Future of Celebrity

Hank,

Excellent analysis. Thanks for the interesting information.

 

George

George, I second your opinion. I feel I'm in a similar mindset as Hank. I usually book two years in advance and the recent pricing I found for both Celebrity and Azamara went beyond the value proposition for us. As Hank pointed out, while they're cutting costs.

I too don't doubt they'll sail almost full while getting their price for some time to come. However at some point, the wind will not fill their sails any longer. Then it will be extremely difficult and costly to fill the cabins once they've chased off their former customers. It's always less expensive to retain a customer than it is to replace them.

However the good thing is there are so many cruise line choices that everyone can find what they like at a price point they're willing to pay.

I agree with hcat too that LLP's direction is not a coincidence. She was groomed for a long time cutting costs at RCL. She's just following corporate dictate to double/double the revenue and net profits.

Celebrity management is not stupid. I don't like their direction, but it is hard to argue with their financial results including advanced bookings which have made Richard Fain excited on an interview by Jim Crammer which was almost a commercial. :eek: They are incorporating technology into everything. They are targeting a demographic that cannot put down a smart phone/smart devise and not be texting, etc frequently. Personal touch will take on a new meaning in future as in 'you do the personal touching of your devise to order, schedule, buy, interact with most anything on ship.'

 

I come from a time when I turned off my phone and put in safe and took out morning of disembarkation. Also, we never used up our limited 'included' internet minutes even when I was working full time.

 

I do believe though that the cruise industry can price themselves out of reach of many passengers and then with all the new competition and capacity coming on, can create some interesting supply/demand challenges.

 

We, for sure, are value cruisers and are NOT seeing the value like we use to and thus sail less. Also, now having 4 granddaughters changes our priorities! :) We will visit the Mouse in Orlando 3 times in next 12 months with kids and grandkids!

You can't talk about X profits. Royal doesn't break out X's results or future bookings so only Fain knows how profitable X really is.

You then complain about the cruise industry pricing themselves out of the reach of many passengers and say you will instead spend more time at Disney. Disney is the king of the price gougers. A one day / one park ticket has now reached $105, up from $60 a decade ago. This is affordable? Add in hotel and meals and an X or any other cruise looks like a bargain.

It isn't just the money...it's the value for the money....Poor service, reduced quality of food, linens, entetainment, on board experiences that are not sales oriented etc..all figure into it for us.

Still cruising with X but not as much as we used to..

Read their earnings reports and future projections? They charge what the market tells them to charge. Celebrity is a for profit business. They don't care who books a cabin, they just care that the cabin is booked by someone. I Dind that Suite prices are high for me, but just try to get one for a popular cruise.

You can't talk about X profits. Royal doesn't break out X's results or future bookings so only Fain knows how profitable X really is.

 

You then complain about the cruise industry pricing themselves out of the reach of many passengers and say you will instead spend more time at Disney. Disney is the king of the price gougers. A one day / one park ticket has now reached $105, up from $60 a decade ago. This is affordable? Add in hotel and meals and an X or any other cruise looks like a bargain.

My circumstances may be different than yours. I don't think I complained like you suggest. I indicated where I felt value was for me and I travel accordingly. You seem to be the one complaining about price increases and Disney being a price gouger. I referred to value and that is personal and did suggest that Celebrity/cruise industry could price many of their customers out. Also, bundling is a typical way to increase revenues and it is not just a base cabin price that people are paying. Many think the drink packages are bargains and they are if you consider the increases in individual drinks that help justify the package pricing.

As to breakout, Celebrity, I will bet, is a contributor to profits. I am sure Richard Fain is taking care of that and Richard Fain did talk about the companies revenue and profits and was excited about them. You too cannot talk about revenue/profits if there is no breakout. I just relayed what Richard Fain indicated.

When you factor in the gratuities, classic drink package and $300 on board credit at a cost of $735pp, I find the fare to be very reasonable for 7 day cruise! Granted My 18 day Tahitian Treasures cruise is not near the value, however we are happy to pay the fare to experience the south pacific. Remember something is worth what someone is willing to pay. If the prices are to high for the marketplace, Celebrity will adjust accordingly.

 

 

 

Islandfan

We have AQU 1 in Caribbean for 7 nights for under $2,000 for two people including taxes and port fees, with drinks package and $475.00 OBC ($300.00 from Celebrity).

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Regarding Europe prices, while the Edge prices are indeed crazy, there are bargains to be found. My DH and I have taken 5 Med cruises with Celebrity and have usually booked no more than 6 months out, paying between $1500-2200pp for 10-12 nights. Cheapest was unbelievable deal for a 12 night Concierge class for $999 when Istanbul was canceled! Will probably never top that but our next trip will be fall of 2018 for $1650pp with two perks for 12 nights. Same cruise is now $1100pp more! I am super-vigilant (some might say anal) about checking prices several times a week for any price reductions all the way up to final payment. Bargains are there to be found but you have to do research on a regular basis to find them. Can't say we'll be on Edge anytime soon but I'll be happy to scoop up the good deals that are bound to surface on other ships until we do.

 

However the good thing is there are so many cruise line choices that everyone can find what they like at a price point they're willing to pay.

 

I agree with hcat too that LLP's direction is not a coincidence. She was groomed for a long time cutting costs at RCL. She's just following corporate dictate to double/double the revenue and net profits.

You'll no doubt be aware of all of the new mega ships currently being built, some of which dwarf S class ships.

I know cruising has become considerably more popular in recent times but will there come a time when there are more cabins than passengers?

It will be interesting to see how X fairs in places like the Caribbean when these ships are finally there.

I don't know if anyone agrees, but I get the impression that LLP is heavily focussed on selling a faux luxury product to people that have not experienced the real thing?

Regarding the just announced (high) prices, Celebrity is testing the market. If their ships fill up early with those willing to pay these prices then they were right about their market assumptions. If ships and certain itineraries do not sell, they will have "sales" or partner with TA's or do any number of things to reduce prices to a market level that gets their ships full. But why would they start out doing the latter 18-24 months prior to the cruise? In general none of this is new. If you dearly want a certain specific cabin or suite on certain itineraries then you might pay more to get it early on. If you don't you are risking that somebody else will grab that one cabin you want on that special itinerary by paying top dollar for it early. On the other hand if you are less choosy and can wait you will eventually get a lower price if the cruise is not sold out. Just supply and demand. Nothing evil going on.

If people can afford Celebrity or indeed want to continue to sail with Celebrity even with their high prices fine but I think people will start to look at other cruise lines and what they can offer.

We will try another cruise line in the future as although Celebrity has fine ships at the end of the day do they offer value for money? Are the shows up to a high standard probably not. Meals are generally good but at the end of the day does the package justify around $500 per day for some cruises?

Some people will look at other cruise lines and leave. Some people will stay with Celebrity but continue to complain anyway. Some people will cruise celebrity and enjoy it.

Some people will look at other cruise lines and leave. Some people will stay with Celebrity but continue to complain anyway. Some people will cruise celebrity and enjoy it.

We've taken about 20 cruises and I won't dwell on the prices in the old days. We've also cruised on most of the mass market lines and a few times on the luxury or near luxury lines. Clearly prices have gone up on most lines in the last few years so we shop carefully & usually early, since cabin location choice is important to us. If prices go too high , we'll change lines or take a land trip. Our latest cruise will be in the Baltic and SPG next summer. We originally were on a wait list reservation on Oceania but they kept raising prices (before a cabin cleared) so we switched to X for a longer cruise at less price. We also caught some early sale prices that were very good. Our current cabin is now about $3,000 more than when we booked last summer. Thus, an inquisitive customer will ultimately help fix the market price of products unless too many uninformed or rich customers are willing to pay higher prices. While X's product is not as good a value as it used to be, it still is good when compared to it's real competition.

You'll no doubt be aware of all of the new mega ships currently being built, some of which dwarf S class ships.

 

I know cruising has become considerably more popular in recent times but will there come a time when there are more cabins than passengers?

 

It will be interesting to see how X fairs in places like the Caribbean when these ships are finally there.

 

I don't know if anyone agrees, but I get the impression that LLP is heavily focussed on selling a faux luxury product to people that have not experienced the real thing?

We fully agree with that observation, but still enjoy our cruises on X...just a diff level of expectation ( which they no longer exceed......).

We look forward to trying EDGE...hope it is not too avant garde for us..but plan on going back to Silhoutte and Equinox as our main go to ships for now!

Book at a price you're ok with and then monitor, monitor, monitor! Only one of our Celebrity cruises never dropped in price from the time of our booking (excepting the Edge Inaugural TBD). For all others, we've saved megabucks by being willing to switch cabin categories whether up or down. On our just completed TA, we moved from 6214, the only 1A available at the time of booking, to 6294, a 2C to save $500 pp and still had a larger veranda albeit over the blue dining roof! Just prior to that cruise we were on the Reflection where we moved from a 2B to a C2 for @1k savings pp.

I used to Cruise with RCL. Nice, but not Celebrity. I believe they give an excellent package. But, pricing? Look at where the cruise goes, how long the cruise is, what market group are they going for. IE: I don't believe that Celebrity is going for the kids. Yes, they have a teenage room, some small children activities, but little entertainment. They like lots of Bars for the adults, dancing till dawn, etc. These were made for the 40-60 group. Relaxing on a ship. Bingo is the game, making art, learning something from an expert. One thing that needs to improve are the suites. Not the size, but the balconies. We have gone back to the sunset back rooms. The Balconies are a little larger and the view is great. Looking back at the last cruise we took for the 30th anniversary we had a suite, was wonderful. The balcony was super large, we had couples to come and had the butler serve the Party cheese / fruit and our champagne to share with others. I just don't see the pricing not keeping up with the economy of the US. Inflation is what is making the price go up. Look at the airlines and how pricing goes. I just wish the pricing would be the same rate: Book early and get better prices.

PS Have you ever been on a cruise ship that seems empty? Even though the ships get bigger, the popularity of cruising is also increasing. So want a good value? Go on one of the older ships like infinity for 10-15 days. You will find value there like cruising the Atlantic.

Location, location, location and how old the ship is. Maybe in 5 years when we have all those SUPER size ships pricing will go down, but I don't believe it will, just will draw more first time cruisers.

Enjoy life and enjoy Celebrity, I know we will.

Just weighing in as a relatively new cruiser. We've completed 3 Celebrity cruises - all on Millennium class - as the prices were right for discovering the delights of cruising. Some experience now under our belts, we're finally branching out to Solstice class. I'm actually excited about the Edge class, but not because I have any particular interest in sailing on it in the near future. I believe that it will make the Solstice and Millennium class ships less expensive to sail. As far as I'm concerned, that would be a good thing.

Just weighing in as a relatively new cruiser. We've completed 3 Celebrity cruises - all on Millennium class - as the prices were right for discovering the delights of cruising. Some experience now under our belts, we're finally branching out to Solstice class. I'm actually excited about the Edge class, but not because I have any particular interest in sailing on it in the near future. I believe that it will make the Solstice and Millennium class ships less expensive to sail. As far as I'm concerned, that would be a good thing.

I don´t think that the solstice class will be cheaper. Because the Millenium and Solstice Class Ships get new cabin´s and Celebrity want´s money for it :)

I don´t think that the solstice class will be cheaper. Because the Millenium and Solstice Class Ships get new cabin´s and Celebrity want´s money for it :)

Edge has certainly made Equinox cheaper for January 2019. Now that Edge is selling out, maybe demand for Equinox will build up. But as Edge class grows to four ships, most of the people who prefer S-class over M-class will shift their preference to E-class. [Think of how many prefer Reflection over all other S-class ships -- lots of people only want to sail the newest]

Marketing is a big part of any cruise line's business plan. Celebrity is simply being smart by hyping and promoting its new class of ship. And there are enough folks, who are into trying anything new, who are going to jump at the chance to try a new ship. But that initial surge does wear-off after a period of time and then reputation is what matters. A cruise line can demand very high prices for high quality (just look at lines like Seabourn, Regent, Sea Dream, etc that charge $1000 per passenger day). But when a line cuts-back on quality and service, and simultaneously raises prices, it is generally heading for future disaster. Eventually the public moves to the product that offers the best bang for the buck. Will Celebrity be able to attract enough younger (and new) customers to offset the losses they are now feeling as folks like me, turn to other lines/options? LLP is gambling that she can fill her ships with many new customers who are willing to pay more for less. Perhaps she is right.....and then again....perhaps she will become one of those CEOs who folks will say "do you remember when LLP ruined Celebrity?"

 

The industry is again going through a major period of change. But there are some new players on the block with deep pockets and interesting ideas. For example, MSC (which is essentially a family owned company) is rapidly expanding their cruise division. They have gone from a very small player (especially in the North American market) to a real player...and with another 10 new builds coming...will soon be a very big player. And now you have Richard Branson who is in the process of building his first "Virgin" cruise ship....which is going to target the 7 day Caribbean market. Anyone familiar with Branson's products knows they are generally high quality with excellent service. He is actually accepting deposits for the first Virgin cruises.....and folks are plunking down their money to try out a new cruise line/ship...before they even know the itinerary or even the dates. Viking is another relatively new player (not impacting the US market in a big way) who is easily filling their ships and getting many rave reviews. It is just a matter of time until Viking decides to make a major move into the lucrative Caribbean market.

 

Where does this leave Celebrity? Will it simply be RCI Lite...trying to survive on luring RCI cruisers to something different? My prediction is that Celebrity has made a mistake in their future pricing. When a line overprices its product they ultimately have to offer many incentives (pricing and amenities) to fill unbooked berths. Cruise lines cannot survive with empty berths..and they will go to extraordinary lengths to put bodies into every bed. From where I sit (as one who has cruised extensively for forty years), future Celebrity cruises are overpriced...for the product being offered. We have simply moved our future business elsewhere...have many of our cruising friends. Celebrity can certainly lure us back, but it will have to be with better deals and a decent product.

 

A few years ago, DW and I regularly cruised on RCI (our DD was Diamond by the age of 15). But one day we realized that RCI was no longer delivering the product we wanted so we simply moved on (and booked more cruises with other lines). A good friend said to us (about 6 years ago) that we would be back (to RCI) and we actually thought he was right. But since the time that we stopped with RCI we have never gone back on one of their ships and have no RCI cruises planned for the future (despite the fact that we cruise over 100 days in many years). Now, we are repeating that pattern with Celebrity (our last booked Celebrity cruise is in a few days) which we have already replaced with more cruises on other lines. What is interesting (to us) is that LLP was a key executive at RCI when we gave up on that line. Now she is at the helm of Celebrity...and we are quickly losing interest in cruising that line. Perhaps its a coincidence.

 

Hank

Keep in mind that while lots of people cruise in the Caribbean it is a pretty saturated market with lots of competition. It commands one of the lower avg prices per day out of the cruise regions. Not much incentive for Viking to move into that market with one of their few ships, as long as they can fill them at a higher price per day elsewhere.

Fits for Branson because he specializes in high service, discount brands such as the various Virgin airlines. His niche of an all adult cruise line (no children allowed on board) should be interesting.

Edge has certainly made Equinox cheaper for January 2019. Now that Edge is selling out, maybe demand for Equinox will build up. But as Edge class grows to four ships, most of the people who prefer S-class over M-class will shift their preference to E-class. [Think of how many prefer Reflection over all other S-class ships -- lots of people only want to sail the newest]

I expect that the Reflection fans are like me and favor the pool being one deck higher. The top side flows better (front to aft) with it like that.

The major lines have over 50 new ships scheduled for delivery over the next five or so years. Unless a whole lot of new cruisers emerge this will force the cruise lines to compete harder for business. Will be interesting to see how X responds to an environment where they are no longer able to raise prices or cut services.

The major lines have over 50 new ships scheduled for delivery over the next five or so years. Unless a whole lot of new cruisers emerge this will force the cruise lines to compete harder for business. Will be interesting to see how X responds to an environment where they are no longer able to raise prices or cut services.

You mean after they chased off the old loyal cruisers for the younger, hipper cruiser? There already are a lot of former Celebrity cruisers on many other boards.

The major lines have over 50 new ships scheduled for delivery over the next five or so years. Unless a whole lot of new cruisers emerge this will force the cruise lines to compete harder for business. Will be interesting to see how X responds to an environment where they are no longer able to raise prices or cut services.

I expect that many of those 50 new ships will replace old ships in those fleets. Celebrity has one of the newer fleets. I am surprised when I see the age (and lack of features) of some of the older Royal and Carnival ships.

Book at a price you're ok with and then monitor, monitor, monitor! Only one of our Celebrity cruises never dropped in price from the time of our booking (excepting the Edge Inaugural TBD). For all others, we've saved megabucks by being willing to switch cabin categories whether up or down. On our just completed TA, we moved from 6214, the only 1A available at the time of booking, to 6294, a 2C to save $500 pp and still had a larger veranda albeit over the blue dining roof! Just prior to that cruise we were on the Reflection where we moved from a 2B to a C2 for @1k savings pp.

That is where the American market wins with being able to switch / cancel without penalties although that is now being targeted. There are some bargains to be had (Caribbean cruises in the near future where the price was very low) but on the whole the 2018 and 2019 schedule prices are higher than we have paid in recent years and the suite prices are on a par with the upmarket cruise lines. Consequently for once I have nothing booked with Celebrity although I actually have 2 future cruise bookings with them (currently as dummy bookings as nothing grabs me) but have bookings elsewhere. As previously said, Europe prices are inflated for what is offered.