Carnival CEO plans to raise prices: "we are way too much of a value"

[RD64]

There is nothing to check - it is fact that MSC is the market leader in Europe, South America, and the Middle East - all of the former Costa strongholds.

[BlerkOne]

Just now, RD64 said:

There is nothing to check - it is fact that MSC is the market leader in Europe, South America, and the Middle East - all of the former Costa strongholds.

By far Carnival is the leading cruise corporation in Europe. MSC has only one brand.

[Z0nker]

On 12/15/2022 at 1:54 PM, mz-s said:

To me their product is not worth higher prices. Everyone will have to do their own comparisons and everyone's calculus will be different obviously.

 

I get that Carnival doesn't want to be known as the Dollar General of the cruise industry anymore, but that reputation is not entirely due to price.

We recently took five day cruises from SF on Carnival and Princess with similar itineraries. The Carnival cruise was $150 less per person, but lacked the Princess Plus package (booze, internet, gratuities).  Which made the Carnival cruise slightly more expensive overall. If they raise their prices, they won't be competitive.

[sfaaa]

MSC USA needs new cruise itineraries.  I am not interested going to the same MSC Caribbean ports over and over again regardless the deals.

[1kaper]

16 minutes ago, BlerkOne said:

Check again. MSC is once again gaining a reputation for the worst food at sea.

Having done two Carnival cruises this year and one MSC I find that hard to believe.  In my experience (reading here and my own experience) that title would go to Carnival. 
I have two MsC cruises booked next year and one Carnival so I guess we’ll see. 

[tidecat]

20 minutes ago, BlerkOne said:

Check again. MSC is once again gaining a reputation for the worst food at sea.

Carnival in Europe is divided up into P&O, AIDA, Costa, and the occasional visit from Carnival Cruise Line - and that's just at the value end. 

[RD64]

I was comparing MSC obliterating Costa in Europe and South America. I was not talking about the various contributions of HAL, Princess, P&O, and Aida among others.

 

For purposes of this discussion the UK, Germany, and Italy all have their own Carnival “ House” brands. These face additional competition from Celebrity and RCL. They also face competition and cannibalization  from their American brands of Princess and HAL.

 

MSC started in the 1990s with one very small ship (an ex-American ship actually) called the Monterey. I don’t recall if at the time - they purchased the long since defunct Lauro Lines - the Melody was included in the sale. For many years, nobody in the shipping industry gave MSC a second thought - least of all Costa. Fast forward 25 years, and Costa has had to do some serious retrenching in both Europe and South America.

 

While MSC may not be a household name in the US, the US is not the only market in the world. MSC knows what they are doing. Did I mention they are also the market leader in South Africa? Small potatoes and numbers perhaps but in the Grand scheme of things Europeans travel to South Africa and vice  versa. Did you happen to see the MSC ships being used for accommodations at the World Cup in Qatar? MSC knows exactly what it is doing.

[Eli_6]

Those of you who think the economy is doing so great are fooling yourselves.  Just because you aren't PERSONALLY seeing it doesn't mean it doesn't exist.  Your own personal experiences are not reflective of the national and international economies that affect CCL and CUK and their pricing. See:  

 

https://www.foxnews.com/politics/household-wealth-suffers-biggest-loss-since-2008

 

https://www.cnbc.com/2022/09/27/stock-market-losses-wipe-out-9-trillion-from-americans-wealth-.html

 

https://markets.businessinsider.com/news/stocks/recession-threat-stock-market-crash-bank-of-america-2023-outlook-2022-11?op=1

 

https://markets.businessinsider.com/news/stocks/recession-outlook-2023-q1-forecast-inflation-stock-market-recommendations-bofa-2022-12?op=1

[Eli_6]

The increase in the cost of groceries, gas, cars, and housing is hurting the people who might otherwise use their discretionary income to cruise with carnival and no longer have discretionary income.  When property values go up, taxes go up and rent goes up for those people who don't own. Maybe the people who make 100k+ are still ok, but the people who make 25k-50k are being hurt by the aforementioned because those items are a much greater percentage of their household income. 

[staceyglow]

1 hour ago, Z0nker said:

We recently took five day cruises from SF on Carnival and Princess with similar itineraries. The Carnival cruise was $150 less per person, but lacked the Princess Plus package (booze, internet, gratuities).  Which made the Carnival cruise slightly more expensive overall. If they raise their prices, they won't be competitive.

It was the CEO of Carnival Corporation who spoke about raising prices.  Princess and Carnival are the same Corporation.

[BlerkOne]

1 hour ago, RD64 said:

I was comparing MSC obliterating Costa in Europe and South America. I was not talking about the various contributions of HAL, Princess, P&O, and Aida among others.

 

For purposes of this discussion the UK, Germany, and Italy all have their own Carnival “ House” brands. These face additional competition from Celebrity and RCL. They also face competition and cannibalization  from their American brands of Princess and HAL.

 

MSC started in the 1990s with one very small ship (an ex-American ship actually) called the Monterey. I don’t recall if at the time - they purchased the long since defunct Lauro Lines - the Melody was included in the sale. For many years, nobody in the shipping industry gave MSC a second thought - least of all Costa. Fast forward 25 years, and Costa has had to do some serious retrenching in both Europe and South America.

 

While MSC may not be a household name in the US, the US is not the only market in the world. MSC knows what they are doing. Did I mention they are also the market leader in South Africa? Small potatoes and numbers perhaps but in the Grand scheme of things Europeans travel to South Africa and vice  versa. Did you happen to see the MSC ships being used for accommodations at the World Cup in Qatar? MSC knows exactly what it is doing.

Carnival is by far the biggest cruise corporation in Europe. Bigger that MSC and bigger than Royal, NCL, etc. MSC should stick to commercial shipping, which is something they know (but still are not number 1 there). Cherry pick all you want.

[Joebucks]

1 hour ago, RD64 said:

I was comparing MSC obliterating Costa in Europe and South America. I was not talking about the various contributions of HAL, Princess, P&O, and Aida among others.

 

For purposes of this discussion the UK, Germany, and Italy all have their own Carnival “ House” brands. These face additional competition from Celebrity and RCL. They also face competition and cannibalization  from their American brands of Princess and HAL.

 

MSC started in the 1990s with one very small ship (an ex-American ship actually) called the Monterey. I don’t recall if at the time - they purchased the long since defunct Lauro Lines - the Melody was included in the sale. For many years, nobody in the shipping industry gave MSC a second thought - least of all Costa. Fast forward 25 years, and Costa has had to do some serious retrenching in both Europe and South America.

 

While MSC may not be a household name in the US, the US is not the only market in the world. MSC knows what they are doing. Did I mention they are also the market leader in South Africa? Small potatoes and numbers perhaps but in the Grand scheme of things Europeans travel to South Africa and vice  versa. Did you happen to see the MSC ships being used for accommodations at the World Cup in Qatar? MSC knows exactly what it is doing.

 

https://cruisemarketwatch.com/market-share/

 

I'm not sure why you are so hell bent on cherry-picking "victories" for MSC cruises. In 2021, Carnival Corporation did 8.8 billion in revenue. MSC did 1.5 billion. While Costa (under the Carnival umbrella) did 1.1 billion. If after 30 years, this is what MSC has to show, I fail to see this MSC dominance you speak of.

 

This is like saying Hyatt corporation is destroying Crown Plaza (a brand of the IHG parent company). IHG shifts its brands as the market evolves. Same with Carnival Corp. They have multiple brands in Europe.

Edited December 18, 2022 by Joebucks

[Homosassa]

2 hours ago, BlerkOne said:

MSC has only one brand.

No. There is Explora Journeys.

[RD64]

45 minutes ago, Joebucks said:

 

https://cruisemarketwatch.com/market-share/

 

I'm not sure why you are so hell bent on cherry-picking "victories" for MSC cruises. In 2021, Carnival Corporation did 8.8 billion in revenue. MSC did 1.5 billion. While Costa (under the Carnival umbrella) did 1.1 billion. If after 30 years, this is what MSC has to show, I fail to see this MSC dominance you speak of.

 

This is like saying Hyatt corporation is destroying Crown Plaza (a brand of the IHG parent company). IHG shifts its brands as the market evolves. Same with Carnival Corp. They have multiple brands in Europe.

Surely you are aware of the slow but steady dissolution of the Costa fleet, with more and more ships being transferred to Carnival North America. This is not a sign of a cruise line in its ascendancy. Costa had too - they invested heavily in the Asian market with their newest ships - when that did not materialize post Covid, they were left between a rock and a hard place. No room for them in Europe - their homeland. And just an FYI - Costa has been around since 1947 - certainly a company that has been around that long should be doing better.  MSC is doing rather well for an upstart.

Edited December 19, 2022 by RD64

[pc_load_letter]

3 hours ago, Z0nker said:

We recently took five day cruises from SF on Carnival and Princess with similar itineraries. The Carnival cruise was $150 less per person, but lacked the Princess Plus package (booze, internet, gratuities).  Which made the Carnival cruise slightly more expensive overall. If they raise their prices, they won't be competitive.

 

Agreed. We did five days on NCL from socal cheaper than we could have taken CCL for 4 days. Those prices reflect the included NCL drinks vs the CCL drink package added.

 

And we loved just about everything on NCL. The MDR food was amazing for bfast, lunch and dinner. Granted, there is no Guys or Shaqs but I appreciate being able to get pretty good after 11pm at The Local vs tired pizza with barely any cheese and not having to wait thirty minutes for it. I just wish Bliss was in socal year round. (We have previously taken NCL in the  Med, Alaska and to Quebec)

 

I just wish more lines did year round  cruises from socal or even better, had a year round  ship in San Diego.

Edited December 19, 2022 by pc_load_letter

[tidecat]

2 hours ago, Homosassa said:

No. There is Explora Journeys.

Which is not even scheduled to begin service until July 2023.

[BlerkOne]

2 hours ago, Homosassa said:

No. There is Explora Journeys.

AFAIK, they aren't cruising yet.

[icft]

I think everyone is reading way too much into this news article. These are CEOs of two majors in an industry talking about the cruise industry vs. land based resorts.

 

The first thing to recognize is that these guys are “talking their book.” They want to generate the perception among consumers that cruising is a better deal and if they actually believe it or not is a different matter. Look at the article’s advice – book quickly to lock in these low prices. The talk of the CEOs already has the media pushing cruise sales.

 

The second thing to recognize is that in Carnival’s case it does not necessarily mean anything to the Carnival subsidiary. There are a number of cruise line subsidiaries under the CCL parent corporation. Some are “premium” brands and some are “value” brands. Even if parent CCL raises prices on most brands the Carnival brand is the value brand and they may well take a different approach with Carnival.

 

My personal view is that the Carnival brand will become like the “free vacation” associated with the old time share real estate business. You get a free cruise but you get badgered constantly with sales pitches. These days Facebook, Twitter, Google.. have been quite successful with the “you are the product” approach. They give you a free service whose only point is to serve you up to advertisers.

 

This is nothing new to the cruise industry. For years the casino operators have offered free cruises to gamblers. They pay the cruise line your cruise fare and give you a free cruise to get you into the casino. Carnival in particular has always done its own version by being the value line but you can’t walk down the promenade without tripping over photographers or art pitches or some jewelry shop drawing.

 

I think for the Carnival brand the “get you on board to sell you things” approach will become more intense to raise revenue rather than raise cruise fares to raise revenue. On our latest cruise we were bombarded with sales pitches for things like a wine package which was new to us. The cruise director spent a huge amount of time on the announcements promoting shore excursions, spa treatments, photos, jewelry sales and the like. I expect an increase in the prices of things like specialty dining and drinks packages and photos and spa treatments more than increases in cruise fares. The food is bad in the main dining room? Then go pay for a specialty restaurant.

[DirtyDawg]

13 hours ago, Eli_6 said:

Those of you who think the economy is doing so great are fooling yourselves.  Just because you aren't PERSONALLY seeing it doesn't mean it doesn't exist.  Your own personal experiences are not reflective of the national and international economies that affect CCL and CUK and their pricing. See:  

 

https://www.foxnews.com/politics/household-wealth-suffers-biggest-loss-since-2008

 

https://www.cnbc.com/2022/09/27/stock-market-losses-wipe-out-9-trillion-from-americans-wealth-.html

 

https://markets.businessinsider.com/news/stocks/recession-threat-stock-market-crash-bank-of-america-2023-outlook-2022-11?op=1

 

https://markets.businessinsider.com/news/stocks/recession-outlook-2023-q1-forecast-inflation-stock-market-recommendations-bofa-2022-12?op=1

And here one from Bloomberg this morning. 

 

https://ca.finance.yahoo.com/news/highest-interest-rates-15-years-100017197.html

[DirtyDawg]

16 hours ago, BlerkOne said:

MSC failed at their last attempt to enter the US market. Time will tell.

Of course they could grow in the U.S. market by buying up distressed assets from the weaker players if things get very bad out there.  It's a classic business strategy for stronger industry players during bad economic times - prey on the financially weak players. Sharks don't just live in the oceans. 🦈

[At Sea At Peace]

Oh well, looks like the thread has taken the turn from CCL's price increase issues to an MSC to-and-fro.

 

CCL is raising prices because it HAS to, by a lot, as much as 75% to break even without interest.  It's not anything they did, it was a 100-year pandemic.  It's leveraged up to the bridge and it appears that the bigger they are . . . . 

 

MSC is privately owned and, as an FYI, by an owner in a pandemic boom industry that saw the top fleets earn TENS of billions of dollars.

 

So, my $0.02 worth ~

 

MSC ~

 

~ did not scrap any ships during the pandemic.

 

~ did not delay or cancel any newbuilds, including the entire new luxury Explora Journeys line.

 

~ did add a new port, New York, a quaint 'little' place that is/was its top source US customer passenger market without a ship even being there, starting April 2023 with Meraviglia.

 

~ did add two new ships.

 

~ did continue, unabated during the pandemic, work on its new Miami terminal (on line end of 2023).

 

~ did not change course from being an 'international line' versus the implied false assertion that it wanted and wants the 'low end US/North American market' from CCL.

 

~ only plans target demographics of 60% US/North American on New York based cruises and continuation of 50% US/North American on Florida port cruises.

[crazy4themouse]

On the topic of MSC, there are also a lot of whispers down here about MSC possibly wanting in on the action at Galveston, as the port talks about their planned 4th cruise terminal:

 

https://www.seatrade-cruise.com/ports-destinations/msc-cruises-ncl-flagged-maybes-fourth-galveston-cruise-terminal

 

https://portofgalveston.com/CivicAlerts.aspx?AID=243

 

I know this MSC discussion seems off-topic, but it's really not. Carnival has a huge stake here, but I think that's only because they're currently the best "value" among our choices from Galveston. Royal is not terribly much more, but I think there's definitely room for a line such as MSC to make a bold impact here. We would absolutely try them if they sailed from Galveston.

 

[talkorpi]

30 minutes ago, crazy4themouse said:

On the topic of MSC, there are also a lot of whispers down here about MSC possibly wanting in on the action at Galveston, as the port talks about their planned 4th cruise terminal:

 

https://www.seatrade-cruise.com/ports-destinations/msc-cruises-ncl-flagged-maybes-fourth-galveston-cruise-terminal

 

https://portofgalveston.com/CivicAlerts.aspx?AID=243

 

I know this MSC discussion seems off-topic, but it's really not. Carnival has a huge stake here, but I think that's only because they're currently the best "value" among our choices from Galveston. Royal is not terribly much more, but I think there's definitely room for a line such as MSC to make a bold impact here. We would absolutely try them if they sailed from Galveston.

 

 

^^^ This.  I actually started a thread in the MSC boards discussing this.  It is mainly European people making judgemental comments about Texans, though, so didn't pick up the type of discussion I assumed it would.

 

 

Edited December 19, 2022 by talkorpi

[mowogo]

11 minutes ago, crazy4themouse said:

I know this MSC discussion seems off-topic, but it's really not. Carnival has a huge stake here, but I think that's only because they're currently the best "value" among our choices from Galveston. Royal is not terribly much more, but I think there's definitely room for a line such as MSC to make a bold impact here. We would absolutely try them if they sailed from Galveston.

 

MSC is the line that is providing the pricing floor for the industry in FL and is really the line attacking Carnival pricing.  And one reason MSC is winning converts is that the Divina is a much nicer ship than the Conquest, for the same or less.  Yes there are differences between the lines, but the price floor for US cruising is always important when talking about raising prices.  

[crazy4themouse]

16 minutes ago, talkorpi said:

 

^^^ This.  I actually started a thread in the MSC boards discussing this.  It is mainly European people making judgemental comments about Texans, though, so didn't pick up the type of discussion I assumed it was.

 

I'm sure that you, like me, aren't at all concerned with how Europeans - or anyone else - views us as Texans. 😊 It's (kind of) surprising that there are still a lot of people who view Galveston as some sort of afterthought when it comes to cruising, but it's the 4th busiest embarkation port in the U.S. and there's a reason Carnival and Royal keep putting bigger and newer ships down here. If I'm understanding what sort of line MSC is, I think they could do very, very well down here.