How long before the economy takes its toll?

[Sea King]

How long will it take before the economy takes its toll on cruising?

 

You can't have it both ways: what will you chose? Heating your home, being able to fill up the gas station, buying groceries or taking a cruise?

 

Will the economy finally, and at long last, wake up Seattle to the reality that less is not better, cutbacks will not attract passengers in this economy to tolerate an inferior product at increased prices and most importantly, tradition still matters

 

What do you think?

 

Maybe the recession will force HAL to do what it should have done all along

[sppunk]

There is no recession, seeing how the economy grew in the first quarter of 2008.

[JimVrhovac]

By the pure economic definition of recession this country is not in a recession. It has slowed down but that is a natural part of the business cycle.

 

Those of us that have invested prudently over the years are not being affected by this slowdown. My portfolio is only down 1 % from January 1, 2008. I have looked at this slowdown more as a buying opportunity than a loss of monies.

 

HAL is a big enough corporation that it will ride out the storm. We have not decreased our cruising schedule at all. On the last several cruises the ships have been at or near capacity and there appears to be no problems caused by the economy.

 

I would guess that Carnival will have a bigger problem as it relies on the younger passanger base that is not as financially stable as the older population.

 

HAL should be more concerned as to the changes that it makes in its policies and how these changes will effect its customer loyalty.

 

Just one's opinions

 

Ruth & Jim

[benchmarklearning]

I agree with the poster from Boston. The economy is not bad and most of the posters on this board are experienced enough to have seen bad economies during their travels and know the difference.

 

Yes, gas prices are up and everything else is going up. But, business is booming (in most sectors), unemployment is very low, markets are strong. Value of dollar does not make European land vacations a wise move. But, overall I foresee very little effect on cruising and vacations in general. (The upcoming election may change that!)

 

Flying is a nuisance (and I do a LOT) because of total mismanagement of the airlines. Even us premier flyers see a noticable difference in the experience and my hope is that someone in management will learn to get it right (like Virgin America, Singapore). The legacy carriers are just plain mis-managed.

[LAFFNVEGAS]

The thing you are missing is the cruise industry has one advantage compared to resorts in Las Vegas and Hawaii and that is they can pick up and sail away to where the economy is better. We are seeing that already with fewer ships in the next 2 years sailing from the West Coast as well as seeing far more ships in Europe and more sailings in more exotic places. This is where the cruise economists must be good fortune tellers and predict if where they move the ships the passengers will book and board.

Just my opinion I think they are all running to Europe but this could actually hurt them because Europe will become too saturated with huge cruise ships. Europe already had cruiselines they were more familiar with now the major lines that US and Canada are familiar with on now coming on strong to their market.

 

My prediction is that you will find the major cruiselines come back into the US Market by 2010.

 

As far as cutting back, yes I have had to do that with everything in my everyday life because I am paid strictly by commission and I have taken a big hit but for right now I am not canceling cruises just cutting back on my accomodations (with the exception of the cruise in 2 weeks;) ) Yes I may have to cancel future cruises but I am on a wait and see what the summer and fall sales do.

 

I think in general most are cutting back on a little bit of everything which is why sales are down in everything. But I think the cruising still provides a great vacation that for many does not cost as much as a land vacation so the cruiselines may actually find new passengers to book those cabins that might not have otherwise.

[sail7seas]

Oh....YOU SO GET IT!!!

 

Those who will still have the money to afford cruising are not looking for less. They can afford to pay for their household/basic living expenses AND cruise but they are not looking for a bare bones experience.

 

With all due respect to everyone reading and not insult meant to any but the fact of the matter is that people who can barely pay their grocery bill, will not be able to pay for cruises. They are often the same folks who seek the very lowest possible price for cruises as they have to. I totally support everyone's right to try to include a cruise in their budget but for HAL to continue trying to make a cruise affordable for many, will chase away those who can long term afford to continue to cruise but will stop if they no longer want to cruise. Some of that group will say "ENOUGH' already..... enough cutbacks and changes.

 

HAL decision makers in Seattle if you are reading this:

 

I am sure you know far better than me and have way more experience and business degrees etc I'm just a cruiser who can continue to afford to cruise, want to continue to cruise but want to continue enjoying a Tradition of Excellence on your ships. If you continue to strip the product bare, you take away what it is we come to the ships wanting and expecting.

 

You will lose those folks who need bare bones pricing in order to cruise. They are (sadly) going bankrupt daily and we are hearing from a poster on these boards who says to have worked with major lines on the ships that each cruise there are more and more people who cannot pay their on board account.

 

Do you want to cater to them? Keep them coming to the ships drawn by continuing lower prices or do you want those who can pay but will stop paying when you take away everything that is ?was? the HAL we love? We lost ship's hostesses, we lost Captain's Welcome Aboard party, we lost traditional Mariner's Party, we lost many cruise activities, we keep losing. At some point, we will have lost as much as we are willing to lose before we Get Lost.So far, DH and I still love HAL and our cruises and we have many future cruises booked. But even we have limits over which we will not cross. You have no more loyal nor enthusiastic cruiser than DH and me. We are your true cheerleaders but we have limits.

 

Thank you for this thread, Sea King. It's what I've been thinking for a while.

 

[sail7seas]

There is no recession, seeing how the economy grew in the first quarter of 2008.

 

 

How far away is a Depression?

No Recession but foreclosures and bankruptcies are at record levels.

 

Have you tried to sell real estate lately?

[Old As Dirt Mom]

In the US, real gross domestic product increased at an annual rate of 0.9 percent in the first quarter of 2008. Not great, but not a recession, either.

[TCF]

I sense a little, "whistling past the graveyard", here, but generally the observations are accurate...at least for the HAL passenger demographic.

When the estimates of 2 million people losing their homes to foreclosure...and another 15 million living in homes that are worth less than what they paid for...come to pass it will be very difficult to deny the word "recession" is in play.

The HAL passenger demographic is people who are 'upper middle-class' and above. If they are still employed it is in professions and senior management positions...if they are retired they have carefully over the years invested their money and planned diligently for retirement...many having done without whatever the describe as "frills" in their lives in order to do so. They are also, generally speaking, better educated.

Given all this careful planning and their position in life they are in a much better position to withstand an economic recessionary impact.

It is the NCL's and Carnival's that are going to take a hit because their passenger demographic falls well below that of HAL and the other "Premium" cruise lines.

Many posters here are right....the worst thing HAL can do is reduce service on its ships. Loyal HAL passengers will withstand a fare increase to cover increase costs long before they will withstand a reduction in the service and perks they have come to expect.

[Alaskabound77]

GDP did increase in Q1 and the stock market is stabilizing and rebounding in certain areas. A stock market rebound generally precedes the end of a recession by about 3-6 months.

[sail7seas]

posted by TCF:

Many posters here are right....the worst thing HAL can do is reduce service on its ships. Loyal HAL passengers will withstand a fare increase to cover increase costs long before they will withstand a reduction in the service and perks they have come to expect.

 

That's it in a nutshell.

[localady]

There are many of us, I am sure that have cut back on our number of days cruising, but we have no desire to cut back on the quality of our cruising experience.

We don't choose a cruise for the "bottom line" and are willing to pay a fair daily rate ($200++ pp/day). What we are hoping for is a cruise that mirrors our past cruises on HAL in terms of quality of service.

We could pay less, yet we don't. We just work a little harder, and plan/save a bit longer, for the experience we want. When that quality of service is taken away, it's time to look elsewhere......

[Thrifty]

I agree that HAL is in a better position to weather any economic storm than many other lines because of their passenger population; i. e., less likely to finance their cruises from home equity withdrawal; but that doesn't mean HAL will be entirely immune. I don't know how much of a drop in the cabin occupancy rate it takes for them to feel it, but it seems to me entirely possible that there will be at least that much or more.

This thread started with the question, how long will it take? I recently read a convincing assessment of the tourist industry generally that suggested that the customers are waiting to see; I certainly am. Any slowdown in bookings may turn out to be shallow or not so shallow. I'm "value conscious" (cheap) enough to be unwilling to book now when better opportunities may be coming in just a few months. (If I were a suite passenger rather than an ocean view type, I should ignore the state of the economy, but I am not so fortunate.)

The opacity of the cabin selection process has frustrated me so much that I now consider the cruise lines as adversaries; declining to let prospective customers easily see exactly which cabins are available may be good revenue management, but it doesn't warm my heart, so I have lost my sympathy for the cruise lines; we are no longer friends.

We shall have to wait for the answer to the slowdown question, but fortunately it shouldn't be long coming, so we need not be extraordinarily patient, just a little.

[PathfinderEss]

I don't know about the goverment reports saying we are not in a recession but try telling that to Home Depot, Costco and other type stores. I've certainly seen some large slow downs at these stores, who use to be so busy you could hardly get anyone to help you, to being able to roll a bowling ball through them now and not being able to hit one person. Gas is now at 4.19, groceries are now jumping up in price everyday and I know it is beginning to take a toll on our economy here in CA. I understand that Las Vegas is down, people just don't have that discretionary income to be gambling with, when it's all going into gas tank or paying for groceries. My personal feelings is that Hal is already feeling the slow down in our economy as are other cruise lines. I know when we were on our last cruise in March, the suites on the next cruise were still open, as we were sailing on ours. Use to be you'd have to book them months and months ahead of time now that has changed.

As far as your question about waking up Seattle, I think as our economy stumbles a bit, Hal will not be upgrading anything. Like all companies, to stay in business they have to turn a profit. They may run more sales to get us to the ships but I think that is all that will happen. My question to you Sea King would be, why do you think if Hal did upgrade their supposed "inferior product" to you, would that really draw customers back who have less discrestionary monies to spend on cruise vacation? I don't believe so and I would also think that if Hal's has such a "inferior product" that you would be cruising on a different cruise line or not at all, IMHO.

[Starr Mtn]

--------------------------------------------------------------------------------

 

Oh....YOU SO GET IT!!!

 

Those who will still have the money to afford cruising are not looking for less. They can afford to pay for their household/basic living expenses AND cruise but they are not looking for a bare bones experience.

 

With all due respect to everyone reading and not insult meant to any but the fact of the matter is that people who can barely pay their grocery bill, will not be able to pay for cruises. They are often the same folks who seek the very lowest possible price for cruises as they have to. I totally support everyone's right to try to include a cruise in their budget but for HAL to continue trying to make a cruise affordable for many, will chase away those who can long term afford to continue to cruise but will stop if they no longer want to cruise. Some of that group will say "ENOUGH' already..... enough cutbacks and changes.

 

HAL decision makers in Seattle if you are reading this:

 

I am sure you know far better than me and have way more experience and business degrees etc I'm just a cruiser who can continue to afford to cruise, want to continue to cruise but want to continue enjoying a Tradition of Excellence on your ships. If you continue to strip the product bare, you take away what it is we come to the ships wanting and expecting.

 

You will lose those folks who need bare bones pricing in order to cruise. They are (sadly) going bankrupt daily and we are hearing from a poster on these boards who says to have worked with major lines on the ships that each cruise there are more and more people who cannot pay their on board account.

 

Do you want to cater to them? Keep them coming to the ships drawn by continuing lower prices or do you want those who can pay but will stop paying when you take away everything that is ?was? the HAL we love? We lost ship's hostesses, we lost Captain's Welcome Aboard party, we lost traditional Mariner's Party, we lost many cruise activities, we keep losing. At some point, we will have lost as much as we are willing to lose before we Get Lost.So far, DH and I still love HAL and our cruises and we have many future cruises booked. But even we have limits over which we will not cross. You have no more loyal nor enthusiastic cruiser than DH and me. We are your true cheerleaders but we have limits.

 

Thank you for this thread, Sea King. It's what I've been thinking for a while.

[Starr Mtn]

<<<<Oh....YOU SO GET IT!!!

 

Those who will still have the money to afford cruising are not looking for less. They can afford to pay for their household/basic living expenses AND cruise but they are not looking for a bare bones experience.

 

With all due respect to everyone reading and not insult meant to any but the fact of the matter is that people who can barely pay their grocery bill, will not be able to pay for cruises. They are often the same folks who seek the very lowest possible price for cruises as they have to. I totally support everyone's right to try to include a cruise in their budget but for HAL to continue trying to make a cruise affordable for many, will chase away those who can long term afford to continue to cruise but will stop if they no longer want to cruise. Some of that group will say "ENOUGH' already..... enough cutbacks and changes.

 

HAL decision makers in Seattle if you are reading this:

 

I am sure you know far better than me and have way more experience and business degrees etc I'm just a cruiser who can continue to afford to cruise, want to continue to cruise but want to continue enjoying a Tradition of Excellence on your ships. If you continue to strip the product bare, you take away what it is we come to the ships wanting and expecting.

 

You will lose those folks who need bare bones pricing in order to cruise. They are (sadly) going bankrupt daily and we are hearing from a poster on these boards who says to have worked with major lines on the ships that each cruise there are more and more people who cannot pay their on board account.

 

Do you want to cater to them? Keep them coming to the ships drawn by continuing lower prices or do you want those who can pay but will stop paying when you take away everything that is ?was? the HAL we love? We lost ship's hostesses, we lost Captain's Welcome Aboard party, we lost traditional Mariner's Party, we lost many cruise activities, we keep losing. At some point, we will have lost as much as we are willing to lose before we Get Lost.So far, DH and I still love HAL and our cruises and we have many future cruises booked. But even we have limits over which we will not cross. You have no more loyal nor enthusiastic cruiser than DH and me. We are your true cheerleaders but we have limits.

 

Thank you for this thread, Sea King. It's what I've been thinking for a while.>>>

 

Excellent response ! Definitely agree - and we've enjoyed numerous

"Suite" cruises in the past, and the only choice for the future.

[Sea King]

My question to you Sea King would be, why do you think if Hal did upgrade their supposed "inferior product" to you, would that really draw customers back who have less discrestionary monies to spend on cruise vacation? I don't believe so and I would also think that if Hal's has such a "inferior product" that you would be cruising on a different cruise line or not at all, IMHO.

 

fair question

 

so lets get to the point

 

IMHO, inferior means less than existed before

 

HAL today is not the HAL of 5 years ago .. there are fewer dining room stewards, fewer menu selections, fewer hot appetizers before dinner, fewer flowers .. and, let's not forget elimination of the captain's Welcome Aboard Party and elimination of the traditional Mariners Society Party

 

what's really interesting though is this: mediocrity now seems to be the theme for the "Carnival Family of Ships" .. instead of letting HAL be HAL, Costa be Costa, Princess be Princess, Cunard be Cunard and Carnival be Carnival to name a few, the "heads" now think tossing everything into a salad bowl is far better than than letting each cruise line keep and improve upon what made it the product that it was

 

in a nutshell, today's HAL is inferior to what it was 5 years ago

 

if HAL is to continue to exist (let alone thrive in this economic state), it's time Seattle figured out one simple truth: now is not the time to cut back .. it is the time to at least maintain the status quo

[Sailor Gal]

I totally agree and think each cruise line should keep their own "personality" and that way cruisers can select the particular experience they're looking for. For example, when we had teens - we cruised Carnival, NCL and RCCL. Now that we have no children at home we are cruising more on Princess and trying HAL for the first time. We are older and more interested in fine cruising rather than rock climbing, night clubs or having small kids running around onboard. If they were all the same, none would suit!

[LAFFNVEGAS]

fair question

 

so lets get to the point

 

IMHO, inferior means less than existed before

 

HAL today is not the HAL of 5 years ago .. there are fewer dining room stewards, fewer menu selections, fewer hot appetizers before dinner, fewer flowers .. and, let's not forget elimination of the captain's Welcome Aboard Party and elimination of the traditional Mariners Society Party

 

 

I think perception is all in the eyes of the beholder and although I am fairly new to HAL my first cruise with HAL was in April 2003 and in all honestly I find there to be more amenities and do not really agree with your percetion that the things you mention are cut backs. First off I definitely do not see a cut back with fewer menu items I see the same amount or actually more items offered. Our first cruise would only offer 1 soup per evening now there is a cold soup and hot soup, sometimes 2 plus the French Onion. I do not see a cut back in flowers if any I am seeing more and more interesting flower arrangements place in different places.

I personally do not like the new Welcome Aboard Reception but I hardly think this is a cut back to HAL in any way. I think they are just looking for variety and that many of the complaints they received were passengers not wanting to stand in line to shake the Captains hand to enter the showroom. Some of us enjoyed that and wish they would bring it back but the cruise lines cannot please everyone. As for the Mariner's Brunch, again I would like them to do it differently but that is not going to happen:o But it certainly is no way a cost cutting if anything it is providing a better Get Together for all Mariners and most likely impresses those with less than 25 days.

 

I think HAL has actually improved their product over the past 5 years. We soon all forget that the Signature of Excellence Upgrades have all been added in the past 4 years, the beds and duvets/sheets, the upgraded Elemis products offered in the stateroom, the flat screen TVs and DVD, the additional of offering complimentory fruit. We are fortunate that HAL still offers Full Room Service menus where many in the same price range of cruises do not.

 

Now I cannot help but think that the cruising of HAL 10 years ago is not highly exaggerated with time and that HAL still offers a very good product for the money. Yes, some things have changed but so has many things like my cell phone, my car, and my computer:rolleyes:

Life really is about change.

[u4ea]

As I understand, Carnival corp. as of last month, will not be ordering any new ships until the economy stabilizes. Correct me if I’m wrong, but I read that last month. I looked for the article, but couldn’t find it, if anyone knows or can confirm this, please do.:confused:

If new ships are not being ordered, how can you expect growth?

Long term wise, it appears not to be good. (pessimistic reality?:eek:) All economies rely on oil, and there is only ’so much’ in the ground. It seems no one is sure, but the world will start to ‘not have enough’ anytime from now to 20 years from now. There’s a lot to it,

http://en.wikipedia.org/wiki/Peak_oil

 

S7S, would you considered a more upscale cruise line if HAL continues the mainstream trend of cutbacks?

 

Mark….

[arzz]

The biggest incentive that I can see that HAL should NOT cut back on services and amenities is that those cruisers who do not care about these things can (and do) cruise other lines for less money. HAL cruisers choose HAL for the product -- the bottom line is there for all of us -- but HAL's bottom line is within reach of those who choose this cruise line. Why mess with a good thing? HAL's repeater rates should support that position.

 

Having cruised many days on HAL as recently as 15 months ago, then two other lines during this past year, then back to HAL -- there is no doubt in my mind that HAL provides the cruise experience that we seek -- and we will continue to return for this experience. We did not leave HAL because we sought something else -- our decisions were predicated on itineraries and plans with friends that HAL could not meet. We could not wait to get back to HAL. Please, HAL, don't alter those things that attract us to you and keep bringing us back!

[gregdude]

Right on, things do change but many folks don't! Old is not always better, sometimes new is good. HAL seems to be trying to adjust to a changing demographic population as the baby boomers start to fill their ships. I am impressed with the number of longer cruises available on HAL that you simply can't find on Carnival or RCCI. HAL is generally a different product aimed at a different audience, but must still face the reality of the economy. Don't forget when you made your reservation you agreed to pay $, and oil (ships run on oil) was also at $. Today when you board that ship you still paid $ but HAL is now paying $$$$ for the same oil. The same analysis can be made for their food bill. I just hope that HAL can continue to supply the same product over the next few months given the reality of running a ship business in what looks like a time of real operational cost increases!!

 

GregDude

[twinkletoes4445]

As I understand, Carnival corp. as of last month, will not be ordering any new ships until the economy stabilizes. Correct me if I’m wrong, but I read that last month. I looked for the article, but couldn’t find it, if anyone knows or can confirm this, please do.:confused:

If new ships are not being ordered, how can you expect growth?

 

Steel prices have almost doubled since the first of the year. It's not just gas prices that's skyrocketing. Unless the fabricator can lock in a price on this steel (and this usually requires an advance purchase of the steel), I can see why no one would want to be building anything in the near future until the price of steel stabilizes.

 

The last time steel prices skyrocketed, was several years back when China was buying up all the scrap steel. I can't remember the name of the company, maybe Haven, but they were in the midst of the Miami airport remodel when the steel prices went up and they ended up in bankruptcy.

[sassyredhat]

Was chatting with my DR. yesterday, and

 

"she-who-always-sails-luxury lines, specifically Crystal"

 

said that they are cutting back.

 

No more sailing Crystal. They have switched to HAL.

 

The have already booked Prinsendam for next year.

 

Pat

[hammybee]

 

The HAL passenger demographic is people who are 'upper middle-class' and above. If they are still employed it is in professions and senior management positions...if they are retired they have carefully over the years invested their money and planned diligently for retirement...many having done without whatever the describe as "frills" in their lives in order to do so. They are also, generally speaking, better educated.

 

 

Given all this careful planning and their position in life they are in a much better position to withstand an economic recessionary impact.

 

It is the NCL's and Carnival's that are going to take a hit because their passenger demographic falls well below that of HAL and the other "Premium" cruise lines.

 

.

 

That HAL may have, at some point in time, attracted the so called upper middle class was probably true. It certainly has not been my experience over the past twelve years or so.

 

The cruise lines know that most consumers choose a cruise based upon price and there is little brand loyalty. This reality is sometimes in sharp contrast to the views expressed by the 250+/- frequent posters on this board, many of whom consider themselves amongst the most loyal of HAL Pals.

 

To meet consumer demand for affordable cruises, they all built bigger ships and/or expanded on what they had in place. The more passengers a ship carries, the lower the unit cost, the more affordable the cruise. It is the nature of almost all business sectors to expand until they exceed consumer demand, kind of like a corporate Peter Principle thing. And then, once over expansion has been achieved, there is a house cleaning and the most financially fit survive, while others do not.

 

HAL now carries more than 1 million passengers a year and most of them are sailing in the majority of cabins, inside/outside. And so often, too often, many of those cabins sell for a pittance on 7-14 day runs. There are folks sailing for $60 p/p, per day and folks paying $3,000 p/p, per day on the same cruise and once outside the cabin, they tend to share a common experience. Those 7-14 day bread and butter runs are chock full of people new to cruising and /or who are just as apt to sail another line, next time.

 

From time to time, someone on this board will pose the "would you pay more to maintain the HAL experience? " and all the usual suspects, including me, chime in that we will. Yet, look at the majority of posts on this or just about any cruise line message board, on CC. It's all about how to get the cheapest cruise fare, which travel agencies have the best deals, free upgrades, better cabins than which were paid for, smuggling booze onto the ship and food off the ship and there is almost always an active anti Auto Tipping/Hotel Service Charge thread, somewhere. These are the people filling ships, nowdays. And there are millions of them. And most of them are not loyal to a particular brand.

 

Flip this over and look at the high end cruise lines with perhaps the most loyal of followings. That's where it gets real scary. The majority of their sails are not selling out. Seaborn seems to be doing better than the others. And the situation at Crystal strikes me as potentially alarming.

 

The number of sails sold out in August and beyond, across all cruise lines, at any price point, is rather dismal. Only thing I am certain of, is that 1-3 cruise lines in business right now, either will not be or will be reorganized, within the next 12-18 months. It's all a part of the business expansion -contraction cycle.

 

For all we know, that HAL does more charters may be the single greatest factor in their favor. They have certainty of a sell out where their competitors do not.