"Always working to raise prices"

[shof515]

11 minutes ago, macandlucy said:

If anyone is interested, you can read the entire transcript of that conference call:

 

https://www.fool.com/earnings/call-transcripts/2019/11/07/norwegian-cruise-line-holdings-nclh-q3-2019-earnin.aspx

 

10 minutes ago, eroller said:

 

 

I listen to earnings calls from most cruise lines.  The tone is different with NCL.  No balance.  It's all about raising prices and no talk about the product and customer experience.   Other cruise lines touch on this as yes, even investors want to know what companies are doing to warrant those higher yields and ensure they are sustainable.  

 

 

In the transcript, Frank kinda skips answering this question and makes a comment about something different. Classic CEO tactic i think

Jared Shojaian -- Wolfe Research -- Analyst

Hey good morning, everyone. Thanks for taking my question. So Frank, I guess, a question for you. I mean, obviously, the forward booked position continues to expand, your booking windows expanding.

Have you thought about taking some more risk right now and not just on the pricing side, but just on some of the, I guess, pricing decisions in terms of your deposit policies? I know I think a year or two ago, you raised the deposit date to 120 days. Is there any thoughts to raise that even longer? And then some of your competitors have focused more on the nonrefundable side. I know that's not really an area where you guys have explored. Can you just talk about that opportunity and how you see that as something that you could expand into?

Frank Del Rio -- President and Chief Executive Officer

Good morning, Jared. As you know, and something I stress in every call, we already have, by a very, very wide margin, the highest yields in the industry, not only in ticket, but in onboard. That doesn't happen by chance. It happens because we work it every hour of every day, always looking for opportunities to raise prices across our three brands, and we do.

And so when you ask me if we're focused on or if we're doing anything on it, that's all we do. That's the primary focus that we have is the combination of our go-to-market strategy, which means that we invest marketing dollars to stimulate demand in the marketplace versus reducing prices. And whenever we believe that the booking window, booking curve combination allows us, we take prices up. It's why we constantly are looking for the optimization of our itinerary is always moving ships to higher-yielding itineraries.

Why we're so bullish on Alaska? Alaska used to be a three-month season, June, July, and August. So now we're seeing -- we're getting there in April, and we're not leaving until October. It's now a six-month season of very, very high-yielding, not only on ticket, but incredible high-yielding on onboard. And so we're going to continue doing that.

We're taking Spirit out of the winter Canary Island marketplace, one of the historically lowest-yielding areas, and we're sending her after her refurbishment out to Asia, Australia, Africa, more exotic itineraries to take advantage of our huge customer base, our past guests files that have never been to those areas because we've never sailed to those areas before. So all these things help the selling process of lower marketing costs, higher occupancy, higher yields, more revenue, more earnings per share. And I think that our performance over the last four or five years proves that, that philosophy, that strategy works.

 

[eroller]

6 minutes ago, cliffd64 said:

Do you think you will influence a change sonehow?  

 

 

Of course not.  This is Cruise Critic.  It's just a place to share views and opinions about the cruise industry and the cruise experience.  Nothing more.  

[macandlucy]

7 minutes ago, eroller said:

 

 

 

I'm glad I'm not the only one.  I never said other companies don't do the exact same as NCL when it comes to raising prices.  Of course they do.  But even on earnings calls they seem to have a little more respect in how they speak about their customers.  On NCL the customer is spoken about as a "wallet", trying to get as much out of that wallet as possible.  

 I thought that tone was new for NCL. I don't recall coming away with the feeling that I am a fool that needs to be relieved of my money 😉  before. Not so blatantly anyway!

 

And you are right about large shareholders usually expressing an interest in customer satisfaction (as it relates to potential future revenues). Maybe it was an off day for FDR and the other guy, maybe the questions caused them to lose focus, I don't know. But I will say that the tone of that call and Andy Stuart's sudden departure did cause my eyebrow to raise.  Time will tell.

[graphicguy]

The good thing about competition (and if one thing's for certain, competition in the cruise industry is intense), is it generally keeps pricing competitive with all the major lines.  You may find there are some times/dates that one line is more/less than another, but they have to compete for your vacation dollar.

 

I've looked at Disney.  They are without a doubt the highest fares I've ever seen for a mainstream cruise line.

 

Royal is right in the thick of it, but NCL seems to somehow beat their fares fairly consistently.  I've sailed some of  their largest/newest ships, and while they are different than NCL's largest ships, they aren't in any way measurably better. So, I shop them for price.  If they have a good fare on the time I want to sail, I'll book them.  But, I also add in the packages NCL offers to do apples-to-apples.

 

I agree that Carnival tends to be the least expensive.  But, the only ships I'm interested in are their newest ones.  

 

MSC at one time was a pretty good deal.  I've sailed the Divina and Meriviglia.  Now, they've brought their pricing more in line with all the other cruises coming out of Miami.

[tandc2019]

I understand when NCL discontinues practices that are no longer profitable (such as chocolate night and lobster) and I know that ultimately they're working for shareholders.  I still find cruising a tremendous value compared to flights, hotels, and meals.  That being said, the one complaint that I have about NCL financially is that the price disparity of an itinerary depending on sail dates.  If you're looking at an itinerary around a holiday or school vacation, the price can jump sometimes as much as 100% from one sailing to another.  It's really not fair to families that don't have as much control over their schedules as other cruisers.  It's borderline price gouging and I really am turned off by it.

[HuliHuli]

9 minutes ago, tandc2019 said:

I understand when NCL discontinues practices that are no longer profitable (such as chocolate night and lobster) and I know that ultimately they're working for shareholders.  I still find cruising a tremendous value compared to flights, hotels, and meals.  That being said, the one complaint that I have about NCL financially is that the price disparity of an itinerary depending on sail dates.  If you're looking at an itinerary around a holiday or school vacation, the price can jump sometimes as much as 100% from one sailing to another.  It's really not fair to families that don't have as much control over their schedules as other cruisers.  It's borderline price gouging and I really am turned off by it.

It is classic supply and demand economics IMHO.  Other cruise lines follow similar pricing strategies and the consumer can decide.  Again, isn't capitalism great!

[eroller]

16 minutes ago, graphicguy said:

The good thing about competition (and if one thing's for certain, competition in the cruise industry is intense), is it generally keeps pricing competitive with all the major lines.  You may find there are some times/dates that one line is more/less than another, but they have to compete for your vacation dollar.

 

I've looked at Disney.  They are without a doubt the highest fares I've ever seen for a mainstream cruise line.

 

Royal is right in the thick of it, but NCL seems to somehow beat their fares fairly consistently.  I've sailed some of  their largest/newest ships, and while they are different than NCL's largest ships, they aren't in any way measurably better. So, I shop them for price.  If they have a good fare on the time I want to sail, I'll book them.  But, I also add in the packages NCL offers to do apples-to-apples.

 

I agree that Carnival tends to be the least expensive.  But, the only ships I'm interested in are their newest ones.  

 

MSC at one time was a pretty good deal.  I've sailed the Divina and Meriviglia.  Now, they've brought their pricing more in line with all the other cruises coming out of Miami.

 

 

 

I'm comparing prices right now for a cruise in early December.  MSC is by far the lowest.  $343 for 7 days or $595 for 11 days.  You really can't beat that.  I know pricing is always going to vary, but generally I find MSC a better value than NCL.  I don't care about the "freebies" that really are not free.  

 

I've sailed Disney 5 times (even got married on DISNEY DREAM), and I love the experience even though I don't have kids.  They are very expensive though, so not something I would consider for every cruise plus I like variety.  I do look forward to retuning to DCL though when they introduce their first new ship.  I can only imagine what their per diems will be?  Still I feel they respect the customer and put the customer first.  Something that keeps me coming back.  I also can't wait to sail on SCARLET LADY with Virgin Voyages.  Higher per diems for an unproven product, but I'm willing to take the risk.  

 

Personally I do find Royal's ships substantially superior to NCL's, so I'm willing to spend more to sail on them.  I'm a big pool person and sun worshipper, and the Breakaway/Breakaway Plus class ships offer probably the worst deck space of any major ship I've sailed on.  Too many "attractions" stuffed into too small a space.  ENCORE seems to take it to a new level.  I think Royal does a better job balancing old school deck space and pools with the attractions.  

 

I'm giving NCL a bit of a break, but I'll be back when the Leonardo Class makes it debut.  I love trying out new prototype ship designs.  

Edited November 11, 2019 by eroller

[tandc2019]

1 minute ago, HuliHuli said:

It is classic supply and demand economics IMHO.  Other cruise lines follow similar pricing strategies and the consumer can decide.  Again, isn't capitalism great!

Yes, I understand supply and demand and capitalism... I passed elementary school too.  And no, it's not a problem exclusively to NCL.  It's also not just a profit scheme, it's to increase the capacity of other sail dates... It's just irritating to have 4 weeks in a given year to take a family vacation and those are the 4 most expensive weeks.

[ColeThornton]

17 minutes ago, tandc2019 said:

(snip)  It's really not fair to families that don't have as much control over their schedules as other cruisers.  It's borderline price gouging and I really am turned off by it.

 

 

In no sense is it price gouging.  As far as being fair, to use the old line my dear departed Mother used to tell me:  "Life isn't fair, act accordingly."

[eroller]

2 minutes ago, newmexicoNita said:

Now that you have finished with your rant, do you feel better? 

 

 

 

Wow such a constructive contributor as usual.  Save your dribble for someone that cares.  

[salty dingo]

Raising prices is true of any business that wants to stay in business. It is also good for competitors who can come in and take a companies customers if they can deliver the same product at a lower price.

 

This is a perfect example of why I cannot be loyal to any one line. Carnival and NCL have had most of my business but I am always open for a change and have no loyalty.

[newmexicoNita]

1 hour ago, shof515 said:

I am also a NCL shareholder. i recently got off the Norwegian Dawn. Maybe it is due to the smaller ship, maybe it is because i am used to the mega ships but my experience  on the Dawn did not live up with my past experience of being on a Norwegian cruise. Customer service and experience is being slightly reduced over time. Entertainment seems to be a bit of a downgrade on these smaller mid ships

and for us: the Dawn is a great fit. It offers lots of dining choices, activities in the atrium, nice pool area, better than the mega ships, good entertainment and decent cabins. I don't know what else people want. On the other hand, there certainly is reasons for all types of ships. We prefer smaller, others want the mega experience. Oh, as for service, whether customer service or basic service, some of the best we have had and we are talking over 20 NCL cruises has been on the Dawn and the Sun. 

[eroller]

Just now, salty dingo said:

 

 

This is a perfect example of why I cannot be loyal to any one line. Carnival and NCL have had most of my business but I am always open for a change and have no loyalty.

 

 

An excellent philosophy that I share with you.  Bravo!  Variety is the spice of life!   

[HuliHuli]

9 minutes ago, eroller said:

I'm comparing prices right now for a cruise in early December.  MSC is by far the lowest.  $343 for 7 days or $595 for 11 days.  You really can't beat that.  I know pricing is always going to vary, but generally I find MSC a better value than NCL.  I don't care about the "freebies" that really are not free.  

Comparing prices is something everyone should do, but as I credit you for knowing, it is not simply the "cruise fare" or sailing days, but rather the full cruise cost, i.e., costs to get to and from the home port, onboard drink and dining cost (whether packaged or ala carte) and a host of other costs and fees (nickles & Dimes to some) that must be paid...vs...the 'perceived' value returned that results in your value proposition for any specific cruise vacation.  Fortunately, that is a decision on which we don't all have to agree and get to make for ourselves,  Enjoy MSC if that is your choice.

[eroller]

2 minutes ago, HuliHuli said:

Comparing prices is something everyone should do, but as I credit you for knowing, it is not simply the "cruise fare" or sailing days, but rather the full cruise cost, i.e., costs to get to and from the home port, onboard drink and dining cost (whether packaged or ala carte) and a host of other costs and fees (nickles & Dimes to some) that must be paid...vs...the 'perceived' value returned that results in your value proposition for any specific cruise vacation.  Fortunately, that is a decision on which we don't all have to agree and get to make for ourselves,  Enjoy MSC if that is your choice.

 

 

Absolutely, but the base price is a starting point.  Generally on all major lines the base price will include the cabin, some drinks (water, coffee, juice in the AM, etc), most entertainment, and all the complimentary dining venues.  You could literally go on the cruise at the base price and not spend an extra dime except for gratuities.  Everyone differs when it comes to extra expenses.  Cocktails, speciality restaurants, internet, spa, shore excursions, etc.  Some require that on vacation and others don't.  After 125+ cruises, I really don't need to spend tons of extra money.  Also it depends on who I'm sailing with (husband, friends, family, or solo).  That makes a big difference in my onboard spending.  Sometimes those "free" bundled packages can be a decent value and other times they hold no value, to me at least.  

[cliffd64]

46 minutes ago, graphicguy said:

 

 

MSC at one time was a pretty good deal.  I've sailed the Divina and Meriviglia.  Now, they've brought their pricing more in line with all the other cruises coming out of Miami.

Another good thing about MSC is they allow you to transfer your status level from other lines....

[Zippeedee]

34 minutes ago, newmexicoNita said:

Now that you have finished with your rant, do you feel better? 

Boy was I shocked when I went to the store the other day and found out chuck roast was $5 a lb. and worse, butter was over $4 a lb. Must be that super market we use is out to get us, big time!!!!

I usually agree with your stance on this stuff, but at my preferred supermarket, the tag line is "more for your dollar". Of course prices are going to increase with inflation, wages, etc but they could at least pretend they are keeping the customer and service in mind. Yes, the call is for stockholders, but they know many stockholders are also their customers. No one wants to hear that they are just a walking wallet. Combined with the decreases in service, perks, etc. it leaves a bad taste.

[newmexicoNita]

10 minutes ago, Zippeedee said:

I usually agree with your stance on this stuff, but at my preferred supermarket, the tag line is "more for your dollar". Of course prices are going to increase with inflation, wages, etc but they could at least pretend they are keeping the customer and service in mind. Yes, the call is for stockholders, but they know many stockholders are also their customers. No one wants to hear that they are just a walking wallet. Combined with the decreases in service, perks, etc. it leaves a bad taste.

I am both a stock holder and a frequent cruiser, though the cruising days are about to end. In fact they pretty much have ended with one, exception next month. When  hear people complain about service, food, whatever I have to wonder: if everything is so bad why are the ships going out pretty close to full and if they were not the company would be losing money instead of having the biggest profit of the 3 major mass marketed lines this year? No one seems to be able to answer this one. 

[FLAHAM]

As soon as other lines implement solo cabins as good as and as cost-effective as NCL Studio cabins, which I greatly enjoy, I will consider them.

[Zippeedee]

Just now, newmexicoNita said:

I am both a stock holder and a frequent cruiser, though the cruising days are about to end. In fact they pretty much have ended with one, exception next month. When  hear people complain about service, food, whatever I have to wonder: if everything is so bad why are the ships going out pretty close to full and if they were not the company would be losing money instead of having the biggest profit of the 3 major mass marketed lines this year? No one seems to be able to answer this one. 

I used to think that way too, and I don't have an answer. My Getaway TA last year was a nightmare in many ways, but not bad enough that I won't give NCL one more try with my Bliss Panama Canal next year. There will always be new people who don't know what they are missing that will take our place when we move on.

[RNRcruisers]

I agree that it is distasteful reading the interview. We all know that they are in business to make money but hopefully it is also important to provide the customer with a valuable service. Personally, NCL isn't my favorite but I avoid the extra fees and find them to be comparable in price and value to other lines. When they aren't then I won't be on them.

[NLH Arizona]

I cruise NCL, Celebrity and Crystal.  I've never found a cruise I was interested in lower on Celebrity or, obviously on Crystal.  I know some have, but unfortunately I haven't.  As far as the nickel and diming, no one can be nickled and dimed, it is the passengers choice, just like I choose to eat only in the specialty dining venues on NCL, where I've only had one bad meal in all my cruises.  I enjoy all three lines and am willing to pay more for Crystal and Celebrity when I find a cruise on them I like.  Everyone one is different when putting a value of a product to decide if it is worth it to them or not.

 

As far as the price hike items the OP mentioned, if it is not important to a passenger, they don't have to use the items; such as, specialty dining, drink package, room service, etc., the same applies on Celebrity where they are now charging $14 a day per person if you pick the classic beverage package as a perk. If you use room service on Royal Caribbean you will be charged $7.95, plus a gratuity.  In other words, all cruise lines find ways for a passenger to part with their dollars and isnt that what every business does, be it cruise lines, department stores, restaurants, etc.

 

I did look at MSC, but now I have two friends who tried them and both were so disappointed with the food and service, that one went back to Royal Caribbean and the other went back to Holland America, so I'll stick with the three lines I like.

 

BTW, I think many would be shocked to listen to the shareholders conference calls of their favorite businesses.  I'm not a stock owner, other than what is done by my financial planner, so I've not been on one of the calls, but have friends that are on boards of some businesses. 

 

If you don't like how a business is run, what they charge, etc., don't give them your money.

Edited November 11, 2019 by NLH Arizona

[Phaedrus78]

Hell, I WISH someone would beat NCL as a value proposition for me, because I'd like to do some sampling of other lines.  

 

But as long as NCL keeps including the open bar perk, along with the others they keep bringing to the table, they just keep coming up cheaper on total than any of the other major cruise lines.  

 

But then, my criteria for what I'm looking for might be different than some.  

[ray98]

LOL.....a quote that describes capitalism....shocking I say !

 

 

There isn't a corporation out there that isn't trying to maximize their market, it is what keeps them alive.

[eroller]

44 minutes ago, ray98 said:

LOL.....a quote that describes capitalism....shocking I say !

 

 

There isn't a corporation out there that isn't trying to maximize their market, it is what keeps them alive.

 

I don’t think anyone is disputing that or has mentioned that companies are not out to make $$.