Regent Earnings

[PaReader]

From Today's Miami Herald

HANNAH SAMPSON

Regent Seven Seas posts loss: Miami-based Regent Seven Seas Cruises reported that revenue grew in the second quarter of 2012, but the luxury cruise operator still posted a net loss.

Revenue increased to $131.5 million, the company said, from $122.8 million during the same time in 2011. Net yield, or the net revenue per available passenger cruise day, increased 2.8 percent. But Regent said that increase was offset in part by promotions the cruise line offered to drive business in Europe, where demand has been soft. Rather than lowering fares, the cruise operator added value to its all-inclusive cruises, which it said increased costs for the quarter.  Net   cruise cost was about $47 million compared to $44.5 million a year earlier. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization — dropped from $24.6 million during the second quarter of last year to $19.4 million in 2012. The net loss was $3.8 million, compared to $3 million in 2011. Regent Seven Seas Cruises is part of parent company Prestige Cruise Holdings along with Oceania Cruises. Prestige Cruise Holdings manages some of Apollo Management’s cruise investments.

[ngtotd]

Interesting...thanks for posting that info!

 

If they lower fares some, maybe we'll bite. All the false-promos are annoying, and sometimes just plain insulting.

[hondorner]

Good luck. If they lower the fares any mre, they'll lose even more mioney, which could lead to cutting service or quitting business. There is no "trickle down" theory in business.

[rallydave]

Interesting...thanks for posting that info!

 

If they lower fares some, maybe we'll bite. All the false-promos are annoying, and sometimes just plain insulting.

 

Couldn't agree more. Think Regent is wasting their money with these false, misleading, and insulting promos. The loss proves their approach is just plain wrong and insulting promos are worse than no promo at all in that people will not consider Regent for future cruises at all based on misleading information.

 

Don't forget, Regent sent out a promo with false promises and while they changed their website to remove the erroneous pricing, they have yet to post or send out anything to explain, correct, or apologize for the errors.

 

If Regent truly reads these boards, they had better take actions to correct these insulting promotions or many will shun Regent. Remember the little boy who cried wolf too many times and no one believed him after that. Regent has become the little boy!!!

[rallydave]

Good luck. If they lower the fares any mre, they'll lose even more mioney, which could lead to cutting service or quitting business. There is no "trickle down" theory in business.

 

Don, If they stop all the absurd mailings, e-mails, phone calls, etc., there would be plenty of money to reduce fares and make more money.

 

Advertising is supposed to bring in customers, not drive them away which is what insulting and erroneous advertising does.

 

What's better, wasting money with potential false and insulting advertising driving customers away or lowering prices to bring more customers in??

 

Also, remember the thread where a customer to Alaska got offered a full refund and $4000 cash to cancel a cruise so a GTY could get on. Perhaps the people who calculate how many guarantees aren't doing a good job as well costing Regent thousands of dollars??? We don't know how they plays into the loss but, could be substantial??

[Wendy The Wanderer]

Well they've got themselves in a bind, don't they, with all the extra amenities they've offered. If they lowered fares, they'd have to withdraw some of those amenities, I'm guessing. Perhaps these "cruise only" offers are a way of doing that.

 

Wish they'd dial back to simply including air, providing good Business Class deals, and being all-inclusive for alcohol. They could only do that if the entire industry took a big downturn; then they'd have an excuse. Oh well.

 

(I'd be really interested to see how the Oceania earnings are going.)

[rallydave]

It's obvious that Regent isn't getting above the 80% occupancy they need to break even without gimmicks and tricks to get people to travel. Raising prices in the current environment is obviously not the correct course of action and neither is all the deceptive advertising. Perhaps Wendy has described a method to increase revenue while reducing pricing. Get rid of the much maligned "free" excursions as well as providing reasonable and not horribly inflated prices for tours they charge for.

 

Sometimes price reductions do result in increased revenue and profits. Significantly reducing the horrible advertising and frequent mailings will also help the bottom line. No, we don't know the whole story but, a lot of intelligent people post on this board and the common complaints and suggested solutions appear to be 180 degrees from the Regent approach which obviously isn't working.

 

Are you listening Regent and PCH?????

[xrvlcruiser]

Here is the actual article . . .

 

 

Regent Seven Seas Reports Record Second Quarter Revenue, Lower EBITDA

 

By Theresa Norton Masek

August 09, 2012 10:17 AM

 

Regent Seven Seas Cruises reported record revenues for the second quarter of $131.5 million, compared to $122.8 million in the second quarter of 2011. Adjusted EBITDA was $19.4 million, compared to $24.6 million for the same period last year. The company attributed the decline to additional product costs from the increased inclusive product offerings added because of the soft market in Europe and the reduction in capacity when Seven Seas Navigator was placed in dry-dock. Net yield was up 2.8 percent driven by an 8.5 percentage point increase in the occupancy rate. The numbers are in line with the estimates released July 31.

 

“We are pleased with our second quarter revenue and net yield increases over the prior year considering the backdrop of a challenging European environment,” said Frank Del Rio, Regent’s chairman and CEO. “In order to drive demand for our softer European sailings, we chose to include additional value in our already industry leading all-inclusive product offerings rather than discount cruise fares. This non-discounting strategy is consistent with our longstanding go-to-market philosophy and reinforces our brand’s high value proposition, but it did increase product offering costs for the quarter. We believe that our steadfast refusal to discount our luxury product has positioned the brand well for the upcoming year. This can be seen in our booking patterns for 2013 sailings as occupancy build is stable while pricing is up in the high single digits compared to same time last year for 2012.”

 

Capacity during the second quarter of 2012 decreased to 163,170 available passenger cruise days, approximately 1.1 percent versus the same period last year, due to the scheduled dry-dock of the Seven Seas Navigator. Net cruise cost, excluding fuel and other expenses, was $47.1 million compared to $44.5 million for the second quarter of 2011. The company said the change is primarily due to increased hotel services costs driven by an increase in occupancy of 8.5 percentage points as well as increased deck and engine expenses primarily associated with a new five-year partnership with Wartsila to maintain the engines throughout the fleet.

 

Fuel expense was $10.4 million compared to $8.6 million for the second quarter of 2011. As of June 30, 2012, the company has hedged approximately 80 percent of the remaining expected fuel consumption for 2012, 52 percent of expected fuel consumption for 2013 and 28 percent for 2014. Other expense was $5.8 million, compared to $5.3 million for the second quarter of 2011, due to the Seven Seas Navigator dry-dock.

[Travelcat2]

Peggy: Thank you for posting the article again. This may stop posters who are trying to run the company via CruiseCritic. Giving opinions is one thing....... getting angry isn't good for your health.;) IMO, the solution is simple...... if you are not happy with Regent, go elsewhere -- many people have done so and many people have switched from other luxury lines to Regent. Sometimes, going to another cruise line can make you appreciate Regent more (or not).

[rallydave]

This may stop posters who are trying to run the company via CruiseCritic.

 

Certainly hope you follow you own advice!

[Travelcat2]

Certainly hope you follow you own advice!

 

There is a difference, as I stated above, between giving opinions (of which I admittedly have many) and blasting the whole Regent organization. When I was the most upset with Regent (over the original concierge program), I never lost sight of the fact that the Regent experience is wonderful and the officers and staff of the ships are exemplary. As you no doubt recall, I stated my opinions regarding the few people at PCH who were making the decisions regarding the new program repeatedly. It is important, IMO, to address the criticism to specific departments rather than the entire company.

 

I also followed my own advice by trying another cruise line -- specifically Silversea. While I will probably always be a Regent loyalist to some extent, there is a benefit to sailing Silversea for certain itineraries that Regent no longer has. Suggest you try another luxury cruise line so you have a broader view of the luxury cruise experience.

[newlondon]

Peggy, Thank you for posting the whole article. If I was Mr Del Rio in the current environment I would be thrilled with these results.

rallydave, I'm not trying to run Regent on CC, but I can tell that their program is working. It's unfortunate when mistakes are made, but have you or your workplace always been perfect? "Those in glass houses shouldn't throw stones"

I'm in the investment business and I promise you that not every decision I've made for myself or my clients has been perfect. We live with it.

btw, Peggy I still intend to e-mail about your generous offer of advice:)

[rallydave]

Peggy, Thank you for posting the whole article. If I was Mr Del Rio in the current environment I would be thrilled with these results.

rallydave, I'm not trying to run Regent on CC, but I can tell that their program is working. It's unfortunate when mistakes are made, but have you or your workplace always been perfect? "Those in glass houses shouldn't throw stones"

I'm in the investment business and I promise you that not every decision I've made for myself or my clients has been perfect. We live with it.

:)

 

Couple of comments New London. I'm not the person who said we shouldn't try to run Regent on CC and know you aren't doing that. Not sure how you can tell their program is working with financial losses and no access to their books. My opinion is that it isn't working and ticking off people. We will never know which one of us is correct.

 

Your example comparing investment advice to printed documents is completely off base. Investment advice is based on best guess from data, trends, and the like. It is also a gamble whenever we make an investment and people who invest mostly know that. If you don't know you are really gambling, you don't belong in investments. The errors Regent continues to make in most cases would be caught with a simple peer review which obviously isn't being done.

 

As far as perfection, my DW always says perfection is a form of imperfection. Don't expect perfection from Regent as they are not life and death but, do expect better than their extremely poor record.

 

As far as my previous job, it was life and death and that's why we checked, double checked, and then triple checked and we still lost two Orbiters and their crew. No way to be perfect but, in Regent's case, many avoidable errors continue to show up as well as the deceptive advertising of which some must be intentional is a real turn off.

 

There are people at Regent who have kept their job when in most other companies, they would be on the street.

[Travelcat2]

IMO, Regent does not have a poor record. Like Crystal and Silversea, it is run more like a Mom and Pop organization with family members in some key positions. The fact that top management at PCH does not have prior experience with a luxury cruise line also shows. If Mark Conroy were completely in charge of Regent (even if he had to go use PCH personnel), I feel that Regent would be in a stronger position than it is now. He has many years of luxury cruise line management experience and has also been on competing luxury lines so he has an understanding of what Regent is up against.

 

Rallydave, my DH was apparently in the same business you were in. He was at the Cape when we lost the first Orbitor (he was there for Magellan - scheduled to be on the next launch of the Challenger). I agree that everything had to be checked and double checked and that it was a matter of life and death. I'm sure you are aware of the costs involved to achieve that state of near perfection. The cost to Regent to hire employees that could reach that level of preciseness would be prohibitive.

 

Again, for newbies reading this thread, it helps to know that Regent has a wonderful onboard product. The issues seem to be with the marketing and advertising of that product (IMHO)

[newlondon]

Rallydave, There are certain measures in the hospitality industry which are watched closely; one is occupancy and the other is rates charged. In the hotel industry it's called revpar or revenue per available room a combination of the two. In Regent's case both are up a good sign. As they said, however, costs also are up due to increased incentives, if, though, they did not have to discount; as demand increases the incentives should diminish. In addition despite the incentives net yield increased what more could you ask for?

I must admit I'm somewhat surprised by your anger re their advertising mistakes. Mistakes happen and I hope I recognize something that is unrealistic. If I find an extra $5k in my checking account I don't get angry: I call the bank and politely say I would like to have it but it's not mine.

I'm sorry you were involved in the loss of two orbiters; I have my own opinions about both which I will not share with you. Suffice it to say neither needed to happen.

[tallship]

IMO, Regent does not have a poor record. Like Crystal and Silversea, it is run more like a Mom and Pop organization with family members in some key positions. The fact that top management at PCH does not have prior experience with a luxury cruise line also shows. (IMHO)

 

As I am slapping my fingers for entering this thread.....

 

2 Questions for TC2

 

How do you know it is run like Mom and Pop?

Why would you state that top mgmt at PCH does not have prior experience with a luxury cruise line? FDR certainly does and others as well

[Travelcat2]

As I am slapping my fingers for entering this thread.....

 

2 Questions for TC2

 

How do you know it is run like Mom and Pop?

Why would you state that top mgmt at PCH does not have prior experience with a luxury cruise line? FDR certainly does and others as well

 

First let me say that I have the greatest respect in the world for FDR. His experience with Renaissance and Oceania is nothing to be sneezed at -- that is for sure. He is one of the most talented and interesting people I have spoken with (not met). His attention to detail really shows in his artwork (that he has painted or selected), the decor of both the Marina and Riviera ships, etc.

 

There isn't exactly a "but to this"....... he sees things differently than some people and is definitely the hand that runs PCH. He has very strong opinions and has the ability to have things done his way. I do not believe that either cruise line that he has been associated with is considered "luxury". Many consider the two newest Oceania ships luxury -- and I cannot disagree in many ways. I do not think that Silversea, Seabourn or Crystal would build such extraordinary ships with such tiny suites (and inside suites? IMO - not luxury).

 

Unfortunately, FDR does not wish to go on any cruise ship that he "does not own". So, unlike Mark Conroy, he has not seen his competition up close and personal.

 

He hired his son in a position that has been highly criticized during the past year. Perhaps anyone in that position would have had the same difficulties. . . but having a relative running excursions brings up questions in some people's minds.

 

IMO, if FDR would expand his horizons (perhaps visit other luxury ships) and really LISTEN to people like Mark Conroy and others like him, he could almost run the world -- he is that good! Having people working for you with experience only helps if you hear what they have to say.

 

Not sure if this post will be allowed to stay on this thread. After all, it is my opinion, mixed in with tidbit or two that I learned from FDR.

[mimito4]

Totally unrelated, since God only knows I'm not a bean counter and don't understand such matters, but I think you all should remove full names and revealing information about posters and their spouses. . .that is, unless they choose to post it themselves.

[Travelcat2]

Totally unrelated, since God only knows I'm not a bean counter and don't understand such matters, but I think you all should remove full names and revealing information about posters and their spouses. . .that is, unless they choose to post it themselves.

 

Thank you for your post. I was quite shocked that my DH's full name was posted on this thread. Actually, I had no idea that anyone knew his name. Rather than causing a fuss I went with it. Stil not happy that this happened.

[juli2020]

First let me say that I have the greatest respect in the world for FDR. His experience with Renaissance and Oceania is nothing to be sneezed at -- that is for sure. He is one of the most talented and interesting people I have spoken with (not met). His attention to detail really shows in his artwork (that he has painted or selected), the decor of both the Marina and Riviera ships, etc.

 

There isn't exactly a "but to this"....... he sees things differently than some people and is definitely the hand that runs PCH. He has very strong opinions and has the ability to have things done his way. I do not believe that either cruise line that he has been associated with is considered "luxury". Many consider the two newest Oceania ships luxury -- and I cannot disagree in many ways. I do not think that Silversea, Seabourn or Crystal would build such extraordinary ships with such tiny suites (and inside suites? IMO - not luxury).

 

Unfortunately, FDR does not wish to go on any cruise ship that he "does not own". So, unlike Mark Conroy, he has not seen his competition up close and personal.

 

He hired his son in a position that has been highly criticized during the past year. Perhaps anyone in that position would have had the same difficulties. . . but having a relative running excursions brings up questions in some people's minds.

 

IMO, if FDR would expand his horizons (perhaps visit other luxury ships) and really LISTEN to people like Mark Conroy and others like him, he could almost run the world -- he is that good! Having people working for you with experience only helps if you hear what they have to say.

 

Not sure if this post will be allowed to stay on this thread. After all, it is my opinion, mixed in with tidbit or two that I learned from FDR.

 

Jackie,

In regards to the Marina/Riviera there are no inside suites. There are a few inside cabins. The largest suites (3-Owner's) on the Marina/Riviera are 2,000 square feet, the Vista Suites(8) are 1,200-1,500 square feet, the Oceania Suites(12) are 1,000 square feet and the Penthouse Suites(118) are 420 square feet. The veranda cabins are 282 square feet.

 

Just got off a ten day cruise on the Silver Shadow which is considered a luxury line. The Silver Shadow could not even come close to the Marina in terms of luxury (food, suites, linens/towels, service, ship etc.).

All inclusiveness doesn't always equate with luxury. There are many all inclusive resorts that are anything but luxury.

 

Silversea has cut back on many things (food, service etc.) since our last cruise in 2009 and 2010. One example:No bottled water in your suite. There are two carafes that are filled with cold tap water. Not what you expect on a luxury line. The ship looks dated.

[Travelcat2]

Jackie,

In regards to the Marina/Riviera there are no inside suites. There are a few inside cabins. The largest suites (3-Owner's) on the Marina/Riviera are 2,000 square feet, the Vista Suites(8) are 1,200-1,500 square feet, the Oceania Suites(12) are 1,000 square feet and the Penthouse Suites(118) are 420 square feet. The veranda cabins are 282 square feet.

 

Just got off a ten day cruise on the Silver Shadow which is considered a luxury line. The Silver Shadow could not even come close to the Marina in terms of luxury (food, suites, linens/towels, service, ship etc.).

All inclusiveness doesn't always equate with luxury. There are many all inclusive resorts that are anything but luxury.

 

Silversea has cut back on many things (food, service etc.) since our last cruise in 2009 and 2010. One example:No bottled water in your suite. There are two carafes that are filled with cold tap water. Not what you expect on a luxury line. The ship looks dated.

 

Very interesting comments about Silversea. We find them on par with Regent. In terms of large suites... there are some mainstream cruiselines with suites the size of a house. It seems that Oceania has three premium ships (maybe 2 now?). I suppose that if the new ships are considered luxury by some people then FDR should be credited with managing a luxury cruiseline for 1+ years.

 

I'm typing this on my Kindle - hope it makes sense:-)

 

P.S. Oceania has onboard policies that are more closely aligned with mainstream rather than luxury cruise lines. Of course this is my opinion based on comparisons I have done.