Shareholder OBC Discontinued?

[borg1of2]

This is the information I was given from Renato Reis, the Loyalty Ambassador on the Radiance last week. I went to book my 2009 cruise while on board and asked him about the recent changes to the combinability of the different credits/discounts beginning January 1st. He advised me it wasn't a matter of shareholder OBC not being combinable anymore, but rather the shareholder OBC would be eliminated altogether beginning January 1st.

This didn't sound right, so I asked again the day before the cruise ended. He told me the same thing, but did say that any bookings made before year end would be granted the shareholder credit so long as the request was submitted to the shareholder benefits department also before year end.

Has anyone else heard this?

 

So, my opinion here is that the person on the cruise is a sales person and it is his job to sell. He obviously sees that with the changes in combining of credits was going to impact his ability to sell. The math just doesn't make sense to book on board anymore. So, I think he presented it in a manner that may have increased his chances to get a booking. If he doesn't he'll slowly see a reduction and therefore a loss of commission revenue, or bonus revenue, that he may get.

 

I just bought my shares at $6.60 a share, so while I did buy for the OBC, I see value in this stock and think it will be a good asset to have. I hope they continue and believe that RCCL will tweak this program to minimize the impact to their bottom line, but still provide enhanced value to its customers.

[PSCruiser]

Well if its authority level you need- I have a friend who's brother works as a VP for a janitorial service, and he has an employee that is a cousin to a woman that cleans houses, and she has a friend that works tables at a restaurant, and she had a customer who coincidently works for the same janitorial service as the VP and cleans at RCL Headquarters, who told the waitress, who told the woman who cleans houses, who told the cousin, who told the employee, who told the VP of the janitorial service, who told his brother, who told me, that he overheard Goldstein in the bathroom, where he was cleaning, saying ships are sailing at only 70% occupancy.

 

So there!!!

 

LOL!!!!

I would have believed it if it was your friend, but it was just your friend's brother.

[Gonzo70]

Shareholder OBC not an incentive for owning the stock??????????????????????? I strongly disagree. Key words here would be "an incentive" vs. "sole reason."

 

It doesn't cost RCL 100 bucks as you are buying services onboard or their overpriced drinks etc. If I am wavering between a Princess, HAL or Carnival cruise over a RCL, all things equal I'm gonna book RCL. Its a great marketing tool for owning the stock. Think about it.

 

Nothing says they won't modify it again to something more along the lines of more shares required or min. length of ownership. But eliminating it just doesn't seem realistic.

 

Wow, lots of misconeptions here:

 

1) The purpose/intent of Shareholder OBC from the company's perspective is not to entice people to purchase RCL stock. Yes, some individuals who purchased small quantities of the stock (a small fraction of 1% of the total float) took the Shareholder benefit into consideration, but again the company is not offering it as an incentive to get people to purchase the stock.

 

2) It absolutely costs Royal Caribbean $100 to give $100 in OBC. The cost of the drinks or whatever is purchased is irrelevent - instead of using your own money to purchase something you are being given $100. RCL makes out with $100 less regardless of what is purchased and how much that product/service cost the company.

 

3) CCL (which owns Carnival, Holland America, Princess and others) also has Shareholder benefits, so RCL Shareholder benefit is not something that is causing people to cruise on their lines over CCL's lines.

 

4) Eliminating is very realistic. It is certainly not a sure thing, but it is a very distinct possibility if we fall deeper into a recession and/or a recovery does not occur for an extended period of time. As RCL is hit harder and harder by the economy they will have to make further cuts and the Shareholder benefit is probably pretty high up on the list in terms of what they will consider cutting.

 

5) The Shareholder benefit is not a great marketing tool. If it was such a great tool, than why are RCL and CCL about the only publicly traded companies that give such perks to their shareholders? The airlines don't give discounts or increased frequent flyer miles to their shareholders. Stores don't give money off. Gas stations don't provide free gas credits. The Shareholder benefit was a nice perk/gift that RCL has been giving to it's Shareholders. Yes, they gain some additional business out of it, but they lose more money than they get back from it. With marketing tools you are looking for a net profit, not a net loss.

[Gonzo70]

I guess you could use that figure to argue either way. Since the shareholders who use the OBC represent such a small fraction of the total number of shares held, there is a relatively insignificant cost savings in eliminating it, especially weighed against the number of bookings that might result from offering it.

 

Sorry, but that is a non-sequitur; it is a complete apples to oranges comparison.

[marci22]

Shucks if they feel that it is a destination all by itself, then park it in the ocean and forget the fuel surcharges.

 

Hey that is actually a good idea.

[xpcdoojk]

Love the whole... I know, and you are wrong, that seems to permeate these threads....

 

never ending... black and white views... tiresome doesn't even begin to describe it.

 

Why can't it ever be a bit of this and a bit of that instead of counting out the definite points where others are wrong. Or just maybe you are partially right, but what about this point. That would be a discussion.... instead we are suppossed to listen to someone tell us all exactly how and why. Seriously, dude get over yourself.

 

jc

[petesweet]

I guess my beef is that I have NC certificates that I had a promise of an OBC when I booked my next cruise. Now I am being forced to book a cruise before 12/31/08 to get the OBC and any other perks that might be offered. I have cruises booked, and have other places that we want to go, but they aren't available yet for the dates we want to book. So note to self we won't be booking any NC Certificates. . . . Does anyone know if you can cancel your NC certificate and get your deposit back without canceling a cruise? If the things are worthless for an OBC why should I keep them?

 

Seems to me that if a person is concerned that the shareholder benefit will be eliminated, that is all the more reason to buy the NC certificate. If you don't, and if the shareholder benefit is withdrawn, you have nothing to fall back on.

 

We plan to get NC certificates on our cruise next month. Since RCCL is our cruiseline of choice, we will continue to book cruises on her, so we are out nothing but the temporary use of our $100. (And we know how much that is worth!!:D) And if the economy should show a surprise turnaround and things change, we will be the lucky ones. Call me the eternal optimist.:)

[tomko2]

All input welcome. Leaving tomorrow on the Independence (fully booked).

Plan to purchase 2 NC Certificates while onboard. Haven't had time to decide when and where the cruises will be but will do so prior to December 31st.

Two Part Question:

1) If I book these two cruises by Dec. 31st using the NC is it possible to also get the Diamond Discount along with the Shareholder OBC?

2) If I change anything on these two bookings (e.g. date, ship, itinerary) but retain the Booking Reference and move it to another date/ship/itinerary, what will be lost?

Thanks very much.

Kathy:)

[Gonzo70]

All input welcome. Leaving tomorrow on the Independence (fully booked).

Plan to purchase 2 NC Certificates while onboard. Haven't had time to decide when and where the cruises will be but will do so prior to December 31st.

Two Part Question:

1) If I book these two cruises by Dec. 31st using the NC is it possible to also get the Diamond Discount along with the Shareholder OBC?

2) If I change anything on these two bookings (e.g. date, ship, itinerary) but retain the Booking Reference and move it to another date/ship/itinerary, what will be lost?

Thanks very much.

Kathy:)

 

For question #1 I am pretty certain you can get all these discounts combined so long as you do so before December 31, 2008. The only exception would be for a particular cruise that has a sale price that specifies that it may not be combined with other discounts. Just make sure you do it before 12/31/08, not on 12/31/08 - the wording of the new policy indicates that no combinations will be permitted on (not after) 12/31/08).

 

For question #2 I am not sure.

 

Have a nice cruise. :)

[Lynnees]

All input welcome. Leaving tomorrow on the Independence (fully booked).

Plan to purchase 2 NC Certificates while onboard. Haven't had time to decide when and where the cruises will be but will do so prior to December 31st.

Two Part Question:

1) If I book these two cruises by Dec. 31st using the NC is it possible to also get the Diamond Discount along with the Shareholder OBC?

2) If I change anything on these two bookings (e.g. date, ship, itinerary) but retain the Booking Reference and move it to another date/ship/itinerary, what will be lost?

Thanks very much.

Kathy:)

 

As long as cruise is actually booked by Dec. 31 you will receive all combos.

 

But ..... and it's a big but.........no changes to date/ship/itinerary after Jan 1 or you will lose all but one. Doesn't matter about keeping the same res. #.

[tomko2]

Gonzo and Lynnees, thank you for your responses.

Will get the NCs onboard and maybe even have some time to peruse the itinerary listings before the cruise is over; otherwise will book something before Dec. 31st.

Kathy:)

[Rancher Dave]

When looking back after some sleep, I would not have used the word Incentive had I written it today. Perk yes...but not a reason to really get someone buying the shares...other than a few who are choosing between RCCL and another stock paying roughly equiv dividends etc...

 

I look to add more shares because I am confident they will go back up, I can cost average my holdings and profit more over time.

 

I will predict end of January early February may be another buying opportunity, but its not guaranteed.

[Morecruisesplz]

Wow, lots of misconeptions here:

 

2) It absolutely costs Royal Caribbean $100 to give $100 in OBC. The cost of the drinks or whatever is purchased is irrelevent - instead of using your own money to purchase something you are being given $100. RCL makes out with $100 less regardless of what is purchased and how much that product/service cost the company.

 

That is just silly! Have you never heard of cost accounting? The OBC is a coupon to be used to purchase items while on the ship. Items which they can provide you at their cost -- not the actual $100 retail value. It's the same reason shoes stores can run BOGO sales and that fast food restaurants can give you a free sandwich if you purchase a fry and a drink with a coupon.

 

5) The Shareholder benefit is not a great marketing tool. If it was such a great tool, than why are RCL and CCL about the only publicly traded companies that give such perks to their shareholders? The airlines don't give discounts or increased frequent flyer miles to their shareholders. Stores don't give money off. Gas stations don't provide free gas credits. The Shareholder benefit was a nice perk/gift that RCL has been giving to it's Shareholders. Yes, they gain some additional business out of it, but they lose more money than they get back from it. With marketing tools you are looking for a net profit, not a net loss.

 

How many loyal royals do you think cruise multiple times per year because in the past the could combine the stockholder OBC with other offers? Of course it has been a great marketing tool! Take our example: we didn't continue to RCCL after our first cruise experience for any reason except that we learned about the stockholder OBC, C & A program, the RCCL credit card, etc. from other cruises and then were mailed coupons from RCCL. Look how quickly we went from never having cruised to Diamond status. If the perks disappear we'll go where the deals still exist! It's that simple. It hasn't been "some additional business" it has to have been HUGE! And of course it is all net profit from these increased bookings! How could possibly thinik it costs them anything? It might cost them $30 in real cost to give you $100 OBC BUT it also brings them the entire cruise cost that most of us would not have spent without the perk! You don't think the added revenue in the casinos, bars, shore excursions, photos, B & J's, Seattle's Best, bingo, etc. made up for the $30 the OBC cost them?

Think before you post!

[negc]

 

4) Eliminating is very realistic. It is certainly not a sure thing, but it is a very distinct possibility if we fall deeper into a recession and/or a recovery does not occur for an extended period of time. As RCL is hit harder and harder by the economy they will have to make further cuts and the Shareholder benefit is probably pretty high up on the list in terms of what they will consider cutting. Only if that shareholder benefit is costing them as much as you think. I doubt that there are so many cruisers on any cruise who are getting that shareholder credit that it has a major effect on the profitability of that cruise, and if any of those people actually booked that cruise because of the benefit, the revenue that their booking generated is a significant profit maker.

 

5) The Shareholder benefit is not a great marketing tool. If it was such a great tool, than why are RCL and CCL about the only publicly traded companies that give such perks to their shareholders? The airlines don't give discounts or increased frequent flyer miles to their shareholders. Stores don't give money off. Gas stations don't provide free gas credits. The Shareholder benefit was a nice perk/gift that RCL has been giving to it's Shareholders. Yes, they gain some additional business out of it, but they lose more money than they get back from it. With marketing tools you are looking for a net profit, not a net loss.

 

Do you have some figures that show that the shareholder credit costs them more than they gain? Unless you have evidence to back up your assertion, I have to question your claim that it produces a net loss. In my mind the cost per passenger of providing shareholders with a nominal onboard credit is probably far less than the cost per passenger of their advertising campaigns and costs them far less than it does to discount fares in order to fill those berths. The whole rationale for discounting fares is the belief that once they are onboard, those passengers who booked because of the bargain fares will more than make up for the discount with their onboard purchases of goods and services.

I don't think either you or I have hard figures to support our positions, but I am willing to bet that the corporate bean counters can tell you with some precision just how much revenue they receive from passengers who used a shareholder credit on their cruise and I would hope that they would use those figures to support any decision as to whether or not the benefit should be discontinued

[ehfl]

According to several threads here, the shareholder OBC will not be eliminated, but you will no longer be able to combine it with other OBC offers, such as the credit you get for booking a cruise or buying a NextCruise certificate while onboard.

 

To me, that means that there's no point in booking while onboard any more. The shareholder credit (which is renewed in May, by the way) is greater than or equal to the OBC.

 

For most cruises, they are the same....However, the NextCruise lets you share the same benefit with others (Stockholder does not). Just ask the loyalty ambasador onboard for coupons to give you your friends and family.

 

There is some value to getting onboard credits for everyone in your party without additional charge.

[Gonzo70]

How many loyal royals do you think cruise multiple times per year because in the past the could combine the stockholder OBC with other offers? Of course it has been a great marketing tool! Take our example: we didn't continue to RCCL after our first cruise experience for any reason except that we learned about the stockholder OBC, C & A program, the RCCL credit card, etc. from other cruises and then were mailed coupons from RCCL. Look how quickly we went from never having cruised to Diamond status. If the perks disappear we'll go where the deals still exist! It's that simple. It hasn't been "some additional business" it has to have been HUGE! And of course it is all net profit from these increased bookings! How could possibly thinik it costs them anything? It might cost them $30 in real cost to give you $100 OBC BUT it also brings them the entire cruise cost that most of us would not have spent without the perk! You don't think the added revenue in the casinos, bars, shore excursions, photos, B & J's, Seattle's Best, bingo, etc. made up for the $30 the OBC cost them?

 

Think before you post!

 

Wow, you could not be more wrong. If it was a "great marketing tool" than:

1) They would have kept it as is.

2) The practice would be commonplace, not extremely rare (i.e. airlines would give shareholders $100 off for flying with them etc.).

 

Also, as I explained in a previous post, if RCL awards a $100 OBC it costs them the full $100. At the end of the cruise when people pay their bill off, any OBC is subtracted from what they have to pay to the cruise line. So if they spent $800 and had $100 OBC, they pay the cruise line $700. The cost of what they purchased is irrelevant. The cruise line gets $700 from them instead of $800, so $100 less.

 

People were cashing in on far too many discounts on a single cruise. This was really hurting their profits. What they are doing may cause them to lose some customers, but overall they will profit from it. That is why they made the change and that is why the vast majority of companies don't allow customers to package together all sorts of different coupons on the same purchase.

[negc]

Wow, you could not be more wrong. If it was a "great marketing tool" than:

1) They would have kept it as is.

2) The practice would be commonplace, not extremely rare (i.e. airlines would give shareholders $100 off for flying with them etc.).

 

Also, as I explained in a previous post, if RCL awards a $100 OBC it costs them the full $100. At the end of the cruise when people pay their bill off, any OBC is subtracted from what they have to pay to the cruise line. So if they spent $800 and had $100 OBC, they pay the cruise line $700. The cost of what they purchased is irrelevant. The cruise line gets $700 from them instead of $800, so $100 less.

 

You argue lost revenue in your example and I might agree with that argument, except that it ignores the possibility that your hypothetical passenger may have been more liberal in his spending because of the credit and without it, may have ended up spending only $600. In such a scenario how does that work to the advantage of the cruise line? In addition you fail to consider those who may have decided to book that cruise because of the $100 credit. In those instances, and they are probably not as rare as you seem to think, the cruiseline gets $700 from them instead of getting $0. Advantage - cruise line.:)