How Will Holland America /Carnival corp Handle the 2 or 3 million barrel decrease in Oil Out put

[CruiserBruce]

3 hours ago, Florida_gal_50 said:

And yet there are many people that will try to tell you differently.  Everything cane be done without petroleum.

Huh?

[mcrcruiser]

On 10/7/2022 at 7:18 AM, Hlitner said:

The world petroleum market is much more complex than many folks acknowledge.  When OPEC cuts the tap, lots of things happen.  Other non-OPEC countries will usually increase production (quietly).  But more importantly, a price increase in crude will likely drive the world into a deeper recession which actually causes a decrease in the demand for petroleum.  The danger to OPEC is the cartel (i.e, OPEC) loses control over worldwide pricing (this has happened in the past) and their member States actually make less money.  

 

One irony is that the USA, Canada and Mexico have plenty of crude reserves and could pull the rug out from under OPEC by adopting policies that increase production.  This happened during the first two years of the Trump administration and the results were that the USA (and North America) became net exporters of petroleum and the prices dropped and then were stable.  But we now have this strange situation where the Biden administration goes around the world begging other countries (and OPEC) to increase production while doing everything possible to curtail production within the USA.  Perhaps there is some logic to that policy, but the result is higher petroleum prices, inflation, recession, and no worldwide environmental benefit.  Go figu

 

Where does this leave HAL and the cruise industry.  Just one more nail in the coffin.  The ability of the cruise lines to increase pricing in a very soft market is questionable and gets into an economic law known as price elasticity.  Raise prices in a recession and it is likely that sales will fall, ships will have more empty capacity (opportunity lost revenue) and cruise lines will continue to lose money.  The obvious economic solution is to reduce supply (cut the number of cruises) by pulling some ships out of service.  Meanwhile, we have MSC which continues to expand with the addition of about 2 big ships per year plus a new cruise line (Explora Journeys) with 6 ships to be built within a relatively short period of time.  Something will have to give....and I fear that is going to happen somewhere within the CCL family of cruise lines.

 

Hank

 

 

Hank I agree with your   post  . imo , some thing will have to give  about thus  industry  &  some of the cruise lines  .We love HAL & just hope HAL survives  . We came to find out recently that Princess has many new  hires who are not well trained & additionally their Ocean Ready Technology has driven me & many others away  .  Just too  involved to put in pre boarding info with their new Ocean Ready app .  So far we were able to do pre boarding with HAL ,the old fashion way on line to get both our bag tags &   boarding passes .Because princess imo is making it so difficult  for us older folks  ,it will hurst their bookings  long term  .further as inflation accelerates it will compound  the problems of profit & loss   .There is no definite  time line to tame inflation even though the FED is increasing rates at accelerated  levels .This inflation is stubborn  . We now have Gas prices exceeding  $ 7 per gallon into close to $8  here in Calif  , when we go  food shopping weekly or bi monthly ,we see prices still increasing   .All this is not good for   the future of luxuries like cruises & then when a person has to add higher air fares & hotel & meal costs to  reach a cruise pier  some thing has to give & imo it will be  slowing down of cruise bookings  except for the higher end cruise lines  that carter the deep pocketed people 

[LocoLoco1]

Fuel price increases of course affect the pricing at all cruiselines or Airlines. It’s real and it’s indeed in the corporate books; we peons WILL get nicked but in unseen ways. It’s always been a laugher to see what one ends up paying at the end of an ‘Advertised $Fare$ cruise’ of say, $2,000/bucks. Add-on charges will be an even bigger deal, and in the future maybe everything will be ala carte more than what it already is. So here’s guessing various Revenue Enhancement tactics once you’re aboard will be the name of the game to make cruising profitable for them. Fuel?? Guessing again, but there is probably only minimally more a cruiseline can do to cut fuel expenses once underway. The corporate Fuel bill is now at the mercy of the World markets at large, as idling vs shutting down strategies can only nibble at the edges. The elephant in the room for cruiselines nowadays, however, is debt service. 3/wks til our cruise, and I don’t do peanuts so I may have to pack my own Jumbo Cashews if cost-cutting gets deeper. 

[mcrcruiser]

Because   of the very high debt  7 cost to service that debt ,we now include insurance against a vendor going  bankrupt   . We buy this type of insurance on Squaremouth.com   .It is not that much more to insure our thousands of cruise dollars  . 

 

 Unfortunately there have been cruise line bankrupt  in the past . I remember one that when the creditors took over the cruise line the passengers had to vacate all the ships the same day   .If U am correct ot was the Renissance   cruise line . Both Azamara & Princess bought some of these 30 to 35000 ton vessels 

[mcrcruiser]

I bought & sold CCL stock to get my OBCs  from  HAL  on our cruises . I bought the stock at  $6.90  sold it for $7.51 per share   .when a stock  has these types of valuations  ,it tells me that there are many underlying  difficulties  with their financials ,especially when the stock once sold for much higher prices pre pandemic  .Now we are just now triple shorting the S&P 500  until we see signs of abated inflation & the FED easing off it;'s  increasing   interest rate  money policies 

 

[LocoLoco1]

Seems like neither Norwegian, RoyalC or CCL wanna be the first to cry uncle. Basic Fares are stupidly low. 

[chengkp75]

While bunker prices have started to rise this past week, they are still about 35% lower than in June.

[AFNavigator]

On 10/8/2022 at 11:32 AM, chengkp75 said:

While you are correct that debt service is a large portion of the corporate balance sheet, bunker fuel is about 15% of operating costs, and the largest single line item, per ship.

Any idea if fuel consumption would be reduced by lengthening sail time between ports a bit?  For example, it seems like a lot of upcoming HAL departures pushed up their Port Everglades departure time by an hour.  That may be due to port congestion, but just wondering if doing so might result in lower fuel consumption by reducing average cruise speed by half a knot or so on the first cruise leg.  (Of course, an extra hour on board also should result in a bit more onboard revenue too).

 

Also, wondering if shore power use results in a net cost savings (less ship fuel consumed but at the cost of electricity use) or is shore power primarily being installed at select ports to reduce in-port emissions?

Edited October 9, 2022 by AFNavigator

[chengkp75]

Slower steaming generally results in less fuel consumption, but reducing by a knot or even two, over the short time spans that cruise ships generally have between ports would not result in a significant savings.  Cargo ships have adopted slow steaming, but that is mainly for many day voyages between ports.  

 

Shore power is not a savings for the cruise ships, since the rate they pay for electricity, or the "use charge" the port levies has to cover the infrastructure costs from providing the shore power station. Plus the ship needs about a $1 million investment to install the shore power connection.  Shore power is forced on the ships in ports that want to reduce emissions.  Shore power is rare in the US, and especially for cruise ships, since cargo ships can use 480v power, while cruise ships require 10,000v power.