Risky Question: Do you feel that Silversea is financially stable?

[Travelcat2]

Jacquie, The charity has nothing to do with SS finances or management stability. If you are responding to inquirers about the financial well being of the line it's immaterial; if you are being asked about SS as a vacation, of course it could be important

 

Sorry -- I guess I should post all of the questions that I am asked. The most important question is financial stability. Then there are questions regarding suites, food, service, etc. Friends that have read the Silversea board do ask about the charity as well as the cleanliness of the ships. I picked the main concern as the "subject" of this thread. IMO, a post about almost anything is relevant to how we respond to people after recommending Silversea and being given reasons why they will not even give it a try.

[UKCruiseJeff]

Sorry -- I guess I should post all of the questions that I am asked. The most important question is financial stability. Then there are questions regarding suites, food, service, etc. Friends that have read the Silversea board do ask about the charity as well as the cleanliness of the ships. I picked the main concern as the "subject" of this thread. IMO, a post about almost anything is relevant to how we respond to people after recommending Silversea and being given reasons why they will not even give it a try.

 

I'm suprised you are asked so often - you say more often than any other question- because it puzzles me that it hasn't figured much or at all on this forum. I'd also have thought that people would ask you more about the actual cruises and how they compare with other lines, but I guess you are saying that is not so. :confused:

 

In the UK if you book using a credit card via a bonded agent you are at no risk at all. If Silversea were to fail, I'd have thought the business would be picked up by another line and things would likely be seamless as a key part of any transfer would be the goodwill element built up over many years. SS clients are fairly loyal. It is a "going concern" but no one here knows anything about their margins. As you know survival has little to do with margins, more to do with cash flow.

 

Much of the comment in the thread claims to highlight factors that indicate to some that they are in trouble, but to me they point to the opposite. For example, acquiring ships for less than a new build price and having reasonable occupancy rates to me indicates prudence and financial astuteness as against high risk.

 

It's difficult enough trying to identify business anywhere that aren't vulnerable having gone through the pressures of the last few years.

 

I'd advise you to advise those that ask you the question, to say that there is risk in anything, but what they should do is buy through an agent and have good insurance and forget it ... and look forward to their cruise.

[bogey]

That isn't the question I am being asked! Yes - I recommend Silversea but when we have to sit in a smoking section because most of the heaters are not working in Hot Rocks (Shadow, September, 2013) and ships are being purchased from used car (oops ship) lots, it does make people question Silversea's financial stability.

 

In this thread about financial stability, you've mentioned the sanitation inspection, turnover in management positions, inconsistent policies, coerced charitable donations, broken heaters, and the purchase of used ships. I don't think the issues you have raised are evidence of financial instability --- the most pressing question you are faced with.

 

I'd like to try and respond to the "used ship lot" concern as it relates to financial stability. Lots of cruise lines buy "used ships." Some examples which I'm aware of:

 

Oceania was founded with three ships purchased from a line that went out of business. The Seven Seas Navigator was designed to be some sort of Russian auxiliary ship, but the hull was purchased by Regent and converted to a passenger ship. Windstar has recently negotiated the purchase of one or more ships from the Seabourn fleet.

 

I have no reason to think that any of those companies are in financial trouble because they have purchased ships from the "used ship lot."

 

I believe that Silversea is the one so-called "luxury line" which, in these difficult times for the travel industry, is undertaking a net expansion of their fleet. Seabourn has added the three Odyssey class ships. I believe that I've read that Seabourn is offsetting that expansion by selling (or at least trying to sell) their original ships. Crystal is down to just two ships. Regent hasn't added a new ship since I started sailing that line about 6 years ago. I'm not sure how old their newest ship is.

 

In contrast, Silversea added to the fleet with the Spirit in 2009, the same year that Seabourn introduced the Odyssey. In the past two years, Silversea has, after major refurbishments, introduced two more ships to its "expedition fleet." Silversea is, I believe, the only luxury line expanding the size of its fleet. I've always considered expansion a sign of success in business.

 

I have looked at all 50 posts in this thread and, while I've seen some valid issues raised, none of those issues make me think that Silversea is financially unstable. I repeat that I don't have a crystal ball. There may be financial problems lurking. But I believe that an objective examination of all the factors that have been discussed in this thread does not support a conclusion that the line is in financial difficulty. And, of course, it is entirely possible that my view is less than objective. :-)

[fizzy]

I find the original question puzzling at best. For the friends familiar with Cruise Critic, I can't imagine what would lead them to wonder about financial stability when starting to research a cruise. The very bad press with the CDC report might make one inquire as to whether things have been taken care of but I guess others might have the same worries after the Regent Navigator CDC report and the Navigator is my favorite RSSC ship.

I would tend to agree with UKJeff that you can assure all of the people asking these questions that they are pretty well covered if they are using a credit card and have proper insurance. I would think that it would hold true across the board for all lines.

[lincslady]

bogey - to set the record straight, Seabourn has sold its three (quite old)small ships, and has just commissioned a new one which will take about 600 passengers, which is pretty much the number the 3 old ships held.

[Threechicks]

Regent is launching the new Explorer in 2016.

[Travelcat2]

Bogey, a lot of our friends are cruisers - mostly on luxury lines. They know that I have been a Regent "loyalist" (for lack of a better word) for years and are surprised when we sail in Silversea. This is probably why I get so many questions (plus being very active on the Regent board). People are more surprised that I rate Silversea so highly. I am usually the one who suggests giving Silversea a try.

 

I honestly have not discussed broken heaters with them. However, if they spent any time reading the Silversea board, they would know that there are issues (just as there are with Regent). It would be interesting to know why the financial stability of Silversea is so often the first question (followed by dress code and, for a long time, smoking in suites).

[bogey]

bogey - to set the record straight, Seabourn has sold its three (quite old)small ships, and has just commissioned a new one which will take about 600 passengers, which is pretty much the number the 3 old ships held.

 

Thanks for setting the record straight. I'd read that they sold their original three ships, but got a mailing earlier this week selling cruises on the Legend and the Spirit into the fall of this year. So I wasn't sure if the sale of those had gone through.

 

I loved those small ships and am hoping to get on one of the Odyssey class in the near future. I hear great things about them.

 

I'm glad to learn that they are expanding even more and hope to hear more about the "coming attraction" that you mention.

[bogey]

Regent is launching the new Explorer in 2016.

 

Great news! Sounds like Regent also continues to do well. Can't wait for 2016 to get here!

[rl787]

I personally would not be remotely concerned about Silversea's financial viability. As has been said, in may cases you are covered by travel insurance, if you are in the UK book with a credit card and you are further protected, this may apply in other countries I am not sure.

As for buying some used ships, to me that sounds quite good business sense, they will be locost compared to new tonnage. I believe at least one is leased for 5 years which is not a major commitment, this gives the company time to decide how the expedition side is working, they can then decide to purchase, extend or dispose of the ship. SS is a private company so we will never know the full extent of the companies finances but generally luxury lines seem to be expanding and the cruise market seems to be holding up quite well.

Another factor that should put any concerned clients at ease is that SS is a global purchaser. Staff costs, entertainers, fuel and provisions are purchased all around the world on a daily basis, if they were having cash flow issues and establishing a poor payment profile I think it is very likely that it would become common knowledge immediately. Today it is very difficult to keep these things quiet.

To sum up my opinion is simply this, book your cruise, have a fabulous holiday on a great line and let the owners and bean counters worry about finance.

[Travelcat2]

I personally would not be remotely concerned about Silversea's financial viability. As has been said, in may cases you are covered by travel insurance, if you are in the UK book with a credit card and you are further protected, this may apply in other countries I am not sure.

.

 

It is great that people in the UK get financial protection.... however, most Regent customers are from the U.S. and Canada (followed by Australia and the U.K.) so protections are not in place for us other than several credit card companies that could possibly assist.

 

Just remembered why "financial stability" was a big issue on Regent last year (around March). Silversea stated that a big announcement would be forthcoming. I was onboard a Regent ship at the time. There was a lot of discussion on the ship (amongst the staff as well as the guests) as to what the announcement would be. The discussions had us so concerned, we cancelled our cruise on Silversea (note: we rebooked about three months later). The "big announcement" had something to do with travel agents :rolleyes:

Edited March 3, 2014 by Travelcat2

[zqvol]

I personally would not be remotely concerned about Silversea's financial viability. As has been said, in may cases you are covered by travel insurance, if you are in the UK book with a credit card and you are further protected, this may apply in other countries I am not sure.

As for buying some used ships, to me that sounds quite good business sense, they will be locost compared to new tonnage. I believe at least one is leased for 5 years which is not a major commitment, this gives the company time to decide how the expedition side is working, they can then decide to purchase, extend or dispose of the ship. SS is a private company so we will never know the full extent of the companies finances but generally luxury lines seem to be expanding and the cruise market seems to be holding up quite well.

Another factor that should put any concerned clients at ease is that SS is a global purchaser. Staff costs, entertainers, fuel and provisions are purchased all around the world on a daily basis, if they were having cash flow issues and establishing a poor payment profile I think it is very likely that it would become common knowledge immediately. Today it is very difficult to keep these things quiet.

To sum up my opinion is simply this, book your cruise, have a fabulous holiday on a great line and let the owners and bean counters worry about finance.

 

Agreed about the financial issues. Same rules apply in the US.

[dan-c-man]

It is great that people in the UK get financial protection.... however, most Regent customers are from the U.S. and Canada (followed by Australia and the U.K.) so protections are not in place for us other than several credit card companies that could possibly assist.

 

Here in the U.S., I was booked and fully paid when Renaissance went belly up some years ago. I had paid with my credit card, and the credit card company took the loss, and did not charge me. Renaissance had not provided the service for which I had paid. So it would appear there is protection when paying with a credit card here in the USA.

 

Dan

[Travelcat2]

It is great that people in the UK get financial protection.... however, most Regent customers are from the U.S. and Canada (followed by Australia and the U.K.) so protections are not in place for us other than several credit card companies that could possibly assist.

 

Here in the U.S., I was booked and fully paid when Renaissance went belly up some years ago. I had paid with my credit card, and the credit card company took the loss, and did not charge me. Renaissance had not provided the service for which I had paid. So it would appear there is protection when paying with a credit card here in the USA.

 

Dan

 

Thanks for that information. Good to know!

[bogey]

 

Just remembered why "financial stability" was a big issue on Regent last year (around March). Silversea stated that a big announcement would be forthcoming. I was onboard a Regent ship at the time. There was a lot of discussion on the ship (amongst the staff as well as the guests) as to what the announcement would be. The discussions had us so concerned, we cancelled our cruise on Silversea (note: we rebooked about three months later). The "big announcement" had something to do with travel agents :rolleyes:

 

I wonder if these financial stability concerns are somehow a Regent thing. Our first Regent cruise was on Voyager and we became acquainted with three couples who were veterans of multiple Regent cruises. At one point, there were a couple of lapses in service. About the same time, word started to get out that Regent and Oceania were about to consummate a merger.

 

One evening at dinner these acquaintances spent a good deal of time discussing whether the impending merger and lapses in service were signs that Regent was "going under" and needed to be saved by Oceania. I think they almost convinced themselves (and me, the Regent rookie) that Regent's best days were over. I didn't cancel my future booking, but I admit they had me a bit worried.

 

Thankfully, their concerns were not well-founded and Regent continues to be a leader in the luxury market. I continue to believe that your friends' concerns about Silversea probably fall into a similar category.

[dusababy]

Bogey I wish I could be as diplomatic as you when dealing with speculation and unfounded rumors.

[Jaffa]

Sorry Travelcat2,

 

ill-con·ceived and irrational thought processes at play here.

 

Any cursory research would have shown that the Lefebrve family and their holdings/assets have grown substantially over the past 6 years.

The company's continued successful expansion into land based investments and tourism development at the bottom of the market, has been well documented in Europe over the last 4 years. They are now perfectly positioned for the upswing.

There also has been several discussions on these boards about this several years ago. You may remember your participation in these.

 

The family themselves have risen 9 places on Europe's rich list and have more than most made good use of the European FC.

 

Being a private set of family company's gives the organization a tremendous amount of business freedom which is not always at hand for publicly listed enterprises.

Deadwood can be moved with more expediency and changes can be made without the cumbersome weight of shareholders or listed company law.

 

With the wealth of talent presently available to the industry due to the GFC, it is no wonder Silversea has been trying new people in roles that may or may not work. If it does not work, move them on quickly. Which is what l see the company has been doing. They are simply using their private company freedoms to their best advantage, and who wouldn't.

 

This is their primary advantage over their competitors, and they are one of the only worldwide cruise company's to carry this advantage in a very competitive market. This is primarily the company's number 1 asset.

And milk it they do!

 

The only surprise to me, is there choice in 2nd hand vessels rather than new builds for the ever expanding expedition arm.

I can only put this down to taking a two way bet on the continued luxury expedition success. Perhaps further market testing.

 

Silversea was the first of the luxury lines to hit this segment and it has been a hit for them from word go. You just need to look at loads and pricing to see there success here.

 

Of course we now see other luxury lines playing follow me and catch up due to the high yields SS has been achieving.

 

Perhaps SS took the quick expansion option by taking 2nd hand vessels rather than a long lead in expansion by waiting for new builds.

 

The next several years will soon tell.

If we see some new expedition build contracts on the drawing board as l expect, Then they will have taken what they have learn't and built it into a perfect hard product for the luxury expedition market.

 

One thing is certain though, Silversea is definitely the market leader in this segment now and there continued expansion and success shows no sign of slowing down. They have found a market niche which they have become very good at.

 

This alone should be enough to put to rest any thought of SS being in any sort of trouble.

 

But adding in my initial paragraphs which are very easy to research yourself shows for certain that this thread is both an ill-con·ceived and irrational thought process.

 

Now l will bunker down for the flaming.

 

Cheers

Edited March 6, 2014 by Jaffa

[drron29]

Thanks Jaffa.Some very good points you raise.Though I was not scared with 5 already booked SS cruises,mostly on the Explorer.

[newlondon]

Jaffa, Your well conceived post is exactly what was needed. While my post about a family company covered some points yours went even further and explained strategy in a way I hadn't considered. Makes going to work for a family company even more problematic.

The idea behind second hand ships, of course, is not new to the industry. Regent's Navigator was second hand and nobody has questioned their viability. Obviously their numbers are public so all would know the truth.

Would be interested to know where you got the Lefebrve family info.

[Travelcat2]

All interesting information however this information is not readily available for people interested in booking a luxury cruise.

 

Newlondon: Regent's Navigator was not a second hand ship ........ it was a second hand hull on which the ship was built. Probably the worst financial mistake Radisson ever made was purchasing that hull. Trying to make the ship sail like a cruise ship has reportedly cost hundreds of thousands of dollars (and it still isn't right).

 

Anyway, thanks for all of the response. They are appreciated.:)

Edited March 6, 2014 by Travelcat2

[dusababy]

All interesting information however this information is not readily available for people interested in booking a luxury cruise.

 

True - but damaging negative gossip is.

[Travelcat2]

All interesting information however this information is not readily available for people interested in booking a luxury cruise.

 

True - but damaging negative gossip is.

 

It is the damaging negative gossip that I've tried to dispel. There certainly is a lot of it out there (not only about Silversea).

[newlondon]

Jacquie, Regent did not lay down the hull for Navigator. Imo, therefore, it is second hand.

[rallydave]

Regarding Regent and financial condition. True Regent has announced a new ship however, there has been no news and nothing regarding the keel laying which would expect to have happened with an 18 month build and scheduled for 2016.

 

Also an IPO has been announced for PCH, parent of Regent and Oceania with a small amount of the stock to raising about $250 M and scheduled to be sold with the purpose listed as to pay down debt. With the IPO, they were required to provide the amount of debt PCH is carrying and if my memory is correct it is around $1.7 B which is quite a bit of debt for a company that lost money two years ago and had profits in the range of $150 M last year.

 

Also there are reports of cutbacks recently on both lines. I'll let others decide if these facts mean Regent is in financial trouble or not.

[Travelcat2]

A bit off topic on the Silversea board. FYI, the steel cutting on Regent's new ship is scheduled for July (24 months prior to anticipated launch date).

 

Getting back on topic, it is really good to know that Silversea is doing well:)