Carnival and the economic downturn

[Mikel1733]

Do you fit the profile of the Carnival Cruiser in tightening your belt?

 

Length and Depth of Economic Downturn

The economic model Carnival used must show the economic recession to be short and shallow with a robust expansion in the third and fourth quarters of 2009. Whatever economic assumptions are being made, it is a guess.

But the cruise line industry is very susceptible to the impacts of recessions. The average cruise ship passenger is passenger is 46 years old and makes $93,000 per year. This translates to 83% of all passengers still working for a living. Working people in a recession tend to forgo vacations and have to be induced with steep discounts. This is why the length of a recession has major impacts on Carnival’s bottom line.

Off subject but still important, average working people worldwide have seen a reduction in their retirement accounts, as well as the homes they live in. Even if this recession is shallow and short, Carnival will be faced with demand destruction as this segment forgoes vacations to rebuild their retirement accounts.

(Seeking Alpha)

[Kaboochi]

Do you fit the profile of the Carnival Cruiser in tightening your belt?

 

Length and Depth of Economic Downturn

The economic model Carnival used must show the economic recession to be short and shallow with a robust expansion in the third and fourth quarters of 2009. Whatever economic assumptions are being made, it is a guess.

But the cruise line industry is very susceptible to the impacts of recessions. The average cruise ship passenger is passenger is 46 years old and makes $93,000 per year. This translates to 83% of all passengers still working for a living. Working people in a recession tend to forgo vacations and have to be induced with steep discounts. This is why the length of a recession has major impacts on Carnival’s bottom line.

Off subject but still important, average working people worldwide have seen a reduction in their retirement accounts, as well as the homes they live in. Even if this recession is shallow and short, Carnival will be faced with demand destruction as this segment forgoes vacations to rebuild their retirement accounts.

(Seeking Alpha)

 

We are booked, paid for and ready to go. Kaboochi

[Nezmo]

I am working but that is the only match ;) to that profile.

 

Wait, I tell a lie... my retirement fund, like most, is whacked right now.

[calicruise74]

I fit the profile (except 34 yrs old) and after this NYE cruise that is booked and paid for, not sure when the next one will be booked. I would like to see some serious discounts for 2009 to help me feel better about spending the $$....especially since I will have to start almost from scratch on my 401k.

[rdytocruz]

This is us and we have canceled our February cruise due to the fragile state of our 401K and the economy in general. There will be another time to cruise and we are hoping to rebuild some of the money we have lost in the last few months. I am still working the the hubby is retired.

[DarthGrady]

Wait, I tell a lie... my retirement fund, like most, is whacked right now.

 

Amen to that! I feared even opening my quarterly report when it came two weeks ago. I immediately wished I hadn't once I did.:mad:

 

 

In regards to the "profile", I wish I pulled 93K a year! Thats not gonna happen anytime soon working for the government. Oh well, its steady work, and good bennies.

[Go-Bucks!]

If you live beyond your means, then things probably feel pretty tight right now. But many people manage their finances well and don't spend more than they earn. Some of us are able to save quite a bit of our money by living frugally. Then we can get a break from work and relax on a nice cruise! I'm not planning to change anything - I take 2 vacations per year. And I don't make anything close to the salary you listed as the average for cruisers.

 

As far as retirement accounts, you only lose money if you sell when prices are lower than when you bought them. For those who don't have to cash them in today in order to retire right now, we can just "stay the course" and the market will come back up. Actually, this is a great time to pick up some investments at bargain prices - remember, "buy low, sell high." :D

[DqALEX]

my next 2 cruises are paid off. Im going

[calicruise74]

Amen to that! I feared even opening my quarterly report when it came two weeks ago. I immediately wished I hadn't once I did.:mad:

 

 

In regards to the "profile", I wish I pulled 93K a year! Thats not gonna happen anytime soon working for the government. Oh well, its steady work, and good bennies.

 

I didnt open mine......

[calicruise74]

As far as retirement accounts, you only lose money if you sell when prices are lower than when you bought them. For those who don't have to cash them in today in order to retire right now, we can just "stay the course" and the market will come back up. Actually, this is a great time to pick up some investments at bargain prices - remember, "buy low, sell high." :D

 

Or when the stockmarket crashes....I am heavily vested in the stock of the bank that I work for and it tanked quicker than I could get out.

[Mikel1733]

I always had the feeling that a large number of cruisers were on the ship courtesy of a credit card loan. I think those will be tougher and more expensive in the next couple of years. Should make some bargains available for those who have the cash to go. I do think the damage to 401k's will make many think twice about spending money on a leisure item until they see some turn around in the markets.

[cruisetobeaches]

I don't fit the profile, either. Must be in the wrong line of work or grossly underpaid. Maybe i should book another cruise................:confused:

[Go-Bucks!]

Or when the stockmarket crashes....I am heavily vested in the stock of the bank that I work for and it tanked quicker than I could get out.

 

 

Yeh, single stocks are risky. I prefer a variety of different types of mutual funds (well diversified). Much less risky. My investment statement is also sad looking, but it'll come back up. Just look at the historical trends of the market. Bear, then bull, then bear, etc. But I'm in it for the long term. The only single stock I own is Carnival Corp. (bought recently for really cheap). :eek:

[CruiznWithHubby]

If you live beyond your means, then things probably feel pretty tight right now. But many people manage their finances well and don't spend more than they earn. Some of us are able to save quite a bit of our money by living frugally. Then we can get a break from work and relax on a nice cruise! I'm not planning to change anything - I take 2 vacations per year. And I don't make anything close to the salary you listed as the average for cruisers.

 

As far as retirement accounts, you only lose money if you sell when prices are lower than when you bought them. For those who don't have to cash them in today in order to retire right now, we can just "stay the course" and the market will come back up. Actually, this is a great time to pick up some investments at bargain prices - remember, "buy low, sell high." :D

 

I'd probably make that amount of money if I worked full time,,,but due to some difficulties our youngest put us through for a while, I chose to only work 2 days a week for now,,,,

 

pretty soon,,,,she's doing much better,,

 

and you're right,,,,great time to buy in,,,,I did :) still am :) Holly

[mudpievelour]

I wish I were still 46 and wish I pulled $93K. Actually, though I did take a good hit (especially my Carnival stock), my 401k is not dead, just terribly bruised. I fortunately can wait a little longer for my 401k to pull back out of this.

 

We cruise about every other year, take land vacations in between, and always get a balcony when we cruise. I have three weeks vacation a year and try to use all of it. I have a very stressful job and NEED the time away. Since I already have a cruise booked for October 2009, and I don't think the "recession" will last another 3 years, I don't think this will change my vacation time much at all.

[calicruise74]

Yeh, single stocks are risky. I prefer a variety of different types of mutual funds (well diversified). Much less risky. My investment statement is also sad looking, but it'll come back up. Just look at the historical trends of the market. Bear, then bull, then bear, etc. But I'm in it for the long term. The only single stock I own is Carnival Corp. (bought recently for really cheap). :eek:

 

I took a high risk by placing my 401k into 100% percent stock, due to my age, I felt I could for another year at least.

 

When my bank was announced that it was being taken over (yea, didnt see that coming), the stock went from $16.00 to .65 (cents!) in 2 hours...I had 6000 shares....do the math on that. :mad: :( Its now back up to $6.00 yipee!!!

[Mikel1733]

We've spent a lot of money on cruises in the past 19 years and even before the recent collapse I've never looked back and wished I'd saved the money. My kids and DW and I had a great number of experiences in foreign ports doing things I never thought we'd ever do. That money could have been put to savings and we could have watched it evaporate along with the rest of the market. Like anything else in life there is a good balance for everything you do. Now we will spend some healing time and hope some good bargains pop up for the vacation fund.

[Mikel1733]

I took a high risk by placing my 401k into 100% percent stock, due to my age, I felt I could for another year at least.

 

When my bank was announced that it was being taken over (yea, didnt see that coming), the stock went from $16.00 to .65 (cents!) in 2 hours...I had 6000 shares....do the math on that. :mad: :( Its now back up to $6.00 yipee!!!

 

 

Was that Wachovia?

[calicruise74]

Was that Wachovia?

 

Yes siree! Interesting times here at ye olde bank....

[CruiznWithHubby]

I took a high risk by placing my 401k into 100% percent stock, due to my age, I felt I could for another year at least.

 

When my bank was announced that it was being taken over (yea, didnt see that coming), the stock went from $16.00 to .65 (cents!) in 2 hours...I had 6000 shares....do the math on that. :mad: :( Its now back up to $6.00 yipee!!!

 

 

ouch!!!!!! I feel for you:( I'm scared to do the math and it isn't even MINE!!!! Hoping things get better soon,,,Holly

[calicruise74]

We've spent a lot of money on cruises in the past 19 years and even before the recent collapse I've never looked back and wished I'd saved the money. My kids and DW and I had a great number of experiences in foreign ports doing things I never thought we'd ever do. That money could have been put to savings and we could have watched it evaporate along with the rest of the market. Like anything else in life there is a good balance for everything you do. Now we will spend some healing time and hope some good bargains pop up for the vacation fund.

 

I share those feelings 100%!! You can never replace memories :) . Much of our $ goes to travel and our daughters education.

[Mikel1733]

Yes siree! Interesting times here at ye olde bank....

 

Maybe a stagecoach will pick you up and take you to work one of these days.:D

[calicruise74]

Maybe a stagecoach will pick you up and take you to work one of these days.:D

 

 

If the stagecoach stops by my office and offers to take me to work, I will be jumping aboard!;)

[Go-Bucks!]

I took a high risk by placing my 401k into 100% percent stock, due to my age, I felt I could for another year at least.

 

When my bank was announced that it was being taken over (yea, didnt see that coming), the stock went from $16.00 to .65 (cents!) in 2 hours...I had 6000 shares....do the math on that. :mad: :( Its now back up to $6.00 yipee!!!

 

 

I did the math and you have my deepest sympathy. :( Can you start putting any further investments into an IRA/Roth IRA or 401K that's in good long term growth stock mutual funds? Research on yahoo finance or Morningstar to find funds that have good returns for 10 years or longer.

[calicruise74]

ouch!!!!!! I feel for you:( I'm scared to do the math and it isn't even MINE!!!! Hoping things get better soon,,,Holly

 

Thanks!..Its like I almost just dont care anymore....so ticked.

 

Sorry to take this thread to a poor me thread.

 

But Holly, go get some sleep and get on the cruise tomorrow ok?!!! Have FUN!!:D