The 3 big cruise lines are burning thru a billion a month

[jimbo5544]

wow

 

https://www.cruiseindustrynews.com/cruise-news/23358-big-cruise-companies-burning-through-1-billion-a-month.html

[jetsfan58]

For many of us who have leadership careers within the Business World this is that past antiquated old projector presentation slide that started with "This Is Our Real Cost Of Doing Business"!!

 

They still have daily operating, overhead, personnel and salary expenses that have to be met.   

[sprint180]

That's crazy.  It amazes me how they can hang on.

[naxer]

32 minutes ago, sprint180 said:

That's crazy.  It amazes me how they can hang on.

 

They have assets and a proven money making model.  Investors and financiers believe they can outlast the virus and the fallout, which isn't irrational.

[glrounds]

7 minutes ago, naxer said:

 

They have assets and a proven money making model.  Investors and financiers believe they can outlast the virus and the fallout, which isn't irrational.

 

I'm sure the investors thought the same of Sears, Toys'r'Us, and Blockbuster. 🙂

[naxer]

1 minute ago, glrounds said:

 

I'm sure the investors thought the same of Sears, Toys'r'Us, and Blockbuster. 🙂

 

That's the way it goes in investing.  The difference being the cruise lines were/are still building to capacity, while the traditional retailers were losing share from competition like Amazon and Netflix.  Carnival scrapping and selling ships is actually helping prevent oversupply.  The bigger question for the cruise lines is whether cruising will still be as popular after the plague.  So far, their booking numbers are showing that doesn't seem to be a problem.

[Radiioman46]

3 minutes ago, naxer said:

 

... while the traditional retailers were losing share from competition like Amazon and Netflix. 

Better hope that Amazon doesn't replace cruising with some "on-line simulation"  that would allow you to go on a cruise in the comfort of your own home. hi hi.

[glrounds]

4 minutes ago, naxer said:

 

That's the way it goes in investing.  The difference being the cruise lines were/are still building to capacity, while the traditional retailers were losing share from competition like Amazon and Netflix.  Carnival scrapping and selling ships is actually helping prevent oversupply.  The bigger question for the cruise lines is whether cruising will still be as popular after the plague.  So far, their booking numbers are showing that doesn't seem to be a problem.

 

At 7 ships in Cozumel at one time, I would have thought we were most definitely at capacity (I see a shortage of ports as the problem) and locals starting to complain about cruise passengers invading their tourist destinations. Are those booking numbers from people cashing in their FCC and $600 OBC or plain ole "let's-go-on-a-cruise" vacation purchases?

[naxer]

1 minute ago, Radiioman46 said:

Better hope that Amazon doesn't replace cruising with some "on-line simulation"  that would allow you to go on a cruise in the comfort of your own home. hi hi.

 

😀 That is not out of the realm of possibility.  It could be the next big thing.  

Come to think of it,...why Amazon?  It could be us.  Got a minute? 🤩😉

[jetsfan58]

The shortage of cruise ports shouldn't become an issue. The number of ports has not changed. Those individuals who rely on the Carnival passengers for their primary sources of revenue are really missing those dollars right now. I truly believe that "open arms" will prevail as soon as Carnival announces that they are back to sailing. 

[naxer]

1 minute ago, glrounds said:

 

At 7 ships in Cozumel at one time, I would have thought we were most definitely at capacity (I see a shortage of ports as the problem) and locals starting to complain about cruise passengers invading their tourist destinations. Are those booking numbers from people cashing in their FCC and $600 OBC or plain ole "let's-go-on-a-cruise" vacation purchases?

 

Whether they were nearing capacity was the question being asked, especially with all the supersized ships entering the lines.  Now, it may be moot for a while.  And yes, finding new destinations was a pre-plague question, and the cruise lines were investing in port development.  If the goal is to keep people enthusiastic about cruising, it really doesn't matter if they are rebooks from cancellations.  If they can keep up the enthusiasm, they'll be fine.  I think the bigger problem is the drip drip drip of cancellation, rebook, and cancellation.  That's discouraging.  

[EscapeFromConnecticut]

1 hour ago, glrounds said:

 

I'm sure the investors thought the same of Sears, Toys'r'Us, and Blockbuster. 🙂

 

  Exactly.
  The "smartest man in the room" syndrome has been horribly amok in American boardrooms & C-suites for many years now. It comes through in a crisis every time. Unfortunately, it is closely linked to "greediest man in the room" syndrome ... so low-performance leaders not only let their companies sink, but they & their associates bleed off the resources every step of the way down. 
   The clear aroma around Carnival since late winter has been mismanagement. Probably inescapable in an industry where retreads and under-performers are recycled rather than permanently launched. Part and parcel of the whole CLIA culture that pervades the major lines.
   

[jimbo5544]

Is that aroma agenda?

[Saint Greg]

1 hour ago, glrounds said:

 

I'm sure the investors thought the same of Sears, Toys'r'Us, and Blockbuster. 🙂

 

I think that's different because those have been permanently replaced by online shopping and movies. Cruising hasn't been replaced. It's just delayed during the virus.

[Purvis1231]

More ships will be docked, sold, and scrapped. When cruising resumes I am afraid not much will be left. I had said before we will probably sail on the Royal Carnival lines.

[jimbo5544]

4 minutes ago, Purvis1231 said:

More ships will be docked, sold, and scrapped. When cruising resumes I am afraid not much will be left. I had said before we will probably sail on the Royal Carnival lines.

More than the ones they already said?

[tidecat]

If North America can't get online by April or May of next year, we may see some more cuts to the fleet just simply to stop the bleeding.

 

If there are any more cuts, my opinion is we might see whatever ship that was going to be retired in late 2022 when the sister to Mardi Gras comes online get moved out of the fleet early. Carnival Ecstasy would be the most likely candidate as she would be due for drydock in 2022, and would be 31 years old. Carnival Paradise would be the next cut as she is due for drydock by early 2021, but if service can resume in 2021, she will get her drydock and be ready to go when cleared. Carnival Elation and Carnival Sensation are not due for drydock until 2023, so they are safe unless if the whole company goes under.

 

The Spirit class ships will sail as long as Tampa, Baltimore, and Jacksonville are profitable sailings.

 

[jimbo5544]

3 hours ago, tidecat said:

If North America can't get online by April or May of next year, we may see some more cuts to the fleet just simply to stop the bleeding.

 

If there are any more cuts, my opinion is we might see whatever ship that was going to be retired in late 2022 when the sister to Mardi Gras comes online get moved out of the fleet early. Carnival Ecstasy would be the most likely candidate as she would be due for drydock in 2022, and would be 31 years old. Carnival Paradise would be the next cut as she is due for drydock by early 2021, but if service can resume in 2021, she will get her drydock and be ready to go when cleared. Carnival Elation and Carnival Sensation are not due for drydock until 2023, so they are safe unless if the whole company goes under.

 

The Spirit class ships will sail as long as Tampa, Baltimore, and Jacksonville are profitable sailings.

 

Of those three, Jacksonville would be on the bottom of the list.

[chipmaster]

The recent assessment of airline and hotel is that the business traveler may never come back to where it was and that funds so much of the profit, they don't even know how to price tickets anymore.

 

As to cruising, there is a new awareness, or maybe called stigma of really how dangerous a social setting cruise ships are.  

 

Let's just assume a high efficacy vaccine helps drive herd immunity.  The very best timing for this is that we will have validated results of that sometime by end of summer.    Till then the extreme cruisers will sail as we see them roll over their FCC and many sailings show low avaliability.   But travel restrictions and severe restrictions ill be in play till many countries feel comfortable with thousands of foreigners coming from a known perfect pandemic incubator.   Yes, this is all FUD, but look at the world today with closed borders, 14 day quarantines.

 

While all this works out you are talking 9 months at a minimum that the vacation will come back, probably the same situation for college football, concerts and return of dense dining...  But as noted the fact we now know in the connected world we are but one wet market random event from the world repeat, you think the business will every be the same, NOPE.

 

I for one love watching the RCCL and CCL stock bounce, makes for fun trading, almost as much as TSLA, AMZN or AAPL which mostly go only one direction.      The cruise line got a few billion in credit, but soon those guys will want their money back and ships will be sold or collected on as the business is going to be very different.

 

That all being said, I do plan to cruise, more likely in 2022 than 2021.

[HaveWeMetYet]

I really think the line in the sand for the cruise lines is August 2021. About half of the revenue for the big cruise lines is June thru August plus the 2 week Christmas and New Year holidays. Survival chances drop dramatically if they are not up to full speed by next August.

[sprint180]

9 hours ago, naxer said:

 

They have assets and a proven money making model.  Investors and financiers believe they can outlast the virus and the fallout, which isn't irrational.

I didn’t say it was irrational. I said it amazes me that they can hang on. 

[wms99]

16 hours ago, Radiioman46 said:

Better hope that Amazon doesn't replace cruising with some "on-line simulation"  that would allow you to go on a cruise in the comfort of your own home. hi hi.

Better hope James Halliday doesn't invent the Oasis.

 

[embarkation75]

15 hours ago, Purvis1231 said:

More ships will be docked, sold, and scrapped. When cruising resumes I am afraid not much will be left. I had said before we will probably sail on the Royal Carnival lines.

 

I'm also starting to believe "Royal Carnival" or "A Royal Norwegian Carnival" are possible outcomes. It's already starting to get financially ugly yet if they aren't cruising by the end of the year, then mergers, selling smaller lines, and massive downsizing may be needed to survive a total collapse by spring 2021. I have zero confidence in any cruise itinerary in 2021 if things aren't moving by the start of the year.

Edited August 13, 2020 by embarkation75

[jetsfan58]

Cruise Family let's "Stop - Pause - Park" for a minute. 

 

First a mega merger would not likely happen due to the current "Mergers, Acquisitions and Monopoly" laws. The two mentioned entities (Carnival and Royal) would then posses a probable major controlling interest in the Cruise industry; therefore, limiting future entrants into the industry and potentially allowing companies to drive down prices to a point where competitors simply cannot survive. I am not speaking from a legal standpoint rather a business standpoint where I have been directly involved in these types of situations. 

 

If a potential merger were to evolve, personally I would want "Carnivals" name as the lead name since they are the larger entity of the two. So "Carnival Caribbean" would be my choice!!!

 

   

[Purvis1231]

1 hour ago, embarkation75 said:

 

I'm also starting to believe "Royal Carnival" or "A Royal Norwegian Carnival" are possible outcomes. It's already starting to get financially ugly yet if they aren't cruising by the end of the year, then mergers, selling smaller lines, and massive downsizing may be needed to survive a total collapse by spring 2021. I have zero confidence in any cruise itinerary in 2021 if things aren't moving by the start of the year.

I agree that it does not look good for cruising any time in the future. I do have cruises books for 2021 and 2022 but I am wondering if the ships I booked will sail. It would not surprise me if Carnival put some of their brands up for sale.