Could the HAL Brand be sold off?

[rkacruiser]

48 minutes ago, iancal said:

No idea what that change will entail. 

 

Princess Nieuw Statendam?  Or, Nieuw Statendam Princess?  😀

[iancal]

Perhaps one or the other, or both, will be sold to an investment firm.  Or Costa, or……?..

 

I suspect that there is more of a chance of a sale/divestiture of one of the many Carnival brands than there is of an amalgamation.  
 

They could be ripe given that they all appear to be stand alone enterprises complete with their own IT systems.

 

 Come to think of it.,,who on earth would want HAL’s IT group?    Other than an IT outsourcing firm. Maybe HAL is ‘safe’ after all.

 

 

Edited July 4, 2022 by iancal

[iceman93]

Dupe.

Edited July 4, 2022 by iceman93

[iceman93]

5 hours ago, Mary229 said:

I dare say, without any statistics to back me up, but a retail concessions likely generates more revenue than a cabin in that space.  Retail includes restaurants, cooking classes, art classes, cigar shops, computer shops/instruction and more

I would agree (without statistics to back either of us up).  A typical cabin sells for anywhere from $100-$2,000 a day; I would certainly hope that any retail space taking up the same amount of square footage would turn a bigger profit than that.

 

But there's a balance to be found.  Fill a ship with retail spaces but no cabins, and there will be no guests to spend money in those retail spaces.  They have to find that sweet spot of having just enough customers on board to maximize spend at all the various retail venues.

Edited July 4, 2022 by iceman93

[AFNavigator]

27 minutes ago, iancal said:

I suspect that there is more of a chance of a sale/divestiture of one of the many Carnival brands than there is of an amalgamation.

A sale or divestiture of one of the Carnival brands would almost certainly make more fiscal sense than a merger within the existing fleets.  A merger might save millions, but not billions.

 

More likely, at least in the short term, will be divestiture of more of the older, smaller, and less efficient ships across the Carnival corp fleets.  Across those fleets, there are quite a number of late 90's/early 2000's ships. 

[richwmn]

7 hours ago, iancal said:

They could be ripe given that they all appear to be stand alone enterprises complete with their own IT systems.

HAL / Princess / Seabourn already share an IT and Web department which was out sourced several years ago.

[DaveOKC]

9 hours ago, iceman93 said:

I would agree (without statistics to back either of us up).  A typical cabin sells for anywhere from $100-$2,000 a day; I would certainly hope that any retail space taking up the same amount of square footage would turn a bigger profit than that.

 

But there's a balance to be found.  Fill a ship with retail spaces but no cabins, and there will be no guests to spend money in those retail spaces.  They have to find that sweet spot of having just enough customers on board to maximize spend at all the various retail venues.

Unless you made the casino larger and increased the payouts!  More people gambling makes alot more money for the ship.  Increased payouts keeps the player in the casino longer and enjoying it more without giving up much revenue as most people will end up losing the same or more, just over a longer period of time, thus enjoying it more and more likely to return the next day.  Losing your money quickly in the casino quickly makes you less likely to return - for most people!

[iancal]

5 hours ago, richwmn said:

HAL / Princess / Seabourn already share an IT and Web department which was out sourced several years ago.

Are they simply hosting and operating or do they actually do the build/design application work?

[richwmn]

38 minutes ago, iancal said:

Are they simply hosting and operating or do they actually do the build/design application work?

What I read a few years ago was that the outside group was doing the build/design/application work for HAL, Princess, and Seabourn. I can't point you to a specific post, but that is what I remember.

 

In addition, several years ago I called a HAL support number outside normal west coast office hours and was greeted by 'Carnival Cruises, opps sorry Holland America."

[iancal]

5 minutes ago, richwmn said:

What I read a few years ago was that the outside group was doing the build/design/application work for HAL, Princess, and Seabourn. I can't point you to a specific post, but that is what I remember.

 

In addition, several years ago I called a HAL support number outside normal west coast office hours and was greeted by 'Carnival Cruises, opps sorry Holland America."

So many variations of outsourcing and service level agreements.  I was involved in the business for a number of years.

Edited July 4, 2022 by iancal

[VermeulT]

I was talking with DH about this last night.  We could see Virgin picking up HAL... their current line is no kids but sways young adult (I'd guess 25-34/ 25-49) If they could keep enough of the HAL vibe, they could appeal to the slightly older demo of HAL and expand their "empire". 

 

Whatever may happen, I will be very sad if we lost the Holland American Line experience.  It may not be what it once was, but it's better than if it were gone completely.

[ontheweb]

13 hours ago, richwmn said:

HAL / Princess / Seabourn already share an IT and Web department which was out sourced several years ago.

And they are all doing such a wonderful job with IT. 🤦‍♂️😢

[LAFFNVEGAS]

20 minutes ago, VermeulT said:

I was talking with DH about this last night.  We could see Virgin picking up HAL... their current line is no kids but sways young adult (I'd guess 25-34/ 25-49) If they could keep enough of the HAL vibe, they could appeal to the slightly older demo of HAL and expand their "empire". 

 

Whatever may happen, I will be very sad if we lost the Holland American Line experience.  It may not be what it once was, but it's better than if it were gone completely.

Oh that is never going to happen, Virgin is in the red much further than CCL/HAL/Princess. They are not taking delivery of the next ship that was to be out very soon and now post poning to an unknown date in 2023. People were hired and told no job. I expect Virgin to be on the market before HAL and possibly is right now. But that is just my opinion.

 

[sfocruiser]

14 hours ago, richwmn said:

HAL / Princess / Seabourn already share an IT and Web department which was out sourced several years ago.

And Cunard

[OmarOak]

Most brands, regardless of industry are for sale given the right price.

 

Today, Cruise lines are distressed assets. The problem is a lack of Buyers who will pay anything beyond a discounted liquidation value of the hard assets. If Carnival sells HAL for $1 Billion, but have $2 Billion of debt related to it, selling just digs their hole deeper.

 

 

[Guest ldtr]

4 hours ago, VermeulT said:

I was talking with DH about this last night.  We could see Virgin picking up HAL... their current line is no kids but sways young adult (I'd guess 25-34/ 25-49) If they could keep enough of the HAL vibe, they could appeal to the slightly older demo of HAL and expand their "empire". 

 

Whatever may happen, I will be very sad if we lost the Holland American Line experience.  It may not be what it once was, but it's better than if it were gone completely.

Virgin has enough of their own issues.  As well as total different ship design and focus.

[Guest ldtr]

4 minutes ago, OmarOak said:

Most brands, regardless of industry are for sale given the right price.

 

Today, Cruise lines are distressed assets. The problem is a lack of Buyers who will pay anything beyond a discounted liquidation value of the hard assets. If Carnival sells HAL for $1 Billion, but have $2 Billion of debt related to it, selling just digs their hole deeper.

 

 

If they sell it as a line the debt associated with it would go with it.

[crusinbanjo]

6 hours ago, ldtr said:

If they sell it as a line the debt associated with it would go with it.

Not always the case.  Most times you are correct that the debt associated with the assets are paired together in a sale, but that is not required.  In many cases where a company is distressed full divisions can be sold, or spun off with only some of the debt to make them more attractive to buyers.  It all comes down to the need to sell vs the value of the business.

[Guest ldtr]

59 minutes ago, crusinbanjo said:

Not always the case.  Most times you are correct that the debt associated with the assets are paired together in a sale, but that is not required.  In many cases where a company is distressed full divisions can be sold, or spun off with only some of the debt to make them more attractive to buyers.  It all comes down to the need to sell vs the value of the business.

Keep in mind that a large portion of the debt is secured by the ships.  Unlikely that you would have any sale of a line without the secured debt being part of the transaction. 

 

Any sale involving those ships would either require the debt to stay with the ships or for the debt to be paid off first.

 

 

 

No way a line would be sold without offloading the associated portion. 

Edited July 5, 2022 by ldtr

[OmarOak]

20 minutes ago, ldtr said:

Keep in mind that a large portion of the debt is secured by the ships.  Unlikely that you would have any sale of a line without the secured debt being part of the transaction. 

 

Any sale involving those ships would either require the debt to stay with the ships or for the debt to be paid off first.

 

 

 

No way a line would be sold without offloading the associated portion. 

Not necessarily true. A "sale" could happen in many ways.

 

In thee event of the sale of the operating company, there is likely debt on the ships and an operating capital line of credit. A Cruise lines could be "sold" in a transaction where the seller receives $0 cash, the Buyer assumes the debt on the hard assets and the seller is left holding the operating line of credit. Essentially the business is "sold" but the seller's return is negative.

 

I brokered this type of transaction a few weeks ago in a different capital intensive industry. It can be ugly for the seller of a distressed business.

[JRG]

1 hour ago, OmarOak said:

I brokered this type of transaction a few weeks ago in a different capital intensive industry. It can be ugly for the seller of a distressed business.

 

Pull up a chair and I will go get another bottle of Riesling.....these threads can get very interesting.

[BermudaBound2014]

On 7/3/2022 at 3:59 PM, ldtr said:

when exactly do those demographics date from.

From CLIA, 2019. Pre covid. Data for HAL will be skewed younger post covid since they aren't running all their longer itineraries. 

 

 

On 7/3/2022 at 3:59 PM, ldtr said:

On recent HAL cruises the ages seem similar to and maybe even younger than Princess on cruises under 14 days.

 

Who said anything about princess? You may want to reread post #144 😉 

 

On 7/3/2022 at 4:19 PM, ldtr said:

Frommers most current report puts HAL average age at 57, around the same as Princess. This is different from earlier that 2018.

 

Sure, fine. Let's use 57 as the average age of HAL passengers. That is still a full decade older than the average cruise passenger (which is 47). Thanks for making my point, again ;).

 

Why do you keep comparing to Princess? I mentioned nothing about Princess, I stated that HAL demographics would "lean toward" less tech savoy experiences and even mentioned that was a guess. 

 

 

For reference, this was the post you quoted in both responses above. 

 

On 7/3/2022 at 12:00 PM, BermudaBound2014 said:

 

Interesting concept. It would seem to me that the demographics of HAL cruisers would lean toward less tech savoy experiences, but that's just a wild guess on my part. The new partnership with MGM casino online gaming deal is being launched on HAL so that should be a good indicator. I do like thinking outside the box.

 

"Through this partnership, gaming will be available on more than 50 ships ported in the U.S. spanning Carnival Cruise Line, Holland America Line and Princess Cruises."

https://www.prnewswire.com/news-releases/betmgm-and-carnival-corporation-partner-to-offer-cruise-ship-gaming-301569556.html

 

 

 

Again, thank you for making my point :). Happy cruising. 

[iancal]

The thing is average age on all cruise lines is somewhat variable by date of itinerary.

 

There will be an average younger demographic on a Caribbean Christmas cruise than there will be for a late January cruise.  Same for Med cruises in summer vs. spring or fall on ANY cruise ship.

 

We do not care about averages.  We only think about the demographics on the ship and at the time we are sailing.

 

Same for length of cruise.  A 7 day will get a far younger demographic than a 21 day cruse.  Not because of the cruise line but rather the length of cruise.

 

I believe that a successful mass market line has to be flexible, to bob and weave as it were, to take advantage of the calendar defined disparate on board revenue opportunities that exist at various dates for multiple demographic groups.  Same for entertainment offerings.

Edited July 5, 2022 by iancal

[BermudaBound2014]

@iancalof course. It's pretty common knowledge in the industry that HAL is attempting to attract a younger crowd so that it can bob and weave more effectively. This article was interesting:

 

https://thepointsguy.com/guide/holland-americas-rotterdam-isnt-grandparents-cruise-ship/

With that said, it's also common knowledge that HAL sails with an older crowd (on average) and, as such, will use this demographic information as it responds to the pandemic.

 

"Another factor that could hold Holland America back until the coronavirus crisis comes to end is the older demographic of its customer base. The line typically draws a lot of travelers over the age of 55, with many in their 60s, 70s and 80s.

Travel agent groups that track age spreads say Holland America passengers can be 15 years or more older, on average, than passengers on Royal Caribbean or Carnival ships." https://thepointsguy.com/guide/holland-america-capacity-cuts/

Edited July 5, 2022 by BermudaBound2014

[MustBCruzn]

I wish I had seen this thread sooner. I recently booked the Feb 2024 35 day Hawaii-Tahiti-Marquesas cruise on the Koningsdam which required a heafty deposit. Now instead of being excited, I'm worried. 😬