HappyInVan

Unfortunately, it is what it is. With excess capacity, CCL fills its ships at bargain basement prices. For example, Hal's Statendam in the Caribbean is still selling November departures, at less than $100/nite pp. That's a crazy price. The customer recovers the cost just with a room service breakfast, full dinner in the Dining Room, and hogging a recliner at the pool. CCL has to cut costs as inflation rages. IMHO, a new range of cost cutting in the new year, as new logistic contracts go into effect.

Usually, big ticket investments (airliners and vessels) are placed in subsidiaries with just one asset. This allows the mortgage lender to quickly seize the asset without getting involved in the parent company's legal issues. IMHO, it is significant that they have placed 12 ships in one subsidiary. This (plus the high interest rate) would explain the loan's popularity. Look at it from the POV of new players. Capturing the parent conglomerate would take a lot of time, expense, cost and uncertainty. In the event of the worst case occuring, there would be a hole in the industry. A new player could immediately start with 12 'clean' ships. Build a brand with industry veterans, or just purchase a brand with or without the ships. As long as there is demand, there will be suppliers. We will still be cruising.

Leave it to the corporate finance experts. They're smart, numerate and have access to the numbers. What's the endgame? Rather than take part in a restructuring of the CCL group, a long term and messy project. The lenders are financing the subsidiary and helping to pay down the original mortgage. In a default, they could simply put the subsidiary into restructuring. White Knight shows up with just a couple of billion, reassures the mortgage lenders, pays off the senior lenders. Easy peasy. Compared to a takeover of the entire group, which requires consensus among the senior lenders, go through the courts, pay a premium to the existing shareholders etc. Yes, the smart sharks are circling.

I'm sure that the lenders and bankers have taken this into account. To ensure that there is enough cushion for themselves.

That's not good news. Means that the lenders would prefer to foreclose and sell the subsidiary than to restructure CCL. Makes sense. The subsidiary would have Carnival's newest and best ships at bargain prices. They'll not need to wade through CCL's complexity and legacy issues. The problem for CCL and it's brands is that once this happens, it will have a cascade effect!

Who will fold first? The market has an opinion. Right now, RCL has a higher market capitalization than CCL, even though revenues are much lower. Historically, CCL had rated higher than RCL in proportion to the differences in revenues. Today, even NCL is favoured by the stock market over CCL.

I've checked. HAL seems normal; before and after logging in. Just CAD. I had had that problem with hotel.xxx. I clear the cookies and caches whenever that happens.

Chengkp75 is correct. There's not much difference between the Carnival Splendor (2006 113k GT 1,600 staterooms) and the Mardi Gras (2020 181k GT 2600 staterooms). In terms of tonnes/stateroom, that's 7 tonnes on both ships. Of course, a ship twice as big means that the company can squeeze in resort features like water parks, a roller coaster, a row of specialty restaurants, full stage revues etc. There is a huge difference in tonnage per pax (and fuel efficiency) at a different price point. For example, Ponant ships (10k GT) contain just 100 staterooms!

I wouldn't worry about it. The industry's excess capacity means that budget travellers will enjoy low fares. Others may not be happy about budget cuts. The important thing is this. I have money in my wallet. I can choose the cruises I want to travel on, or the land-based alternatives.

I've been negative on CCL for some time because of its over-expansion, and poor response to the pandemic. Its not just my opinion. The market (many buyers and sellers) agree. CCL's market capitalization is just $9.1b today, on sales (last FY) of $9.6b. By comparison, NCLH (only 3 brands) has a market cap of $5.4b today, on historical revenue of just $2.4b. https://www.cnbc.com/quotes/CCL?qsearchterm= https://www.cnbc.com/quotes/NCLH?qsearchterm= I'm waiting for CCL (10 brands) to rise above the knee-jerk reflex of trying to fill the ships. To attend to the critical need for strategic management of their brands.

Sitmar was active in the 1960s-1980s. The industry is very different today. That said, Costa faces the classic problems outside its home market, because of culture and language. Ideally, AIDA and Costa should operate smaller ships in North America, not 5k pax behemoths. In fact, I have doubts about whether 5k pax giants are appropriate for old European cities and island ports.

Here's my take. Its normal for conglomerates to over-expand during the good times, particularly when money is cheap. The real test of senior management comes when the bad times roll around. The company needs to focus and prioritize during this crisis. Planning a fighting retreat to stay alive. Make no mistake, CCL faces insolvency this winter if its a repeat of last winter. In the cruise industry, there are two main types of customers. The vacationers and the travellers. The vacationers have just 3-7 days vacation from their jobs. Many will have their families with them. So, the cruise industry is in competition with Disney World etc. The ships need to get bigger, in order to build the mini-amusement parks, breath taking atrium, multiple F&B outlets, lavish Vegas shows etc. And, to lower cost per pax. These pax expect convenience, very competitive prices and the Wow factor. In the cruise industry, this is the equivalent of the McDonald restaurants. On the other hand, the travellers are retirees and the leisured $$$ class. They favour longer voyages to exotic places. Willing to pay higher prices for quality experiences. $500-$1,000/nite on small ships. More than $1k/nite to ride on the ships' RHIB in the Galapagos or the Arctic. The Carnival brand caters primarily to vacationers. Cunard and Hal is favoured by travellers. The $$$$ pax gravitate to Seabourne. The problem is everything in between. Costa is a Mediterranean brand. Do they need 12 ships? Aida serves the Germans. Do they need 12 ships? Princess' latest ships take 5k pax. Does it make sense to compete with Carnival brand? Is there over-capacity when Princess/HAL's marginal prices matches Carnival? In order to raise money and reduce losses, should CCL transfer ships or sell brands? Does it make sense to merely transfer Costa ships to Carnival brand when their market is saturated. Should CCL sell Aida/Costa, or Cunard/HAL?

Wall Street Sinks Carnival??? Factually speaking, its the covid pandemic and our response that has crippled the cruise industry. The stock market (many buyers and sellers) is merely channelling money away from CCL because it doesn't like what it sees. In a strong quarter, CCL has only managed to earn $300m before interest, taxes and depreciation. Whilst interest rates are shooting up, and CCL is borrowing at ultra junk bond rates. The current quarter is expected to be relatively weak, and CCL is still trying to get all ships to sail! Just as we enter the flu season. CCL has suffered the worst stock market performance among the big three. Having expanded the fastest, and losing money on 90 ships. IMHO, CCL had the wrong paradigm during the pandemic. Expecting that covid would fade away, and things would return to pre-pandemic $$ normal.

OMG! CCL traded as low as $7.01 this morning. Down 20% and right at the Morgan Stanley target of $7. “Shares of Carnival fell below their pandemic lows Friday after the cruising company posted third-quarter earnings that revealed higher costs associated with inflation, supply chain disruptions and the maintenance of health and safety protocols...company is projecting fourth-quarter bookings below 2019 levels — at lower prices...” https://www.cnbc.com/2022/09/30/carnival-shares-fall-on-ballooning-costs-dragging-cruise-stocks-lower.html The CEO is upbeat, but let's analyze the bits and pieces. Earnings before interest, taxes and depreciation was just $300 million for a strong quarter. Unfortunately, CCL is rolling over its debt at >10% rates. CCL said that capacity was 90% occupancy in August. Unfortunately, “For the cruise segments, revenue per passenger cruise day ("PCD") for the third quarter of 2022 decreased compared to a strong 2019.” CCL said that they still had $7.4b in liquidity. But, customer deposits total $4.8b. The bottom line is that CCL is on the threshold of insolvency. Any showdown or pause would have immediate consequences. As we approach the winter season, what are the chances that the small Caribbean ports will reimpose vax, testing, mask and insurance requirements? Will you still cruise if the ships do that?

Nonetheless, the cruise industry is stuck with the decisions they've made before the pandemic. Their market strategy had been to increase market penetration. Raising revenues by increasing the number of pax. Selling cruises with ever lower prices based on bigger ships with lower costs. This strategy worked against them during the pandemic. As pax paying $100/night could cost $500/night in hotel costs. https://ca.news.yahoo.com/windsor-man-had-pay-5-080000582.html Going forward, this basic economics will remain a problem for mass carriers, as long as infected pax are required to isolate onshore. Why does Public Health still require quarantine? As is well known, covid infects like an aerosol. Passing on infections just by proximity. That's why so many ships has had infection rates of >10% this summer. In contrast, I don't know of any ship with a norovirus infection rate of 10%. Will the cruise industry ever generate the same level of vacationers of the pre-pandemic era? IMHO, not likely while a mask mandate can be imposed. It is what it is.

I would never buy a stock for its OBC. I keep my investment $$$ decisions separate from my leisure $ choices. Should we buy CCL for the OBC at $3? Perhaps, if your time horizon is just 6 months and you are confident that you will be cruising soon. Why should we NOT invest in cruise companies? The market speaks. CCL is stalled near a thirty-year low. Despite the loosening of restrictions. IMO, the biggest worry is the inability of the ships to keep covid under control. IMHO, another operational pause this winter (and/or a real recession) could finish off CCL.

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Is the OP as agile and young as you?? Will the OP be unloading from the front of the plane like you? 🙄

At that end of the update, there is this cautionary... “Global COVID-19 regulations and protocols are continuously changing and we may revise or modify these requirements (effective immediately) to evolve in line with the latest practices at any time. Please check back regularly for any updates.” In view of the many countries involved in a typical itinerary, there is the likelihood that some country's requirements will change over time. For example, the concession for the self-administered test may be cancelled for un-vax pax if their numbers are bad. Thinking ahead, how would a ship control a large outbreak onboard? Use of masks? What would happen if the ship doesn't get covid under control? Chaos at disembarkation... https://boards.cruisecritic.com/topic/2882896-covid-experience-nieuw-statendam-september-7th-%E2%80%93-17th-quebec-city-to-boston/#comments Every piece of the travel experience is part of a system. There are no freebies.

Just a heads up. Princess has updated their protocols September 26 for Canada and Greece. Seems that they are maintaining Enhanced protocols for the long ocean voyages... https://www.princess.com/plan/cruise-with-confidence/cruise-health/vaccine-testing-requirements/ In any case, un-vax pax require tests. No free pass for them! We should soon hear from HAL. I do not expect their protocols to be drastically different from Princess. Happy cruising!

Here's an interesting note... "Individuals are reminded that they should not travel if they have symptoms of COVID-19. If travellers become sick while travelling, and are still sick when they arrive in Canada, they should inform a flight attendant, cruise staff, or a border services officer upon arrival. They may then be referred to a quarantine officer who will decide whether the traveller needs further medical assessment as COVID-19 remains one of many communicable diseases listed in the Quarantine Act." https://www.canada.ca/en/public-health/news/2022/09/government-of-canada-to-remove-covid-19-border-and-travel-measures-effective-october-1.html

Thanks. Fortunately, the Canadian cruise season is ending in just weeks. I was on the NS and there was a lot of infection onboard. Desperately coughing people not wearing masks. Resulting in... https://boards.cruisecritic.com/topic/2882896-covid-experience-nieuw-statendam-september-7th-–-17th-quebec-city-to-boston/

Yes, but what about the Transport's Ministry's orders on cruise travel?

You may be right!

Sept 9? That'll be the NCL Pearl docking at Wharf 30? https://www.portquebec.ca/en/cruises/vessel-schedules/seasonal-schedule Assuming that they shuttle you to the cruise terminal (Wharf 22), you could leave your luggage there. https://www.portquebec.ca/en/cruises/information-for-cruise-ship-passengers/access-to-docks Or, you could walk to (15 minutes) the train station (Gare du Palais) and leave your luggage there. Assuming that they let you walk out of the secure area. It'll be easier to later get a taxi from the train station. Alternately, you could try the Musée de la civilisation (10-5pm) $19-$24 and its coatroom. Its just across Rue Dalhousie from Wharf 22. https://www.mcq.org/en/plan-a-visit/schedules-rates-location Should you wish to visit the old town, Bus 11 goes by the cruise terminal (and train station) and up the steep hill and pass the City Hall. It'll be an easy walk down from the old town to the cruise terminal or train station. https://www.rtcquebec.ca/en/schedules-and-routes/bus-schedule/all-routes/11/pointe-de-sainte-foy The rates for a taxi... https://www.aeroportdequebec.com/en/airport-access/taxis-and-limousine Enjoy