Regents Brexit price warning and NCL profit warning

By the way, Brexit now appears to be having a positive impact on the British economy:

http://www.express.co.uk/finance/city/700959/Wages-up-and-unemployment-down-as-Brexit-Britain-booms

Really interesting article - thanks for posting!

I wouldn't personally rely on the Daily Express for a balanced, in depth view of the UK economy.

I wouldn't personally rely on the Daily Express for a balanced, in depth view of the UK economy.

I agree...................particularly when most of the data on which the 'journalist' based their article was pre the Brexit vote :rolleyes:

No doubt you would prefer to read about it in "The Telegraph", in fact a bonus, 2 articles, both from today

http://www.telegraph.co.uk/business/2016/08/18/shoppers-shrug-off-brexit-vote

http://www.telegraph.co.uk/business/2016/08/17/uk-to-avoid-recession-and-world-economy-to-stabilise-as-brexit-s/-with-spending-spree/

Those links don't get you to the Telegraph articles, but they are easy to find and confirm the accuracy of the Daily Express articles. The "Big Government Knows Best" doomsayers appear to have been wrong once again, predictably.

But some people won't be satisfied unless they read about it in the (far left) Guardian...

One has to be sceptical the validity of Regent's quoting of Brexit for a price increase in the UK.

I have received details from my TA of a Regent cruise this October where the 'from' price has been reduced from £5659 to £2999.

How much 'fat' is built into their price structure?

Today on the radio, a very popular travel writer/television personality in the U.S. (Peter Greenberg) discussed this issue with another travel professional. In their opinion, there will be a 25% drop in tourism to places in the EU (including Great Britain at this point). Airfares are already dropping. They specifically mentioned British Airways where one can fly for $999/person r/t which includes 3 nights at a 5 star hotel. They also mentioned another airline (do not recall which one) that has flights from JFK to Lisbon (also round-trip) for $799 which allows for up to a 3 night stay in Lisbon after which they will fly you "free" r/t to anywhere in Europe that they fly to.

There are fixed costs, variable costs, and profit.

When a ship is not full, and it is after final payment (since most cruise lines do not give refunds if the price declines) most cruise lines will pick selected markets and discount aggressively. They can forget about profit - anything they get above the variable costs helps offset some portion of the fixed costs. Generally they have to be careful about it (hence the selected markets) so they don't anger the folks who paid full fare but it is quite common. I believe that Regent has been actively trying to increase their UK business so that might be a logical market to offer discounts on voyages that are not filling up as expected.

A few years ago we were on a regent cruise and there were quite a few Canadian cruisers that we met that had been made offers about a month prior at about 60% of the price we had paid. But, we had a great time, got what we paid for, and so did they.

Good point! I've noticed discounted cruise offers in the U.K. for Med. cruises for the last two summers. I wonder if people in the U.K. and Europe are as concerned about terrorism as those of us in the U.S. are? It wouldn't surprise me to see more than 25% less people from North America on European cruises next summer.

TC,

I suspect you are correct. We have some friends that we cruise with once or twice a year and they will not even consider most European or Med cruises this year due to terrorism. Different people have different risk tolerances. To us, the probability of it happening is extremely low and it happens everywhere so we exercise caution but don't let it stop us from traveling. I may be wrong, but I suspect most Europeans are very aware of terrorism but also realize it happens even in their home countries (and, yes, it happens in the US too) so they might not think that travel there is any more a hazard than not traveling.

I suspect there will be some relative bargains available next year but probably not so much for US residents as that is where the main (75%+) revenue comes from and a discount is unlikely to sway somebody that is scared. So, why discount to the intrepid ones that will travel anyway. Maybe some last minute bargains but not a generally lower price.

New brochure today with even more price cutting. Lima to BA for 2017 21 days now significantly cheaper than same itinerary in 2018 (on which we are booked). Can't wait until retirement so I can just book last minute deals (actually next January is not LAST minute).

Marc

24 August 2016

Norwegian Cruise Line Holdings Ltd. (NASDAQ: NCLH) dropped about 2.1% on Wednesday 8/24/16 to post a new 52-week low of $36.90 against a 52-week high of $64.27. Volume of around 1.8 million was about 20% below the daily average of around 2.2 million. The stock closed at $37.68 on Tuesday night. The cruise line operator had no specific news.

Source

j

It actually closed at $36.18, rising slightly in after hours trading

gnomie :)

Still trying to get a breakdown of the three cruise lines to determine which cruise line is missing their goal by the largest percent. Is Regent the problem, is Oceania or NCL the problem, or are all three pretty equal?

Also, what is the latest stock news from competitive cruise lines? Somehow I need to put this into perspective. As stated previously, the cruise industry in general is affected by world events. As of today, there are many issues around the world. In order to be concerned (or not), I would need to see a breakdown of CCL (i.e. the profits of all of their cruise lines as well as other Regent competitors) before I even begin to become concerned.

Travelcat,

I don't think you are going to be able to get that data. It is probably very well guarded and proprietary. There might be some blogs around that give hints but probably nothing at all official or likely accurate. And probably only for the total entity. I took a look at the last Annual Report / Form 10K for CCL and the only data broken down by line was number of ships and capacity. No revenue or profit. Some expectations with respect to market growth and penetration but only in a very general way.

I've written company reports submitted to the SEC and we always tried to present the minimum data required - I'm confident that most if not all companies do the same. And, in my experience, after I've written them the lawyers (not being negative - that is what they get paid to do) have parsed them to the absolute bare minimum legally required except for the glowing statements about how they meet/beat customer expectations (with some restraint so they can't be held liable).

Still, if you have not looked at a 10K/ Annual Report I encourage you to do so. Unless numbers turn you on, ignore them. Just read the text. For CCL, it is interesting to read their risk factors as well as the number of port facilities that they own/operate or have joint venture in. Also, the cruise lines that they own, what their market is, and the cruise lines that they have joint ventures with (some are very localized and we have not really heard of them except you have probably seen some in ports and wondered "who the heck is that". But, all this with the disclaimer that I'm a bit of a geek and what I find interesting might not be so for the average reader. That said, even I don't plan on reading the other reports for the major players in the industry.

I'm somewhat satisfied with what Regent offers but less so over the past two years, have sailed enough with them to never go back to the mass market line offers (I've sailed with mass market lines extensively but not since I sailed Regent and I'm not quite up to the Titanium level yet but soon). I'm contemplating trying some others in the luxury ranks but appreciate the less formal approach that Regent offers.

Just my two cents.

Best,

John (as in John and Jan)

..............

 

Also, what is the latest stock news from competitive cruise lines? Somehow I need to put this into perspective. As stated previously, the cruise industry in general is affected by world events. As of today, there are many issues around the world. In order to be concerned (or not), I would need to see a breakdown of CCL (i.e. the profits of all of their cruise lines as well as other Regent competitors) before I even begin to become concerned.

CCL today closed at $47.19. 52wk Range $40.52 - $55.77. So down form 52 week high about 50%

RCCL today closed at $71.04 52wk Range $64.21 - $103.40 down about 65%

NCLH at bottom of 52wk Range $36.16 - 64.27.

I own stock in them both and I wonder why NCLH is at it lowest trading range.

As to which is dragging the stock down, NCHL, Regent or O, it doesn't really matter; the whole Company is affected. Zika, Brexit, Terrorism, perceived bad customer relations, maybe all of the above, or none, the stock is way down while the competitors, as such, are fairing much better.

And none of the other Companies made such a gloomy forward 2017 statement as FDR did last month.

Yes, as a stock owner I am very concerned about NCHL stock, much more so than I am about CCL.

j

Thank you for posting that information.

Yes, I am curious about which of the three brands did the best financially,(even though as you pointed out, it affects the whole company). I'm assuming that Regent's parent company may focus on the 1 (or 2) lines that that performed the poorest and perhaps leave the other one(s) alone as they are doing close to expected.

Thank you for posting that information.

 

Yes, I am curious about which of the three brands did the best financially,(even though as you pointed out, it affects the whole company). I'm assuming that Regent's parent company may focus on the 1 (or 2) lines that that performed the poorest and perhaps leave the other one(s) alone as they are doing close to expected.

Now how would you know that Regent is doing close to expected unless you can sift through and decipher a 10K. Companies shift assets all around and they can make the P&L statements look better than they are....done all the time. So many things come into play such as losses carrying forward, tax credits, write offs and many other items that are too long to list.

I can see that John understands this very well.

Thank you for posting that information.

 

Yes, I am curious about which of the three brands did the best financially,(even though as you pointed out, it affects the whole company). I'm assuming that Regent's parent company may focus on the 1 (or 2) lines that that performed the poorest and perhaps leave the other one(s) alone as they are doing close to expected.

Look here for overall stats. http://www.nclhltdinvestor.com/sec.cfm

Nothing broken down by parts as PCH is private equity. But some interesting 2 year old info in an S-1 filing here .

j