Half Capacity Sailing

[MsTabbyKats]

13 hours ago, Markmom18 said:

Hi,

  My late March 2020 cruise was cancelled, so I rebooked for October. In September I had a flight To Idaho to visit my elderly parents. 

 

  Yesterday I moved my  September Idaho trip to October.

 

 Then moved my Galveston Freedom Cruise to September.  
 

Flipping the 2 trips, trying to do both. 🤔🤔 Yeah.. 😟.

 

  If this upcoming Cruise gets cancelled BY CARNIVAL —-which would be the 2nd COVID-19 Cruise of mine getting axed by THE Company —- do I get an additional $600?? 😲  
 
Anybody with first hand experience, no guessing, with info on my question, care to share your experience?

 

Thanks,

🛳🛳

 Bobbi 

 

Since nobody knows what will be offered on future cancellations, nobody will have first hand experience.  

[Honolulu Blue]

35 minutes ago, PhillyFan33579 said:

From talking to countless Carnival officers over the years, most of their profits come from sales on the ship to include alcohol, shops, bingo, casino, spa, speciality restaurants, excursions, etc. i would assume this will still be true if ships sail at reduced capacity initially. 

 

Good point.  The rest of this post isn't aimed at you or anyone in particular; it's mostly about me trying to get my thoughts down.  

 

It seems likely that on these first cruises that revenue per person will be off, perhaps by a lot.  Taking them source by source:

 

• Alcohol - I'm not sure how much is sold through room service and in the shops (less affected) as opposed to the bars, lounges, and restaurants (more affected)
• Shops - no more mega-sales with customers swarming the Promenade deck.  Social distancing rules could hurt overall sales.
• Bingo - Problematic, but with social distancing it might work.  I expect them to try.
• Casino - Land casinos are starting to open, I expect cruise casinos to to the same.  Lots of social distancing and cleaning.
• Spas - Close person-to-person contact has always been problematic.  I see them closed unless they somehow come up with a snake-oil-ish "cure" for COVID-19.
• Specialty restaurants - Depends on the restaurant(s) and the ships, but these could be OK.  Capacity will be down due to social distancing.
• Excursions - I think at least some ports will limit where cruisers can go and this may also limit the number of excursions.  Bus capacity will be limited, but this is less of a problem (I assume tour guides on even the most remote islands can snag another bus or two when needed)

[lobster1313]

25 minutes ago, Luckiestmanonearth said:

And how would that business make money if half its customer base gets ill and never returns 

If that was going to happen it would have in February and early March but it didn't.  There were still very few people that got sick except for the ships that various governments blocked.

[jsglow]

2 hours ago, shipbound2 said:

All businesses want to make money. If CCL ships sail with half capacity  is like a restaurant opening with half capacity , how would they make any money to cover costs for the ships just sailing or the restaurant  just operating and make a profit.

 

If sailing at a loss is the best way to ease back into full capacity at a later date Carnival will be happy to do it. 

Edited May 25, 2020 by jsglow

[Joebucks]

2 hours ago, shipbound2 said:

All businesses want to make money. If CCL ships sail with half capacity  is like a restaurant opening with half capacity , how would they make any money to cover costs for the ships just sailing or the restaurant  just operating and make a profit.

 

 

To your restaurant analogy, would you rather be able to pay 75% of your rent, or none of it?

[chengkp75]

2 hours ago, PhillyFan33579 said:

From talking to countless Carnival officers over the years, most of their profits come from sales on the ship to include alcohol, shops, bingo, casino, spa, speciality restaurants, excursions, etc. i would assume this will still be true if ships sail at reduced capacity initially. 

This is based on the ship sailing at full capacity, the fares cover the expenses, and the onboard revenue is the profit.  If the cabins are limited to 50%, then any profit from onboard revenue goes towards covering the other half of operating expenses, unless you double the fares.

[iggyc]

We cruised on a full ship last August. Capacity 3000 but only 2400 on board with all cabins full. Crew member said following week there would be 600 more people onboard for holiday cruise as 3rd and  4th passengers.

 

so is 1/2 capacity only 1/2 of cabins booked or 1/2 of 3000.  
 

will be interesting to see how the numbers play out

 

 

[Markmom18]

1 hour ago, MsTabbyKats said:

Since nobody knows what will be offered on future cancellations, nobody will have first hand experience.  

  Doh🤣🤣  Oh boy, where is my brain?  Of course,  .....

 

 🛳🛳

 Bobbi 

[firefly333]

33 minutes ago, Markmom18 said:

  Doh🤣🤣  Oh boy, where is my brain?  Of course,  .....

 

 🛳🛳

 Bobbi 

In the past 3 rounds of cancellations you were not allowed to keep the $600 obc and get a additional $600. I would bet if they have to cancel again, the same as true. I'm not a gambler but would take that bet.

[Saint Greg]

40 minutes ago, iggyc said:

We cruised on a full ship last August. Capacity 3000 but only 2400 on board with all cabins full. Crew member said following week there would be 600 more people onboard for holiday cruise as 3rd and  4th passengers.

 

so is 1/2 capacity only 1/2 of cabins booked or 1/2 of 3000.  
 

will be interesting to see how the numbers play out

 

 

I was thinking if they actually did it one of the best ways to start would be to not allow more than 2 people in a room. It sounds good for distancing and doesn’t hurt their bottom line as much since people pay less for the additional passengers.
 

Also they should love solo cruisers. One one person in a room, show, etc and they pay for two people. 

[ninjacat123]

1 hour ago, Honolulu Blue said:

• Spas - Close person-to-person contact has always been problematic.  I see them closed unless they somehow come up with a snake-oil-ish "cure" for COVID-19.

Here in SC we have massage and facial stores opening back up, stating that they will be using enhanced cleaning, masks and gloves.  I just had my nails done (yay!!) and I was required to wear a mask, use hand sanitizer prior, sign a hold harmless and there was a plexiglass screen between me and the nail tech.

[PhillyFan33579]

46 minutes ago, chengkp75 said:

This is based on the ship sailing at full capacity, the fares cover the expenses, and the onboard revenue is the profit.  If the cabins are limited to 50%, then any profit from onboard revenue goes towards covering the other half of operating expenses, unless you double the fares.

I always enjoy reading your comments and know you are very knowledgeable about ships and the cruise industry.  If your comment above is correct, why would the CFO of RCCL state the break even point on their newer ships is 30% capacIty and 50% capacity for older ships. He didn’t mention anything about higher fares when he was discussing this topic. 

[Honolulu Blue]

4 minutes ago, ninjacat123 said:

Here in SC we have massage and facial stores opening back up, stating that they will be using enhanced cleaning, masks and gloves.  I just had my nails done (yay!!) and I was required to wear a mask, use hand sanitizer prior, sign a hold harmless and there was a plexiglass screen between me and the nail tech.

 

Thanks for sharing.  I wonder if all the compromises they'd have to make to provide spa services onboard would be worth it.  My guess is no, but they might be SO profitable that they need to try.

[MsTabbyKats]

21 minutes ago, firefly333 said:

In the past 3 rounds of cancellations you were not allowed to keep the $600 obc and get a additional $600. I would bet if they have to cancel again, the same as true. I'm not a gambler but would take that bet.

 

2 minutes ago, Honolulu Blue said:

 

Thanks for sharing.  I wonder if all the compromises they'd have to make to provide spa services onboard would be worth it.  My guess is no, but they might be SO profitable that they need to try.

I'm wondering about massages and facials....especially facials.

[ObstructedView2]

2 hours ago, Honolulu Blue said:

 

Specialty restaurants - Depends on the restaurant(s) and the ships, but these could be OK.  Capacity will be down due to social distancing.

 

 

 

 

 

 

 

✌️  😄  ✌️

[ninjacat123]

My DH and I went out for dinner at our golf club restaurant on Saturday.  Our table was on the outdoor deck, but even being outside there was distance between tables. Our server didn't wear a mask (we were not required to wear a mask) and it worked out well.

Last night we went to pick up take out fajitas and the bartender who took our order said we could wait inside, sitting at a booth and enjoy a margarita while we waited for our order. Booths were roped off so you couldn't sit back-to-back and the same with tables. The bartender and wait staff wore masks, we were not required to. 

This is how SC is phasing in dining at restaurants.

[BlerkOne]

Sailing at reduced capacity would lead to reduction in crew.

 

Spa treatments are usually in private rooms. Sanitize the rooms between treatments and sanitize the people. What's the problem?

 

A wildcard is fuel which is still quite low. I suspect the cruise lines are hedging all they can.

 

Many venues, like shops, are outsourced, and the operator pays rent based on ships sailing full, so likely some adjustment will need to be made there.

 

I expect onboard prices to go up some to compensate a little for lower revenue from cabin sales.

[BlerkOne]

57 minutes ago, PhillyFan33579 said:

I always enjoy reading your comments and know you are very knowledgeable about ships and the cruise industry.  If your comment above is correct, why would the CFO of RCCL state the break even point on their newer ships is 30% capacIty and 50% capacity for older ships. He didn’t mention anything about higher fares when he was discussing this topic. 

 

I find the info from Royal highly suspect. Besides higher cabin prices, with some sales to stimulate buying, they could raise onboard prices some.

[lobster1313]

If anything on board pricing would be lowered. You don't raise prices to increase sales.

[firefly333]

1 hour ago, MsTabbyKats said:

 

I'm wondering about massages and facials....especially facials.

I think I read they were out sourced and so carnival might not mind so much if they were minimal. Though I once got a facial because everyone said they were wonderful. I guess I'm wierd, a loner. I was uncomfortable having a woman rubbing on me. Never tried again, but I'm wierd. 

 

The stores are outsourced too, though I'm sure carnival gets  big cut. Their big money makers are excursions bars and casino. I'm sure you all have noticed you cruise another line and the exact same merchandise is in the stores, maybe a different logo. That's because the same company runs them on multiple cruise lines

[Wanna_Cruize]

I wouldn't be surprise to see shop prices to be the same or inflated a bit. Same with excursions. There will be a LOT of guests sailing with lots of OBC to spend onboard. I wish they would let you reserve excursions ahead of time, but pay onboard so you could use OBC. The way it is now, there will be a scramble once you are onboard to book your excursions before they sell out. 

[chengkp75]

1 hour ago, PhillyFan33579 said:

I always enjoy reading your comments and know you are very knowledgeable about ships and the cruise industry.  If your comment above is correct, why would the CFO of RCCL state the break even point on their newer ships is 30% capacIty and 50% capacity for older ships. He didn’t mention anything about higher fares when he was discussing this topic. 

Because, as you quoted in your OP in the other thread:

 

“On our newer ships,” said Liberty, “you need about a 30% load factor to kind of break-even” on what’s known as an EBITDA level of profitability.

This refers to the earnings before interest, taxes, depreciation and amortization and can be a misleading number due to the various things not factored in."

 

So, yes, they can "break even" if they don't consider "paying the rent" or "paying taxes".  So, they would break even at a lower capacity rating, but would then have to pay the financing on the ship, and the part of corporate overhead attributed to the ship from taxes on the corporate headquarters, etc.

 

What I said about covering expenses with full capacity fares means that they cover not just operational costs, but all financing charges for the ship, and all corporate overhead costs.  Notice that he said "kind of" break even.

[PhillyFan33579]

3 minutes ago, chengkp75 said:

Because, as you quoted in your OP in the other thread:

 

“On our newer ships,” said Liberty, “you need about a 30% load factor to kind of break-even” on what’s known as an EBITDA level of profitability.

This refers to the earnings before interest, taxes, depreciation and amortization and can be a misleading number due to the various things not factored in."

 

So, yes, they can "break even" if they don't consider "paying the rent" or "paying taxes".  So, they would break even at a lower capacity rating, but would then have to pay the financing on the ship, and the part of corporate overhead attributed to the ship from taxes on the corporate headquarters, etc.

 

What I said about covering expenses with full capacity fares means that they cover not just operational costs, but all financing charges for the ship, and all corporate overhead costs.  Notice that he said "kind of" break even.

Thanks for the response and explanation. 

[chengkp75]

45 minutes ago, BlerkOne said:

A wildcard is fuel which is still quite low. I suspect the cruise lines are hedging all they can.

Well, most bunker prices are about 60-67% of last year's price, so while low, not that low, but most of the cruise lines use long term bunker futures contracts, and with the period of shutdown coinciding with the drop in fuel price, their futures contracts may pass right over the downward dip (which is actually what the futures contracts are all about), plus they are not buying any fuel at this time.  And while the most marked drop in fuel prices is in VLSFO (the 0.5% sulfur fuel required since 1 Jan unless the ship uses a scrubber), as more and more ships need this fuel as the year goes on, I expect this to have a similar marked increase in price, (and crude is about 70% of last year), or go even higher as demand outstrips refining capacity.

[MsTabbyKats]

21 minutes ago, firefly333 said:

I think I read they were out sourced and so carnival might not mind so much if they were minimal. Though I once got a facial because everyone said they were wonderful. I guess I'm wierd, a loner. I was uncomfortable having a woman rubbing on me. Never tried again, but I'm wierd. 

 

The stores are outsourced too, though I'm sure carnival gets  big cut. Their big money makers are excursions bars and casino. I'm sure you all have noticed you cruise another line and the exact same merchandise is in the stores, maybe a different logo. That's because the same company runs them on multiple cruise lines

The more things are taken away....what's left of the cruise?  Especially on sea days!