Royal Caribbean/celebrity financial health

[scottsla]

with the current Crystal disaster it makes me think about the health of other cruise lines and how well they are surviving as well as how far in advance to actually pay for my cruise. 

 

What is the financial health of the RCC?

Normally I pay for my cruise quite early or put sizable deposits down more according to when disposable income hits my account (share dividends, bonus's etc), however now considering avoiding that and sticking to required deposits/payments only.

Does most Travel insurance cover insolvency? my current one doesn't so something I need to investigate.

 

Currently have 2 cruises booked for 2023 and 2024.

Edited January 23, 2022 by scottsla
spelling error

[Jim_Iain]

It is best to speak with a financial advisor.  

 

Recent good article on their current balance sheet.

 

https://simplywall.st/stocks/us/consumer-services/nyse-rcl/royal-caribbean-cruises/news/health-check-how-prudently-does-royal-caribbean-cruises-nyse

[glmacruise]

I wouldn’t trust these cruise lines at all. We are avoiding cruising until further notice.

[Algebralovr]

I’m one of the thousands of shareholders who bought 100 shares a while back.  Some paid more, some paid less.  Some got their shares when the cost was in the single digits. Some paid over $100 per share.  Many of us bought because we like the on board product and like owning a small piece of the company where we vacation.  Other bought it for the on board credit when you cruise. 

 

They started canceling cruises  in February 2020.  They finally were allowed to resume limited cruising in summer 2021.  Over 12 months with zero income. 
 

Many of the cruised they cancelled they awarded 125% if the cruise cost as a future cruise credit.  That also makes their books a mess, since it is a form of debt. 
 

Yet our waiter on our last cruise said that while he was on furlough, he was paid a subsistence level pay, and while it was not a lot, his family could always eat. That bought a lot of loyalty from the crew.  His friends on other lines did not get any pay.  They also have a retirement plan that is a one time payout. If they pass before retiring, that amount is paid to the family. (A friend learned that the hard way.)

 

So, are they doing well financially?  No - NONE of the cruise lines are.  But they are cruising, bringing in some capital to work toward paying their bills.  
 

For now, I’ll continue booking crises, I’ll simply make an effort to book on board to keep my deposits low. 

[Arizona Wildcat]

Deposits and payments are supposed to be in escrow accounts.  Since we are dealing with foreign companies, hard to say how one eould fare in a reorganization.   Probably poorly.

Thank you to Jim for posting RCCL balance sheet. It has gone from excellent stockholder equity to negative.  Lots of debt and a multibillion $$ hunk will need to be refinanced shortly.

 

[scottsla]

22 minutes ago, glmacruise said:

I wouldn’t trust these cruise lines at all. We are avoiding cruising until further notice.

I don't consider it about trust, more risk management. There is always a chance something can happen, just that risk is heightened during an event like a pandemic. As suggested above my risk mitigation involves keeping my deposits and money at risk to a minimum. I do need to follow up on my insurance options though.

[canderson]

1 hour ago, scottsla said:

What is the financial health of the RCC?

 

They're a publicly traded company, and as such, have to make regular filings to the SEC.  All of their reports are available.

https://www.rclinvestor.com/financial-info/sec-filings/

If you're not comfortable interpreting these, there are resources that can assist.

 

As for insurance, some policies DO cover issues of insolvency of the companies providing the covered services.  Not all, though.  Definitely something you'll want to be sure is included as it seems important to you.

 

[TrulyBlonde]

There is a lot of information on the Crystal board.. It would be smart of all of you to read as much as you can over there. It is a real eye opener! 

It is a real shame that Crystal has really put a black mark on all of the cruise lines with this bankruptcy issue. There were warning prior.

Word of advice: Beware of FCC's and keep your down payments as low as you can. 

 

 

[Arizona Wildcat]

13 minutes ago, TrulyBlonde said:

There is a lot of information on the Crystal board.. It would be smart of all of you to read as much as you can over there. It is a real eye opener! 

It is a real shame that Crystal has really put a black mark on all of the cruise lines with this bankruptcy issue. There were warning prior.

Word of advice: Beware of FCC's and keep your down payments as low as you can. 

 

 

I read a bunch of posts on the Crystal board.  Crystal has a different country of registry and different reorg rules.  It also has an interesting combo of older ships and a VERY loyal clientele. 

Gentling is a Hong Kong China company.  Very different rules likely than with RCCL.  

[Arizona Wildcat]

14 minutes ago, TrulyBlonde said:

There is a lot of information on the Crystal board.. It would be smart of all of you to read as much as you can over there. It is a real eye opener! 

It is a real shame that Crystal has really put a black mark on all of the cruise lines with this bankruptcy issue. There were warning prior.

Word of advice: Beware of FCC's and keep your down payments as low as you can. 

 

 

I read a bunch of posts on the Crystal board.  Crystal has a different country of registry and different reorg rules.  It also has an interesting combo of older ships and a VERY loyal clientele. 

Gentling is a Hong Kong China company.  Don't think posters know Chinese BK rules.  

[Babr]

1 hour ago, scottsla said:

I don't consider it about trust, more risk management. There is always a chance something can happen, just that risk is heightened during an event like a pandemic. As suggested above my risk mitigation involves keeping my deposits and money at risk to a minimum. I do need to follow up on my insurance options though.

Financial default is a time sensitive purchase, like the pre-existing conditions waiver. There is also a waiting period. Usually the company must cease all operations with no chance of repairing the financial damage unlike bankruptcy which offers restructuring. In those cases, the company may continue to operate.

 

Several companies such as Nationwide, Berkshire Hathaway or IMG offer financial default coverage, but some like Allianz will insure only preferred providers.

 

It is probably best to consult a broker for a full explanation of how this kind of coverage works.

[BigAl94]

3 hours ago, Jim_Iain said:

It is best to speak with a financial advisor.  

 

Recent good article on their current balance sheet.

 

https://simplywall.st/stocks/us/consumer-services/nyse-rcl/royal-caribbean-cruises/news/health-check-how-prudently-does-royal-caribbean-cruises-nyse

A good article indeed. I simply fail to see how RCG can trade their way out if this without filing for bankruptcy/reorganisation within the next 12 months. Buyer beware.

[mek]

4 hours ago, scottsla said:

with the current Crystal disaster it makes me think about the health of other cruise lines and how well they are surviving as well as how far in advance to actually pay for my cruise. 

 

What is the financial health of the RCC?

Normally I pay for my cruise quite early or put sizable deposits down more according to when disposable income hits my account (share dividends, bonus's etc), however now considering avoiding that and sticking to required deposits/payments only.

Does most Travel insurance cover insolvency? my current one doesn't so something I need to investigate.

 

Currently have 2 cruises booked for 2023 and 2024.

While I understand wanting to pay a cruise off early, why not create a separate fund to keep the money you need and then pay it when due?  There is absolutely no way I would pay off any cruise, vacation package, etc. early even if I had insurance to cover bankruptcy.  

[scottsla]

52 minutes ago, mek said:

While I understand wanting to pay a cruise off early, why not create a separate fund to keep the money you need and then pay it when due?  There is absolutely no way I would pay off any cruise, vacation package, etc. early even if I had insurance to cover bankruptcy.  

yeah I am now, already opened separate account just to store the funds. To be honest I just had never really thought of the risk of bankruptcy for a cruise previously, hence I had not even checked if my insurance covered that till Crystal. With two cruises booked that would be almost $30k at risk if I did my usual pay it at bonus time and while that isn't a huge disaster I would certainly prefer to not donate it to creditors if something happens so yeah I will only pay what is required going forward.

[the penguins]

8 hours ago, scottsla said:

with the current Crystal disaster it makes me think about the health of other cruise lines and how well they are surviving as well as how far in advance to actually pay for my cruise. 

 

What is the financial health of the RCC?

Normally I pay for my cruise quite early or put sizable deposits down more according to when disposable income hits my account (share dividends, bonus's etc), however now considering avoiding that and sticking to required deposits/payments only.

Does most Travel insurance cover insolvency? my current one doesn't so something I need to investigate.

 

Currently have 2 cruises booked for 2023 and 2024.

Pay on a credit card and you are fully protected, also travel insurance fully covers you - both rules apply to UK passengers.

[chengkp75]

10 hours ago, Arizona Wildcat said:

I read a bunch of posts on the Crystal board.  Crystal has a different country of registry and different reorg rules.  It also has an interesting combo of older ships and a VERY loyal clientele. 

Gentling is a Hong Kong China company.  Very different rules likely than with RCCL.  

A corporation can choose where to file for bankruptcy/reorganization.  Many foreign corporations choose to file in the US, due to our favorable laws.  Genting has filed in Bermuda.  The ocean ships are registered in the Bahamas, and the river boats in Malta.  Ship's registry nor even country of incorporation for the company determines where you can file for bankruptcy.

[RollWave]

11 hours ago, TrulyBlonde said:

Word of advice: Beware of FCC's and keep your down payments as low as you can. 

 

 

Current FCC policy requires use by the later of end of 12/22 or one year from original sail date.

 

We will have two FCC to use. Planned to combine them toward one cruise in December 2022 and then hold off on booking more trips for a while. The Crystal bankruptcy has us now wondering if using the FCC for a December booking is too far out. 

 

Thoughts & opinions on the optimal time frame for using FCC under current Celebrity policy.

 

[mek]

If they are a substantial amount of money or even if they aren't, I would book something as soon as possible and use them up - especially since you live in Florida and can easily drive to the port. 

 

I have $500 in a NRD + insurance  from a cruise I booked in November, 2019 that I keep moving around and that is all I'm willing to let a cruise line have right now. I realize this is a very small amount but I'm not willing to gamble on anything until the dust settles with Covid.

 

I know it doesn't bother some people, but I hate to lose money.

 

 

 

 

 

 

 

 

 

 

 

 

 

[bucfan2]

‘Financial Health concerns’ is what it should be titled IMO.  And it applies to every cruise line/company.  Determining the validity and extent of the concern is where the problem lies.  Sailing at 50% (or way less) is certainly not easing the cause for concern. 

Edited January 24, 2022 by bucfan2

[TeeRick]

For those not thinking about the possibility of cruise line bankruptcies- really?  It has been discussed here on these boards since March 2020 when every line starting taking on massive debt to survive.  At first everybody thought it was for a few months.  Then it became 16 months until the first cruises started again.  And the big boys were (are) still building and launching very expensive new ships.  And the low number of passengers sailing now is not profitable or sustainable.  But hopefully a glimmer of hope if we truly turned the corner with the demise of Omicron.  But we should certainly think about who could go down in the industry and what happens to all of our FCC's.

[PTC DAWG]

6 hours ago, the penguins said:

Pay on a credit card and you are fully protected, also travel insurance fully covers you - both rules apply to UK passengers.

CC for final payment is a no brainer, I wouldn’t consider anything else. 

[Arizona Wildcat]

7 hours ago, the penguins said:

Pay on a credit card and you are fully protected, also travel insurance fully covers you - both rules apply to UK passengers.

Travellers in the US only have travel insurance if purchased.  Most US credit cards will protect you in a bankruptcy/reorg.   I was reimbursed when FlyBe went BK in 2020 (UK).  At the same time was given a credit toward a future stay at a UK property with a 12 month time limit.  Credit card credit was refused.  Same with FCCs.  Use them or lose them is what we were told.

Note - most US credit cards do NOT provide travel insurance.   Chase Sapphire and many AMEX do.  Am sure there are others.

 

Edited January 24, 2022 by Arizona Wildcat

[NCHPcruiser]

We recently took our first Crystal cruise after sailing solely with Celebrity for years.  It was a wonderful cruise with the absolute best food and crew of any cruise we have sailed on.    Were it not for the abysmal internet we would have already booked another (glad we didn’t!) although we would have continued to cruise Celebrity as well.

 

I think one important difference regarding the financial situations of the two lines is that Crystal was NEVER profitable once Genting purchased it and certainly not profitable prior to the pandemic.   While I don’t understand the why, from what I’ve read GentingHK purchased Crystal to up it’s PR profile.  

I believe investors think (as do I) that cruising has a bright future and while I never “pay ahead” for a cruise we are not worried about losing our current deposits or the full payment already made for our March cruise due to a financial crisis with Celebrity or RCCL.  

[Happy Cruiser 6143]

Be careful when you allege that all credit cards have your back during bankruptcy.  Capital One certainly does not.  I learned that the hard way during all the Iceland tour providers (who had required full payment up front) bankruptcies.  

[the penguins]

18 minutes ago, Happy Cruiser 6143 said:

Be careful when you allege that all credit cards have your back during bankruptcy.  Capital One certainly does not.  I learned that the hard way during all the Iceland tour providers (who had required full payment up front) bankruptcies.  

That's why I specified UK where all cards have to offer this protection by law.