NCL stock down on mixed earnings results.

[my3sonsnj]

 

I may not always agree with how some of the decisions have been implemented but I can see the logic behind them and why they might do so.

 

 

Excellent Point!

 

I've really enjoyed reading this thread and the various quantitative analysis.

 

"It is the mark of an educated mind to be able to entertain a thought without accepting it." ~Aristotle

[RDC1]

Threat to NCL? Who said anything about a threat to NCL? I loved the NCL that I sailed with so 2008 to 2014. This isn't the thread to rehash all of the changes that have been made, but it was also certain public statements made by Del Rio that put the changes into context for me and this isn't the place to rehash those either. Del Rio wants to move NCL up on the cruise line food chain and there is nothing wrong with that other than it puts NCL out of my price point.

 

You did. You said he was changing the nature of ncl if that is not a threat to the current nature then what it.

[sparks1093]

You did. You said he was changing the nature of ncl if that is not a threat to the current nature then what it.

 

That might be a threat to passengers that are loyal to a line but it's not a threat to the line itself. If you are taking a mainstream line and changing it into a premium line then you are changing the nature of the line. Can Del Rio pull it off? Only time will tell.

[RDC1]

That might be a threat to passengers that are loyal to a line but it's not a threat to the line itself. If you are taking a mainstream line and changing it into a premium line then you are changing the nature of the line. Can Del Rio pull it off? Only time will tell.

 

I never said threat to the line, I said threat to the nature, which is basically the same thing as you said when you said that he was changing the nature.

 

In reality NCL is not being changed to a premium line. It is a two tier, split ship, split class line (depending upon which term you want to apply) with areas being restricted for a higher tier passenger (Haven) vs the mainstream component. The premium component of NCLH remains Oceania and Regent. NCL as a whole, is not premium and never will be, outside of Haven. Even with Haven it is very difficult to have a premium experience in the middle of a mass market ship.

 

It is designed to overlap portions of both Celebrity and RCCL (neither of which are premium lines). There is nothing in its cost structures that are outside of the mainstream line pricing model. Of course mainstream has quite a range with Carnival and RCCL at one end and Celebrity, Princess and HAL at the other. Now his comments about moving up market would seem to match in that the line is trying to compete with Celebrity and well as RCCL. That is a bit more up market then being placed directly across from RCCL.

 

Price increases have been showing up in all of the mainstream lines this past year, because they all have been able to, to some degree. Mostly those increases have shown up in terms of extra fees, and not is base pricing even though there has tended to be less discounting with all three companies. Discounts are tending to show up in the form of packages such as free gratuities, drink packages, Internet, OBC then in the reduction of actual prices. In many cases the base price is increased to cover some of the cost of the packages. Those people that want those packages get a discount, those that don't want them get to pay more and get the package anyway. As a result you see higher base prices, but when you look at the cost of the packages and final fare the real price increase is not that much.

 

Again I come back to what specifically has really changed that much with NCL that its nature is considered to be changing? (notice I change the wording to not use the term threaten the nature, but retained the same meaning). Most of the business model is exactly the same, if anything it is continuing to move away from traditional cruising which has been NCL's focus for a number of years.

[RDC1]

Threat to NCL? Who said anything about a threat to NCL? I loved the NCL that I sailed with so 2008 to 2014. This isn't the thread to rehash all of the changes that have been made, but it was also certain public statements made by Del Rio that put the changes into context for me and this isn't the place to rehash those either. Del Rio wants to move NCL up on the cruise line food chain and there is nothing wrong with that other than it puts NCL out of my price point.

 

Several people in this thread have indicated that the stock price is dropping because of the changes NCL has made. The discussion of those changes, the business reasons for doing so, and the impact upon the competitive environment certainly do relate to a discussion of stock price.

 

Have the other cruise lines moved out of your price point as well? When you describe price point are you referring to a specific cabin class? Haven vs regular. If all the lines have moved up compared to your price point, then that is not a change in pricing vs competition, but a rising across the market.

[sparks1093]

Several people in this thread have indicated that the stock price is dropping because of the changes NCL has made. The discussion of those changes, the business reasons for doing so, and the impact upon the competitive environment certainly do relate to a discussion of stock price.

 

Have the other cruise lines moved out of your price point as well? When you describe price point are you referring to a specific cabin class? Haven vs regular. If all the lines have moved up compared to your price point, then that is not a change in pricing vs competition, but a rising across the market.

 

I just priced a balcony cabin on the CCL Pride for 2/18 and it is $100 more than what we paid in 2012. Similar cabin on NCL for the same week is $1300 more than what CCL is charging.

[sparks1093]

I never said threat to the line, I said threat to the nature, which is basically the same thing as you said when you said that he was changing the nature.

 

In reality NCL is not being changed to a premium line. It is a two tier, split ship, split class line (depending upon which term you want to apply) with areas being restricted for a higher tier passenger (Haven) vs the mainstream component. The premium component of NCLH remains Oceania and Regent. NCL as a whole, is not premium and never will be, outside of Haven. Even with Haven it is very difficult to have a premium experience in the middle of a mass market ship.

 

It is designed to overlap portions of both Celebrity and RCCL (neither of which are premium lines). There is nothing in its cost structures that are outside of the mainstream line pricing model. Of course mainstream has quite a range with Carnival and RCCL at one end and Celebrity, Princess and HAL at the other. Now his comments about moving up market would seem to match in that the line is trying to compete with Celebrity and well as RCCL. That is a bit more up market then being placed directly across from RCCL.

 

Price increases have been showing up in all of the mainstream lines this past year, because they all have been able to, to some degree. Mostly those increases have shown up in terms of extra fees, and not is base pricing even though there has tended to be less discounting with all three companies. Discounts are tending to show up in the form of packages such as free gratuities, drink packages, Internet, OBC then in the reduction of actual prices. In many cases the base price is increased to cover some of the cost of the packages. Those people that want those packages get a discount, those that don't want them get to pay more and get the package anyway. As a result you see higher base prices, but when you look at the cost of the packages and final fare the real price increase is not that much.

 

Again I come back to what specifically has really changed that much with NCL that its nature is considered to be changing? (notice I change the wording to not use the term threaten the nature, but retained the same meaning). Most of the business model is exactly the same, if anything it is continuing to move away from traditional cruising which has been NCL's focus for a number of years.

 

It's Del Rio's vision, tell him he can't achieve it;).

[NLH Arizona]

It's Del Rio's vision, tell him he can't achieve it;).

Wasn't it Mr. Sheehan's vision. I believe he said that with their current ships and the new away ships, NCL was positioned to be at the top of the premium category. I wonder if Mr. Del Rio has just been challenged to bring Mr. Sheehan's vision to fruition by the board who foolishly believe Mr. Sheehan.

But the Breakaway is more than a game-changer for the industry: It's a game-changer for NCL. With the first ship in the line's new class of ships debuting, the cruise line feels it's positioned to compete with premium and luxury cruise lines.

 

"With the beautiful ships we have, with freestyle proposition, we always had the opportunity to be at the top of the premium category, Sheehan said. "We're on our journey. With this ship, we have the leader in the premium category, and soon Getaway following behind."

Edited August 29, 2016 by NLH Arizona

[RDC1]

I just priced a balcony cabin on the CCL Pride for 2/18 and it is $100 more than what we paid in 2012. Similar cabin on NCL for the same week is $1300 more than what CCL is charging.

 

How about RCCL, Celebrity? Those are NCL's primary competition?

 

For that matter what about the other CCL lines? Such as Princess?

 

CCL has clearly been positioned as the lowest priced of the mass market lines. What is the NCL ship that you are comparing the CCL Pride to? Is it similar in age and amenities?

 

Just did a check I assume that you are comparing the CCL pride, western caribbean out of Tampa, to the Getaway out of Miami. CCL Pride 824 with $25 Obc and Getaway 949 with the Pick 4 promotion. A better comparison might be the CCL Splendor out of Miami the same week. That way you don't get port pricing deviation in the comparison. There is a little change but not much CCL Splendor is 834 with $25 OBC.

Edited August 29, 2016 by RDC1

[sparks1093]

Wasn't it Mr. Sheehan's vision. I believe he said that with their current ships and the new away ships, NCL was positioned to be at the top of the premium category. I wonder if Mr. Del Rio has just been challenged to bring Mr. Sheehan's vision to fruition by the board who foolishly believe Mr. Sheehan.

But the Breakaway is more than a game-changer for the industry: It's a game-changer for NCL. With the first ship in the line's new class of ships debuting, the cruise line feels it's positioned to compete with premium and luxury cruise lines.

 

"With the beautiful ships we have, with freestyle proposition, we always had the opportunity to be at the top of the premium category, Sheehan said. "We're on our journey. With this ship, we have the leader in the premium category, and soon Getaway following behind."

 

Could be, but he would have faced the same challenges.

[sparks1093]

How about RCCL, Celebrity? Those are NCL's primary competition?

 

For that matter what about the other CCL lines? Such as Princess?

 

CCL has clearly been positioned as the lowest priced of the mass market lines. What is the NCL ship that you are comparing the CCL Pride to? Is it similar in age and amenities?

 

Price-wise NCL is up there with Celebrity and RCCL going by the recent comparisons that I've done. )One cruise that I priced had Celebrity come in at $300 less than NCL.)

 

The NCL ship was the Breakaway so obviously it's the newer ship, but that's not a big selling point for me. The BA does come with the "free" beverage package but that also is not a big selling point for me since we don't buy those packages anyway.

[RDC1]

Wasn't it Mr. Sheehan's vision. I believe he said that with their current ships and the new away ships, NCL was positioned to be at the top of the premium category. I wonder if Mr. Del Rio has just been challenged to bring Mr. Sheehan's vision to fruition by the board who foolishly believe Mr. Sheehan.

But the Breakaway is more than a game-changer for the industry: It's a game-changer for NCL. With the first ship in the line's new class of ships debuting, the cruise line feels it's positioned to compete with premium and luxury cruise lines.

 

"With the beautiful ships we have, with freestyle proposition, we always had the opportunity to be at the top of the premium category, Sheehan said. "We're on our journey. With this ship, we have the leader in the premium category, and soon Getaway following behind."

 

Cruise line execs like to use the term Premium for the mass market lines, even though they remain mass market. Of course Celebrity has always liked to consider itself to be a premium line. The use of the term premium line can also be confused with them saying that they can command premium pricing, which simple means that they can charge more than the competition.

[RDC1]

Price-wise NCL is up there with Celebrity and RCCL going by the recent comparisons that I've done. )One cruise that I priced had Celebrity come in at $300 less than NCL.)

 

The NCL ship was the Breakaway so obviously it's the newer ship, but that's not a big selling point for me. The BA does come with the "free" beverage package but that also is not a big selling point for me since we don't buy those packages anyway.

 

That is about where I would expect NCL to price. Against what they consider to be their primary competition.

 

Celebrity used to be my favorite line until they raised prices and started throwing in the drink packages (total value about the same as prior to the increase) so they could act more all inclusive. I also disagreed with them moving more to the ship within in a ship mode for suites. As a result they are no longer my favorite line replaced by Princess, though I still cruise them on occasion for a specific route, just as I will still sail NCL on occasion (Though my next NCLH line cruise in Oceania).

[NLH Arizona]

Cruise line execs like to use the term Premium for the mass market lines, even though they remain mass market. Of course Celebrity has always liked to consider itself to be a premium line. The use of the term premium line can also be confused with them saying that they can command premium pricing, which simple means that they can charge more than the competition.

I think there are three categories of cruising. Luxury, Premium and Mass-Market (with two categories mid-priced and lower budget priced). I cruise in all three categories and there is a difference between Crystal and Celebrity and between Celebrity and NCL. I just find it funny that Mr. Sheehan said NCL was already positioned to be the top of the premium line and not one person blinked an eye, but when Mr. Del Rio said it, you would have thought that the world was coming to an end. Edited August 29, 2016 by NLH Arizona

[sparks1093]

That is about where I would expect NCL to price. Against what they consider to be their primary competition.

 

Celebrity used to be my favorite line until they raised prices and started throwing in the drink packages (total value about the same as prior to the increase) so they could act more all inclusive. I also disagreed with them moving more to the ship within in a ship mode for suites. As a result they are no longer my favorite line replaced by Princess, though I still cruise them on occasion for a specific route, just as I will still sail NCL on occasion (Though my next NCLH line cruise in Oceania).

 

Only problem from where I sit (and I realize that this is just me and my opinion) I have seen nothing that Del Rio/NCL has done to enhance the on-board experience to warrant me expending that much money for their product. I've always perceived NCL to be a little better than CCL, but not $1300 better, even for one of their newer ships. If I were going to spend that kind of money on a cruise I would rather spend it on a cruise line that is already occupying the niche than on a cruise line that is still trying to evolve into the niche.

[SteveH2508]

I think there are three categories of cruising. Luxury, Premium and Mass-Market (with two categories mid-priced and lower budget priced). I cruise in all three categories and there is a difference between Crystal and Celebrity and between Celebrity and NCL. I just find it funny that Mr. Sheehan said NCL was already positioned to be the top of the premium line and not one person blinked an eye, but when Mr. Del Rio said it, you would have thought that the world was coming to an end.

 

I think the Sheehan statement was when they launched the Breakaway (just saw the Mighty Ships programmes on it again recently).

 

He certainly was not going to stand up and say "Hey folks, we screwed up the atrium with a smokey casino; the balconies are too small and the corridors too narrow etc."

 

He was bound to 'big it up' - just like FDR is doing with his interviews.

 

The executives listening would also not pitch in and say "Hey Kevin, we have got ABC wrong" (at least not at a public launch) unless said exec. was looking for a new career.

 

The point that some of us are trying to make, is that independent reviews and opinions are much more valuable and accurate than Chief Executive's puffery.

[NLH Arizona]

The point that some of us are trying to make, is that independent reviews and opinions are much more valuable and accurate than Chief Executive's puffery.

I totally agree with you. I think there has been so many more positive opinions and reviews than there have been negative.

 

I don't think you really read Mr. Sheehan's statement: "With the beautiful ships we have, with freestyle proposition, we always had the opportunity to be at the top of the premium category, Sheehan said. "We're on our journey. With this ship, we have the leader in the premium category, and soon Getaway following behind." What is so hysterical is that Mr. Sheehan thought they already had the opportunity to be at the top of the premium category before the away ships and not one blink of an eye or he's an idiot comment from the loyals. Even with this unimaginable remark, I guess Mr. Sheehan could do no wrong, where anyone else is wrong from the get go.

[StolidCruiser]

I totally agree with you. I think there has been so many more positive opinions and reviews than there have been negative.

 

I don't think you really read Mr. Sheehan's statement: "With the beautiful ships we have, with freestyle proposition, we always had the opportunity to be at the top of the premium category, Sheehan said. "We're on our journey. With this ship, we have the leader in the premium category, and soon Getaway following behind." What is so hysterical is that Mr. Sheehan thought they already had the opportunity to be at the top of the premium category before the away ships and not one blink of an eye or he's an idiot comment from the loyals. Even with this unimaginable remark, I guess Mr. Sheehan could do no wrong, where anyone else is wrong from the get go.

 

Thanks for the enlightening perspective.

 

I, too, often wondered why Sheehan is considered the Messiah and Del Rio is considered the devil incarnate.

 

Perhaps because one sugar coats what he says and the other doesn't.

[SuiteCruiser]

Thanks for the enlightening perspective.

 

I, too, often wondered why Sheehan is considered the Messiah and Del Rio is considered the devil incarnate.

 

Perhaps because one sugar coats what he says and the other doesn't.

 

I think if you read what Del Rio says he sugarcoats just as much. I also don't think anyone would ever say "we're positioned to be at the top of the mass-marketed lines" as they don't feel that's what they are.

 

There are plenty of lower level cruise lines world wide, so don't think NCL or CCL at are at the bottom by any stretch.

[RDC1]

I think there are three categories of cruising. Luxury, Premium and Mass-Market (with two categories mid-priced and lower budget priced). I cruise in all three categories and there is a difference between Crystal and Celebrity and between Celebrity and NCL. I just find it funny that Mr. Sheehan said NCL was already positioned to be the top of the premium line and not one person blinked an eye, but when Mr. Del Rio said it, you would have thought that the world was coming to an end.

 

I consider lux to be very few. Regent, Crystal, maybe one or two others. Premium are those in the same range as Oceania, Azmara, maybe Cunard at the bottom end of Premium. Celebrity, HAL, Princess maybe at the higher end of mass market, but still mass market, NCL, RCCL lower down, and CCL at the bottom.

 

Distinguishing characteristics: what is included, quality of the experience, size of ship, service levels, customization, etc.

[NLH Arizona]

Thanks for the enlightening perspective.

 

I, too, often wondered why Sheehan is considered the Messiah and Del Rio is considered the devil incarnate.

 

Perhaps because one sugar coats what he says and the other doesn't.

Mr. Sheehan also made cuts like the end of lobster in the MDR and the end of the chocolate buffet, but still not the negativity is laid on him that has been laid on Mr. Del Rio from day one.

[RDC1]

Only problem from where I sit (and I realize that this is just me and my opinion) I have seen nothing that Del Rio/NCL has done to enhance the on-board experience to warrant me expending that much money for their product. I've always perceived NCL to be a little better than CCL, but not $1300 better, even for one of their newer ships. If I were going to spend that kind of money on a cruise I would rather spend it on a cruise line that is already occupying the niche than on a cruise line that is still trying to evolve into the niche.

 

The cruiselines have been very restricted to increase price for a number of years. So don't be surprised when they raise them when they can. More of inflation then an improvement in experience.

 

There is a very good web site

 

http://www.cruisemarketwatch.com/market-share/http://www.cruisemarketwatch.com/market-share/

 

It gives market share in both revenue and number of passengers, while it is somewhat skewed because it is number of passengers and not share of passenger days (so it can be impacted by average cruise length variation between lines). If you take the ratio between passenger % and revenue % you can get a good idea of the various lines relative pricing structure. You have to tweak a little to adjust for average cruise length (for example Princess has a longer average than Celebrity so even with the same price structure Princess would end up with a higher ratio).

[swedish weave]

Mr. Sheehan also made cuts like the end of lobster in the MDR and the end of the chocolate buffet, but still not the negativity is laid on him that has been laid on Mr. Del Rio from day one.

 

I have two comments to add a little reality to this discussion.

 

What Sheehan said is not anywhere near as important as what he did. He took over a cruise line that Veitch had on the brink of failure and turned it into a company that could survive under his leadership.

 

I question if Del Rio can come close to that degree of success.

 

Second --- How many premium or luxury cruise lines can you name that can survive on their own without being under the umbrella of one of the mainstream cruise lines?

 

Try to remember that the largest and most successful companies in the entire world cater to the masses. The so-called elite don't have the wherewithall to support the luxury they want and the companies that try to cater to only a small segment of the public generally fail.

[Fido Chuckwagon]

NCL down even further today, now trading at a new almost 2 year low. RCL is up today, as is CCL.

[sparks1093]

The cruiselines have been very restricted to increase price for a number of years. So don't be surprised when they raise them when they can. More of inflation then an improvement in experience.

 

There is a very good web site

 

http://www.cruisemarketwatch.com/market-share/http://www.cruisemarketwatch.com/market-share/

 

It gives market share in both revenue and number of passengers, while it is somewhat skewed because it is number of passengers and not share of passenger days (so it can be impacted by average cruise length variation between lines). If you take the ratio between passenger % and revenue % you can get a good idea of the various lines relative pricing structure. You have to tweak a little to adjust for average cruise length (for example Princess has a longer average than Celebrity so even with the same price structure Princess would end up with a higher ratio).

 

Sorry, that stuff is lost on me:o. I care about how much I have to pay for a cruise and the value it represents to me and my family. NCL gave us some great cruises that provided a great value to us. Now, it is possible that we could have a similar experience if we sailed on NCL but no one has been able to articulate what enhancements have been done to the onboard experience to make it worth what NCL is currently charging. I don't mind paying $10 for a $10 burger but I don't want to pay $14 for a $10 burger.