Will this impact Azamara?

CCL is actually the brand with the biggest identity problem. Carnival is clearly mass-market. Seabourn is clearly ultra-luxury. What divides Princess and HAL? They are both in the premium area, with ships too large to fit entry-luxury [except one very old HAL ship that doesn't have good enough food for this segment]. CCL claims that HAL is above Princess in their pecking order, but its reputation as the entry-way to the nursing home belies that. They are the ones that need to focus on separating image.

 

NCL has three very clear price points [NCL mass-market; Oceania entry-luxury and Regent luxury (not so sure about 'ultra')].

 

RCL suddenly is the only company that covers all four price segments: Royal Caribbean mass market; Celebrity premium; Azamara entry-luxury; Silversea ultra-luxury. All clearly defined, each operating in the black in their area. Looks like a winner to me!

I agree with your assessment. One thing I don't get in RCI's umbrella, is why the Celebrity Xpedition ships aren't transferred over to Azamara? They certainly don't 'fit' into Celebrity's mainline fleet....:confused:

Carnival "copes" with more than four brands.

CCL is actually the brand with the biggest identity problem. Carnival is clearly mass-market. Seabourn is clearly ultra-luxury. What divides Princess and HAL? They are both in the premium area, with ships too large to fit entry-luxury [except one very old HAL ship that doesn't have good enough food for this segment].

Exactly! The Holland America forum is rife with chest beating and other over-the-top hysteria as CCL makes Holland America and Princess more similar than different. I've said many times in the Carnival, Holland America and Princess forums that I don't see a long-term future for four brands serving the North American market. That's got to be every more so the case at the top end of the market where the customer base is naturally smaller.

 

I think Azamara's best chance to remain intact hinges on the Silversea executive management agreement. As long as Silversea is managed from Monaco then perhaps RCL will be reticent about folding Azamara (something that they completely control) into Silversea (something that the don't completely control).

 

[Holland America and Princess] are both in the premium area, with ships too large to fit entry-luxury [except one very old HAL ship that doesn't have good enough food for this segment].

Prinsendam will depart the fleet at the end of 2019:

Well, Jacqui, it's official now, she has been sold to Phoenix Reisen, it was announced on May 18 in their own paper, she will join the Royal Viking Sea, now named the Albatros..

With respect, I don't see a real future for separate "entry-luxury" and "luxury" grades. I think that's the same kind of customer-base-splitting that you've noted with regard to Holland America and Princess, and as I indicated about, even more hazardous given that the customer-base being split is even smaller.

 

CCL claims that HAL is above Princess in their pecking order

As someone who follows CCL very closely, and cruises Holland America more than other cruise lines, I haven't see any real evidence of what you've said here. Holland America's most passionate fans, perhaps, engage in a lot of wishful thinking along those lines (while Princess' fans tend to be more realistic and less beholden to their wishful thinking).

Who knows, this could perhaps be good for Azamara as those in Miami do not know how to manage a premium offering, and over the years the Azamara product has declined with continuing drives to extract more money from passengers for things that should be standard at this level. I believe it is called nickel and diming in America and I saw this recently on Quest when two couples from America, on their first Azamara cruise, ordered their first round of drinks and handed over their sea pass thinking it was to record their purchase, and were none too pleased when they saw their bill and were loud voicing this with other passengers nearby.

How about Silverseas managing Azamara, little chance I suppose.

How about Silverseas managing Azamara, little chance I suppose.

It isn't being the realm of possibility but make no mistake every dollar invested in capital improvements and infrastructure would have to provide returns in excess of every other way the corporation can spend that money.

 

This message may have been entered via voice recognition. Please excuse any typos.

Well, the stock market appears to like the combination. RCL jumped 5% upon the announcement of the deal, and it has remained up 5% in today’s trading!

 

 

Sent from my iPad using Forums

By the way, for those keeping score, that’s an increase in RCL value of over one BILLION dollars.

 

 

Sent from my iPad using Forums

By the way, for those keeping score, that’s an increase in RCL value of over one BILLION dollars.

 

 

Sent from my iPad using Forums

 

Isn't it also an increase in Debt to the tune of one BILLION dollars?

By the way, for those keeping score, that’s an increase in RCL value of over one BILLION dollars.

 

 

Sent from my iPad using Forums

 

After losing billions in value in the last few months. Was trading around $135.00 about 3 months ago. ~20% higher than now. Was way overvalued at $135.00 and perhaps overvalued at $113.00. Time will tell.

Isn't it also an increase in Debt to the tune of one BILLION dollars?

 

Yes, debt will certainly increase as a result of this transaction, but remember that the stock price, which is the market's perception of the net value of the company, already reflects debt in its valuation.

Isn't it also an increase in Debt to the tune of one BILLION dollars?

 

plus assuming 500M debt, against value of 2 billion.

 

Royal Caribbean obviously think it is a good deal for expansion of their brand.

I agree with your assessment. One thing I don't get in RCI's umbrella, is why the Celebrity Xpedition ships aren't transferred over to Azamara? They certainly don't 'fit' into Celebrity's mainline fleet....:confused:

 

Two of the older Xpedition ships are going away as Celebrity is building the Flora, a luxury all suite ship dedicated to the Galapagos. Only Xpedition and Flora will remain and because of the rules restricting number of passengers a line can have to 164, Xpedition will be downsized from 100 passenger capacity to 64. Hopefully, the removal of 18 cabins or 36 beds will create more public space on the Xpedition. I know this because I just booked the Xpedition (1/2 price of the Flora)).

 

It makes much more sense to keep Flora and Xpedition in the Celebrity family because Celebrity can better market Galapagos to its current much more significant customer base. Silver Sea also operates in the Galapagos and has a dedicated ship there. Not sure if Ecuador will allow one company to have 100 extra passengers or if they will consider Celebrity and Silversea to be separate.

Pure speculation here, but this is what makes for interesting forum discussion. Presuming that the initial Silversea talks predated the Pursuit decision (despite occurring in reverse order), which is plausible considering the size of the Silversea transaction, and the time it takes to mobilize such a significant credit facility, it is perhaps corporate’s tacit acknowledgement of an abandonment of Larry Pimental’s long-term charge (possibly upon hiring) to bring Azamara from super premium to the luxury market (at least from a pricing standpoint), and that Pursuit was the resulting Plan B, to fall back and cement themselves firmly within the super premium market. As I recall, the Silversea press release included an acknowledgement by Mr. Fain that the luxury market was one of the RCL gaps that they were excited about filling.

 

 

Sent from my iPad using Forums

I think you are wrong. If you look at the business model of the two lines before this was announced they are in different marketplaces. Royal keeping them separate gives them a wider share of the market. Silversea absorbing Azamara doesn’t make sense.

 

If you’d said the same two years ago I might have wondered because Azamara still hadn’t found their feet. Since then they have established themselves in different areas of the world and are profitable. So absorbed into Silversea? No. Whether any other changes happen within Azamara because if it, well that’s Royal's decision and they are already here!

 

Phil

 

“...established themselves in different parts of the world...”? What do you mean here? Until recently, Azamara has only had 2 ships so their itineraries have been somewhat limited compared to Silversea which has 9 ships and is all over the world...

Azamara has established strong markets in the USA, the U.K, Australia and Europe. That seems to me to cover quite different areas of the world.

 

 

Sent from my iPad using Forums

Azamara has established strong markets in the USA, the U.K, Australia and Europe. That seems to me to cover quite different areas of the world.

 

 

Sent from my iPad using Forums

 

So are you saying you dont think Silversea is strong in USA, Europe, UK and Australia? Have you looked at their cruise offerings? They have a strong presence in these areas.

I don’t think excitedofharpenden was saying that Azamara have established themselves in different areas of the world than Silversea. I think he was saying that in the last couple of years Azamara have established themselves in various different areas of the world. He also said they and Silversea are in different marketplaces, I think meaning they offer a different product aimed at a different segment of the market, not at different geographical areas.

 

 

Sent from my iPad using Forums

Oh ok, if that’s the case, then that totally makes sense!

I don’t think we need to worry here. Silversea is very different to Azamara. I love both, but must be honest and say that SS is very much a step up. The prices reflect that too. A club continent is equal to a standard balcony on SS. Then you need to add in Premium drinks offerings plus a lot more that is included in a SS ticket. Both brands will happily sit under the RCCI banner with hopefully some of the best bits of both filtering through.

 

 

Sent from my iPad using Forums

I don’t think we need to worry here. Silversea is very different to Azamara. I love both, but must be honest and say that SS is very much a step up. The prices reflect that too. A club continent is equal to a standard balcony on SS. Then you need to add in Premium drinks offerings plus a lot more that is included in a SS ticket.

I'm not sure I'd be relieved of worry based on that. I've said many times on a number of different forums on CC that I think that a four-tier marketing model is inefficient in the North American market. There may be passengers interested enough to make it seem like each of the four make sense, but the question will always remain about what happens if it is collapsed down to a three-tier model? Some passengers will leak out through the seams - no question about that - but the same thing happens all the time in the opposite direction, and more importantly, the three-tier marketing model may be so much more efficient (not to mention how much more efficient it is to operationally maintain three service specifications instead of four) that the added efficiencies may overwhelm the small amount of leakage. Simply put: I think it might be more profitable to the corporation to force Azamara passengers to choose between upgrading to Silversea, downgrading (?) to Celebrity, or leaking out through the seams.

I can see that point of view. I think my instincts are that the three R class ships that are Azamara do not easily fit with Silversea or Celebrity. On this alone I think we are safe. Also, both Silversea and Azamara have a much wider customer base, though North America is still very important. What happens when these ships reach (more) maturity is anyone’s guess. Will RCCI build new ships for the Azamara brand or do as mentioned above and revert to a three tier system? Larry P in his recent presentation to us spoke eloquently at length on the cruise industry as a whole. With so few ship building yards able to build cruise ships, and with the massive expansion of the industry (see MSC for example) slots for new builds are booked until 2021! This decision will need to be made soon, if it already hasn’t. With Larry P at the helm, and with a spot on the RCCI board we can hope for a rosy future for Azamara, what comes after is the worry.

 

 

Sent from my iPad using Forums

I can see that point of view. I think my instincts are that the three R class ships that are Azamara do not easily fit with Silversea or Celebrity. On this alone I think we are safe. Also, both Silversea and Azamara have a much wider customer base, though North America is still very important. What happens when these ships reach (more) maturity is anyone’s guess.

The biggest difference between CCL and RCL is how much of CCL is made up of cruise lines explicitly aimed at a non-North American market. Maybe it is time for RCL to do something like that. While I think there's only room for three cruise lines serving three different tiers of the US marketplace, there is loads of room for other cruise lines that serve specific foreign markets.

If anything I think it will probably be a case of targeting specific styles of cruising. Azamara to a degree is almost that. Being only three ships in size can we really class them as a fourth tier? The Azamara USP is comfortable cruising with an emphasis on destination emersion. This is about to be ramped up with land excursions being heavily pushed. From the horses mouth (Mr LP) we can expect much more of this to come, the Southern Africa itineraries for example. As the big man stated, Azamara doesn’t challenge on ultra luxury, Michelin starred cuisine or provide the best casino facilities at sea. Others do it better. Azamara is about providing unique experiences in unique destinations. As you can probably tell, he sold it to me big time! I couldn’t quite put my finger on why I enjoyed Azamara so much after SS and SB, maybe this ethos pervades, and I like it.

 

Let’s not write off the fourth tier idea though. Remember years back Richard Branson introduced Premium Economy to the airline industry at Virgin Atlantic. It was a huge success and copied mercilessly by airlines all over the world. Maybe not such a good idea to compare airlines with cruise lines, but it is nonetheless a line of thought.

 

 

Sent from my iPad using Forums

I certainly hope that Azamara will continue as it has been and having Silversea in the tier above them seems to make that more likely, not less. I also hope that with Silversea under the RCI corporate umbrella they will bring their dress code into the 21st century – that is the one thing that stops me from considering their cruises (and is a big selling point for Azamara!).

I certainly hope that I also hope that with Silversea under the RCI corporate umbrella they will bring their dress code into the 21st century – that is the one thing that stops me from considering their cruises (and is a big selling point for Azamara!).

 

 

We totally agree with you. Whilst it’s nice to change & dress smartly for dinner, we really don’t want to don ‘posh frock’ & tie & jacket just to eat a meal!

 

 

 

Sent from my iPad using Forums

We totally agree with you. Whilst it’s nice to change & dress smartly for dinner, we really don’t want to don ‘posh frock’ & tie & jacket just to eat a meal!

 

Sent from my iPad using Forums

 

I agree with both of you, but the Silversea regulars probably believe that more casual dress would somehow cheapen their experience. For that reason, that dress policy probably won't change. If I ever decide to take a luxury cruise, I'd go with either Crystal or Regent, which have relaxed dress codes.