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Paulchili

What does the future of cruising look like?

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We all know the financial difficulties the cruise line companies are facing now and in the near future. Stocks of most of them fell 25% just today, there are many cancellations and few bookings, lots of refunds, compensations, last minute discounts, etc.

Assuming that most companies will survive this crisis, it would appear logical that they would want to and need to make up for these losses in some way. The options are limited - the most obvious ones being higher fares or cutting back on the product in some way. For example, Oceania’s budget for food is among the highest, if not the highest, in the industry. Cutting back on this would change Oceania significantly for me and perhaps others.

Neither one of these two Above options is a pleasant prospect.

What do people think?

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13 minutes ago, Paulchili said:

We all know the financial difficulties the cruise line companies are facing now and in the near future. Stocks of most of them fell 25% just today, there are many cancellations and few bookings, lots of refunds, compensations, last minute discounts, etc.

Assuming that most companies will survive this crisis, it would appear logical that they would want to and need to make up for these losses in some way. The options are limited - the most obvious ones being higher fares or cutting back on the product in some way. For example, Oceania’s budget for food is among the highest, if not the highest, in the industry. Cutting back on this would change Oceania significantly for me and perhaps others.

Neither one of these two Above options is a pleasant prospect.

What do people think?

 Doom For the Cruise industry I fear .

https://www.express.co.uk/news/world/1252986/Coronavirus-italy-cases-latest-news-lockdown-Conte-Lombardy-Rome

 Italy has completely shut down I fear Spain will be next then the rest of Europe , not sure where ships will be able to dock after April .

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Paul, I bought Oil today on Dip. 😉  I really believe this will be under control in 6 to 8 months. However, we have a confirmed case here in Aspen today. A 20 yr old Aussie and 13 of her buddies now have symptoms and are getting tested. 

I only ski in the morning, no restaurants, no flying, cruising, or travel. Laying Low to hopefully stay healthy and keep our little Community safe too.

 

I am not Doom and Gloom and this will be a temporary setback for cruise lines.

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Obviously, there is too much capacity right now for demand.  One only has to look at the airlines cutting capacity.  Itineraries will have to be cut back, move overs to remaining itineraries offered, and some ships sidelined for at least short term.  Hopefully, creditors will realize this a short term bump and work with the cruise lines. 

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How much protection/help are the cruise lines getting from their insurance for events like this? If they receive significant compensation, can the insurance companies handle this?

I certainly don’t have the answers for any of this.

My question was - can the cruise industry continue after this as if nothing happened or will this lead to some significant changes?

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Will partially depend upon their debt ratios and how long it lasts.

 

I’m not gloom and doom on this. We have a two week France cruise on Uniworld in July. I fully expect this to be past we’ll before then.

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Paul, the food on Riviera this cruise right now has been the best ever on our 12 Oceania Cruises.  Great service as well.  So far so good! 

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2 minutes ago, pinotlover said:

I’m not gloom and doom on this. We have a two week France cruise on Uniworld in July. I fully expect this to be past we’ll before then.

In other words, you feel that Oceania’s cruises in, say this October, will be just like they were always before - no changes at all. The company will take the losses and say - tough luck but no big deal, we don’t have to make up for those losses in any way.

Stockholders be damned.

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7 minutes ago, CintiPam said:

Paul, the food on Riviera this cruise right now has been the best ever on our 12 Oceania Cruises.  Great service as well.  So far so good! 

That’s great to hear - thanks.

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4 minutes ago, Paulchili said:

That’s great to hear - thanks.

More variety in the offerings is the most noticeable positive (spouse does not eat pork, seafood or fish so this has made him very happy); high quality (excellent beef offerings, even in the GDR), lots of international cuisine,  both Asian and South American, seafood offered at most meals, more vegetarian and vegan offerings, etc.

 

I have eaten seafood daily to my heart’s content! ❤️

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10 minutes ago, Paulchili said:

In other words, you feel that Oceania’s cruises in, say this October, will be just like they were always before - no changes at all. The company will take the losses and say - tough luck but no big deal, we don’t have to make up for those losses in any way.

Stockholders be damned.

I believe earnings will be affected thus cruise line stock prices will be decreased for quite awhile. 
 

Oceania is a product priced strongly in the cruise market place. They don’t have much room to negatively affect service or food quality while protecting their cruise prices. 
 

NCL’s financial performance will have a much greater impact than Oceania in the stock price. 
 

Any changes? That new ship could easily be delayed or cancelled.

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Perhaps this will delay many of the new builds across the industry until the industry resumes to previous capacity levels and personal feeling is that industry may have now too many ocean/river ships sailing as some ports struggle to handle larger ships.  We always wonder 'does the world really need to have more floating amusement ships for 4,000+'! 

On the positive side, it may provide improved 'industry' health sanitation standards for every day and especially at time of risk e.g., GI, Noro and heaven forbid another COVID19; expect there are standards now but, maybe areas for improvement (still wonder why it is only Princess line that has COVID-19).

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Our DD works for Azamara as a Business Development Manager...for the So Cal, AZ and NV markets. This means that she is the interface between AZ and the TAs in that region. We heard from her today ...and at least on the AZ front there is a hiring freeze and all non essential travel for AZ employees is banned. She is very concerned for the TAs and their income and business...and feels this may have long term consequences for the cruise industry. The dry dock for the "Journey" has been modified and they are quite concerned for what will be the status of the ships once the normal move to Europe should occur in April Just an FYI from her perspective. 

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When you have national public health officials stating that people should not cruise it is a significant problem for the industry.  Princess totally mishandled the Diamond Princess coronavirus outbreak and now the industry is paying for it.  Clearly cruise ships can be environments where viruses can be quickly passed from passenger to passenger.  I think people who otherwise thought a cruise ship was a very safe environment, especially those with pre-existing health issues may rethink cruising in the future.  Just because you are on vacation doesn't mean nothing bad can happen to you. I also hope this is the end of the self serve buffet you find on most ships.  There must be no better way to spread disease than a buffet.  

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We have the 15 nts Ruby Princess booked RT SF-HI for 2021.  I just checked the price to see if there was a drop.  Nope, price is actually $300 more PP than when we booked.  All things shall pass.  

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Posted (edited)
5 hours ago, TrulyBlonde said:

Paul, I bought Oil today on Dip. 😉  I really believe this will be under control in 6 to 8 months. However, we have a confirmed case here in Aspen today. A 20 yr old Aussie and 13 of her buddies now have symptoms and are getting tested. 

I only ski in the morning, no restaurants, no flying, cruising, or travel. Laying Low to hopefully stay healthy and keep our little Community safe too.

 

I am not Doom and Gloom and this will be a temporary setback for cruise lines.

The temporary set back will  cost billions in negative cash and profits........  When they come back they will either have to liquidate capital assets, /declare bankruptcy .  or  adjust what and how  they budget and what they charge. 

 

 I do not expect fares going down.   I do expect  the cruise industry that emerges from this panic to be significantly different.   Just how  remains to be seen.

 

Since two major costs are Labor and Fuel, I can see parking  a lot of ships  and letting the crews go on furlough.     With no overhead of labor and fuel  there will be significant saving     I can see the O fleet mothballed and  the R ships re deployed..  Less beds to fill,than the bigger boys.......Just a thought

Edited by Hawaiidan

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We will have to see what the impact of bailout package would be if it is offered to the cruise industry. I am concerned for my landed based TA whom I have worked with since 2005. Basically a mom and pop operation who specialize in cruises. Also the crew could be hit hard.

 

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I think a lot of folks need to take a deep breath, the rest need to do their best to remain calm. This too shall pass, just like most of these things. It's not the end of the world, Armageddon is not here. 

 

Cruising will go on, same as it ever was. The only difference is I won't be able to go due to losses in the market from over reactionary types with online trading accts. 

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I agree, ORV.  I doubt that there really would be any significant changes to the style and manner in which each line operates, that would just confuse and drive customers away.  And vacation dollars may be a bit harder for some people to come up with.  This market collapse and the sharp reduction in interest rates leading to declining incomes is going to take some time to recover from.  There may be a significant dent in disposable income for a lot of folks.  No money, no cruises.  

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19 minutes ago, Hanoverian said:

This market collapse and the sharp reduction in interest rates leading to declining incomes is going to take some time to recover from.  There may be a significant dent in disposable income for a lot of folks.  No money, no cruises.  

But surely this has to affect the cruise lines in some way.

I am not suggesting that this is the end of cruising - this too shall indeed pass. But how will the cruise lines recover in view of the huge losses they face now and with fewer customers in the near future due to both fear of cruising and lack of funds.

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19 hours ago, TrulyBlonde said:

Paul, I bought Oil today on Dip. 😉  I really believe this will be under control in 6 to 8 months. However, we have a confirmed case here in Aspen today. A 20 yr old Aussie and 13 of her buddies now have symptoms and are getting tested. 

I only ski in the morning, no restaurants, no flying, cruising, or travel. Laying Low to hopefully stay healthy and keep our little Community safe too.

 

I am not Doom and Gloom and this will be a temporary setback for cruise lines.

Agree with you 100%   Just canceled a Regent cruise to Alaska in June.  Time to lay low and come back to fight another day.  This too will pass.  Quickly I hope.  Stay safe.   

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Posted (edited)

You really need to look at Debt and the costs and ABILITY to service the debt.  The two companies that are in the worst positions are NCL and Crystal.  It really is going to depend on how long this keeps going into the prime Med cruising season where both lines earn a majority of their revenue.

 

I can also see lines reviewing their CAPEX and we could likely see postponements/delay of new ship building for NCL, Oceania, Regent, and Crystal.  For O -- maybe even retiring one of the R class ships??

Edited by PaulMCO

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1 hour ago, ORV said:

I think a lot of folks need to take a deep breath, the rest need to do their best to remain calm. This too shall pass, just like most of these things. It's not the end of the world, Armageddon is not here. 

 

Cruising will go on, same as it ever was. The only difference is I won't be able to go due to losses in the market from over reactionary types with online trading accts. 

I am in the same boat ORV...... however I pulled the stock I need for this years adventures out  Jan 5..... I agree this is an emotional issue and the market responds to emotion.   This is a great time to buy in

No one looks at the fact that the regular flu has been had by 180 million in the us and 18,000 deaths........Corona  about 100 infected and 23 deaths.....     Look at the big picture

or as paul would say    its a  LASTR   because AIOB  , IR

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26 minutes ago, PaulMCO said:

You really need to look at Debt and the costs and ABILITY to service the debt.  The two companies that are in the worst positions are NCL and Crystal.  It really is going to depend on how long this keeps going into the prime Med cruising season where both lines earn a majority of their revenue.

 

I can also see lines reviewing their CAPEX and we could likely see postponements/delay of new ship building for NCL, Oceania, Regent, and Crystal.  For O -- maybe even retiring one of the R class ships??

I see the big ships being a liability  more crew, more restaurants, more cabins to fill  more fuel burn...R ships  less beds to fill, less labor less fuel  less food consumption. greater chance of higher occupancy.   Look at Brandon's problem  brand new line coming out of the box...big debt, huge potential decrease in market due to the stock scene limiting avail capital for people.  HMBTITST

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