NCLH Earnings Release (CY22) and Conference Call . .

[mrlevin]

. . . and the stock keeps falling; now down 12%.  Rosy numbers but disastrous commentary caused stock to keep falling during Q&A session.  Especially concerning were statements that demand wouldn't be hurt by continuous cost cutting - time will tell.  At least they have warned us in advance that time in ports will be shortened in order to be more fuel efficient at sea.

 

At least no mention of delays in Grandeur inaugural so I am happy.  

 

Marc

[Pcardad]

They want the new ships out as fast as possible as they expect to be at 100% capacity this year...

 

[mnocket]

I'm hoping that the cost cutting that has become very apparent on the mainstream lines (e.g. Celebrity, et. al.) doesn't start to rear its head on the luxury lines.  Those cost cutting measures are what has driven me to RSSC. 

 

It's notable that the areas that were singled out for driving expenses up were fuel, food & labor.  These are exactly the areas that we are seeing increased customer complaints on the mainstream lines - shorter port stops, decreasing food quality and declining service due to understaffing.  I hope there's a firewall that will prevent these cutbacks from impacting RSSC, but who knows?

[irishwitchy]

Can you go into the times in port being reduced to save fuel comment. I rather see a bunch more overnights and less ports to reduce fuel.  

[Pcardad]

If you have more overnights you have less ports in a given time frame....most clients want more ports. Having said that, the closer to optimum cruise speed the better and this is far below the 18 - 20KTS that Regent typically sails at.

 

https://www.marineinsight.com/know-more/how-much-fuel-does-a-cruise-ship-use/

 

This site is really interesting.

[irishwitchy]

pcardad, thanks for that link - very interesting read

 

[mrlevin]

There have already been cutbacks on food due to cost; e.g., king crab legs and crab cakes in P7.  Hopefully, not too much more.  As for ports, I think they want to design itineraries that travel at a reasonable speed entire time between ports; i.e., have ports 160-200nm apart and travel at 16kts instead of 80 and 240 and have to travel at 10 or 20kts.  

 

I did get a bit scared listening to FdR's answer to an analysts question regarding cost cutting; hopefully won't impact Regent too much but we need to "cost-cut-shame" Regent for any actual cost cutting that impacts the customer experience (they can cut out the 40-50 brochures I get per year).  

[RachelG]

32 minutes ago, mrlevin said:

There have already been cutbacks on food due to cost; e.g., king crab legs and crab cakes in P7.  Hopefully, not too much more.  As for ports, I think they want to design itineraries that travel at a reasonable speed entire time between ports; i.e., have ports 160-200nm apart and travel at 16kts instead of 80 and 240 and have to travel at 10 or 20kts.  

 

I did get a bit scared listening to FdR's answer to an analysts question regarding cost cutting; hopefully won't impact Regent too much but we need to "cost-cut-shame" Regent for any actual cost cutting that impacts the customer experience (they can cut out the 40-50 brochures I get per year).  

Totally agree.  If they would stop sending me brochures every week (and sometimes more often) I would really appreciate it as they go right in the recycle. 

[DaveFr]

3 hours ago, RachelG said:

Totally agree.  If they would stop sending me brochures every week (and sometimes more often) I would really appreciate it as they go right in the recycle. 

Rachel, have you tried opting out of marketing mailings on the Regent website? If not, go to the bottom of the main website page and under “Resources,” click on “Update Marketing Preferences.“ Supposedly this link gives you the option of opting out of some or all of marketing emails, mailings or phone calls. I don’t know if it works but it’s worth a try.

 

Dave

[pingpong1]

5 hours ago, mrlevin said:

There have already been cutbacks on food due to cost; e.g., king crab legs and crab cakes in P7.

Hi Mark - The "story" is that there has been a moratorium on crab fishing over the past few years.  That is actually true.  But I can still buy Alaskan king crab legs at our local Costco.  Just not in the quantity that Regent would need!  And the main problem is that they're now triple the cost of a few years ago.  As much as $100+ per pound!  So, I guess the Regent accountants in Miami just can't "handle" that kind of overhead cost at the moment!  Fingers crossed for the future!  Best Regards.

[RachelG]

I heard about the crab moratorium too, but then saw the crab on offer at Costco.  Didn’t check the price though.

 

Dave, I have thought of trying that.  I still like the big once a year catalog with all the cruises though.  Just wish they would stop the every week mailings.

[Timeflies]

17 hours ago, Pcardad said:

If you have more overnights you have less ports in a given time frame....most clients want more ports. Having said that, the closer to optimum cruise speed the better and this is far below the 18 - 20KTS that Regent typically sails at.

 

https://www.marineinsight.com/know-more/how-much-fuel-does-a-cruise-ship-use/

 

This site is really interesting.

Thanks Pcardad for sharing.  Interesting to read and a good website.

[Lonedaddy]

16 hours ago, mrlevin said:

There have already been cutbacks on food due to cost; e.g., king crab legs and crab cakes in P7.  Hopefully, not too much more.  

They had crab cakes at p7 in February on Explorer and they had them at a restaurant in singapore

 

 

 

 

 

[mnocket]

20 hours ago, irishwitchy said:

Can you go into the times in port being reduced to save fuel comment. I rather see a bunch more overnights and less ports to reduce fuel.  

Sure.  Over on the Oceania board there has been quite a bit of discussion and disappointment about port calls being shortened.  Here's a thread from January...

 

https://boards.cruisecritic.co.uk/topic/2909545-reduced-port-stays/

 

A bit closer to home... on my upcoming RSSC cruise in December our port call in SAN JUAN is 7AM-1PM.  Really just a half day.  That said, I don't think this has become a real problem on RSSC - YET, and I'm hoping it won't in the future, but if ships are going to sail a slower speeds port times are going to be affected.  I love the idea of more overnights and hope this is the direction RSSC and others take.

[alainciao]

WSJ article today on NCL says non-fuel costs per capacity day are forecast to be 15% lower this year.

[mrlevin]

1 hour ago, alainciao said:

WSJ article today on NCL says non-fuel costs per capacity day are forecast to be 15% lower this year.

And that can't all be from back office or marketing; that has to include impacts on food and service onboard Regent ships (in addition to NCL and Oceania).  

[slidebite]

We haven't taken a Regent cruise since 2018. We board next month. If the experience is noticeably degraded from our previous cruises (which I genuinely don't expect) I doubt we'll take another one.

 

If the cutbacks are truly dialing back waste and the experience on the customer side of things isn't noticeably different (crab legs won't effect me but noticeable lack of general service, food quality, portions will) we'd probably continue to do more as we get older.

 

For a couple with a finite budget for holidays, both in time and $$, they are just too darn big of an outlay to justify a less than premium experience.

[Gpilon]

If Regent "cheapens" the experience, we would look to spend our vacation dollars somewhere else. We are on Splendor the end of this month doing a TA crossing and I plan to pay attention to ensure we still get the "luxury experience" we pay for.

[Lonedaddy]

Curious to what the P/L looks like for each unit.  Regent may be turning a profit and may not need to cut whereas NCL may have a bigger cost cutting issue.  So, the impact may not be as great on Regent just have to wait and see.

[Pcardad]

With expected 100% - 103% booking rates, there will always be someone to take the rooms....but do you honestly think Regent is going to tank the experience? Really? 

 

[jeb_bud]

I’m not so sure about this 100% booking rate. Both cruises we have booked this year are well below 100%. Just looking at the number of “available” suite categories tells me there are plenty of vacancies. 

[Pcardad]

29 minutes ago, jeb_bud said:

I’m not so sure about this 100% booking rate. Both cruises we have booked this year are well below 100%. Just looking at the number of “available” suite categories tells me there are plenty of vacancies. 

Just read their earnings report - page 14.

https://static.seekingalpha.com/uploads/sa_presentations/529/91529/original.pdf

 

Clearly lists FY2023 guidance at 103.5% occupancy. Companies don't typically lie on these documents...the SEC would own them.

 

 

Edited March 2, 2023 by Pcardad

[pingpong1]

2 hours ago, Pcardad said:

Just read their earnings report - page 14.

https://static.seekingalpha.com/uploads/sa_presentations/529/91529/original.pdf

 

Clearly lists FY2023 guidance at 103.5% occupancy. Companies don't typically lie on these documents...the SEC would own them.

 

 

If their booking/occupancy numbers are so great at the moment, I'm wondering why they are offering "free" 2-level suite upgrade incentives and lots of OBCs for the remainder of many '23 itineraries?

[seasickphil]

On 2/28/2023 at 8:21 PM, mnocket said:

I'm hoping that the cost cutting that has become very apparent on the mainstream lines (e.g. Celebrity, et. al.) doesn't start to rear its head on the luxury lines.  Those cost cutting measures are what has driven me to RSSC. 

 

It's notable that the areas that were singled out for driving expenses up were fuel, food & labor.  These are exactly the areas that we are seeing increased customer complaints on the mainstream lines - shorter port stops, decreasing food quality and declining service due to understaffing.  I hope there's a firewall that will prevent these cutbacks from impacting RSSC, but who knows?

How or why do you think luxury lines will escape any cost cutting measures?

[Pcardad]

1 hour ago, pingpong1 said:

If their booking/occupancy numbers are so great at the moment, I'm wondering why they are offering "free" 2-level suite upgrade incentives and lots of OBCs for the remainder of many '23 itineraries?

I didn't claim they were great at the moment. NCL said that their anticipated 2023 bookings would be what you read on page 14. They will do whatever is required to ensure 100% bookings. The cost of what a client consumes is nothing compared to fuel, salaries, fees, etc. Whatever they get from the final people to fill the ship is almost entirely profit.