew.  Now, wages can be higher than this, and there is some wage discrimination based on national origin, but not by much.  And, while, as I said above, US crew cost can be about 5 times more than international wages, that doesn't quite equate to a "tiny fraction".  Not sure what you mean when you say "NCL agreed to absorb POA into the company".  POA, is owned by a US subsidiary of NCL called NCL America, and always has been.

Chief, you and I have cross swords on most of this before. 

Like I said before 'Your theory is correct, but reality is something else'.

I am posting here this one time and like I said before 'you would have the last word here'

 

When Black bought into NCL he left out POA from the agreement. It was several months later that Black was persuaded to take in POA. So I don't know how Genting manage to change his mind.They decided to form a subsidiary company NCL America under Black's control.  

 

work 84 hours per week.  Like the oil rig workers the officers/ management staff work to a 17 week schedule. They then get a few weeks off. Crew work to a different timing. They have a 10 month contract and get a few weeks off. Officers do not work to any labour laws. Crew work to some labour laws or are suppose to be under some semblance of labour laws.

 

MLC and ILO. These are talking shops and it is a fiction that they set a minimum wage. In this part of the world where a lot of the crew comes from there are reports from UNHCR of 'slave labour' in some of these third world countries. So for you to quote MLC and ILO shows 'your theory is correct but reality is something else'.

Even then no labour laws would allow you to calculate overtime the way you did. Overtime is elective, non compulsory and cannot be calculated the way you did

Even MLC and ILO would tell you that crew must have 1 day off in the week. Which even the ships homeport in US do not follow. I stand by my statement that Disney is the only company paying O/T.

 

I don't know how you can calculate the US crew getting just 5 time the third world crew, based your fictitious figures from the MLC and ILO. Reality from crew report is that they are getting $500 per month which is a lot money for the crew. In Singapore here we have heard that a few crew are taking up to 2 years for them to pay of the loan that they took out to get training and permits  to go on the ships.

Edited May 7, 2020 by datolim
.............

[AmazedByCruising]

8 hours ago, chengkp75 said:

Most studies show that operating a US flag cargo ship is 2.7 times as expensive as a flag of convenience, and that crew cost is about 5.3 times an international crew.  That is for a 20-25 man cargo ship.  Expand that to the 900+ crew on the POA.

 

Hi Chief,

 

Am I right that crew cost is only a small percentage of the total cost of running a cargo ship? If so, what other costs are caused by flying a US flag besides more expensive crew?

 

[chengkp75]

2 hours ago, AmazedByCruising said:

 

Hi Chief,

 

Am I right that crew cost is only a small percentage of the total cost of running a cargo ship? If so, what other costs are caused by flying a US flag besides more expensive crew?

 

Even for a foreign flag ship, crew costs are about 35% of total operating costs.  For data on the other costs, and why they are higher for US flag, here is a government study from about 10 years ago:

 

https://www.maritime.dot.gov/sites/marad.dot.gov/files/docs/resources/3651/comparisonofusandforeignflagoperatingcosts.pdf

 

While other costs are only slightly higher for US flag ships, the significantly higher crew costs tends to overshadow the effects of higher cost in the other areas.  One area of note in this study that I've known about my entire career is in insurance cost, which is largely inflated for US flag operators by the cost of personal injury lawsuits on behalf of crew.

[Newleno]

8 hours ago, chengkp75 said:

 minimum wage for seafarers, which is currently $618/month, based on a 40 hour work week.  That comes to about $3.60/hour.  Hours worked in excess of 40/week are paid at 125% of the base wage, or about $4.50/hour.  So, if a crew member works 84 hours per week (12 hours/day), then they are entitled to a minimum of $1470/month (rough numbers).  Now, their compensation as outlined in their contract will more likely, for a cabin steward or waiter in the DSC pool, say their compensation is $250 salary, and $1250 DSC contribution, and will not mention hourly rates, but the hourly rate is how it is calculated.  This is the minimum wage set by law, and that's not a bad wage for the home countries of most of the crew.  Now, wages can be higher than this, and there is some wage discrimination based on national origin, but not by much.  And, while, as I said above, US crew cost can be about 5 times more than international wages, that doesn't quite equate to a "tiny fraction".  

I dont think  I am following this correctly , So basically working crew (like room attendants) get paid about $1470 a month plus room and board.  (no additional DSC?)  And the same position on POA would be paid 5 times that for $7350 a month?

[CruiseMH]

If it wouldn`t be profitable, NCL wouldn`t operate this route !
The only important thing is the profit margin. If the profit margin is way lower than on the rest of the fleet, they wouldn`t do it.

 

In case, NCL would disappear, i am sure someone would take over the POA and continue the route.

Doing it from the west coast wouldn`t make any sense, cause you need at least 4 sea days in each direction to get there.

 

 

[chengkp75]

1 hour ago, Newleno said:

I dont think  I am following this correctly , So basically working crew (like room attendants) get paid about $1470 a month plus room and board.  (no additional DSC?)  And the same position on POA would be paid 5 times that for $7350 a month?

As I noted, the way the contract is written, a combination of DSC and salary will total up to the $1470/month.  The hourly figures are only used to calculate how much the total needs to be, but since overtime hours are not optional, the total amount for a month is fixed, and can be broken down any way the company wants to, typically using DSC to make up the vast majority of the total compensation.

 

Now, on the POA, no, the wage for a cabin steward, for example, is not 5 times as high.  The figure of 5 times foreign crew cost for US is for crew cost, not necessarily wages.  That cost for US crew will entail the employer's share of Social Security, and any union defined benefits, as well as vacation pay when the crew is off the ship (which the international crew do not get).  So, no, their wage will not be 5 times as high.  This figure is also, as noted previously, an average, so that not every crew makes 5 times what a foreign crew makes for the same position, but some make more and some less, and also this is for a relatively small crew of a cargo ship (no studies have been made that I'm aware of, of the cost comparison of cruise ships specifically), so for a cruise ship, the crew cost differential may be lower than 5 times.  A large majority of crew on the POA make Hawaiian minimum wage, and are required to file taxes both in Hawaii and their home states (though there is generally a reciprocal tax credit between states for taxes paid to other states).

[chengkp75]

39 minutes ago, CruiseMH said:

If it wouldn`t be profitable, NCL wouldn`t operate this route !
The only important thing is the profit margin. If the profit margin is way lower than on the rest of the fleet, they wouldn`t do it.

 

In case, NCL would disappear, i am sure someone would take over the POA and continue the route.

Doing it from the west coast wouldn`t make any sense, cause you need at least 4 sea days in each direction to get there.

 

 

I didn't say it wasn't profitable, I said it was marginally profitable.  And the profit margin is significantly lower than the rest of the fleet, but they do it because they have a monopoly for inter-island cruises.

 

However, if you look at pricing, a 12-14 day cruise from the West Coast is less than a 7 day cruise on POA.  POA has cut their profit margin to the bone (when they had 3 ships sailing in Hawaii, the last year they lost $174 million, just on the Hawaii operation).  The foreign ships, even with about 3 times the fuel consumption can offer a longer cruise for less money.  POA takes its fuel in Hawaii, and that fuel has to be shipped there, adding to cost.  POA takes all of its food, liquor, and stores in Hawaii, and all of that needs to be shipped there, adding to cost.  The other lines can take fuel, food, liquor and stores on the West Coast, where everything is cheaper.  Additionally, foreign ships can import their spare parts from overseas manufacturers to the ships in the US duty free (no import duty), and they can buy their liquor "out of bond" meaning they pay no state liquor tax on it.  The POA, which has mostly European equipment onboard, has to pay customs duty on all parts brought into the US for the ship, and must pay Hawaiian state liquor tax on all liquor purchased.  Also, there is no recycling facility in Hawaii, so the POA pays to ship glass, metal, and plastics back to the West Coast.

[don't-use-real-name]

34 minutes ago, CruiseMH said:

If it wouldn`t be profitable, NCL wouldn`t operate this route !
The only important thing is the profit margin. If the profit margin is way lower than on the rest of the fleet, they wouldn`t do it.

 

In case, NCL would disappear, i am sure someone would take over the POA and continue the route.

Doing it from the west coast wouldn`t make any sense, cause you need at least 4 sea days in each direction to get there.

 

 

Plus the foreign port of call - Vancouver - Victoria - Ensenada or on a real quirk Fanning Island -OR- a

round about circle trip with Tahiti.

NCL has a seasonal Canada Hawaii New Zealand Australia and the return that is popular -BUT- the sea days

 

I posted earlier about a hotel - A hotel could have a combo package even tying in an airline or two -

fly to Honolulu - hotel - cruise -? hotel - and flight home - The POA is a hotel at sea.

 

 

[Newleno]

15 minutes ago, chengkp75 said:

POA has cut their profit margin to the bone (when they had 3 ships sailing in Hawaii, the last year they lost $174 million, just on the Hawaii operation).  

Did not know how good we had it back then, we got a 7day balcony room for $399 due to the overcapacity in Hawaii. (Hawaii on POA was our very first cruise)  

Edited May 7, 2020 by Newleno

[spanishguy1970]

On 5/6/2020 at 1:01 AM, Firepath said:

With NCL being the only line currently with a Hawaii only itinerary, what do you think will happen if they are out of the picture? No more 7 day islands only cruise or would someone else be allowed to take over that route? It seems quite popular.

well go on another line. I checked the price for NCL hawaii and compared it to Celebrity and NCL was so expensive.

 

One time i checked the price for 7 days and it was 1899 for an inside cabin, then i went and checked a 16 day cruise on Celebrity out of San Diego and it was 999 inside stateroom, with great itinerary.

[Laszlo]

On 5/6/2020 at 1:01 AM, Firepath said:

With NCL being the only line currently with a Hawaii only itinerary, what do you think will happen if they are out of the picture? No more 7 day islands only cruise or would someone else be allowed to take over that route? It seems quite popular.

 

Thats the one market NCL could double their prices and the ship would still sail full. The are currently the only game in town

[chengkp75]

12 minutes ago, Laszlo said:

 

Thats the one market NCL could double their prices and the ship would still sail full. The are currently the only game in town

Actually, no.  And this is why they removed 2 ships from the service.  The foreign ships sailing from the West Coast supply enough competition to drive fares down.  If they could fill the ship at twice the price, don't you think they would have done it?

[Laszlo]

1 minute ago, chengkp75 said:

Actually, no.  And this is why they removed 2 ships from the service.  The foreign ships sailing from the West Coast supply enough competition to drive fares down.  If they could fill the ship at twice the price, don't you think they would have done it?

I'm guessing they will now Lol. Sailing to Hawaii from the west coast is great if you like all the sea days. NCL has the best sailings of the islands

[Newleno]

2 hours ago, chengkp75 said:

As I noted, the way the contract is written, a combination of DSC and salary will total up to the $1470/month.  The hourly figures are only used to calculate how much the total needs to be, but since overtime hours are not optional, the total amount for a month is fixed, and can be broken down any way the company wants to, typically using DSC to make up the vast majority of the total compensation.

 

Now, on the POA, no, the wage for a cabin steward, for example, is not 5 times as high. 

I am just trying to figure what would be an approximate salary for a POA room attendant, just some type of general formula, say they only worked 70 hours per week $10.10 is minimum wage in Hawaii? 40X10.10=404, then overtime pay 30X10.10X1.5=454.5, combine them and you have $858.5 per week, annual basis equivalent = $44,642  plus room and board.  So once again I am missing something, because I dont think that is a bad salary, so my calculations/interpretations must be way off.  Perhaps the best part in order to get the job you only have to have "Have a Reasonably Clear Background" Sweet I qualify!

Edited May 7, 2020 by Newleno