What is the BREAK-EVEN LOAD for Oceania "O" ships and "R" ships?

Just out of interest, does anyone know the break-even load for Oceania "O" ships, and for their "R" ships? How many passengers does each ship needs to fill before they start making a profit?

What prompted me to ask the question was one member wrote on this board about her experience on the Riviera after the unfortunate 3 recent incidences of that dreaded "N" virus (sorry Oceania fans to remind you of the "nasty Noro"! I know you want to forget that and put that behind you. I want Oceania ships to be well too, don't we all !!). Anyway, she indicated that the Riviera was not full and quite interestingly, she was able to book for the specialty restaurants more often than is usually the case (and I think she mentioned the quality overall

was actually better probably because there were fewer passengers).

So, I was just wondering how many passengers does Oceania need to fill for their ships before they break-even? It must cost the company a lot just to maintain and run those cruise ships with so many staff on board.

Just out of interest, does anyone know the break-even load for Oceania "O" ships, and for their "R" ships? How many passengers does each ship needs to fill before they start making a profit?

 

What prompted me to ask the question was one member wrote on this board about her experience on the Riviera after the unfortunate 3 recent incidences of that dreaded "N" virus (sorry Oceania fans to remind you of the "nasty Noro"! I know you want to forget that and put that behind you. I want Oceania ships to be well too, don't we all !!). Anyway, she indicated that the Riviera was not full and quite interestingly, she was able to book for the specialty restaurants more often than is usually the case (and I think she mentioned the quality overall

was actually better probably because there were fewer passengers).

 

So, I was just wondering how many passengers does Oceania need to fill for their ships before they break-even? It must cost the company a lot just to maintain and run those cruise ships with so many staff on board.

Wouldn't breakeven be a factor of both average price paid and volume?

I would imagine it would probably be based on total revenue gained compared to the costs, although the calculation may be a bit beyond my simple mind !

For airlines, they could calculate on average, what is the break-even load for that flight based on their RASK (revenue per available seat kilometer) compared to the CASK (Cost per average seat kilometer) , that way, you could calculate the percentage load for that flight to make it break-even ,eg 60%, 70%, 80%, etc. Likewise, you could probably calculate the percentage break-even load for a cruise ship.

I just wondered what is that percentage level of passengers to make a cruise break-even for the Riviera or the Marina, or even the Regatta or the Nautica? Just curious that's all. It may also affect how much and how ready a cruise company will be willing to make deep discounts for that cruise.

Cruising is not just all good food, lovely ports, nice rooms, spas, etc. It's a lot to do with number crunching as well, its a BIG SERIOUS MULTI-BILLION DOLLAR BUSINESS !

I also wonder with so many new luxury cruise ships being added to the cruise market recently (not just Oceania adding so many new ships and more capacity but other luxury cruise lines as well), will there come a time when there is a "GLUT" in the market?

If that happens, there may be huge competition between the rival cruise companies and perhaps Cruise Fares may fall. It will be a cruise buyer's market. Alas, one can dream !!!!

I also wonder with so many new luxury cruise ships being added to the cruise market recently (not just Oceania adding so many new ships and more capacity but other luxury cruise lines as well), will there come a time when there is a "GLUT" in the market?

 

If that happens, there may be huge competition between the rival cruise companies and perhaps Cruise Fares may fall. It will be a cruise buyer's market. Alas, one can dream !!!!

Good points but I don't think there will be a "GLUT" anytime soon due to the size of luxury ships. If you include Oceania's new ship, the approximate capacity of all of their ships is 5,000 -- the size of one megaship. Regent (with their new ship) will have a total capacity of 2,640 and Seabourn's current four ships only have a capacity of 1,832.

Hi C,

According to a report prepared back in the 90's, Break-even is about 60%.

(http://uwf.edu/hbettisoutland/Case%20Studies/Carnival%20Corporation.pdf )

Ira

Not sure the significance of any break-even calculation. If the ship is in Pappete and needs to be in Sidney for a full load in 12 days, what difference does break even on that P-S cruise mean? They may discount, to a certain extent, to bring in enough revenue to pay for fuel and maybe direct operating costs. However, no line would discount enough to diminish its name brand and overall price structure.

I believe we are currently seeing an example of this. O filled the Marina, on every cruise between Sidney and Auckland. However, they have suffered to marginal crowds on the sailings between S.A. to Sidney and Auckland back to S.A. The profits in the S-A run just were no longer enough to cover the losses for the other legs on the Marina. Solution = send in a R ship to make that run starting in 2017. However, when your in the middle of the ocean, and need to be somewhere else to make a lot of money, break even factors are not pertinent numbers always. ;)

Not sure the significance of any break-even calculation. If the ship is in Pappete and needs to be in Sidney for a full load in 12 days, what difference does break even on that P-S cruise mean? They may discount, to a certain extent, to bring in enough revenue to pay for fuel and maybe direct operating costs. However, no line would discount enough to diminish its name brand and overall price structure.

;)

No one would discount enough to diminish its name, that's true, but Oceania has just slashed some of its Med cruises by up to around 60 per cent ! Now, that is WHAT I CALL A DISCOUNT !!!

Patience sometimes does pay!

And , dreams do become realities- sometimes !!!

PS: In the past, when I first went on cruises and paid full-fares, I felt like a fool when some of my fellow passengers paid so much less for the same standard of cabin.

Cahpek;

I do agree with one of your earlier posts in that I do believe some of the markets are (over)saturated. My daughter and her husband did Alaska last summer on Celebrity and she reported their ship, from crew reports on board, was around 65% full. The Carribe in winter is another market where a glut exists and discounting is heavy. Problem is, the ship either ply those waters during the winter, or dry dock/tie up and bring in no revenue only expense.

The med cruises are another matter altogether. Oceania, imo, is paying a financial penalty for dropping Istanbul. Good overall decision, or not, it has lead to a lot of cancellations and cruises not booked. Also, for many of us, we are not going to do the Med, especially southern portions thereof, from mid June through August. It's just to frigging hot! Additionally, many of the port towns still effectively shut down from 2-6, so visits are basically only 4-5 hours then back to the ship. It should come as no surprise to anyone that O would have to discount its cruises at that time. I'm actually surprised they start out as highly priced as they do, but I suppose O hopes to catch the early bookers with higher prices then slash at the end. When someone has to slash prices 60%, as you reported, it typically means they were dramatically overpriced to begin with!

No one would discount enough to diminish its name, that's true, but Oceania has just slashed some of its Med cruises by up to around 60 per cent ! Now, that is WHAT I CALL A DISCOUNT !!!

Patience sometimes does pay!

And , dreams do become realities- sometimes !!!

 

PS: In the past, when I first went on cruises and paid full-fares, I felt like a fool when some of my fellow passengers paid so much less for the same standard of cabin.

Well I have seen it too and what your seeing is a reduce in fare but also a reduced level of on board benefits to match.... fares I saw in December inclided AIR, Gratuities shore ex and internet. Then I say fares come down no gratuities and just internet and shore ex. Then last month saw cruise only fares no nothing attached.

Sort of like buying a car complete.... then seeing it offered way cheaper, Radio, tires, seats all extra cost...

Many shop by seeing the advertised price and forget the details of what they are getting vs what was advertised..... Your just getting a sale on a cake, no frosting or filling.

Well I have seen it too and what your seeing is a reduce in fare but also a reduced level of on board benefits to match.... fares I saw in December inclided AIR, Gratuities shore ex and internet. Then I say fares come down no gratuities and just internet and shore ex. Then last month saw cruise only fares no nothing attached.

Sort of like buying a car complete.... then seeing it offered way cheaper, Radio, tires, seats all extra cost...

Many shop by seeing the advertised price and forget the details of what they are getting vs what was advertised..... Your just getting a sale on a cake, no frosting or filling.

Actually, the reduced fare does STILL include those benefits you mentioned , i.e. their so-called "O Life Choice" bonus :

Air (from online/phone travel agent)

Free Wifi

Choice of: Drinks package or 4 excursions or up to USD$1000 per cabin (depending on length of cruise) - you could use some of the on-board credit to cover gratuities and with quite a bit to spare for wines, etc.

That's the amazing thing about it. It's got the fare reduced but all the "goodies" intact!

Granted, that ship, the Riviera has not had a good time recently - since Nov/Dec 2015 till Mar/Apr 206, it has encountered NOT JUST ONE BUT THREE NOROVIRUS outbreak incidents - I think this has already been discussed in other threads on this board.

So if anyone were to take that cruise, they may have to keep their fingers crossed especially (correct me if I am mistaken) the source of the Norovirus on that ship has still not yet been found.

Could that be one of the reasons for the big drop in fares?

If one is optimistic, the cruise may be completely problem free and you get a great cruise at a great price. It will have to be up to the individual to decide what they want to do.

Actually, the reduced fare does STILL include those benefits you mentioned , i.e. their so-called "O Life Choice" bonus :

 

Air (from online/phone travel agent)

Free Wifi

Choice of: Drinks package or 4 excursions or up to USD$1000 per cabin (depending on length of cruise) - you could use some of the on-board credit to cover gratuities and with quite a bit to spare for wines, etc.

 

That's the amazing thing about it. It's got the fare reduced but all the "goodies" intact!

 

Granted, that ship, the Riviera has not had a good time recently - since Nov/Dec 2015 till Mar/Apr 206, it has encountered NOT JUST ONE BUT THREE NOROVIRUS outbreak incidents - I think this has already been discussed in other threads on this board.

So if anyone were to take that cruise, they may have to keep their fingers crossed especially (correct me if I am mistaken) the source of the Norovirus on that ship has still not yet been found.

Could that be one of the reasons for the big drop in fares?

If one is optimistic, the cruise may be completely problem free and you get a great cruise at a great price. It will have to be up to the individual to decide what they want to do.

I think this may be a Med cruise or one to the mid east where most prudent travelers are not interested in the associated political risks in this climate of untest. Well, me for one....Noro can be found in hotels and resorts its more or less a product of traveler influx to a confined destination.... not a worry to me....