Will the 2022 Recession affect NCL cruise fares?

[ysolde]

4 hours ago, phillygwm said:

Recession and negative GDP are macroeconomic concepts.  The question is how is it affecting the households of people who would be inclined to cruise.  With unemployment still historically low, the real concern for households has been inflation.  Not to minimize that, but it has a regressive impact: If you're making $25K, inflation will hit you harder than someone making $250K.   

 

If employment numbers crash and inflation continues to get worse, all bets are off.  Ditto for a new, especially virulent and lethal COVID strain.  Otherwise, perhaps "destination" cruises will suffer a bit because the cost of airfare is way up.  Personally, I opted for a cruise out of NYC, which is a train trip for me.  But I just don't think most people will cut out cruising entirely, especially with travel demand so strong.

 

This sounds about right.  We scheduled a TA cruise in November to coincide with a trip to Europe we were taking anyway.  We will just be heading home via a Mediterranean cruise that ends as a TA voyage.  Sounds kind of old-timey, but it works.

[david_sobe]

Bringing this thread back to cruising and the short answer is NO.  Cruising will not go down in price anytime soon.  Airfare is at record levels yet sold out flights.  Car rentals are highest level ever even if you can get one.  Hotels in south Florida are over 90% occupancy.  People are traveling more than ever even before the pandemic.  Cruises will not go down in price and could actually go up in price.

[BermudaBound2014]

21 minutes ago, david_sobe said:

Bringing this thread back to cruising and the short answer is NO.  Cruising will not go down in price anytime soon.  Airfare is at record levels yet sold out flights.  Car rentals are highest level ever even if you can get one.  Hotels in south Florida are over 90% occupancy.  People are traveling more than ever even before the pandemic.  Cruises will not go down in price and could actually go up in price.

 

Not in the remaining part of 2022.  I am currently looking at some fabulous prices for this fall. 

 

https://www.travelweekly.com/Cruise-Travel/Truist-Securities-report-falling-cruise-prices

[IMNOFUN]

21 hours ago, barb65 said:

If I have to spend a little extra on a cruise, I tell my kids, "I'm spending your inheritance."🙂

That's exactly what I say. However, our next cruise if paid by the granddaughters' inheritance and they're just fine with that. Of course, they're on the cruise.

[MichiganBound]

We are indeed, technically, in a recession having already had two quarters of negative growth.  Having said that, this does not feel like a recession at this point.  People are out and about spending their money like there's no tomorrow.  Restaurants are packed, planes are packed, concerts are full, and loads of people are going to sporting events.  I live in Michigan and we know what a recession feels like here...this doesn't feel like a recession.  Gasoline prices went up for several months and got very expensive.  However, they have been dropping for 3 weeks or so and have come down at least $1/gallon here in Michigan and are likely to keep dropping.  That will, in turn, put downward pressure on prices of other goods and services.  I think we may have already passed peak inflation.  Employment remains very strong.  "Now Hiring" signs still appear everywhere.  My sense is that, all other things being equal, this will be a short and shallow recession...maybe 2-3 quarters of negative growth in total.  Obviously numerous future events could screw things up.  Pick your crisis:  Russia/Ukraine, Iran, COVID, Monkey Pox, a major hurricane in the Gulf of Mexico.

 

Back to the question at hand.  Will cruise prices go down in general?  Currently, I don't see it.  As others have said, there are deals to be had if you can wait till the last minute.  Some Transatlantic and Repositioning cruises on NCL are looking cheap between now and the end of the year.  Some late season Alaska cruises are looking very cost-effective as well.  But I don't see a general wholesale price reduction in the near-term.  Longer term I suppose it's possible if the recession is longer/deeper than I anticipate.

[Taishartrueblood]

We are in a recession (could be a moderate or severe one, we will see) and that tends to drive down prices of luxury goods.

 

We are also in both a demand-pull and supply-push inflationary cycle which means that every dollar you have is worth less (and it an extremely hard cycle to break out of... raising taxes and more spending is exactly the wrong way).

So to answer the OP's question.... Maybe 😛 I am betting that the inflationary pressures will vastly outstrip the recessionary (stagflationary) pressures so cruises (and ALL goods) will cost more next year. Honestly, i recommend buying tangible assets, particularly tax-protected assets, as the $100 you have saved and that is in your bank account.... may only be worth $90 next year. 

 

Take my advice for exactly what it cost you 😛 

Edited July 30, 2022 by Taishartrueblood

[roomba920]

On 7/28/2022 at 1:12 PM, BermudaBound2014 said:

 

 

 

 

Regarding the recession; Economists have been saying that 2 quarters of negative growth indicated a recession (unofficially).  Based on the Beruae of Economics, we hit that today with another -0.9%.

 

However the White house released this statement indicating there are other factors to consider and 2 quarters of negative growth does not automatically indicate a recession. 😉 

 

The administration even took the unusual step of publishing an explainer of sorts, maintaining that two consecutive quarters of economic contraction does not, in and of itself, constitute a recession. The White House posted a blog entry last week saying that in addition to GDP, data pertaining to the labor market, corporate and personal spending, production and incomes all go into the official determination of a recession.

 

 

 

No need to repeat propaganda.

[BermudaBound2014]

4 hours ago, roomba920 said:

No need to repeat propaganda.

 

Can't make this mess up if I tried. 

[njkate]

One can hope but I doubt it. I priced a 10 day on Dawn next July for Northern Europe 

4 in a club balcony $17k uhhh I think not and that was the cheapest I could figure out, that is taking NCL air bundled in there

In 2018 I did 3 in a 2 bedroom Haven on Baltics for $9k

Edited July 30, 2022 by njkate

[graphicguy]

15 hours ago, david_sobe said:

Bringing this thread back to cruising and the short answer is NO.  Cruising will not go down in price anytime soon.  Airfare is at record levels yet sold out flights.  Car rentals are highest level ever even if you can get one.  Hotels in south Florida are over 90% occupancy.  People are traveling more than ever even before the pandemic.  Cruises will not go down in price and could actually go up in price.

While I do agree, I have about $500 in my NCL account due to a pretty decent price drop on my last cruise with them a couple of weeks ago.  ALready looking to use it.  While I’m looking at the cheapest rates, I can probably book a 7 day cruise around New England for about $300 after using my credit.

 

I can’t even stay at home and cook and drink every night for that amount.

 

Competition will keep fares from growing for the most part.

 

As an aside, I think I’ve told you this before, years ago you were one of two CC members around here who prompted me to start cruising NCL regularly.  Can’t recall the other person’s name, but he used to post here a lot, but haven’t seen him in here in a long while. 

Edited July 30, 2022 by graphicguy

[complawyer]

the magic 8 ball says "aint no way" 
 

[roboref]

On 7/29/2022 at 4:40 PM, david_sobe said:

Bringing this thread back to cruising and the short answer is NO.  Cruising will not go down in price anytime soon.  Airfare is at record levels yet sold out flights.  Car rentals are highest level ever even if you can get one.  Hotels in south Florida are over 90% occupancy.  People are traveling more than ever even before the pandemic.  Cruises will not go down in price and could actually go up in price.

Maybe NCL can keep the prices high, but I have cruised cheaper than ever before this past year on Carnival. They do reduce prices to fill ships. If consumers aren't happy with an NCL price many will move along to other lines. Cruising is a commodity as well. Cruise lines will have more difficulty filling to capacity as flights remain high, as many are not going to cruise when it costs so much and is so difficult to get there and back home via flying.

 

As far as several comments on this not being a recession because the labor market is growing, that is just not going to work. Jobs are always trailing indicators of economic prosperity. With rampant inflation and rising interest rates, demand destruction has already begun. Jobs will not being growing much longer. No soft landings. 

 

On the original question, I am waiting until 60 days, maybe only 30 days before travelling to buy a cruise. I got burned by NCL when I rebooked a cruise in January 2021 for March 2022, at $799 inside p/p. Less than 60 days before that cruise Club suite balconies were $699. For me I am waiting, I have the luxury to be very flexible.

Edited August 1, 2022 by roboref

[JustAPilot]

We just did the Med on Epic and the ship was close to capacity. Lots of international guests especially from South America, NCL did both English and Spanish announcements. We also had lots of guests from Israel to, so yes ships are back to capacity with lots of international paying passengers with money.

[DrSea]

The prices have started to come down already. I am seeing cruises that are cheaper than the last 6 months of checking on sailings in the shoulder season. IDK if it is the economy but it's coming down precipitously. 

[BermudaBound2014]

On 7/28/2022 at 3:46 PM, graphicguy said:

NCL ships have been sailing at or near capacity for the last couple of months.  If that's any indication

 

I do think all of that has meant NCL has a pretty rosy financial picture moving forward.  I invested at $11.  I get $100 OBC on every cruise as a result.  NCLH is trading at $12 today.  I see lots of upside.  My ROI is looking good with the OBC, which I'll use at least once or twice more this year.

 

 

I promised to come back and update this thread with accurate information when NCL released their earnings call on August 2nd. They postponed that earnings call until today (Aug 9) likely because their numbers are worse than expected, but as promised here I am to clear up the fake news.

 

1) NCL is not sailing at or near capacity. They sailed at a dismal 65% capacity second quarter and HOPE to get to 80% in third quarter. These numbers are worse than expected. As I mentioned before, there are a few ships that managed to sail at 100% but those are few and far between. Even tJuly only made it to 85% occupancy in July (one of the best months of the year).

 

2) NCL does not have a 'pretty rosy picture moving forward". Bottom line after you sift through all the BS: Today's release to the United States Securities Exchange Commission states they lost another 500 million last quarter AND THEY DO NOT EXPECT profits in third quarter. Adding to debt and admitting that they won't be profitable for the 3 busiest months of the year does not make for a 'rosy picture"

 

One year after our heated debate, I would suggest that things are still very fluid in the cruise industry on all three fronts: profitability, occupancy and covid protocols. Time to give up that ghost.

 

I hope this clears up all the misinformation. The Data I below comes direction from documents filed with the United States Securities and Exchange Commission. It's not fake news.

.

https://www.globenewswire.com/news-release/2022/08/09/2494757/24500/en/Norwegian-Cruise-Line-Holdings-Reports-Second-Quarter-2022-Financial-Results.html

 

 

 

[roboref]

On 8/1/2022 at 7:12 AM, JustAPilot said:

We just did the Med on Epic and the ship was close to capacity. Lots of international guests especially from South America, NCL did both English and Spanish announcements. We also had lots of guests from Israel to, so yes ships are back to capacity with lots of international paying passengers with money.

No NCL isn't selling all the rooms at the high rates they are demanding:

 

(Reuters) - Norwegian Cruise Line Holdings Ltd forecast a loss for the current quarter and revenue below estimates as occupancy rates remained stubbornly below pre-pandemic levels, sending its shares down 12% on Tuesday.   
 

Its second-quarter occupancy of 65% compared with more than 107% in 2019, a level the company does not expect to reach till the second quarter next year.  
 

In contrast, rival Royal Caribbean Group forecast triple-digit occupancy by the end of this year and Carnival Cruise Line expects to approach 110% during its current quarter.”

[BermudaBound2014]

3 minutes ago, roboref said:

 

In contrast, rival Royal Caribbean Group forecast triple-digit occupancy by the end of this year and Carnival Cruise Line expects to approach 110% during its current quarter.”

 

I believe the Reuters article is miswritten. NONE of the cruise lines are doing well. Here are the facts as filed with the United States Securities Exchange Commission

 

Second quarter results of occupancy:

NCL sailed at 65% occupancy

CCL sailed at 67% occupancy

RCL sailed at 83% occupancy

 

RCL and CCL both stated they expect to reach 100% occupancy ON SOME OF THEIR SHIPS. Devil is in the details.  CCL said that overall they only expect to reach 80% occupancy in Q3. These CEO's like to spin the language into what they want you to believe and the news jumps onboard.

 

I find the quarterly releases to be the most accurate information.

[roboref]

13 minutes ago, BermudaBound2014 said:

 

I believe the Reuters article is miswritten. NONE of the cruise lines are doing well. Here are the facts as filed with the United States Securities Exchange Commission

 

Second quarter results of occupancy:

NCL sailed at 65% occupancy

CCL sailed at 67% occupancy

RCL sailed at 83% occupancy

 

RCL and CCL both stated they expect to reach 100% occupancy ON SOME OF THEIR SHIPS. Devil is in the details.  CCL said that overall they only expect to reach 80% occupancy in Q3. These CEO's like to spin the language into what they want you to believe and the news jumps onboard.

 

I find the quarterly releases to be the most accurate information.

I went and read the Q2. I stand corrected. NCL was at 65% and RCCL was " This outperformance in Q2 versus our expectations was driven by continued strength in our onboard revenue and accelerating load factors, which hit nearly 90% in June and delivered 82% for the quarter. " The point is still correct in the previous poster had said anecdotally that NCL was nearing 100% which is not correct, and my previous point was NCL would have a hard time filling up ships if they want to keep the policy of not reducing fares. When RCL is $400 for a 7 night cruise and Carnival is $150 for a 7 night cruise and NCL remains at $599 or $699, NCL will really have a hard time holding those prices!

[BermudaBound2014]

9 minutes ago, roboref said:

I went and read the Q2. I stand corrected. NCL was at 65% and RCCL was " This outperformance in Q2 versus our expectations was driven by continued strength in our onboard revenue and accelerating load factors, which hit nearly 90% in June and delivered 82% for the quarter. " The point is still correct in the previous poster had said anecdotally that NCL was nearing 100% which is not correct, and my previous point was NCL would have a hard time filling up ships if they want to keep the policy of not reducing fares. When RCL is $400 for a 7 night cruise and Carnival is $150 for a 7 night cruise and NCL remains at $599 or $699, NCL will really have a hard time holding those prices!

 

I agree, the point you were making was correct. It just drives me crazy when journalists print crap like that reuters article which spin these numbers to appear much higher than they really are. 

 

BTW: Yes, RCL hit 88% in June but NCL hit 84% in July so they are more similar than the article leads us to believe,  but I absolutely agree that NCL is clearly behind the competition.