Is The Recovery of Cruiselines Dead in the Water?

[SLSD]

I apologize for the paywall here:  https://www.wsj.com/articles/cruise-lines-wont-catch-a-wave-11648722600?fbclid=IwAR2lwlxlyMgqNuBHO-LhuQVT_lPAjjsfglHIcJoSlFUoDf3gqCTDurvdjfk  And I, of course, have no way of verifying this for our favorite cruise line, Seabourn.  But, I CAN say that if everything was as before (which it may never be), Mr. SLSD and I would be taking at least three cruises this year, if not more.  My worry is that at some point, the numbers are going to come home to roost and even Carnival and its subsidiary Seabourn will be beyond recovery.  I can understand why cruise lines like Seabourn are not advertising cases of Covid onboard.  Each new case report hurts their bottom line.  

 

Edited March 31, 2022 by SLSD

[cruiseej]

Dead in the water, as in permanently? No. Stalled/treading water for now? Sure. Covid impact is declining, but not gone; some major destinations for cruise lines remain closed, and consumer sentiment is better but not all better. There's still a tragic and scary war going on, fuel prices are way up, and the cruise industry isn't immune from labor shortages. 

 

Measuring things over a brief time period just because the industry decided the first quarter of the year is "wave season" is short-sighted. Cruise lines may need to do a second wave (sorry, unintentional double-entendre) of promotion sometime later in the year if/when the path seems better, but that's just a marketing challenge, not a permanent problem. 

 

And for those of us interested in luxury cruising, the end of the article has this extremely positive sentence: "Over the past eight weeks, he has observed bookings for premium-priced cruises for all future sailings up 20% to 25% versus comparable 2019 levels." Of course, if the parent cruise lines tank, our favorite cruise line(s) will go down, too, but short of complete collapse, the luxury cruise market is leading the way for the industry.

[SLSD]

On 3/31/2022 at 11:25 PM, cruiseej said:

Dead in the water, as in permanently? No. Stalled/treading water for now? Sure. Covid impact is declining, but not gone; some major destinations for cruise lines remain

 

And for those of us interested in luxury cruising, the end of the article has this extremely positive sentence: "Over the past eight weeks, he has observed bookings for premium-priced cruises for all future sailings up 20% to 25% versus comparable 2019 levels." Of course, if the parent cruise lines tank, our favorite cruise line(s) will go down, too, but short of complete collapse, the luxury cruise market is leading the way for the industry.

I certainly hope your assessment is correct!  I know many of us posting here who have not yet cruised since the pandemic began are hoping for the best.  

[crusinbanjo]

6 hours ago, SLSD said:

I certainly hope your assessment is correct!  I know many of us posting here who have not yet cruised since the pandemic began are hoping for the best.  

Same here. We have not cruised since January of 2020, just prior to the cv-19 onset in the US.  Mrs Banjo and I are considering putting a toe in the water, (so to speak), on a 2022 Fall Canada / New England cruise  but are still watching and watching to see how the spring season plays out.  

 

I CERTAINLY hope what Cruiseej said is correct!

[2SailingNomads]

Given that we and another 494 pax are on the Ovation right now I think the answer is NO.  People will make their own decisions based on risk assessment.  Do you risk getting Covid on-board, yes as I noted in another thread there are multiple cases both of crew and pax.  One crew member we spent a lot of time with, they were always properly masked, and on the second day in close contact with, we did not see until today and they admitted they were in isolation.  So a risk to the crew and pax.  If the symptoms of the newer variants become less severe for fully vaxed people then it becomes more like a flu for a couple of days (as multiple people we know who have gotten sick with the Omicron and BA variants told us, including some friends on-board and a couple of crew).  For us the biggest risk are: denied boarding and not getting a negative test to fly back to the US.  

Everyone has to find their level of comfort.  First time I had to sit on a plane for 6 hours to Hawaii wearing a mask I dreaded it, turned out to not be bad at all and have gone back, when I fly home Saturday it will be 10+ hours on a flight.  We have decided we can live with the current restrictions in order to live our lives the way we desire to.  As a good friend, and frequent Seabourn sailor says: YOLO...

[saminina]

Besides the obvious, countries requiring insane and  ever changing entry policies have not been well publicized.   Filling out online forms + Covid test to board a plane in Lisbon to do a one hour transit in Madrid.  The extremely frustrating form was not needed to board plane, only Covid negative cert.

 

On Silver Moon for the crossing with 202 passengers.  Out of the 202, only a handful were paying.  Ship was loaded with SS execs, vendors, travel agents as guests.  Previous cruise had 100 passengers.  After Lisbon, ship sailed empty for five days to Greece where they expect loads to pick up.

 

 Suggestion to US residents returning on flights.  If you do not have it.....Global Entry.  It's faster now than it was two years ago.  Out in less than two minutes after walking into immigration area.  And it takes 90 seconds to get to the kiosk.

Edited April 4, 2022 by saminina

[SLSD]

4 minutes ago, saminina said:

Besides the obvious, countries requiring insane and  ever changing entry policies have not been well publicized.   Filling out online forms + Covid test to board a plane in Lisbon to do a one hour transit in Madrid.  The extremely frustrating form was not needed to board plane, only Covid negative cert.

 

On Silver Moon for the crossing with 202 passengers.  Out of the 202, only a handful were paying.  Ship was loaded with SS execs, vendors, travel agents as guests.  Previous cruise had 100 passengers.  After Lisbon, ship sailed empty for five days to Greece where they expect loads to pick up.

 

 Suggestion to US residents returning on flights.  If you do not have it.....Global Entry.  It's faster now than it was two years ago.  Out in less than two minutes after walking into immigration area.  And it takes 90 seconds to get to the kiosk.

That is a surprising number (at least to me) of nonpaying guests.  

[Covepointcruiser]

I thought the Silver Moon is a new ship.   They always sail with Non Revenue passengers to publicize a new ship.    Guess if you count the number of passengers traveling free on Casino passes, we would be surprised at the number of no fare passengers.   The Blue Chip program on the Royal brands finances a number of the “free” cabins and  Silver Seas is under that umbrella company.

[Colgal]

No the Silver Moon is not the new ship- the Silver Dawn is and I can’t wait to sail on her in July.

 

 

[Covepointcruiser]

I know she was built in 2020, obviously at a very bad time because of the Pandemic.   I wasn’t aware there was an even newer one.   Seabourn had a new ship, the Venture, whose launch was really delayed by the pandemic.   She was supposed to be sailing in Spring 2021, then Spring 2022 and now her maiden voyage is scheduled for July.   We are scheduled to take her in September.

[Covepointcruiser]

New York Times reported today that Carnival Cruise Lines just had their biggest week for booking in history.   Don’t know if that is across all their brands.   They said the week showed a double digit increase from the previous 7 day record.  Don’t think the cruise lines are dead in the water right now.

[Wendy The Wanderer]

And fellow luxury line, Regent, just cancelled a cruise on their smaller ship, Navigator, which was supposed to sail from Barbados today, apparently because too many of the crew were down with Covid.

[rucrazy]

On 4/6/2022 at 8:38 AM, Covepointcruiser said:

New York Times reported today that Carnival Cruise Lines just had their biggest week for booking in history.    Don’t think the cruise lines are dead in the water right now.

An increase in bookings do not equate to increase in in sailings and sailings are the only way to gage solvency IMHO... Time will tell if the industry will remain solvent.

1 hour ago, Wendy The Wanderer said:

And fellow luxury line, Regent, just cancelled a cruise on their smaller ship, Navigator, which was supposed to sail from Barbados today, apparently because too many of the crew were down with Covid.

We had a friend on a longer cruise last month and said the cruise line dropped requirements for masking and social distancing 3 days into a month long voyage... Covid did raise its ugly head.. and as she phrased it "COVID isn't done yet"!

 

My advice is Be safe out there!

[cruiseej]

4 hours ago, rucrazy said:

An increase in bookings do not equate to increase in in sailings and sailings are the only way to gage solvency IMHO

 

Not so. Cruise ships have not been sailing at or near capacity. Carnival, for instance, said this week in their report on the first quarter that they had an occupancy rate of around 54% in the first quarter across their brands. If they get more bookings and can sail at 70% or 75% capacity, that will improve profitability immensely because their costs for handling 50% more passengers is pretty small. (In the short-term, getting more ships back into operation will result in additional capacity and start-up costs, which will be a drag on profits.)

[rucrazy]

42 minutes ago, cruiseej said:

If they get more bookings and can sail at 70% or 75% capacity, that will improve profitability immensely because their costs for handling 50% more passengers is pretty small. (In the short-term, getting more ships back into operation will result in additional capacity and start-up costs, which will be a drag on profits.)

I agree with the premise but if more and more out brakes occur there will be more and more canceled cruises.. That was my point.

[visagrunt]

The test for solvency is not sailings; it's cash.  Companies don't go bankrupt because they aren't making profits, they go bankrupt because they run out of cash.

Record breaking bookings are a good indicator.  Selling/scrapping of underperforming ships is another.

On the other hand, fuel prices are an enormous element of operating cost and it is unlikely that fuel hedges will see lines through the petroleum market uncertainty.  A rising inflation coupled with likely central bank responses will necessarily put a damper on consumer spending.

On balance, the disappearance of Crystal will re-endow the luxury end of the market, and the bottom end will always have the price advantage which is important in tight times.  The lines to watch are the premium lines whose parent corporations with the least deep pockets.