Seabourn Pricing for 2010

[Keith1010]

This is a good thread and I have enjoyed the most recent comments.

 

I do agree that if things continue with the economy that Seabourn will need to lower their pricing because the reality is that many people will take less cruises at the current pricing. So, no question that booking will be down. Even with lower pricing bookings will likely be down. I think my only comment was that I would think the would rework 2009 pricing before dealing with 2010.

 

I just hope that they can do so without affecting their quality. They were able to do this post 9/11 when fares were lowered and quality seemed to be maintained but I am sure it was a challenge. And while the luxury lines offer nice products and have had some very strong years, the last couple of years, even they have cut back on some things that they used to offer. Some might be small things but most of them have cut back some.

 

Interesting about Silversea. I remember post 9/11 that at the last minute they put one of their ships in drydock. I remember many passengers heard about it at the last minute and had to adjust plans as well as deal with the penatlies associated with their airline tickets.

 

Friends that we know on most of the luxury lines note that occupancy is quite low. Definitely indicative of the economy.

 

 

This is a challenging time for almost all businesses. It is clearly the worst economic situation to hit since the great depression.

 

Keith

[TLCOhio]

This is a challenging time for almost all businesses. It is clearly the worst economic situation to hit since the great depression. Keith

 

Hate to disagree slightly with the smart and super savvy Keith, but if you look actually at the real economic numbers, it is clearly the worst since 1982-83 and 1979-80.

 

The unemployment rate for January, 2009 is 7.6%. It will go higher during the coming months. In late 1982 and early 1983, it went over 10%. It peaked at 10.8% in Dec. 1982. In May 1975, unemployment went to 9.0%. In 1979-80, inflation was over 13%, interest rates were super high and unemployment was higher than average (7.8% in July 1980). There were also some bad years for the "misery index" in the late 1940's, early 1950's and late 1950's. In 2008, inflation dropped to 0.1%. That wasn't all good and perfect. Interest rates are also low now. Things are not good right now, but the hype that it is "the worst since the Depression" is not supported by historic facts. With more two-family incomes now, more people are working, overall. It's never a good time for any unemployment and there are other factors of economic importance to consider. A higher than normal number are behind on mortgage payments, but most are paying their bills and managing things in a reasonable manner. Adjustments need to be made. This is just a little historic perspective data to balance the overall picture. This data is easy to find via the Internet and check now. BUT, many in the news business are a little lazy or time-pressured, taking as gospel whatever is stated or claimed by the political class to be true and honest.

 

THANKS! Enjoy! Terry in Ohio

[Keith1010]

Terry excellent points as usual. And time will only tell how much worse this gets. But be sure to take into account the following items that are not part of the unemployment and inflation statistics.

 

1. The amount of personal wealth that has essentially evaporated over since the slump began.

 

2. The instability of the banking and financial insdustry and the size of the institutions who either went out of business or were bought by other institutions. While the sheer number of failed institutions are less than during the S&L scandal, we are talking about failures of some major institutions this time around and the fact that many others would have failed if not for the emergency loans they received. If that action was not taken, we might have seen a total collapse.

 

3. The fact that this is not just isolated to the USA and that many other countries are facing similar problems. This is truly a global economic situation making it far worse.

 

4. The amount of money that the government is spending on both the finanicial institutions in conjunction with stimulus spending coupled with other spending such as mortgages.

 

5. The low numbers we are seeing in key indicators from automobile sales to new housing starts.

 

What we have on our side is history. If not for the history of the depressoin and the number of safety guards that were put into place to minimize the chance of the depression I suspect this would have had the potential of being much worse sooner rather than later. Of course, with the depression the depression did not hit for quite some time.

 

In short, we don't know exactly where we are in the economic situation. Time will only tell.

 

Great statistics that you provided and I do hope things dont' get worse but keep in mind that the numbers have worsened in December and January which could mean several more months of bad numbers. Let's hope that this is not the case but some of the economists who I have a good deal of respect for do have some major concerns at this point in time.

 

Keith

[TLCOhio]

What we have on our side is history. If not for the history of the depression and the number of safety guards that were put into place to minimize the chance of the depression I suspect this would have had the potential of being much worse sooner rather than later. Of course, with the depression the depression did not hit for quite some time.

 

In short, we don't know exactly where we are in the economic situation. Time will only tell. Keith

 

THANKS, Keith! All true and also very realistic. We just don't know right now! You didn't mention a national debt going to $12 TRILLION, PLUS and a huge trade imbalance. Plus, the huge unfunded Social Security and Medicare obligations. No honest insurance actuarial would approve that system and its current financial set-up. That's been a good, but government-run Ponzi scheme. Legal, however. And, needed. Let's hope for the best! Is the cup half-empty or half-full?

 

With 306 million people now in the US, that means a national debt of $12.1 TRILLION would equal $39,542 for each man, woman and child in the United States.

 

Terry in Ohio

[Constance331]

It is my view that the repeal in 1999 of one of the "safety guards that were put into place", namely the Glass-Steagall Act of 1933, is one of the reasons we now find ourselves in the mess we're in.

 

Maybe not, but I'm just saying ...

[westmount]

Every second day, I receive an insert in the mail with a new deal from Seabourn. I'm booked for part of the world tour next year, and hope they figure out how to make it affordable for those getting whacked by foreign exchange rates and the economy before thoughts of canceling hit me. Since clients can cancel 90 days in advance, no reason to promote too far ahead, as people are too nervous to book ahead and plunk down deposits for 2010, and I'm sure they will continue to promote heavily as long as they feel they have to.

By the way, RCI and CCL (seabourn) are owned by very smart, conservative financial people, don't loose too much sleep worrying about their ability to pay debts. The high end will take a hit, but the low end will do quite well as people will get tired of going nowhere, and nothing beats the advantages of cruising, especially now that the ships are leaving from many local American ports. At the end of the day, people had to get off the credit card wagon at some point, and when the smoke clears, people will spend what they can afford, not such a terrible way to live. As I said on another posting, I went to the Baltics on Seabourn last summer for around 20k, and now it's 12k, so I guess they are keeping up with the markets as they must.

[WesW]

interesting interview with Seabourn's VP of Marketing at link below, Adam Snitzer talks about how Seabourn is dealing with the global economic downturn, how booking on Seabourn has changed, and Seabourn current brand strategy...

 

http://www.johnmariani.com/archive/2009/090215/index.html

[norm2002]

Seems to me there are two major issues that were not evident at the time of the more recent recessions - I was not around at the time of the Depression and am not an expert on its history or inception.

 

One has already been mentioned, that this time it is a far more global problem than previous occasions. This is, of course, exacerbated by our now living in a global economy. In previous decades, each country could insulate itself more than it can now from problems in other countries. Now, with multinational corporates and the interdependence of nations and, indeed, continents, no one can be truly insulated. It used to be said that when the USA sneezes, the UK catches a cold. Now that is a worldwide phenomenon.

 

The other major difference, which I do not believe has happened since the Great Depression, is the almost complete loss of faith by the public in the banking sector. This is made even worse by the Madoff saga and now, apparently, the Stanford saga. Who do you trust with any money you do have? And if the public will not lend money to the banks, how can the banks lend money to others? And when the banks do have money (mostly funded by our governments at our expense), they will not lend to viable businesses, making those businesses less viable.

 

Of course, eventually, things will improve but, in the meantime, I have little doubt the worst is yet to come.

[cruiseyguy]

ColonelWes-Interesting interview with Seabourn's Marketing VP. Although I'm sure he put on his happiest face, several interesting points came through: 1) it pays to wait until close to sailing for the best deals now, unlike the past, 2) Seabourn will "move heaven and earth" to send ships out "full" (read: they'll price at whatever it takes), 3) they will try to maintain quality although they are being "squeezed," 4) they believe the downturn is "temporary" (not sure many economists would agree on that one now).

[Keith1010]

ColonelWes-Interesting interview with Seabourn's Marketing VP. Although I'm sure he put on his happiest face, several interesting points came through: 1) it pays to wait until close to sailing for the best deals now, unlike the past, 2) Seabourn will "move heaven and earth" to send ships out "full" (read: they'll price at whatever it takes), 3) they will try to maintain quality although they are being "squeezed," 4) they believe the downturn is "temporary" (not sure many economists would agree on that one now).

 

While they did say temporary but then said 1, 2 or 3 years. Obviously no one knows for sure and the so called experts will give you different opinions.

 

Keith

[Chairsin]

Evethough numbers appear to support that the economy is not as bad as during the depression what I am seeing among many of my friends (younger retirees) who granted have seen a reduction in their nest eggs is that in spite of the fact that their income has not gone down they feel less well off and that they should tighten their belt even if they do not need to. This psychological reaction has causes them to buy less expensive wine, hold off on purshasing a new car and travel less eventhough they have the money to live much "better". They see all of the people around them losing their jobs and homes and don't want to appear insensitive by spending "lavishly". So I do believe that Seabourn and other luxury cruise lines will have to offer very special fares to induce people to overcome those concerns.

[LaPaloma]

Evethough numbers appear to support that the economy is not as bad as during the depression what I am seeing among many of my friends (younger retirees) who granted have seen a reduction in their nest eggs is that in spite of the fact that their income has not gone down they feel less well off and that they should tighten their belt even if they do not need to. This psychological reaction has causes them to buy less expensive wine, hold off on purshasing a new car and travel less eventhough they have the money to live much "better". They see all of the people around them losing their jobs and homes and don't want to appear insensitive by spending "lavishly". So I do believe that Seabourn and other luxury cruise lines will have to offer very special fares to induce people to overcome those concerns.

Chairsin--you got it right--we are in the process of moving to a high end retirement community. We have almost a building boom going on--7 new homes being built--all in excess of $800,000. The residents we have met, are all concerned about the economy, and are making small cut backs, but nothing that effects the life style. I think a lot of our problems are the result of all the potential problems the politicans claim will happen if we don't bail everybody out--and who knows if any of the bailouts will really improve things! With the number of well fixed retired people that sail the highend small ships, the Marketing people have a real problem setting a Marketing program. We get mail and E mail from all the good small lines, and I must say SB only gets a C- in my opinion--of course I'm 20 years out of date! Don