CCL Annual Report 2018 - ticket price covers "most meals"

[OlsSalt]

From the 2018 CCL Annual Report::  

 

Results of Operations

We earn substantially all of our cruise revenues from the following:

 

• Sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and from airports near our ships’ home ports and cancellation fees. We also collect fees, taxes and other charges from our guests

 

• The cruise ticket price typically includes the following:

Accommodations

Most meals, including snacks at numerous venues

Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club and

sun decks

Supervised youth programs

Entertainment, such as theatrical and comedy shows, live music and nightclubs

Visits to multiple destinations

 

• Sales of goods and services not included in the cruise ticket price are generally the following:

Substantially all liquor and some non-alcoholic beverage sales •

Casino gaming •

Shore excursions •

Gift shop sales •

Photo sales •

Internet and communication services Full service spas
Specialty restaurants
Art sales

Laundry and dry cleaning services

 

These goods and services are provided either directly by us or by independent concessionaires, from which we receive either a percentage of their revenues or a fee.

Edited March 12, 2019 by OlsSalt

[Fouremco]

Nothing surprising here, including the use of such qualifiers as:

 

"The cruise ticket price typically includes the following" and "Sales of goods and services not included in the cruise ticket price are generally the following".

 

 

[cruisemom42]

More telling to me by far (as regards inclusion of food) is the statement about what is not generally included. The only mention of food has to do with specialty restaurants. There is nothing to indicate that there is any "sale of goods/services not included not included in the cruise ticket price " in the MDR, Lido or room service, for example....

 

Sales of goods and services not included in the cruise ticket price are generally the following:

Substantially all liquor and some non-alcoholic beverage sales •

Casino gaming •

Shore excursions •

Gift shop sales •

Photo sales •

Internet and communication services Full service spas
Specialty restaurants
Art sales

Laundry and dry cleaning services

Edited March 12, 2019 by cruisemom42

[CruiserBruce]

Sounds like boilerplate plate describing of their revenue streams.

[cruisebie]

Stirring the pot? I think a bigger spoon is needed.  Notice how they cite 2018 as their 3rd consecutive record year?  Doesn't sound like a corporation forced to institute a $10 extra entree charge because cruise prices are so low they can barely make ends meet.

 

Here is a link to the report http://phx.corporate-ir.net/phoenix.zhtml?c=140690&p=irol-reportsannual

[OlsSalt]

3 hours ago, cruisebie said:

Stirring the pot? I think a bigger spoon is needed.  Notice how they cite 2018 as their 3rd consecutive record year?  Doesn't sound like a corporation forced to institute a $10 extra entree charge because cruise prices are so low they can barely make ends meet.

 

Here is a link to the report http://phx.corporate-ir.net/phoenix.zhtml?c=140690&p=irol-reportsannual

 

Seattle says they are doing it to limit food waste - others , not Seattle, concluded they were doing it only to increase cash flow.  Again, out West, the cruise industry is taking a lot of bad PR hits due to its "environmental impacts" - this could be just a "green-washing" move. 

 

The use of the term "most meals" was curious - did they intentionally build in some limits as to at least amount by using this phrase?

Edited March 12, 2019 by OlsSalt

[OlsSalt]

CCL family member Costa works on food waste reduction goals, per UN agenda:

 http://crew-center.com/costa-cruises-reduce-food-waste-50

 

Food waste has become a cruise industry issue.

[cruisebie]

Thanks for posting this very interesting article.  It looks like the Costa program is very well thought out and executed, from reducing waste in the food preparation phase to donating unused food to charity.  I see no mention of a $10 charge for an extra entree.  In fact, their Director General says their challenge was to do this without affecting the spirit of the holiday.  HAL would do well to emulate these methods.

 

If HAL's goal was to reduce food waste, it's hard to see how bringing someone an entire entree for $10 instead of just an extra lobster tail as was reported on the other thread will reduce waste.  It seems like more waste will be generated since likely only the lobster tail will be consumed.   Not to mention that there will now be more people ordering multiple of the other courses to avoid the charge, generating still more waste.

 

No wonder that many see this as a cash grab instead of a waste reduction move.

 

 

[OlsSalt]

5 hours ago, cruisebie said:

Thanks for posting this very interesting article.  It looks like the Costa program is very well thought out and executed, from reducing waste in the food preparation phase to donating unused food to charity.  I see no mention of a $10 charge for an extra entree.  In fact, their Director General says their challenge was to do this without affecting the spirit of the holiday.  HAL would do well to emulate these methods.

 

If HAL's goal was to reduce food waste, it's hard to see how bringing someone an entire entree for $10 instead of just an extra lobster tail as was reported on the other thread will reduce waste.  It seems like more waste will be generated since likely only the lobster tail will be consumed.   Not to mention that there will now be more people ordering multiple of the other courses to avoid the charge, generating still more waste.

 

No wonder that many see this as a cash grab instead of a waste reduction move.

 

 

 

Talking to the chef on another cruise line, he said they could pretty well predict how many people would order certain items, no matter what was on the menu - they got a "feel" for this after many cruises. So let's work with the assumption this $10 surcharge is an attempt to reduce waste, as HAL states and is becoming a current operating ethic throughout the cruise industry.

 

  Certainly that was the intention when HAL took away the trays in the Lido - other studies in other buffet settings like college dorm cafeterias found eliminating trays did materially cut down on wasted food costs.

 

So is their food waste justification for the surcharge valid?  They might be able to predict X number of people will order the lobster (for example) so to avoid waste they plan on have X+margin of error numbers of lobster onboard.  If this works out according to their "feeling" , great --no waste.

 

If their "feeling" holds true they will have just enough, and a few to spare. But if too many people order 2X lobster, then that means some later in the evening get 0 lobster. If they assume XX number will order two lobsters and they do not, then they "waste" the extra lobster in reserve.  

 

So maybe the fine art of predicting who, when and how many will order what and in what quantities is off - leading to either disappointment of passengers who don't get what they wanted, or waste by having too much on hand -- not yet finding  the sweet spot they want to achieve.  

 

Maybe appetites of passenger demographics have changed too and HAL is taking a lead since they are now dealing with a new passenger base besides us old folks who tended to eat less.  This means their old "feelings" about prior passenger demographic appetites have not yet caught up with their new passenger demographics ...yet. 

 

We really don't know from just the words about Costa what they are doing - maybe they think allowing multiple appetizers or desserts maintains the quality of cruising too. Personally I applaud any effort HAL makes to reduce operating waste, while still offering other expected onboard pleasures that may have a better cost ratio than multiple quantities of entree meat dishes, which I assume carry the highest food costs..

 

Work in progress obviously, since we are all operating from speculation instead of fact. We will all need to stay tuned to see how this goes.

 

I still worry far more HAL is losing money and customer good will due to its abominable new website - and maybe this is how they are taking it out on their customers who actually have bust through the website and were able still make reservations.  

 

That is  the real feed back I would like to learn more about. Are they having to fire sale cruise prices and offer costly incentives to travel agents to make up for lost online bookings, and now are having to "nickel/dime" operating expenses any way they can - letting the burden fall of those who obtain extra benefits - like second entrees?

 

Yes, that argument can be stretched to infinity, but food entrees and food waste is an immediate and measurable area to see if surcharging is a way to cut waste; and not necessarily to increase revenues. If they don't have the extra lobster, they just don't have the extra lobster if they continue to operate as they have in the past - and dump later what did not get ordered.  

 

Much we simply do not know.

Edited March 13, 2019 by OlsSalt

[YXU AC*SE]

[thread drift] 

 

This was also interesting ... 

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzA0NzYyfENoaWxkSUQ9NDE3MDQyfFR5cGU9MQ==&t=1

 

 

Sales of Ships

 

In March 2018, we entered into an agreement to sell an NAA segment 1,260-passenger capacity ship. The ship will be transferred to the buyer in April 2019.   

Pacific Eden (former Statendam)   P&O Australia 

 

In March 2018, we sold and transferred an EA segment 700-passenger capacity ship.

Adonia    P&O UK

 

In April 2018, we sold and transferred an EA segment 1,300-passenger capacity ship. 

neoClassica     Costa  

 

In June 2018, we sold a NAA segment 840-passenger capacity ship. The ship will be transferred to the buyer in July 2019.

Prinsendam   HAL

 

In June 2018, we sold an EA segment 1,880-passenger capacity ship. The ship will be transferred to the buyer in August 2019. 

Oriana    P&O UK

 

In August 2018, we entered into an agreement to sell an NAA segment 1,680-passenger capacity ship. The ship will be transferred to the buyer in March 2019.

Pacific Jewel (former Crown Princess)    P&O Australia 

 

In November 2018, we entered into an agreement to sell an EA segment 2,210-passenger capacity ship. The ship will be transferred to the buyer by the end of 2019.    

Atlantica    Costa

 

In November 2018, we entered into an agreement to sell an EA segment 2,110-passenger capacity ship. The ship will be transferred to the buyer at a date still to be determined.   

Mediterranea    Costa

 

Scott. 

[RDC1]

Standard SEC filing boiler plate. you can find the same language about meals going back for years.

[cruzin4us]

It's funny, cuz I almost drool at food waste......that means I've got a good compost pile.   They need to give the food waste to countries that have bad soil....seriously!!

 

[galipemi]

 

On 3/12/2019 at 11:09 AM, OlsSalt said:

The cruise ticket price typically includes the following:

Accommodations

Most meals, including snacks at numerous venues

Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club and

sun decks

Supervised youth programs

Entertainment, such as theatrical and comedy shows, live music and nightclubs

Visits to multiple destinations

I'm thinking that the wording about "most" meals has to do with the Pinnacle Grill/Tamarind/Sel de Mer/Canaletto being upcharge restaurants and therefore not (fully) covered by the actual cruise fare.  Note the wording is about what's included in the ticket price rather than what that price actually pays for in terms of costs to HAL.   This looks more like website wording to sell cruises versus what a specific revenue stream actually pays for.

[OlsSalt]

10 hours ago, galipemi said:

 

I'm thinking that the wording about "most" meals has to do with the Pinnacle Grill/Tamarind/Sel de Mer/Canaletto being upcharge restaurants and therefore not (fully) covered by the actual cruise fare.  Note the wording is about what's included in the ticket price rather than what that price actually pays for in terms of costs to HAL.   This looks more like website wording to sell cruises versus what a specific revenue stream actually pays for.

 

Yours is a very sound analysis. However, I am also not seeing "unlimited food on demand" as cruise ticket expectation. Wonder what their definition of a "meal" is. 

 

[wombatKY]

4 minutes ago, OlsSalt said:

 

Yours is a very sound analysis. However, I am also not seeing "unlimited food on demand" as cruise ticket expectation. Wonder what their definition of a "meal" is. 

 

 

Up until this month and depending on which ship you sailed, it has always been whatever you wanted to eat. 

[Hawaiidan]

On 3/12/2019 at 11:10 AM, cruisebie said:

Stirring the pot? I think a bigger spoon is needed.  Notice how they cite 2018 as their 3rd consecutive record year?  Doesn't sound like a corporation forced to institute a $10 extra entree charge because cruise prices are so low they can barely make ends meet.

 

Here is a link to the report http://phx.corporate-ir.net/phoenix.zhtml?c=140690&p=irol-reportsannual

The key word to contemplate is "MOST"  meals  not referring to the specialty sales    To me  that translates into  " the  fare covers the meals for SOME passengers , but not ALL."          The, "But  NOT all", is what the $10 is for is pretty clear to me!

[Hawaiidan]

1 hour ago, wombatKY said:

 

Up until this month and depending on which ship you sailed, it has always been whatever you wanted to eat. 

 

Perhaps  years of abuse finally came to roost. 

 Remember when HAL permitted unlimited wine brought on board?   People brought multiple case lots  pushing the privilege    HAl reacted to this by charging now. .... 

 Maybe too,  the increase in instances of  above normal consumption  of food, because of the attitude " whatever I

want to eat .."   unlimited ......., has had its day  as well.? 

Its the many who never  push anything to its limits who suffer from the actions of a few who do !.     That's the way life is...it is not a perfect world.

[Hawaiidan]

On 3/13/2019 at 4:28 AM, YXU AC*SE said:

[thread drift] 

 

This was also interesting ... 

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzA0NzYyfENoaWxkSUQ9NDE3MDQyfFR5cGU9MQ==&t=1

 

 

Sales of Ships

 

In March 2018, we entered into an agreement to sell an NAA segment 1,260-passenger capacity ship. The ship will be transferred to the buyer in April 2019.   

Pacific Eden (former Statendam)   P&O Australia 

 

In March 2018, we sold and transferred an EA segment 700-passenger capacity ship.

Adonia    P&O UK

 

In April 2018, we sold and transferred an EA segment 1,300-passenger capacity ship. 

neoClassica     Costa  

 

In June 2018, we sold a NAA segment 840-passenger capacity ship. The ship will be transferred to the buyer in July 2019.

Prinsendam   HAL

 

In June 2018, we sold an EA segment 1,880-passenger capacity ship. The ship will be transferred to the buyer in August 2019. 

Oriana    P&O UK

 

In August 2018, we entered into an agreement to sell an NAA segment 1,680-passenger capacity ship. The ship will be transferred to the buyer in March 2019.

Pacific Jewel (former Crown Princess)    P&O Australia 

 

In November 2018, we entered into an agreement to sell an EA segment 2,210-passenger capacity ship. The ship will be transferred to the buyer by the end of 2019.    

Atlantica    Costa

 

In November 2018, we entered into an agreement to sell an EA segment 2,110-passenger capacity ship. The ship will be transferred to the buyer at a date still to be determined.   

Mediterranea    Costa

 

Scott. 

Interesting.....it appears that the future of cruising on HAL  is focusing on going to  ships larger than  2200 pax.    Saving in  the economy of scale.....    Sad as  1200 ships are about the largest that  to me deliver a real ocean going experience.   It seems that they see the future public as wanting to be on newer, total resort experience rather than  ship experiences. 

 In other words   ships for people who  want to cruise  but don't want to do it on s ship !!!!!!

[RDC1]

2 hours ago, Hawaiidan said:

Interesting.....it appears that the future of cruising on HAL  is focusing on going to  ships larger than  2200 pax.    Saving in  the economy of scale.....    Sad as  1200 ships are about the largest that  to me deliver a real ocean going experience.   It seems that they see the future public as wanting to be on newer, total resort experience rather than  ship experiences. 

 In other words   ships for people who  want to cruise  but don't want to do it on s ship !!!!!!

I think it is more that the public are very price sensitive, and to maintain price HAL needs to improve cost efficiency.