Why is Celebrity playing "chicken" with its customers

[GRBlizz]

By now it is patently obvious that cruises in Europe cannot happen as advertised in April or probably May. Most of the ports are closed to tourists, the countries are on lockdown, and all major countries of the world have told their citizens to stay off cruise ships and away from many European countries. For countries with socialized medicine, they have added the power of denying insurance coverage to citizens who go against these "advisories."

 

Meanwhile, Celebrity says its April and May cruises in Europe (and TAs) are still going as scheduled. Really? How?

 

So we passengers are caught in a game of chicken. If we take the CWC option, we get 100% FCC. But if they cancel, we get 25% more FCC or the option of a refund. That's a big difference, especially if FCC is of no use to you for whatever reason. At least $1000, and likely more.

 

I understand Celebrity is probably trying hard to figure out exactly how far out to cancel. Fine. But if it would be useful to know how many people actually intend to sail on a given date before making those decisions, why not make the cancellation offer retroactive? Then people like us (and many on our Roll Call) can go ahead and cancel and they'll know for sure what would be the capacity were they to go ahead. Failing that, make the call, please. It's less than four weeks away!

 

Respectfully, a loyal US-based Celebrity cruiser who is anxiously waiting for the day when the European market is open to cruising again.

 

 

 

 

[WonderMan3]

We know why. They want you to cancel first so they don't have to issue a full refund, just future cruise credit.

Edited March 17, 2020 by WonderMan3

[bubbachief]

Copy that

[UnorigionalName]

Pretty sure all the cruise lines have switched to survival mode.  The goal is no longer to maximize revenue, it's to prevent bankruptcy.  A little making people upset now is probably worth it to save cash on hand.  Their boards are probably all panicking and crunching the numbers.  Every cruise that sails and every bit of cash they keep in will let them survive for a little bit longer before bankruptcy.  It's a waiting game between coronavirus and their cash.

[bluwes]

There are over 360 cabins showing available on our 13th April Reflection sailing. Its previously been shown as cancelled then it suddenly was taken of the list and eventually shown as available. 

Our flights from the UK have been banned from flying, so we cant even get there if we wanted to. We have cancelled our pre cruise hotel in Fort Lauderdale without penalty. We are now waiting for Celebrity to cancel so we can have the option of a cash refund rather than a FCC.

If they don't cancel, what would happen if  over half the remaining stateroom occupants cancelled 48 hours before sailing

 

[GRBlizz]

8 minutes ago, bluwes said:

We are now waiting for Celebrity to cancel so we can have the option of a cash refund rather than a FCC.

If they don't cancel, what would happen if  over half the remaining stateroom occupants cancelled 48 hours before sailing

 

 

I agree with you. They must not need to know what their "true" passenger load is, presumably because they can read the signs, Based on the Roll Call for my April 13 Apex cruise, there are a lot of people holding onto bookings who have no intention of cruising,

[Ontario Cruiser]

Yes this is ridiculous It is going to be crazy 48 hours before each transatlantic crossing. Just do it because we know a huge percentage are waiting.I know we are

Ontario Cruiser

[Life Buoy]

Their chickens will come home to roost.

[kearney]

Did I miss something or am I confusing cruise lines... but can't you cancel within 48 hours and get your money back? Or was that just Royal. If Celebrity has that offer, why not just go ahead and cancel? what am I missing?

[cruiserchuck]

1 minute ago, kearney said:

Did I miss something or am I confusing cruise lines... but can't you cancel within 48 hours and get your money back? Or was that just Royal. If Celebrity has that offer, why not just go ahead and cancel? what am I missing?

 

If you cancel, you get FCC, not money back.

[DrKoob]

1 hour ago, UnorigionalName said:

Pretty sure all the cruise lines have switched to survival mode.  The goal is no longer to maximize revenue, it's to prevent bankruptcy.  A little making people upset now is probably worth it to save cash on hand.  Their boards are probably all panicking and crunching the numbers.  Every cruise that sails and every bit of cash they keep in will let them survive for a little bit longer before bankruptcy.  It's a waiting game between coronavirus and their cash.

 

RCL Corp and Carnival are nowhere near bankruptcy (Can't say the same for Norwegian). They all have huge budgets for upgrades and new builds just waiting to happen. They will just put those plans on hold. The Amplification of Royal ships and the upgrade of the rest of the X fleet will be put on hold until the crisis is over and people can sail again. The same with Beyond. Work has started, but they can delay payments or stop work at this point. 

The FCC incentive is just to keep you as a customer. As a travel professional, all my first time cruisers (who don't have a clue) have cancelled. All my long-time cruisers are asking if there are any great bargains out there. 

 

We have a cruise on Flora that we have not made final payment on yet. We are supposed to sail on August 2. I will make that payment in April and hope that we can go. If we can't I will wait until the final day to see what they offer me. We still want to go and have budgeted for it. Who knows, I could wind up sailing in a suite with my 225% FCC. If X holds my money for three months, I really don't care. Our travel fund makes less than 2% interest (to keep it liquid) so if I make back 225%, then that's super. BTW: My air is booked with X so that is covered either way. 

 

Be smart and just wait. The biggest reason they are asking you to wait is that they are beyond swamped. The cruises I have had to cancel have taken me 2-3 hours of hold time. Just hang on. If nothing changes, you get more to make sure you cruise. Don't be like those people who demanded refunds on cruises going next week about a month ago. They got their refunds but if they had waited, they would have gotten a whole lot more.

 

Jim

 

PS: 

If you want to get the shareholder's credit on future cruises, this is a great time to buy RCL stock. It's down below $30. 

 

Edited March 17, 2020 by DrKoob

[GRBlizz]

2 minutes ago, kearney said:

Did I miss something or am I confusing cruise lines... but can't you cancel within 48 hours and get your money back? Or was that just Royal. If Celebrity has that offer, why not just go ahead and cancel? what am I missing?

 

If you cancel you get 100% future cruise credit. If they cancel on you, you get 125% credit or your money back. If you plan to cruise again in the time period allowed (through 2021), 25% extra is a pretty sizable sum. And if you don't plan to cruise in that time period, it's either 100% back or a total loss.

[Roger88]

1 hour ago, WonderMan3 said:

We know why. They want you to cancel first so they don't have to issue a full refund, just future cruise credit.

This was exactly what I thought. Its also some kind of game between the cruise company and the insurance agency. The cancelation of the cruise should be approved and legal in some terms for them to initiate the initial cancellation. Then they have to decided what to do with your money. Giving it back to you does not sound like a good idea, so the only thing that seems to be more viable is either offering you another cruise on a later date or just issuing you a gift card with credit equal to your pay to pay on board of your next cruise with them 

[GRBlizz]

4 minutes ago, DrKoob said:

Be smart and just wait. The biggest reason they are asking you to wait is that they are beyond swamped. The cruises I have had to cancel have taken me 2-3 hours of hold time. Just hang on. If nothing changes, you get more to make sure you cruise. Don't be like those people who demanded refunds on cruises going next week about a month ago. They got their refunds but if they had waited, they would have gotten a whole lot more.

 

 

That's why Celebrity should just offer everyone the "we cancel" deal, so no one feels like a chump and they know where they stand.

[DrKoob]

7 minutes ago, GRBlizz said:

 

That's why Celebrity should just offer everyone the "we cancel" deal, so no one feels like a chump and they know where they stand.

 

If you get a 225% FFC why would you be a chump? Are you ever going to cruise Celebrity again? Then don't you think you would use it. If you are pretty much sure you will never cruise with them again, just cancel. But if you think you might, why not wait? I know exactly where I stand. I am either going where I want to go (in which case I am happy) or I am getting 225% FFC when they cancel me.

 

Jim

Edited March 17, 2020 by DrKoob

[downsmead]

Not sure where you get the 225% FCC, if you cancel under CwC, you get 100%FCC. If X cancel, you get the option of 100% cash refund or 125% FCC. 
There is a lot of difference between 125% and 225%!

[UnorigionalName]

23 minutes ago, DrKoob said:

 

RCL Corp and Carnival are nowhere near bankruptcy (Can't say the same for Norwegian). They all have huge budgets for upgrades and new builds just waiting to happen. They will just put those plans on hold. The Amplification of Royal ships and the upgrade of the rest of the X fleet will be put on hold until the crisis is over and people can sail again. The same with Beyond. Work has started, but they can delay payments or stop work at this point. 

The FCC incentive is just to keep you as a customer. As a travel professional, all my first time cruisers (who don't have a clue) have cancelled. All my long-time cruisers are asking if there are any great bargains out there. 

 

We have a cruise on Flora that we have not made final payment on yet. We are supposed to sail on August 2. I will make that payment in April and hope that we can go. If we can't I will wait until the final day to see what they offer me. We still want to go and have budgeted for it. Who knows, I could wind up sailing in a suite with my 225% FCC. If X holds my money for three months, I really don't care. Our travel fund makes less than 2% interest (to keep it liquid) so if I make back 225%, then that's super. BTW: My air is booked with X so that is covered either way. 

 

Be smart and just wait. The biggest reason they are asking you to wait is that they are beyond swamped. The cruises I have had to cancel have taken me 2-3 hours of hold time. Just hang on. If nothing changes, you get more to make sure you cruise. Don't be like those people who demanded refunds on cruises going next week about a month ago. They got their refunds but if they had waited, they would have gotten a whole lot more.

 

Jim

 

PS: 

If you want to get the shareholder's credit on future cruises, this is a great time to buy RCL stock. It's down below $30. 

 

 

Carnival is relatively safe, they have a relatively good sized war chest.  But why do you think all 3 cruise lines just tapped their revolving credit to the max?  NCL stock was cratering until they basically mortgaged off the Bliss for cash.  Everyone is focusing on cash.

 

RCCL is in trouble because they are leveraged.  Recently their business was booming and instead of using their income to reinvest in the company, they gave the money to shareholders and took out giant loans for their recently completely investments (coco cay, Symphony, recently completed amplifications).  So yes, all the cruise lines were planning on spending huge amounts of money to upgrade and invest, but none of the companies were saving revenue to do so.  They were all depending on cheap cash and using huge loans to finance these investments.

 

The question isn't if the cruise business will be around in 5 years.  Everyone is pretty certain that it will be.  The question is if these large cruise lines will exist in their current form, and if current holders of their stock will retain any equity in the company in 5 years.  No one is thinking they will go chapter 7 and they'll sink the ships or something when no one wants to run them.  But they may need restructuring, and restructuring may not include any equity for current shareholders.  That is the risk.

 

That's why the stocks on all 3 responded positively to big cash moves.

[Eglesbrech]

8 minutes ago, downsmead said:

Not sure where you get the 225% FCC, if you cancel under CwC, you get 100%FCC. If X cancel, you get the option of 100% cash refund or 125% FCC. 
There is a lot of difference between 125% and 225%!

Perhaps it’s different in the US? I would be interested to know if it is as well.

[Guindalf]

8 minutes ago, UnorigionalName said:

 

Carnival is relatively safe, they have a relatively good sized war chest.  But why do you think all 3 cruise lines just tapped their revolving credit to the max?  NCL stock was cratering until they basically mortgaged off the Bliss for cash.  Everyone is focusing on cash.

 

RCCL is in trouble because they are leveraged.  Recently their business was booming and instead of using their income to reinvest in the company, they gave the money to shareholders and took out giant loans for their recently completely investments (coco cay, Symphony, recently completed amplifications).  So yes, all the cruise lines were planning on spending huge amounts of money to upgrade and invest, but none of the companies were saving revenue to do so.  They were all depending on cheap cash and using huge loans to finance these investments.

 

The question isn't if the cruise business will be around in 5 years.  Everyone is pretty certain that it will be.  The question is if these large cruise lines will exist in their current form, and if current holders of their stock will retain any equity in the company in 5 years.  No one is thinking they will go chapter 7 and they'll sink the ships or something when no one wants to run them.  But they may need restructuring, and restructuring may not include any equity for current shareholders.  That is the risk.

 

That's why the stocks on all 3 responded positively to big cash moves.

Can you quote sources for all the so-called facts you are stating? I suspect not.

 

I’m sure there are goings-on behind the scenes that we’re totally unaware of in order to minimize the damage that everyone is going through. I’m not suggesting that they are doing the right thing, because who actually knows what the right thing is! You can’t unring a bell, so I’m sure the cruise companies (all of them) will weigh up all their options before making any announcements. 
 

Princess, for example, stated that anyone who didn’t cancel would be ‘rewarded’ with a $200 OBC, which has now been removed. 
 

It would be foolish for any company to cancel before they’re sure it’s necessary. We can see it is and I’m canceling my Alaska cruise scheduled for may 17th, but waiting to hear from Princess first. I can get almost all of my money back if I cancel before the 22nd otherwise it becomes 50/50 refund/fcc.

[UnorigionalName]

4 minutes ago, Guindalf said:

Can you quote sources for all the so-called facts you are stating? I suspect not.

 

I’m sure there are goings-on behind the scenes that we’re totally unaware of in order to minimize the damage that everyone is going through. I’m not suggesting that they are doing the right thing, because who actually knows what the right thing is! You can’t unring a bell, so I’m sure the cruise companies (all of them) will weigh up all their options before making any announcements. 
 

Princess, for example, stated that anyone who didn’t cancel would be ‘rewarded’ with a $200 OBC, which has now been removed. 
 

It would be foolish for any company to cancel before they’re sure it’s necessary. We can see it is and I’m canceling my Alaska cruise scheduled for may 17th, but waiting to hear from Princess first. I can get almost all of my money back if I cancel before the 22nd otherwise it becomes 50/50 refund/fcc.

 

??? it's all over the news:

https://www.reuters.com/article/revolver-drawdown/us-companies-eye-credit-lines-as-pandemic-worsens-uncertainty-soars-idINL1N2B53ER

https://www.barrons.com/articles/cruise-operator-carnival-3-billion-credit-facility-coronavirus-51584372413

 

Sorry it was the Epic, not the bliss:

https://www.seatrade-cruise.com/news/nclh-secures-additional-675m-liquidity-amid-coronavirus-uncertainty

 

https://www.barrons.com/articles/batten-the-hatches-cruise-line-investors-the-industry-faces-a-tough-but-surmountable-slog-51584113133

"Farley, however, notes that the downturn doesn’t necessarily equate to cash depletion for Carnival and its peers. These companies, she says, are offering incentives on cancellations to take a future cruise credit worth a 25% higher amount for two years, with an option to get the original amount of cash back after two years if the credit isn’t used."

 

[idh2019]

15 minutes ago, downsmead said:

Not sure where you get the 225% FCC, if you cancel under CwC, you get 100%FCC. If X cancel, you get the option of 100% cash refund or 125% FCC. 
There is a lot of difference between 125% and 225%!

 

Special deals for special people?

 

Anyway back to topic. We are NOT going on our Celebrity cruise. We got back from a Far East cruise on 9th January (not with Celebrity). Covid-19 kicked off in China the following week. We realised how lucky we had been. So we decided about a month ago not to risk our luck again. Yes, the stress levels since then have been high, but we decided we could just about "live with" the loss of all money if that was the worst case scenario. Hard-earned cash lost but health before vacation.

 

Since then the option of FCC from Celebrity and  future flight vouchers from the airlines we have booked with have given us some comfort but would we ever really want to use them in the allowed time frame? Not likely.

 

With the worsening of the disease we see that cancellations and 100% refunds are now likely so we are holding out. Today's UK FCO advice to not to travel anywhere should help and our travel agent is indicating they will be working to cancel all March/April travel for their customers - UK has various regulations in place if things get cancelled so hopefully they should kick in.

 

If we get most of out money back, a big sigh of relief while we face weeks of "social distancing". I can probably cope. My wife needs more than me to talk to 😁

 

PS regarding use of TA in forums - is it travel agent or transatlantic?

[Orator]

In the end Celebrity has always treated me fairly. I suspect that they will in this case. Hopefully they have insurance that will protect them. We really don't know the entire story.

[Georgia_Peaches]

2 hours ago, GRBlizz said:

Meanwhile, Celebrity says its April and May cruises in Europe (and TAs) are still going as scheduled. Really? How?

Right.  It's not looking very likely.  Have you already cancelled/changed your flight arrangements and hotel accommodations?  Were I in your situation, I'd take care of that and then wait out the cancellation to get either the cash or 125% FCC.  I don't think Celebrity thinks they are making that TA as planned.  They are just hoping you'll cancel before they have to...like others have said.

 

I'll play chicken because in the end we will win with the 125% FCC.  Already changed flights and cancelled hotel.

 

Like you, waiting for the world to change back to business as usual.

[Georgia_Peaches]

3 minutes ago, Orator said:

We really don't know the entire story.

Couldn't agree with you more!  And we never will.

[Mytravellove]

1 hour ago, DrKoob said:

 

If you get a 225% FFC why would you be a chump? Are you ever going to cruise Celebrity again? Then don't you think you would use it. If you are pretty much sure you will never cruise with them again, just cancel. But if you think you might, why not wait? I know exactly where I stand. I am either going where I want to go (in which case I am happy) or I am getting 225% FFC when they cancel me.

 

Jim

Jim, Celebrity is only offering 100% cash refund or 125% FCC if they cancel the cruise. However, I know that Princess is offering 225% FFC or 100% cash refund and 50% FFC.