Have the cruise lines overexpanded?

[Gonzo70]

Anyone remember the cruise industry in the 12 months after 9/11???? Talk about empty ships and rock bottom prices (ok they weren't totally empty but certainly not full).....they survived that.......they are still around...and the ships are bigger and newer......

 

A key difference now is that their operating costs are way high. After 9/11 although people were not spending as much money, RCL's operating costs were low enough that they could have large price drops and still make money. It is a double edged sword currently; people are spending less money but their operating costs are way up. Also post 9/11 was a panic reaction to a terrible event, but things economically recovered fairly quick in most areas. High oil is a major reason for the current predicament which is very likely a permanent condition.

[isujim]

A key difference now is that their operating costs are way high. After 9/11 although people were not spending as much money, RCL's operating costs were low enough that they could have large price drops and still make money. It is a double edged sword currently; people are spending less money but their operating costs are way up. Also post 9/11 was a panic reaction to a terrible event, but things economically recovered fairly quick in most areas. High oil is a major reason for the current predicament which is very likely a permanent condition.

 

I agree with you that operating costs are higher now than during the 9/11 period. I would also agree that high oil prices are here to stay. I would also predict........that we will adjust......including the cruiselines. What will be interesting is how they will adjust.....which is anybodys guess. One way or another...through raising prices, either base rates or more pay as you go charges or operating cost cuts, they will adjust.

 

It will be interesting........IF......the economy continues the way it is.....who is left standing, and who is able to manage the times better than others.

[CanTex]

I agree with you that operating costs are higher now than during the 9/11 period. I would also agree that high oil prices are here to stay. I would also predict........that we will adjust......including the cruiselines. What will be interesting is how they will adjust.....which is anybodys guess. One way or another...through raising prices, either base rates or more pay as you go charges or operating cost cuts, they will adjust.

 

It will be interesting........IF......the economy continues the way it is.....who is left standing, and who is able to manage the times better than others.

The turmoil seems to be feeding on itself. If a company like General Motors was ever to go bankrupt like is being speculated today, all bets are off. That would be devastating for consumer confidence.

[thesmiths]

I agree........fact and fiction:)

 

Always is:D but still good stuff.

[Gonzo70]

 

It will be interesting........IF......the economy continues the way it is.....who is left standing, and who is able to manage the times better than others.

 

Since CCL has significantly less debt per equity and is a much larger company (in terms of market cap) they likely would be the one standing if economic conditions deteriorate to the point that there is not enough room for RCL & CCL both (hopefully it will not come to this, but if oil does go to $200 in the coming years as some predict this may be a reality). I do not think CCL would buy RCL because of the deteriorating growth and debt issues, but what they might do is purchase their most desireable ships on the cheap (as their would be minimal competition) if RCL were to go under. Who knows though, maybe congress will wake up and start utilizing the energry resources available in the U.S. which if implemented properly could bring oil down enough to put the economy back on good footing and buy time to develop cost effective alternative energy sources.

[isujim]

Since CCL has significantly less debt per equity and is a much larger company (in terms of market cap) they likely would be the one standing if economic conditions deteriorate to the point that there is not enough room for RCL & CCL both (hopefully it will not come to this, but if oil does go to $200 in the coming years as some predict this may be a reality). I do not think CCL would buy RCL because of the deteriorating growth and debt issues, but what they might do is purchase their most desireable ships on the cheap (as their would be minimal competition) if RCL were to go under. Who knows though, maybe congress will wake up and start utilizing the energry resources available in the U.S. which if implemented properly could bring oil down enough to put the economy back on good footing and buy time to develop cost effective alternative energy sources.

 

Hopefully........it won't come to that. Speculation won't specifically solve anyone's problem and probably only add fuel to an existing set of conditions.

 

I guess in the end my whole point is that the economic conditions right now would at least raise my eyebrows a bit........but I'm still confident that Rc and all the cruiselines will find a way to prevail........to not do so would not be a pretty picture.

[Moeve]

Er Hallo some of you are not looking at the whole picture the Oasis is bigger (roughly the size of 2 Voyager class ships) and this is the beauty of it.... It carries the passengers of TWO ships on one and this adds up. Only one capt with a huge salarly instead of 2 - only one hotel manager instead of 2 it carries on the list goes through the whole crew....It all adds up to the sum at the bottom which will be better than just about everything afloat today

 

Over and above that many of you simply ignore the fact that the US market may NOT be the future of cruising. You may find yourselves in a samller group in furture. There are other passenger groups out there who are gaining in strength.

[shaggyofwv]

The turmoil seems to be feeding on itself. If a company like General Motors was ever to go bankrupt like is being speculated today, all bets are off. That would be devastating for consumer confidence.

 

 

GM, Ford, and Chrysler are all on the verge of bankruptcy. The future of the U.S. economy doesn't look pretty.

[shaggyofwv]

Er Hallo some of you are not looking at the whole picture the Oasis is bigger (roughly the size of 2 Voyager class ships) and this is the beauty of it.... It carries the passengers of TWO ships on one and this adds up. Only one capt with a huge salarly instead of 2 - only one hotel manager instead of 2 it carries on the list goes through the whole crew....It all adds up to the sum at the bottom which will be better than just about everything afloat today

 

Over and above that many of you simply ignore the fact that the US market may NOT be the future of cruising. You may find yourselves in a samller group in furture. There are other passenger groups out there who are gaining in strength.

 

 

I would say it is common sense that the U.S. is not the future of cruising.. The U.S. is becoming a 3rd world country thanks to our great congressional leaders.

The emerging economies of Asia are the future of cruising, in my opinion.

[isujim]

Boy.......talk about some half empty glasses;)

[Cruising89143]

Boy.......talk about some half empty glasses;)

 

Ain't that the truth.:rolleyes: Beginning to wonder if we will all wake up tomorrow. ;)

[The Big Booper]

One other point to be added to this discussion is that the main Carnivore (thanks Gordon :D ) brands such as Carnivore, Princess and Costa pack more people into their ships than the main RCI brands. The space factor for the Voyagers is the highest of all the big ships. Just look at the newbuilds. Kiddie poos not considered here.

 

Princess Crown et al - 3050 people at 116,000 GRT

Carnival Conquest type - 2950 people at 109,000 GRT

Carnival Dream - 3650 people at 128,000 GRT

Costa Concordia- 2950 people at 114.500 GRT

 

Voyager - 3114 people at 138,500 GRT

Freedom - 3650 people at 158,000 GRT

 

 

Not to mention that Carnivore is the line of choice of the buckets of beer crowd. I would like to have the concession to supply them with beer.

 

We don't do Princess any more and will only do a Carnivore out of NY to Canada early in the season when the pool deck is not a factor since the ampitheater seating is a joke, not to mention the long Lido lines during the day

[antsp]

Is this the same RCL that provides only one usable pool for over 3000 people unless you dont have children on the voyager class ships, ( one pool split in two )

[Cruise Junky]

Does anyone know the current debt load of the two companies? I was reading an article yesterday from some analyst who was concerned about RCI debt load, but I have no idea how it compares to CCL.

[Cruising89143]

Is this the same RCL that provides only one usable pool for over 3000 people unless you dont have children on the voyager class ships, ( one pool split in two )

 

 

Plenty of pool space and it is two separate pools but try again.:rolleyes:

[antsp]

If RCL had more pool areas there product would improve big time, biggest problem is on cold days at sea your kids have no place to swim

[curley23]

Er Hallo some of you are not looking at the whole picture the Oasis is bigger (roughly the size of 2 Voyager class ships) and this is the beauty of it.... It carries the passengers of TWO ships on one and this adds up. Only one capt with a huge salarly instead of 2 - only one hotel manager instead of 2 it carries on the list goes through the whole crew....It all adds up to the sum at the bottom which will be better than just about everything afloat today

 

Over and above that many of you simply ignore the fact that the US market may NOT be the future of cruising. You may find yourselves in a samller group in furture. There are other passenger groups out there who are gaining in strength.

 

Well, at least someone is kind of getting it here. It is not just about the fuel efficiency of the new ships, but that they will be floating profit centers.

Yes they will be able to carry twice as many pax for about the cost of a voyager ship. There will be more revenue centers, ie: restaurants, shops, bars, etc. More choices for pax to spend more money on board. One good thing is that the pax will have choices, to spend, or not to spend.

 

Give them the base package as we know it now, and more other choices. Some people will call it nickel and diming, but no one will be forcing them to spend.

Currently about 40% of revenue comes from on board purchases. They will be able to boost that on the new ships.

[Cruise Junky]

Well, at least someone is kind of getting it here. It is not just about the fuel efficiency of the new ships, but that they will be floating profit centers.

Yes they will be able to carry twice as many pax for about the cost of a voyager ship. There will be more revenue centers, ie: restaurants, shops, bars, etc. More choices for pax to spend more money on board. One good thing is that the pax will have choices, to spend, or not to spend.

 

Give them the base package as we know it now, and more other choices. Some people will call it nickel and diming, but no one will be forcing them to spend.

Currently about 40% of revenue comes from on board purchases. They will be able to boost that on the new ships.

 

But you're assuming it's going to attract the masses. I'm sure it will until the novelty wears off. So they might be "able" to carry twice the amount of passengers but will they on a year to year basis, especially as you described....with all the revenue centers. People still want to cruise, but they might want to opt for a ship that doesn't charge them for everything they want to do.

[GXmanDC]

If RCL had more pool areas there product would improve big time, biggest problem is on cold days at sea your kids have no place to swim

 

 

OMG. Stop the presses. Call the bankers, if RCI retrofits their ships with more pools the economy will rebound, price of oil will drop and all will be well.:rolleyes:

 

I'm sorry, but I cannot make any connection between pools and the current economic situation.

[G'ma]

What other expenses? Again you feel the need to give your opinion but you cannot back up what you post. Even though I doubt that you have even been on a RCI ship what expenses cost on a RCI ship that you get for free on Carnivore? Let's see, rock climbing, ice skating, ice shows, in line skating, zip line, carousel, and Flowrider. All free on RCI. What do they cost on Carnivore? That's right, Carnivore doesn't have those things.

 

Ice cream, pizza, sandwiches, room service? All free on RCI unless you want to move up to something like Ben and Jerry's or Johnny Rockets. Otherwise they are free just like who? Carnivore. RCI gives you a choice.

 

Specialty dining? Yes it does cost to eat in the specialty dining rooms on RCI. That's right it also costs to eat in Carnivore's specialty dining room. Boy, for a past TA you sure aren't up on the latest happenings in the industry are you?:rolleyes:

 

Also something else that you and the other Carnivores haven't thought of. That Carnival Dream that is smaller than a Voyager class ship is going to hold over 4500 guests when full with all berths being used. That is more than a Freedom class ship. Talk about noisy and no privacy. See, for every knock that you can give about RCI, there are many more about Carnivore.

 

Are there any other rumors or myths about Royal Caribbean that you would like for me to dispell while I'm at it?

 

Did I knock the whole company? Where do you see that. The discussion was about the Oasis.....not the whole company..... As for the pay-as-you-do, I feel no need to document it here - it's plainly laid out on RCL website and in other reviews.

 

And, you are right. I haven't cruised on RCCL since they started adding the rock climbing, skating rinks, and the other bells and whistles. Prior to that, I had sailed on every ship they owned.....many times...... It's simply not my cup of tea. I cruise to cruise....

 

As for CCL, you should know that "Carnivore" is usually directed to the passengers who sail on the ships, not the ships or the company itself....and the name has been around for a long time.

 

So, stop being defensive......RCCL is a fine cruise company. They've simply made a huge mistake with the Genesis brand of ships......and, in MY opinion, it will come back to bite them in the rear.....

[Cruising89143]

Did I knock the whole company? Where do you see that. The discussion was about the Oasis.....not the whole company..... As for the pay-as-you-do' date=' I feel no need to document it here - it's plainly laid out on RCL website and in other reviews.

 

And, you are right. I haven't cruised on RCCL since they started adding the rock climbing, skating rinks, and the other bells and whistles. Prior to that, I had sailed on every ship they owned.....many times...... It's simply not my cup of tea. I cruise to cruise....

 

As for CCL, you should know that "Carnivore" is usually directed to the passengers who sail on the ships, not the ships or the company itself....and the name has been around for a long time.

 

So, stop being defensive......RCCL is a fine cruise company. They've simply made a huge mistake with the Genesis brand of ships......and, in MY opinion, it will come back to bite them in the rear.....[/quote']

 

You have knocked RCI at every turn right here on this very board. Why don't you keep it on the Carnivore board? You cannot document the on board charges because you have no idea of what RCI charges for and what they don't. You are just grasping at straws. I gave actual facts. What did you give? :rolleyes:

 

I know all about the history of Carnivore. I was once one of those folks until I got smart, opened my eyes and realized that there was a much better cruise line out there that actually treated their guests like they wanted them back. Too bad Carnivore hasn't figured it out.

 

Also, not being defensive. It's one thing to share an opinion but it's another to make statements that are not true or misleading and in your case you have done plenty here on this board and not just this post. Not even sure why you hang out over here other than to just stir the pot.

[curley23]

But you're assuming it's going to attract the masses. I'm sure it will until the novelty wears off. So they might be "able" to carry twice the amount of passengers but will they on a year to year basis, especially as you described....with all the revenue centers. People still want to cruise, but they might want to opt for a ship that doesn't charge them for everything they want to do.

 

Just who else do you think it is supposed to attract?? do you think that only the same people cruise year after year?? There is a very small percentage of people who have ever cruised. The potential for new comers is very real for the future.

The whole cruise industry does not need to attract a very large percentage of these people who have never cruised to become new customers each year to stay full. Besides, when the new ships come on line, they can replace 2 or 3 ships on the same itinerary. Those ships can be moved to other ports around the world as well as retiring older smaller ships. Every one who has new ships on order, are not having them built smaller.

 

What do you think the ships are doing today. you get your room, basic meals, entertainment,etc. Everything else you pay for. The future will be the same, except you will have more pay choices. Those who want to spend more to get more will have that choice. They will not raise prices 25-50% over todays fares to include more, as people are not going to pay it. What is wrong with having a choice on whether to spend your money, or not.

The only ships not charging you for options, will be the ones that include it for a very premuim price as are now out there. Do you see those lines with ships that carry 3500+ pax.??

[CanTex]

You know you can't expect a coddled Champion to bite the hand that feeds him. :D

[MattInFLL]

aqha - I agree with you, so much of this has to do with fear and buying into the fear.

 

Sure, the housing crisis is an issue, but the real difference with this downturn as opposed to those in recent memory is the price of gas. Our economy is so based on vehicles and transport, that it affects almost everything we do. (But I will remind those who can remember the 1970's downturn, that not only did gas go through the roof, but it was scarce and rationed - and yet we all survived, and we will again.)

 

At any rate, all this gnashing of teeth here and in the media, and yet hardly anyone talks about the fact that our current gas price crisis could very well be a myth. Demand for oil was actually trending down over these past couple of years. Supply of oil was not really declining. Economics 101, when demand falls and supply is steady - prices are supposed to drop. But wait, our prices skyrocketed, completely against basic economic theory.

 

Hmmmm.

 

No matter what your political leanings, this should make you wonder what's really going on here.

[shaggyofwv]

aqha - I agree with you, so much of this has to do with fear and buying into the fear.

 

Sure, the housing crisis is an issue, but the real difference with this downturn as opposed to those in recent memory is the price of gas. Our economy is so based on vehicles and transport, that it affects almost everything we do. (But I will remind those who can remember the 1970's downturn, that not only did gas go through the roof, but it was scarce and rationed - and yet we all survived, and we will again.)

 

At any rate, all this gnashing of teeth here and in the media, and yet hardly anyone talks about the fact that our current gas price crisis could very well be a myth. Demand for oil was actually trending down over these past couple of years. Supply of oil was not really declining. Economics 101, when demand falls and supply is steady - prices are supposed to drop. But wait, our prices skyrocketed, completely against basic economic theory.

 

Hmmmm.

 

No matter what your political leanings, this should make you wonder what's really going on here.

 

Where did you get your information about the demand for oil "trending down"?

Emerging economies such as China and India are going to bypass the US in consumption very soon. Demand may be lessening here in the states, but it is growing rapidly elsewhere.