Cruise Industry Positive Outlook and HAL Ships

[jeh10641]

On 7/11/2024 at 6:05 PM, TRLD said:

HAL and Princess have different niches and the targeting of the two lines are getting further apart with the design decisions of the Sun class Princess ships. 

 

HAL has actually been successful in bringing their age demographics down since they launched music walk.   Princess on the other hands demographics have been getting older.  Probably one of the reasons Princess is trying to attract some younger cruisers with the design decisions on the Sun.  Not clear if they know how to make use of them though.

 

Pretty clear that with the decisions and the size Princess is giving up some of their current destinations ports.  They have also been bringing their average cruise length down as ships sizes have gotten larger.  That leaves HAL pretty much along with the combination of average ship size, number of destination ports (more than 100 more than Princess and 200 more than Celebrity), and average cruise length.

I have heard from multiple sources that one of Family/Kid areas on Sun princess hass not opened and is likely to never open. It may have to be re-purposed.

Jim

[jeh10641]

On 7/12/2024 at 4:08 PM, cbr663 said:

 

This resonates with me.  Not only are more and more cities pushing back hard against cruise ships and the entire industry, the events of the last few days have left me wondering what will happen next.  Cruise passengers in Barcelona were sprayed with water pistols by protestors and the Seven Seas Voyager cruise ship was recently surrounded by protestors sailing in smaller boats and was unable to dock in the port of Concarneau and the ship was forced to sail away and bypass the port.  Seems like an escalation to me and cruise lines seem totally unprepared.

 

I also have many friends who are experienced cruisers who are all sharing that their enjoyment levels have plummeted due to over crowded ships and ports.  It has me wondering how much longer they will continue to cruise.

I, too, have heard that ports are trying to cut back on the number of cruisers. However, it seems to me that the number of cruisers versus the number of total tourists shows that the latter is many times more than the former.

Jim

[jeh10641]

On 7/14/2024 at 12:20 PM, BermudaBound2014 said:

 

Not necessarily.

 

The July 2024 orderbook just came out and the only new builds added recently were smaller ships of viking, regent 7 seas, and crystal. 

 

It does seem like there is a dichotomy emerging. The mass market lines are all building larger ships. But, the luxury lines are in the game and placing orders continuously. Those of you who like sailing on smaller ships will have plenty of new builds to choose from, but the ticket price will be higher.

 

Ironically NCL is building the most new ships with RCL behind. CCL is in the distance. As mentioned, CCL's new strategy is to increase passenger capacity in Carnival, P&O, and Aida. I don't foresee a new HAL ship on the horizon as quickly as many here do.

 

 

 

Here's a list of the new builds (I don't believe this list has the recent orders added yet, but you can see the trend). Luxury lines are expanding their fleets with smaller ships and the orderbook for smaller ships is not lacking.

https://cruiseindustrynews.com/cruise-ship-orderbook/

 

 

 

 

 

 

Since you posted this, carnival just announced several new ships in the 8,000-passenger range. That is larger than many small cities/towns.

Jim

[BermudaBound2014]

9 minutes ago, jeh10641 said:

Since you posted this, carnival just announced several new ships in the 8,000-passenger range. That is larger than many small cities/towns.

Jim

 

We've already beaten that one to death. See post #87 😄 

[BermudaBound2014]

40 minutes ago, jeh10641 said:

Unless something has changed recently, I believe that Princess was based in California. HAL and Seabourn are in the same Carnival Cruise Line division.

Jim

 

You are correct. It is the website terms and conditions office that is in Seattle. Thank you. 

[jeh10641]

5 minutes ago, BermudaBound2014 said:

 

You are correct. It is the website terms and conditions office that is in Seattle. Thank you. 

My pleasure. I enjoy your posts.

Jim

Edited July 26 by jeh10641
spelling

[TRLD]

1 hour ago, chisoxfan said:

Unfortunately an awkward position that locks HAL in a conundrum. I cannot imagine there will be investment in new ships in the small and midsize range particularly when (as you state) their pricing is frozen with 'mass market pricing'. CCL has recently committed to new 'large' ships for Carnival and new ships for Princess moving forward (Sphere).  I wasn't suggesting HAL  becomes Princess as much as the Pinnacle class ships would absorb into Princess. Can the smaller HAL ships remain profitable with mass market pricing? I don't know but the demographic still seems to be shrinking and also expects a high level of quality than perhaps cannot  be supplied on small ships with challenged profitability. Things can perhaps remain stagnant until the current 'balloon' of cruise pricing and bookings pops with recession. Certainly no crystal ball here but cannot see (sadly) how HAL thrives in the long term as it exists. JMHO

Keep in mind that there is a big difference between mass market and premium with quite a range. According to data from market watch HAL at about $3,300 per passenger comes in at the high end of Celebrity ($2,700), Princess($2,137) and HAL in revenue per passenger. Though still about half compared to the premium Azamara ($7,784) and Oceania($7,369).

 

So there is some room before they get into the premium pricing range.

 

From what I have seen the shorter cruises in the competitive markets (Alaska, Med, Caribbean) are competitively priced, but the price per day is significantly higher on their unique longer itineraries.

 

They could certainly support ships in the upper 2000 range like their recent builds. Rather unlikely anything smaller.

 

The lines that CCL has indicated have reached the 12% or higher ROIC all have one thing in common. For Aida, P&O and CCL all of their recent builds have been 5000+ passenger with more of a tilt towards families. We have been on the P&O Iona but not on the Aida ships. Princess Sun is a similarly sized ship but is configured to hold substantially fewer passengers.

 

I suspect that capital investment will be delayed for a couple of years, until debt gets paid down, then there will be some new spend for HAL as well as Princess and Cunard. As much as CCL strategy is to be the value brand, there is too much money in the adult market at the Princess and HAL price point, even if it is a lower priority at current debt loads.

[BermudaBound2014]

25 minutes ago, TRLD said:

Keep in mind that there is a big difference between mass market and premium with quite a range. According to data from market watch HAL at about $3,300 per passenger comes in at the high end of Celebrity ($2,700), Princess($2,137) and HAL in revenue per passenger. Though still about half compared to the premium Azamara ($7,784) and Oceania($7,369).

 

Can you please link to this data set? All I can find on market watch is from 2021. My google skills are clearly lacking.

 

Thank you.

[TRLD]

9 minutes ago, BermudaBound2014 said:

 

Can you please link to this data set? All I can find on market watch is from 2021. My google skills are clearly lacking.

 

Thank you.

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

[TRLD]

2 hours ago, jeh10641 said:

I have heard from multiple sources that one of Family/Kid areas on Sun princess hass not opened and is likely to never open. It may have to be re-purposed.

Jim

It appears that the vendor was not able to get Rollglider to work (it was their first ship installation, a bit different than their land based ones).

The statement from Princess was that they couldn't accept it. Meaning in  most cases that the vendor failed to deliver a working product meeting the terms of the contract 

 

We will have to see what they replace it with.

[Cruzin Terri]

Deleted

Edited July 26 by Cruzin Terri

[TRLD]

2 hours ago, jeh10641 said:

I, too, have heard that ports are trying to cut back on the number of cruisers. However, it seems to me that the number of cruisers versus the number of total tourists shows that the latter is many times more than the former.

Jim

Sure but cruise ship passengers spend much less. Using Key West as an example half of their tourists were cruise ship and half land based. The cruise ship half contributed 15% of tourist spend, while the land half contributed 85%.

 

Cruise ship tourists come in groups during relatively short periods of time, making the crowding they cause more visible, land tourists are more speed out and individual. Though some tour group companies are also getting some criticism.

 

Hard to hide the rather massive cruise ship that comes with cruise tourism. That makes it a visible target. It is also an easy target compared to trying to cut off all of the different land tourism mechanisms. Though Venice is charging a day fee, and Amsterdam is trying to reduce the number of downtown hotels, in addition to their cruise ship restrictions.

[BermudaBound2014]

Here's a full data set from Market watch (ty trld) 

 

I think some of you may find the context interesting.

 

I highlighted MSC just for giggles because I think it's time MSC get their very own category considering how many passengers they carry 😄 . Also, gentle reminder that during COVID MSC Cruises had mom and dad (MSC Shipping company) around so they didn't have to borrow Billions in debt. They are a absolutely a player in the industry.

 

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

 

 

[TRLD]

33 minutes ago, BermudaBound2014 said:

Here's a full data set from Market watch (ty trld) 

 

I think some of you may find the context interesting.

 

I highlighted MSC just for giggles because I think it's time MSC get their very own category considering how many passengers they carry 😄 . Also, gentle reminder that during COVID MSC Cruises had mom and dad (MSC Shipping company) around so they didn't have to borrow Billions in debt. They are a absolutely a player in the industry.

 

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

 

 

MSC is certainly growing. The big 3 holding companies will probably become the big 4 if MSC keeps up it's expansion rate. 

 

The 2 interesting lines are MSC funded by the shipping side and Viking whose capital spend is largely funded by the extra cash they have on hand from their booking terms  requiring full payment much further in advance then the other companies. It worked very well funding their river cruise expansion.

 

While the data set can give some insight, unfortunately the best one can do is get revenue per passenger, not the more telling revenue per passenger per day. Part of HALs advantage is probably due to its longer average itinerary length.

 

It really does allow one to clearly see the revenue per passenger difference between a mass market family line, a mass market adult line, a premium line and a luxury line.

Edited July 26 by TRLD

[BermudaBound2014]

19 minutes ago, TRLD said:

MSC is certainly growing. The big 3 holding companies will probably become the big 4 if MSC keeps up it's expansion rate. 

 

The 2 interesting lines are MSC funded by the shipping side and Viking whose capital spend is largely funded by the extra cash they have on hand from their booking terms  requiring full payment much further in advance then the other companies. It worked very well funding their river cruise expansion.

 

While the data set can give some insight, unfortunately the best one can do is get revenue per passenger, not the more telling revenue per passenger per day. Part of HALs advantage is probably due to its longer average itinerary length.

 

It really does allow one to clearly see the revenue per passenger difference between a mass market family line, a mass market adult line, a premium line and a luxury line.

 

Color me dumb, but I honestly had no idea that Princess carried twice the passengers as HAL (skewed for length of cruise of course), but still! 

 

I wasn't surprised at MSC. I've sailed them several times and the value is most certainly there both in and out of the Yacht Club.  The Aponte Family has stated numerous times they intend not to be just part of the big 4, but the biggest of the 4 and they have a very aggressive ship building schedule. They aren't traded publicly so it's difficult to disseminate the data points, but I suspect they will overtake NCL in # of passengers in the near future. MSC is also the parent company of the recently launched Explora Cruises which are likely going to be stiff competition in the luxury cruise market.

 

Total % Passengers

CCL (Carnival, + P&O + HAL + Aida + Princess + etc...) = 42.9

RCL (Royal + Celebrity + Seabourn) = 25.7

NCL (NCL + Regent + Oceana) = 9.4%

MSC  8.5%  (not sure why Explora is shown separately) 

 

Sorry to the non-math folks who are totally bored with this discussion 😄 

[CNSJ]

19 hours ago, TRLD said:

there is a big difference between mass market and premium with quite a range. According to data from market watch HAL at about $3,300 per passenger comes in at the high end of Celebrity ($2,700), Princess($2,137) and HAL in revenue per passenger. Though still about half compared to the premium Azamara ($7,784) and Oceania($7,369).

Perhaps there is room for a Semi-Premium market with HAL raising prices 20-25% and making improvements (or retuning to previous levels of) in service, food quality, etc.  This means ships need to stay at existing size.

 

I do not want to pay the Azamara/Oceania price tag, and find HALs itineraries to be adequately diverse, so I am willing to pay a bit more....to get more.

[chisoxfan]

Appreciate all the comments but to me the overiding concern is what is HAL?

Princess, X, Cunard, Carnival, MSC seem to have a fairly clear identity even though some may have a few smaller ships with more enhanced itineraries. I am excited to try Pinnacle class on HAL and my expectations are close to those for Princess except for better (IMO) music choices and an opportunity to try CO. Otherwise for me no interest in older smaller ships (would be more open to these if they retained BB Kings). I think CCL has shown their hand on new builds which I don't think will be in HAL's future. In the 'healthy' cruise environment we are in HAL can probably float along profitably but will CCL invest in the 'old ships'....will demographics get younger.....can they push pricing with older fleet and limited suite 'benefits'? No answers here on what I think is a difficult marketing decision that may have to be faced when the Industry is more challenged by recession.

[jeh10641]

I looked at Club Orange as an option (suites are way beyond my budget) and the only benefit I see for me is embarkation and tendering priority. Neither of those are worth the fees. For Club Orange dining on Pinnacle Class ships, there is a private dining room with one or two daily specials not available in the MDR. However, we like to add specialty dining venues to our trips as they are "special". That means paying extra for meals twice as often as I care to do. We are not drinkers and my internet needs are simple.

 

HAL offers us the type of cruising we like, quiet with enough entertainment options. We are in our 80s with no grandkids. Our son has grand pets. If the opposite was true and we were younger, perhaps the bells and whistles of larger ships might be attractive to us. The so-called premium lines also might be more attractive to us if our budget could afford them as well.

 

Jim 

[TRLD]

On 7/26/2024 at 2:36 PM, BermudaBound2014 said:

Here's a full data set from Market watch (ty trld) 

 

I think some of you may find the context interesting.

 

I highlighted MSC just for giggles because I think it's time MSC get their very own category considering how many passengers they carry 😄 . Also, gentle reminder that during COVID MSC Cruises had mom and dad (MSC Shipping company) around so they didn't have to borrow Billions in debt. They are a absolutely a player in the industry.

 

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

 

 

I have been trying to get around the per passenger limitation to try and see how the various lines are doing relative to each other.

 

I decided to use the marketwatch revenue data to see how effectively each line is using its capacity. That would seem to be a good indicator of occupancy/fares for a line. Since if either was low it would result in a lower dollar per berth number.

 

For Princess, HAL and Celebrity  here are the results:

 

Princess  $76,233

HAL  $116,313

Celebrity $119,366

 

Looking at $ per berth (2 per cabin capacity) HAL seems to be near Celebrity, and considerably higher than Princess.

 

When I get the time I will look at other lines. Now if I can only find an expense number of each line.

[BermudaBound2014]

7 minutes ago, TRLD said:

When I get the time I will look at other lines. Now if I can only find an expense number of each line.

 

We may not always agree, but I like you more each day 😄 . These efforts are appreciated. No one can say you don't like to crunch data. There was a statistician on my staff who lived by the saying "Crunch the numbers until they confess" 🙂 

 

PS: What method did you use? I'll contribute with some of the other main stream lines just for giggles 🙂

Edited July 29 by BermudaBound2014

[TRLD]

58 minutes ago, BermudaBound2014 said:

 

We may not always agree, but I like you more each day 😄 . These efforts are appreciated. No one can say you don't like to crunch data. There was a statistician on my staff who lived by the saying "Crunch the numbers until they confess" 🙂 

 

PS: What method did you use? I'll contribute with some of the other main stream lines just for giggles 🙂

Pretty simple. Added up the lower berth capacity for all ships in a line that were in service at the start of the year and not retired during this year. That yields 2 per cabin capacity. Then divided that into the revenue number from the market watch data.

 

I was a senior VP overseeing market research, customer service, contracts and comm ops finance before I retired. Since I have been on a couple of  boards. I tend to look at things from that perspective. Which often puts me at odds with the they are doomed to fail because I do not like what they are doing folks.

 

I thought that you would like the approach.

 

No such thing as a perfect cruise line. The question is can they find a niche that works for them and a segment of the market.

[chisoxfan]

2 hours ago, TRLD said:

I have been trying to get around the per passenger limitation to try and see how the various lines are doing relative to each other.

 

I decided to use the marketwatch revenue data to see how effectively each line is using its capacity. That would seem to be a good indicator of occupancy/fares for a line. Since if either was low it would result in a lower dollar per berth number.

 

For Princess, HAL and Celebrity  here are the results:

 

Princess  $76,233

HAL  $116,313

Celebrity $119,366

 

Looking at $ per berth (2 per cabin capacity) HAL seems to be near Celebrity, and considerably higher than Princess.

 

When I get the time I will look at other lines. Now if I can only find an expense number of each line.

These numbers are questionable.  They make it appear that HAL is 50% more efficient than Princess. Why would CCL not throw all of their capital expenditure at HAL instead of Princess or Carnival. 

[BermudaBound2014]

1 hour ago, TRLD said:

Pretty simple. Added up the lower berth capacity for all ships in a line that were in service at the start of the year and not retired during this year. That yields 2 per cabin capacity. Then divided that into the revenue number from the market watch data.

 

I was a senior VP overseeing market research, customer service, contracts and comm ops finance before I retired. Since I have been on a couple of  boards. I tend to look at things from that perspective. Which often puts me at odds with the they are doomed to fail because I do not like what they are doing folks.

 

I thought that you would like the approach.

 

No such thing as a perfect cruise line. The question is can they find a niche that works for them and a segment of the market.

 

I believe I'm on the record stating CCL is likely too big to fail. I am also on the record stating that the debt load being carried makes me skeptical that CCL will remain in tact with all 9 brands (yes, I know you believe they are paying debt off quick enough not to be concerned). We are both capable of reading a 10Q and on this we shall just agree to disagree and let time tell the story. If HAL is around in a decade I'll admit I'm wrong 😁. Actually, if HAL starts building ships again in 2026 as you have predicted, I'll eat crow then too. I'm never hesitant to admit when I'm wrong. BTW: Not sure this prediction is doom and gloom, as companies evolve all the time. Selling off parts of a company to make the parent company stronger often makes everyone happy.

 

I am also on record stating the HAL has found a niche in longer cruises with unique itineraries at a very reasonable cost. They are getting a good chunk of my vacation budget in 2025 for these reasons. I'll also add that HAL seems to have a niche in the sedate cruising market. I don't mean that in a negative way, but seems to me that many on the HAL boards appreciate fewer activities and are content being in bed by 10:30 p.m. Some here are actually repulsed by the thought of a waterslide at sea while I'm riding that bad boy into the sunset 😄  

 

If another line mainstream line was offering 35 night itineraries to Tahiti  (and 22 night itineraries to Antarctica) at a similar price point; I'd very likely be choosing to spend my travel budget on another line. I like more activities and a much more modern ship design which offers lots more choices. But, as it sits, no other mainstream line is competing with HAL in the itineraries I'm booked on so I'm choosing to sail with HAL, knowing what product HAL delivers. No complaints, but that doesn't mean that I turn a blind eye to areas where HAL can improve.  IMO; All lines have things they do well, and areas that fall short of the competition. The only thing I've found consistent across all the mass market cruise lines is the feeling of gratitude I experience every day at sea.

 

Ok, for giggles: 

 

NCL  $116,772

(I counted roughly 54,000 cabins at 2 per cabin)

 

Almost on par with HAL and celebrity. But, we need to realize that data is skewed here because NCL does not often have just 2 in a room.

 

It would be so much easier if the cruise lines just gave us the data in the quarterlies. 😄 

 

[TRLD]

3 minutes ago, chisoxfan said:

These numbers are questionable.  They make it appear that HAL is 50% more efficient than Princess. Why would CCL not throw all of their capital expenditure at HAL instead of Princess or Carnival. 

Because it is only one side of the equation. It does not show expense.

 

For all we know Princess is 50 or 60% more efficient in cost per berth.

 

I would expect that Carnival may also be less efficient on revenue per berth, but they have reached their ROIC. They are certainly much lower on cost per passenger.  Most likely they reached the ROIC target because of a much more efficient cost structure.

 

What this data does show is that HAL is bringing in revenue in line with their competition for each berth.

 

I did compare the total average revenue per passenger number for all off the CCL lines against what was reported in recent 10qs to check that they were in the proper range, as a check on the data set.

[TRLD]

20 minutes ago, BermudaBound2014 said:

 

I believe I'm on the record stating CCL is likely too big to fail. I am also on the record stating that the debt load being carried makes me skeptical that CCL will remain in tact with all 9 brands (yes, I know you believe they are paying debt off quick enough not to be concerned). We are both capable of reading a 10Q and on this we shall just agree to disagree and let time tell the story. If HAL is around in a decade I'll admit I'm wrong 😁. Actually, if HAL starts building ships again in 2026 as you have predicted, I'll eat crow then too. I'm never hesitant to admit when I'm wrong. BTW: Not sure this prediction is doom and gloom, as companies evolve all the time. Selling off parts of a company to make the parent company stronger often makes everyone happy.

 

I am also on record stating the HAL has found a niche in longer cruises with unique itineraries at a very reasonable cost. They are getting a good chunk of my vacation budget in 2025 for these reasons. I'll also add that HAL seems to have a niche in the sedate cruising market. I don't mean that in a negative way, but seems to me that many on the HAL boards appreciate fewer activities and are content being in bed by 10:30 p.m. Some here are actually repulsed by the thought of a waterslide at sea while I'm riding that bad boy into the sunset 😄  

 

If another line mainstream line was offering 35 night itineraries to Tahiti  (and 22 night itineraries to Antarctica) at a similar price point; I'd very likely be choosing to spend my travel budget on another line. I like more activities and a much more modern ship design which offers lots more choices. But, as it sits, no other mainstream line is competing with HAL in the itineraries I'm booked on so I'm choosing to sail with HAL, knowing what product HAL delivers. No complaints, but that doesn't mean that I turn a blind eye to areas where HAL can improve.  IMO; All lines have things they do well, and areas that fall short of the competition. The only thing I've found consistent across all the mass market cruise lines is the feeling of gratitude I experience every day at sea.

 

Ok, for giggles: 

 

NCL  $116,772

(I counted roughly 54,000 cabins at 2 per cabin)

 

Almost on par with HAL and celebrity. But, we need to realize that data is skewed here because NCL does not often have just 2 in a room.

 

It would be so much easier if the cruise lines just gave us the data in the quarterlies. 😄 

 

Keep in mind the measure is 2 per cabin berth efficiency as a way to get around per passenger. Really does not matter if they charge more at one per cabin or put 4 people in it. It is the revenue per a standard capacity measure which does not change by itinerary length. The revenue could be earned in 1 35 day cruise or 5 7 day it does not matter. Unlike per passenger cruise length does not matter nor does number in a cabin.

 

Now if we just had someway to get at the other half, the expense side.

 

No problem with critiques, it is the 4 horsemen of the apocalypse that jump on every tid bit of news that can be interpreted as bad, that HAL is doomed, that get me posting.

Edited July 29 by TRLD