Royal can breakeven with 30% load factor. Until things get back to normal

[molly361]

Whatever they do and whenever they start back up it's guaranteed that there will be pissed off people

[CRUISEFAN0001]

2 minutes ago, molly361 said:

Whatever they do and whenever they start back up it's guaranteed that there will be pissed off people

Not to mention posts that vent those views. 🙂

[time4u2go]

41 minutes ago, CRUISEFAN0001 said:

Not even close.

 

If anything, the pent up demand for cruises and other vacation choices following Covid-19 will result in more of an appreciation and demand than in the past, albeit with changes needed to assure the safety of passengers.

More of a demand will undoubtedly result in more of a price, too.

[CRUISEFAN0001]

2 minutes ago, time4u2go said:

More of a demand will undoubtedly result in more of a price, too.

Likely not for a while... until demand gets back to "near normal" levels.  They'll know that data from future booking levels.

[A&L_Ont]

9 hours ago, John&LaLa said:

 

They could cancel all cruises August- November, then change the itineraries to Only do short Bahamas, then cap the occupancy 

 

Just speculation, no evidence of any kind

You might be onto something... they can still take deposits on those sailings, and then cancel them monthly. Then they sell new three day Bahamas sailings with capped occupancy.
 

Actually pretty smart on their part, especially if folks are continuing to give deposits and full payments. It continues to keep them afloat while slowly sending refunds and FCCs to those on the cancelled cruises. 

Edited May 23, 2020 by A&L_Ont

[OBX-Cruisers]

13 hours ago, Sunshine3601 said:

I definitely agree with everything you said.    Less crowds at the casino, movie theater, etc. etc.  and less crowd at windjammer will help with the buffet situation.    And less pool chair hogs!!!

First, there will not be a buffet as it existed in the past according to Mr. Bayley the CEO........this may be temporary for months to years but will likely depend on the course of CV-19 that is unpredictable now.  Second, the "shows" will likely be significantly modified as well when you are stretching cost over fewer paying passengers. Definitely smaller crew for fewer passengers.

Things will likely be VERY different to make up for all that space you will be gaining

[LXA350]

7 hours ago, yogimax said:

This is nonsense.  RCCL cannot exist at 30% capacity for any extended period of time.  This "spin" factors out interest, taxes. depreciation and amortization.  Last I looked interest and taxes can't be ignored.

 

I do wish management would be more up front with us and, at this moment of time, we need to more realistic than optimistic.

 

Royal has to begin operations at some point and all the concepts they are developing also need to be tested in the "real" environment in order to fine tune. As it seems for the operation of a cruise to half ways make sense once travel resrtictions allow it and they are in a situation to fill a Oasis or Quantum Class ship to at least 30% they will start cruising again. Depending on the global situation and demand they can step by step increase capacity from there in addition they will use the lessons learned and apply the newly developed concepts more efficiently as more cruise ships will be added back into operation.

 

I also highly suggest no one to be on one of the first sailings who is very impatient and not ready for a "new" normal, as even with light loads on ships certain processes that also need to be learned by crews in practice could take longet and be frustrating. hence, patience is probably also needed at the begining.

[DeltaOne]

I remember a cruise show (maybe it was on the Discovery Channel?) from a few years ago (maybe even 5 to 10 years ago?) that said the ship had to be at 95% or higher capacity for them to make a profit.

 

That's why they use move-ups and price reductions to fill the ship, especially after final payment date.

 

I guess the unknown is can they make money at a reduced capacity with reduced staff and different itineraries?  Same question for restaurants...

[bouhunter]

10 hours ago, ownedbypets said:

I want to know how they are going to decide who gets to cruise if the sailing is currently booked at over 50%.

Yeah, the people getting excited about half full ships won't be so happy if they're the ones booted off to accomplish it.

[molly361]

10 hours ago, ownedbypets said:

I want to know how they are going to decide who gets to cruise if the sailing is currently booked at over 50%.

By when people booked.  Those that booked first get priority  Or they can offer incentives to people to cancel/change

Edited May 23, 2020 by molly361

[Computer Nerd]

I'll be happy to get back on a cruise ship no matter the occupancy on board. 

[Billy Baltic]

1 hour ago, CRUISEFAN0001 said:

Not even close.

 

If anything, the pent up demand for cruises and other vacation choices following Covid-19 will result in more of an appreciation and demand than in the past, albeit with changes needed to assure the safety of passengers.

OK. So you book time off work. You book a cruise. You probably book flights and hotel. Then a couple of months before your cruise you get an email from RC saying you (and thousands of others who booked) can’t sail because they need to reduce to 50% capacity. 
In my opinion the vast majority of people won’t react to that with “I must book another RC cruise”.

If RC are to sail at reduced capacity in 2021 they need to right size at the booking stage. 

[LXA350]

7 minutes ago, Billy Baltic said:

OK. So you book time off work. You book a cruise. You probably book flights and hotel. Then a couple of months before your cruise you get an email from RC saying you (and thousands of others who booked) can’t sail because they need to reduce to 50% capacity. 
In my opinion the vast majority of people won’t react to that with “I must book another RC cruise”.

If RC are to sail at reduced capacity in 2021 they need to right size at the booking stage. 

 

At the moment no one talks about having 50% of passengers kicked out of a confirmed booking. Once operations are back to mosly normal, hopefully by next summer the idea i not to cruise with ships that are 50% full. They are currently talking about when cruises will resume where it's more about at what load factor would it even make sense to operate a cruise ship. Should for some reason over a more extended period be certan restrictions on the maxium capacity RCL will have enough ways to deal with it. Such as no last minute deals, cancellations before the cruise and if really needed they will also block capacity, something we are still far away from.

[Ocean Boy]

1 hour ago, CRUISEFAN0001 said:

Not to mention posts that vent those views. 🙂

Which will be met with the usual amount of empathy found on these boards.

[drrich2]

49 minutes ago, Paul from Maryland said:

I remember a cruise show (maybe it was on the Discovery Channel?) from a few years ago (maybe even 5 to 10 years ago?) that said the ship had to be at 95% or higher capacity for them to make a profit.

I think I saw that, too. They followed the cruise over a week, and toward the end, there was this sort of 'nail-biting suspense' of waiting to see if all the onboard purchasing had tilted the overall cruise profit into the black, so to speak. It gave me the impression that just filling the staterooms wasn't enough; they had to generate a lot of income onboard to push over into profitability. 

[PhillyFan33579]

14 hours ago, Tree_skier said:

I'm looking forward to sailing on half empty ships!  What a treat!

Would you still feel the same if your cruise price was significantly higher? I haven’t heard anything specific but common sense tells you cruise prices will go up, especially if demand increases based on fewer available cabins. Of course another big factor will be how long will cruise ships sail with reduced capacities. 

[mek]

9 hours ago, Jingerwoppy said:

Might be sailing with fewer passengers but you'll pay for it. What they didn't say is that if they drop the capacity to 30% they will get to substantially increase the prices because the demand will likely exceed the supply.  

My guess is most cruises, especially the ones until the end of this year, are already booked at 30% so why would prices increase?  I think a lot of 2021 cruises are also booked at 30% also - just because of Lift and Shift, if no other reason.

[JBSteelerfan]

39 minutes ago, molly361 said:

By when people booked.  Those that booked first get priority  Or they can offer incentives to people to cancel/change

 

And I think that is the best way to accomplish this if needed.  Sort of like the airlines do (or did) when flights were overbooked.  Offer something for people to volunteer to cancel or change their sailing date, otherwise go back from latest bookings to get the number left needed.  Hopefully this will just be a for a short time period once things start back up.

[Ocean Boy]

41 minutes ago, molly361 said:

By when people booked.  Those that booked first get priority  Or they can offer incentives to people to cancel/change

Depending on numbers, they could also go by cabin category. Maybe start by emptying the insides, next ocean views, etc. until they reach the desired numbers. As it is, RCI has invented so many different categories in the last few years it could be an easy way to do it.

[John&LaLa]

10 hours ago, Jingerwoppy said:

Might be sailing with fewer passengers but you'll pay for it. What they didn't say is that if they drop the capacity to 30% they will get to substantially increase the prices because the demand will likely exceed the supply.  

 

Yes its not sustainable,  but they lose less sailing half full than parked

[Ocean Boy]

1 minute ago, John&LaLa said:

 

Yes its not sustainable,  but they lose less sailing half full than parked

That depends. I would think there has to be a number where it costs less to park a ship than to run it. 

[John&LaLa]

8 minutes ago, Ocean Boy said:

That depends. I would think there has to be a number where it costs less to park a ship than to run it. 

 

Unfortunately,  you can't just park a ship like you do a second car. The ocean is constantly at war with you, and humidity creates mold

[Ourusualbeach]

Personally I think that very little if all this speculation of people getting their reservations cancelled and who gets kicked off will ever see the light of day.

 

Several points.

 

Whatever % they start sailing with whether it’s 30, 50 or 70% it won’t last forever.  Will we ever get back to 100%.....unknown but it will go up from what they initially start with.
 

Currently if you look at pretty near any sailing that’s within a month of the first day of sailing the occupancy level of that cruise is already below 50% or will be as soon as final payment date hits.  Of  those that make final payment many have just done so to get either a cash refund or the 125% FCC and really have no intention of sailing and would bail using the 48 hour CWC policy once they realized the ship was actually sailing.

 

No one here knows Whether Royal has already put caps in place to limit bookings.  Yes I know there are a few sailings that are almost sold out yet they still have the odd cabin for sale but maybe Royal knows those sailings will never sail anyway so why not get another deposit (that’s a different thread).  It would not surprise me at all that for some of the short sailings that they anticipate will sail that there is already caps in place but I doubt that we will ever hit them. 

 

 

[orville99]

11 hours ago, drrich2 said:

Here's a major elephant in the room; are they factoring in reduced passenger capacity into the bookings they're taking for 2021? 

It's easy to say 'Just lift and shift,' or similar, but if you've got a job, kids in school, etc..., other factors may impact your vacation scheduling flexibility. For some people, getting time off approved can seem like pulling teeth. 

If they take bookings to fill those ships, then decide to cancel on 2/3rds the passengers, there'll be some ticked off people. 

Not really all that difficult given the number of cancellations they are getting. A scenario like this would quickly and quietly reduce capacity. Say I cancel my cabin for November. Rather than put it back in inventory, RCL simply blocks it from being booked, and capacity is reduced. If they do that every time someone cancels, they effectively reduce capacity on the ship while not having to bump any passengers who have reservations.

 

[CRUISEFAN0001]

50 minutes ago, Billy Baltic said:

In my opinion the vast majority of people won’t react to that with “I must book another RC cruise”.

OK.  There's one opinion.