Baron Barracuda

Same at Royal. In each of the past two quarters revenue increased from basically $0 in prior year to $1B+ in current one yet bottom line showed no improvement. Among factors, operating at reduced loads, high re-start expenses, fuel is up (only partially hedged) and interest costs are climbing. Once upon a time Jason Liberty estimated newer / larger ships break even at 30% load and older / smaller ones at 50%. That projection appears to have been overly optimistic.

Believe the positive stock reaction (aside from the overall market being up big) is aside from a miss on earnings there were no negative surprises. During the quarter hey turned cash flow positive and their liquidity position appears stable. Most of fleet is back in service and will soon be operating with yields above 100%. Bookings solid and making progress on staffing issue. Expect to be slightly in the black next quarter on an EBITDA basis.

Keep an eye on CCL tomorrow. Earnings release pre-market followed by analyst call at 10am (live-stream available on their web site). What they have to say about bookings, pricing, staffing, etc will impact other cruise stocks. One difference is CCL historically has not hedged their fuel needs while RCL typically hedges 50% of current year and 25% of following year.

Look at itineraries that include the ABC islands which in addition to being beautiful destinations lie outside the hurricane belt.

Good analysts generate lots of revenue for their firms. Those who do the work and add value are well compensated. Institutional clients won't pay for research that merely parrots the street consensus so those "analysts" don't last long. A big piece of every analysts job is to regularly visit the companies they follow to view its operations first-hand and ferret out non-public information. Good luck trying to get an edge simply by reading 10k's and press releases.

CCL today announced a venture with MGM to operate sports books on 50 Carnival, HAL and Princess ships. I'm sure Royal will be an interested observer as any opportunity for additional onboard revenue would be welcome. CCL also announced it will be holding an analyst update session next Friday. Coming this close to the end of the quarter can only assume they will be pre-announcing a disappointing quarter. Their disclosures might also impact the stocks of RCL and NCLH.

imo all three cruise lines could be attractive targets for private equity or a sovereign wealth fund. The underlying cruise business remains sound and once (hopefully) covid recedes they can go back to minting money like it was 2019. The problem is their balance sheets are in tatters requiring a sizeable chunk of cash flow to be dedicated to debt service. A patient buyer could wait a couple of quarters while operating losses chip away at capital and drive their debt to below par. They could then scoop up the debt cheap and dictate terms to stockholders.

With stockholders equity now down to $4B (and debt up to $20B+) after losing $1B+ in each of the past two quarters RCL may soon be forced to shore up the balance sheet by issuing a lot of new equity. Should have done so earlier this year when stock was trading at $90, or a month ago at $60, or even a week ago at $50. Now if forced to sell at $35 it would be extremely dilutive and painful. Unfortunately, faced with continuing losses and an uncertain economy Liberty may have no choice other than to do whatever it takes to keep creditors at bay. Also, wouldn't be surprised if at least one of CCL, NCLH and RCL is sold this year..

This is a major turnaround for Viking which until yesterday was testing guests for covid daily. Those who tested positive on their ocean cruises were quarantined aboard ship but those on River Cruises were put ashore at the next port and sent to hotels until it was deemed safe for them to return home. A cc poster yesterday reported that on one river boat 50 of 150 passengers had tested positive and been disembarked. We're doing a river cruise with them in three weeks and are ecstatic not to have that testing risk hanging over our heads.

Must still be updating the site as "Explore Safely" section of MVJ has the new no testing announcement while "Before you go" still shows pre-cruise testing requirement.

Miss the Michel Roux menus on the smaller ships when mdr dining was a real delight.

So, per Street article price drop inside fp date gets me a non-refundable obc. Is this new? Don't remember them giving me anything once inside fp.

With most ships back in service and operating at 59% loads RCL still lost $1.3B last quarter. Their capital is dwindling and who knows how much additional debt the market will allow them to borrow. Desperately need to get loads back above 100%. Appear willing to do so even while shortstaffed and risk the bad customer satisfaction scores.

Cruise lines initially enjoyed some pricing power after re-start. They had fewer ships sailing and were limiting passenger loads. There were also a large number of FCC's outstanding with limited expiration dates. Now, as supply and demand approach equilibrium with all ships returning to service and load factors creeping back toward normal we'll see what level of pricing the market allows.

On last earnings call seem to remember Jason Liberty commenting that he expected most ships to be sailing with full loads by summer. That would include both Royal and X. Unless they locate several thousand additional crew there are going to be an awful lot of comment cards being returned with scores of 5 or lower.

If low pay is the issue (I don't believe it is), given how much of crew's compensation now comes from grats rather than salary would expect cruise lines to offset higher personnel cost by simply raising the daily grat charge as Carnival did recently. Doesn't work for X though thanks to Always Included.

Your OBC of $700 is really nice though; is it because you've used this TA previously? We have 2 Viking cruises coming up (one is 29 days), so I'm wondering if I should transfer these to the TA you use. Mind sharing their name? 🙂 CC doesn't permit us to name TA's. We have been using the same very large online outfit for over 20 years. For Viking sailings we initially book directly with VO or VR. Have found their reps to be knowledgeable and allows me to deal directly with Viking Air to ensure I get the flights I want. Once booking is switched to TA all contact with Viking has to go through them. Every TA should offer some form of incentive to use their services. Just shop around and ask. My TA told me Viking caps the incentive they are allowed to offer and that I receive the maximum.

Before calling I always research alternate flights myself both for the airline in question and alternates. That way when you reach a live human (after hours on hold) you can tell them what flight and seats you want. When presented with both a problem and a reasonable solution they are usually happy to assist.

For our upcoming Grand European tour our TA is giving us a $700/cabin loyalty credit. Did same for our last VO cruise. They send it as a check post-cruise. Are you aware of the VR 25th anniversary sale? Substantial price discounts on the Grand European and they're throwing in the Silver Spirits bev pkg. Here's the link. https://www.viking.com/promotions/us/river/ANV25/20220404/grand-european-tour.html?fbclid=IwAR25DH_Vw8ZVwlUOiPB-9P3M79wYQcJd2YLzcJ9izsLzq8ae1cDPP5AI4W4#

In the past three years despite issuing millions of new shares Royal's stockholder equity has shrunk from $12B to $4B. Haven't read through the boilerplate on their many debt issues but have to be concerned about what level of capital they need to maintain to satisfy debt covenants. Further operating (not cash flow) losses could force them to issue additional shares and in a weak stock market any offering would take place at a price below the current market price. This would not be good for current shareholders.

"The circumstances described by eel do raise the question of whether the on board physician should have some professional discretion, especially around the "90-day" timing. There's no magic to the 90-day window, it's simply a point in time chosen by the CDC. Other countries' health institutions have different recovery "windows" and quarantine times. While it may be simpler for the cruise lines to avoid exceptions, I'm sympathetic to the difference that one day made in this case. 🍺🥌" Maybe a lesson for anyone who tests positive around 3 months prior to a Viking sailing is to delay applying for a recovery letter so it is dated no more than 90 days from disembarkation.

Don't know what anyone can hope to learn from charts of a company that was basically shut down for two years, doesn't have all their ships back in operation, is currently sailing at reduced loads, has experienced massive balance sheet destruction and is not yet cash flow positive. Better to monitor 10q's for signs of improvement.

In the past X has shown a pattern of opening their schedule at reasonable price only to raise them sharply once they hit a certain booking level. Prices might later drop as sailing date approaches. Also, lots of FCC's out there with the expiration clock ticking. Those concerned about covid and/or Europe want to push replacement booking as far out as possible. Pricing farther out sailings higher incentivizes customers to use FCC's on closer in ones.

We began sailing with X back in '93 and really loved them. Left for Royal when our kids were young but went back once it was just the two of us. Several years ago though they began to change and many of the little niceties that we enjoyed gradually disappeared. Food quality and selection slipped. No more shrimp or sushi at the buffet, cheaper cuts of meat in mdr, and for a short time they tried to charge for burgers at the grill. The constant up-sell pitches for specialty restaurants and the spa grew annoying. We never actually had a bad X sailing, they just became progressively less special. That led us to try Viking and we were very happy. My wife loves the tours, lectures and socializing at afternoon tea. I love the food. We find the crew, especially the senior officers pleasant and welcoming. Our PV3 was huge and didn't cost much more than Concierge Class on X. We're taking a Viking River cruise this July and hope to be just as satisfied with them..

Could pretty much cut and paste my comment from 4q '21 earnings as results were pretty much similar. Prior year with entire fleet shut down and revenue near $0 they lost $1B. This year with most ships back in operation and revenue of $1B+ they still lost $1.2B. This dropped stockholders equity from $5B to $4B. Better have a great summer or they'll need to issue a ton of new equity.