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paulgraff

Carnival can survive?

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Here are my thoughts on all of this: 

 

1 - will I cruise again? Definitely! I have a cruise booked in October and fully plan on going if the ships are sailing and there is not a large number of outbreaks on them happening at that time or a high possibility of getting quarantined away from my home for 2 weeks. 

 

2. Do the cruise lines deserve a bailout? I think they absolutely do. They may not have US registered ships, but they still employee a lot of US citizens not just on the ships but in their various reservations offices. Think of all of your PVPs and Carnival reps answering your phone calls and emails now. Plus when the ships sail they are pumping money in US economies - people are paying money to fly or drive to port cities, staying in hotels pre or post-cruise, eating out and dining at US port cities or US ports of call (Hawaii, Key West, etc.). Think of how much money states like Florida get from tourism and travel. Every bit of that helps to keep those economies going. 

 

It may take time, but I do think Carnival (and other large cruise lines) will come out on the other side of this. 

 

Misty

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President Trump announced that he spoke with Carnival cruise lines and Carnival offered to help with some their ships, if needed.  He later mentioned that the cruise lines are part of the industries that would be helped.

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I'm fine with the bailouts as long as it's mostly directed to paying salaries to the front line employees. Not executive bonuses and payouts. I think the stock will bounce back and I think that Carnival will manage through this- if they don't then the country as a whole is headed for a lot rockier future financially then any of us should ever want to think about. I booked another cruise for August the 15th but I'd go sooner if I could get off work. When I was on the Vista February 29th it was spotless. The terminal did a great job of screening people and I haven't heard of a single person yet sick from that voyage. I'd feel safer there than here in fact. In some ways, and I know it's an unpopular opinion, I think this is starting to balloon bigger than it needs too but in the end I'm hopeful for future and ready to cruise again. 

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7 hours ago, paulgraff said:

Can Carnival survive or do you think they are going to go bankrupt? Their stock is just a little over $9.00 this morning and I heard yesterday they just took out a 2 BILLION loan to help them for the next few months.

 

Also, should a company that registers its ship out of America so they don't have to pay taxes to the US get government support in the form of  a bailout?

 

And finally will you go back to cruising ASAP?

I'll be brief, since it's mostly repeating what others have said:

 

  • SOMEONE in the cruising sphere will survive.  The demand was there before this, and there will be some demand remaining once things die down.  Brands might be shuttered, ships might be sold for pennies on the dollar, and/or there might be some major consolidation.  I think Carnival, the brand and the corporation, are as well positioned as anyone to avoid going under.
  • I'm not in favor of direct bailouts to the cruise industry.  The idea of using idled cruise ships as surplus hospital beds/hotel rooms can be considered a backhanded bailout, which I'm OK with.
  • I have a cruise in November.  I THINK everyone will be ready by then.

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Posted (edited)
7 hours ago, N7786W Flyer said:

I posted this elsewhere, but the subject of the article seems to fit the topic of this thread...interesting reading about the investment opportunity (or not) in the 3 major cruise lines here in the USA...

 

Garnett

 

https://investorplace.com/2020/03/3-cruise-line-stocks-that-have-been-crushed-by-the-coronavirus/?mod=mw_quote_news

 

Great article that everybody should read. I've heard similar analysis of the stock values of Carnival and its upside potential if this ever occurs. I'm more concerned right now if and when cruise ships can return to the seas.

 

I'm deadly opposed to bailouts as that fiddles with the basic rules of Capitalism, but if they are based on low interest loans and not outright grants, and since this was in no way the fault of the businesses involved, I'm okay with that.

Edited by glrounds

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4 hours ago, spiritkat090909 said:

Before I learned my lesson, I bought stock in KMart, Lucent tech, Pilgrims Pride, and Vlasic pickles.  That was all I bought. And ALL of them went bankrupt. Three reorganized and are still around, but not my investment. SO, as much as I WANT 100 shares of Carnival Corp. at bargain basement price, I am doing my part and NOT buying so they won't be guaranteed to go out of business. 😉  I no longer buy any stock.  My savings account is on the hoof: cows.  If the price goes down, we'll just eat them instead of selling them.  And the returns are pretty good for the most part. Double after year 3. lol

Whatever you do, PLEASE don't buy any Carnival stock! lol.

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5 hours ago, cltcruiser said:


There are plenty of US citizens working on Carnival ships. 
 

Also, I believe all of the port cities would vehemently argue with you that there is a compelling reason to keep the ships going out of there. 
 

It’s a sticky issue without easy answers. 

One of the things I enjoy doing on a turn around day on a B2B is to watch the port activity. I get up early and watch the many semi trucks arrive, driven by Teamsters who make good money, and staging by port stevedores, who also make good money. I watch them loading the weekly consumable supplies, and it is interesting how they are staged in order to be loaded by type of item. Having worked in materials management and logistics for over 40 years I find it to be a well oiled operation. I am told the cruise port stevedores are full time port employees, and most of the cruise ship turn around activity is done on weekends, which equates to overtime for many of them.

On the last turnaround day, I estimated over $300,000.00 worth of consumable supplies were staged for loading. In addition to that, I read the average fuel consumption to be approximately 250 tons per day, as I watched the fuel barge arrive for refueling. All of that was being delivered from the port area. With two ships home porting at that facility and turning around almost on a weekly basis, that one dock generates millions of dollars in American supplied goods and services every year. And I am confident that milk and dairy products, etc. are not being imported for loading onto the ship. The same for most of the beer, hard liquor, and sodas loaded by the skid. Perhaps half of the wine is imported, but is distributed domestically.

If you take the number of suppliers involved, and the distribution, transportation and labor involved times the number of ships restocking domestically every week, the monetary value is enormous and well work sustaining, regardless of the nationality of the crew members.

As for taxes, every cruise passenger generates money for every port they enter or leave. Don't worry, government is making money off the cruise industry. Now as for other means of transportation, how much does the cruise industry cost the government in direct to industry costs? Especially when compared to airlines (airports, for example) or trucking (highways for example) Post are primarily costed by freight, imports and exports of goods.

So in my opinion targeting the cruise industry is misguided. They provide a valuable service, and spend vast amounts of money with domestic businesses, and far less cost to government than other industries.

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25 minutes ago, glrounds said:

 

 

 

I'm deadly opposed to bailouts as that fiddles with the basic rules of Capitalism, but if they are based on low interest loans and not outright grants, and since this was in no way the fault of the businesses involved, I'm okay with that.

That's what they are so the term "bailout" is misleading.  

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7 hours ago, Host Carolyn said:

I

With so much of the country and so many ports on lockdown and businesses closed I don't see how cruises could start up again for at least a month after the virus peaks....and who knows how long on that will be. I tend to be optimistic by nature but wondered when cruises were halted why it wasn't at least late May.  

Sadly, all that is true(not the you tending to be optimistic part....😉).  While they would LOVE to start 4-10, I can not see a path to do that.  Whether true or not, we will see.  Hope I am proven wrong on this.  

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7 hours ago, spiritkat090909 said:

Before I learned my lesson, I bought stock in KMart, Lucent tech, Pilgrims Pride, and Vlasic pickles.  That was all I bought. And ALL of them went bankrupt. Three reorganized and are still around, but not my investment. SO, as much as I WANT 100 shares of Carnival Corp. at bargain basement price, I am doing my part and NOT buying so they won't be guaranteed to go out of business. 😉  I no longer buy any stock.  My savings account is on the hoof: cows.  If the price goes down, we'll just eat them instead of selling them.  And the returns are pretty good for the most part. Double after year 3. lol

Around here many an old timer supplements their social security with Angus beef.its money in the bank either way.i don't have enough dirt for cows I raise sheep.luckily I like lamb just as good as beef or pork.

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15 minutes ago, scpirate said:

Around here many an old timer supplements their social security with Angus beef.its money in the bank either way.i don't have enough dirt for cows I raise sheep.luckily I like lamb just as good as beef or pork.

Lol, I have no idea what this analogy means........it is an analogy....right?😎

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I really don't think cruises will begin again in April.  I truly think it will at least be May, if then. The reason being is that the cases are still increasing.  I don't think we will peak for another 2 weeks or more.  They probably won't start cruises again until we have only new cases here and there. 

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I look at it this way. I am a bank that is holding the note on say Carnival cruise line. Would it be in my best interest to let them default leaving me with a bunch of ships that i have no business on how to run. Or, would i simply borrow them funds to get through their tough times knowing they are going to flourish once this bump in the road is over. The bank already borrowed them  more funds this week. 

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22 hours ago, pe4all said:

Hope CCL will survive - have a cruise booked for January 2021!

 

Well, they could survive but have to go through a bankruptcy to do it. Knowing next to nothing about bankruptcy, I have no idea what impact that might have on deposits for your (and my) future cruises. Would we lose them? Would the future cruise credits people have gotten for their cruise being cancelled lose their value?

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Mark these words, the big lines will not be left to die because of this. If anything, they will change some procedures and make some concessions. They are far too important to the local economies that they sail from. They also voluntarily paused their operations, and Carnival is currently assisting the US government. Letting these companies suffer will only further cause the public to lose faith in losing, and those economies will continue to suffer.

 

Now for an even looser prediction, I wouldn't be surprised if the US government finds a way to get some sort of financial return from this, even if it is maintaining an portion of stock.

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I am confident in Carnivals standing and ability to withstand this standstill.

 

I will be back..already scheduled for August 15th 2020 and march 27  2021...i am platinum and have always enjoyed what Carnival offers.   I expect some cutbacks, and possible added costs in the future.   

 

I think they deserve a bailout...they were asked by the president to shut down...they didnt have to (along with all other cruiselines).   Cruises are a huge essential part to many states and islands economies (airlines, restaurants, tour operators, hotels etc)   

 

I think the bailout should be a loan that has to be paid back and the solid cruise lines will be able to do that.  The bailouts from the 2008 period were paid back and there is no reason to expect that these would be any different.

 

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Rough road back for sure, but I absolutely have confidence Carnival and other brands will do it.   Up to this point, cruising was a very popular and affordable vacation option.  It was growing by leaps and bounds and most of the cruise lines were building new ships.

 

It may take some time, but I have 4 booked and will continue to book them as long as I can afford to.  Maybe the ships won't be quite so crowded for a few months - but it will continue to get back to normal in time.

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On 3/19/2020 at 5:28 PM, scpirate said:

Around here many an old timer supplements their social security with Angus beef.its money in the bank either way.i don't have enough dirt for cows I raise sheep.luckily I like lamb just as good as beef or pork.

 

On 3/19/2020 at 5:45 PM, jimbo5544 said:

Lol, I have no idea what this analogy means........it is an analogy....right?😎

 

I know this is a week old, but scpirate quoted someone who doesn't invest in stocks anymore and instead invests in cattle.  Scpirate was relating to others using livestock as an investment too.  Not an analogy, real life in some areas of the country.

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4 minutes ago, pacruise804 said:

 

 

I know this is a week old, but scpirate quoted someone who doesn't invest in stocks anymore and instead invests in cattle.  Scpirate was relating to others using livestock as an investment too.  Not an analogy, real life in some areas of the country.

Thanks 

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On 3/19/2020 at 6:32 AM, paulgraff said:

Can Carnival survive or do you think they are going to go bankrupt? Their stock is just a little over $9.00 this morning and I heard yesterday they just took out a 2 BILLION loan to help them for the next few months.

 

Also, should a company that registers its ship out of America so they don't have to pay taxes to the US get government support in the form of  a bailout?

 

And finally will you go back to cruising ASAP?

1. Yes.  What they are looking for is a backstop for the loans, not a bailout.  Even with the beating they took today the stock is at $14.40.  I bought more the other day and intend to hold it.  

2. They are not part of the bailout package.  Even though millions of dollars in the stimulus package did go directly to foreign countries and have nothing to do with US workers or taxes. 

3.  I intend to sail on the cruises I currently have booked, and then book a lot more after that.    

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Posted (edited)
On 3/19/2020 at 9:48 AM, linbobky said:

Was the Pride of America built here in the U.S? It is flagged US.

 

On 3/19/2020 at 9:52 AM, doublebzz said:

Yes. Ingalls Shipbuilding in Mississipi.

Actually, the Pride of America was only partially built at Ingalls.  The company they were building it for went bankrupt after 9/11, and the yard and the US government (loan guarantees) were stuck with a partially finished cruise ship.  NCL bought the hull, and towed it to Germany for finishing.  This took her US built content below the required level for PVSA compliance, so an exemption to the US built clause of the PVSA was granted in exchange for taking the ship off the government's hands.

 

Now, the US built requirement is only to be PVSA compliant (i.e. able to carry passengers from one US port to another US port, or to make voyages between US ports with no foreign port call), it is not a requirement to be US flagged.  Any of the current ships owned by the major cruise lines could be flagged US, if they were transferred to a US subsidiary of the cruise line (as NCL has done, to meet the US owned clause), they just could not do PVSA voyages.

 

As for Carnival's liquidity, there is really nothing to worry about.  The $2 billion in loan package they took out was likely already in place but unused, and really only amounts to the cost of less than 3 ships.

Edited by chengkp75

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