Solvency of Cruise Lines

[Travelcat2]

rallydave - if being right is so important, you're right about having more knowledge than I do regarding this situation - just as I have more onboard knowledge of Regent than you do.  However, this is not a contest.  If you take my knowledge of Regent Corporate and what I've observed and discussed with Regent crew, officers and passengers during our 34 cruises and pair that with the financial analysis that is being discussed on this thread, perhaps the collaboration could come upon with ideas that would be mutually beneficial to Regent and to the passengers .  Regent needs to fill their ships going forward without diluting the onboard experience.  

 

For clarification purposes, I do know what profit and loss is and know how to do math,  I was not familiar with the terms being used above and was honest enough to admit it.  I could not have spent my career in H.R. without knowing math.  

[rallydave]

5 minutes ago, Travelcat2 said:

being right is so important, you're right about having more knowledge than I do regarding this situation - just as I have more onboard knowledge of Regent than you do

thank you

 

6 minutes ago, Travelcat2 said:

If you take my knowledge of Regent Corporate and what I've observed and discussed with Regent crew, officers and passengers during our 34 cruises and pair that with the financial analysis that is being discussed on this thread, perhaps the collaboration could come upon with ideas that would be mutually beneficial to Regent and to the passengers .  Regent needs to fill their ships going forward without diluting the onboard experience.  

Partially true the financial analysis was only provided by myself.  Others like you only discussed their wants and not even you did any type of analysis nor rationale for what you suggested.  As to discussions with crew and officers or knowledge gained from Regent corporate will not provide you a bit if the information needed to do the neessary financial analysis.  If you think anybody at Corporate has provided you accurate financial information over what is available to the public thru public filings, you are really dreaming.  Disclosing any of that type of informaton to a private party like yourself will get any public company which Regent is part of in deep trouble with SEC.

 

Still waiting for any detailed analysis of type of loss and how it applies from your POV as well rationale for your position other than bottom line it will improve the filling of the ships. 

[Travelcat2]

5 minutes ago, rallydave said:

thank you

 

Partially true the financial analysis was only provided by myself.  Others like you only discussed their wants and not even you did any type of analysis nor rationale for what you suggested.  As to discussions with crew and officers or knowledge gained from Regent corporate will not provide you a bit if the information needed to do the neessary financial analysis.  If you think anybody at Corporate has provided you accurate financial information over what is available to the public thru public filings, you are really dreaming.  Disclosing any of that type of informaton to a private party like yourself will get any public company which Regent is part of in deep trouble with SEC.

 

Still waiting for any detailed analysis of type of loss and how it applies from your POV as well rationale for your position other than bottom line it will improve the filling of the ships. 

 

I did not say that my knowledge of Regent has anything to do with financials.  I would never even want to discuss private issues with people at Corporate or officers onboard a ship - it is none of my business.  

 

As many posters know, we spend a lot of time interacting with officers and crew (when they are not busy - work comes first) on Regent ships.  I've tried to absorb as much information as possible from them as well as from other passengers (mostly cruising friends since we are not particularly social with strangers).   Regent is a hobby - one that I have tried to learn as much about as possible in order to answer questions from "newbies".  

 

So, trying again, what can Regent do to entice passengers to come back on board that does not require lowering fares or unnecessarily affecting their bottom line?

[rallydave]

1 minute ago, Travelcat2 said:

So, trying again, what can Regent do to entice passengers to come back on board that does not require lowering fares or unnecessarily affecting their bottom line?

Don't believe there is anything that will do everything that you are asking about.   The fares and bottom line financials are what they are based on how everything now works.  Change anything to entice new passengers or old ones who have left have to affect fares and bottom line.  They are so interelated that changing anything including fares just has to affect the on board experience as they are completely entwined.   In other words what you are trying to do is virtually impossible.   When you change something other things just have to change.

[CBWIR]

58 minutes ago, Travelcat2 said:

 

 

So, trying again, what can Regent do to entice passengers to come back on board that does not require lowering fares or unnecessarily affecting their bottom line?

Giving you a $500 credit as you suggested in an earlier post is in fact lowering the fare.

[Wendy The Wanderer]

TC, in rallydave's defence, this thread is about solvency, not how much you might know about Regent itself.

[Dolebludger]

The above posts raise a related question in my mind. When Regent sails again, what will the demand be like? Some factors suggest it will be markedly down. People may continue to fear Covid 19 -- not from being on a Regent ship but from all the other public areas one must pass through to reach the ship on the front end, and to reach home on the back end. Many have had their financial ability damaged by a period of unemployment, loss of their investment value, or both. And there is uncertainty about a "second wave" that could halt a ship mid cruise and could strand (or at least inconvenience) the guests. As some of feel that NCLH is on very unstable financial ground there is a possible of trip interruption due to bankruptcy. On the positive side, it seems that many now have FCCs, and they may want to use them fairly quickly. After at least four months of no cruises available, there could also be pent up demand that will boost bookings. So we have two sets of factors working against each other, making it impossible to predict demand level when (and if) Regent cruises again.

[rallydave]

25 minutes ago, Wendy The Wanderer said:

TC, in rallydave's defence, this thread is about solvency, not how much you might know about Regent itself.

Sorry Wendy your post was correct.  I misread it.  Thanks for the post.

Edited April 26, 2020 by rallydave

[Mjflowers]

24 minutes ago, Wendy The Wanderer said:

TC, in rallydave's defence, this thread is about solvency, not how much you might know about Regent itself.

And the beat goes on

 

[Mjflowers]

1 hour ago, Travelcat2 said:

 

I did not say that my knowledge of Regent has anything to do with financials.  I would never even want to discuss private issues with people at Corporate or officers onboard a ship - it is none of my business.  

 

As many posters know, we spend a lot of time interacting with officers and crew (when they are not busy - work comes first) on Regent ships.  I've tried to absorb as much information as possible from them as well as from other passengers (mostly cruising friends since we are not particularly social with strangers).   Regent is a hobby - one that I have tried to learn as much about as possible in order to answer questions from "newbies".  

 

So, trying again, what can Regent do to entice passengers to come back on board that does not require lowering fares or unnecessarily affecting their bottom line?  Let Regent tell us. Not an admitted “cheerleader”.

 

 

[Travelcat2]

33 minutes ago, CBWIR said:

Giving you a $500 credit as you suggested in an earlier post is in fact lowering the fare.

 

I understand that but Regent tends to give OBC's easier than they reduce fares.  Regent likely gets a percentage of sales from the Boutique which could be one of the reasons why they give OBC's rather than lowering fares.

 

Wendy - I will try to briefly explain.  Some people on this thread know finances.  I know "Regent" (not saying that there are not others that know Regent as much or more than I do).  In order for a plan to work, it would take knowledge of both subjects.  Taking excursions as an example ........ "we" (many of us) know that there are a group of long time cruisers (and former cruisers) that would like the opt out option implemented.  The financial side would know if this makes financial sense.  However, if someone wanted to remove certain items from the CR menu to save money, "we" know that this would be a huge negative for a large portion of Regent cruisers.  More passengers mean more money to Regent.  I do to know how much money Regent could spend on a positive change for passengers - that would increase bookings before it affected their bottom line.  

 

The two subjects go hand in hand.  

[Pcardad]

43 minutes ago, CBWIR said:

Giving you a $500 credit as you suggested in an earlier post is in fact lowering the fare.

 

Is it any different than Regent offering a credit instead of airfare (which is also a profit center for them)?

[rallydave]

15 minutes ago, Travelcat2 said:

I understand that but Regent tends to give OBC's easier than they reduce fares.  Regent likely gets a percentage of sales from the Boutique which could be one of the reasons why they give OBC's rather than lowering fares.

While this may in fact be true the more important reason for giving OBC rather than decreasing cruise costs or giving credits on the fares is that any dolar reduction in the cruise fare is a one dollar reduction on income while for OBC don't know the real value as that varies by what one uses OBC for but, it could be as little as zero lost income per dollar if any of the OBC is not used to probably $0.50 per dollar lost on some items where OBC is used and the items spend for cost Regent 1/2 of what the customer are charged.   The true costs are only known to Regetn but, for sure a dollar of OBC does not reduce the Regetn income by a dollar..

[Travelcat2]

11 minutes ago, rallydave said:

While this may in fact be true the more important reason for giving OBC rather than decreasing cruise costs or giving credits on the fares is that any dolar reduction in the cruise fare is a one dollar reduction on income while for OBC don't know the real value as that varies by what one uses OBC for but, it could be as little as zero lost income per dollar if any of the OBC is not used to probably $0.50 per dollar lost on some items where OBC is used and the items spend for cost Regent 1/2 of what the customer are charged.   The true costs are only known to Regetn but, for sure a dollar of OBC does not reduce the Regetn income by a dollar..

 

Thank you!

[JMARINER]

2 hours ago, rallydave said:

thank you

 

Partially true the financial analysis was only provided by myself.  Others like you only discussed their wants and not even you did any type of analysis nor rationale for what you suggested.  As to discussions with crew and officers or knowledge gained from Regent corporate will not provide you a bit if the information needed to do the neessary financial analysis.  If you think anybody at Corporate has provided you accurate financial information over what is available to the public thru public filings, you are really dreaming.  Disclosing any of that type of informaton to a private party like yourself will get any public company which Regent is part of in deep trouble with SEC.

 

Still waiting for any detailed analysis of type of loss and how it applies from your POV as well rationale for your position other than bottom line it will improve the filling of the ships. 

As if it matters, and it seems to for some here,  I have 50 Regent cruise (727 SS days) over the last 19 1/2 years.

 

I agree with your analysis  the  HCLH is in a deep hole. Without a "white Knight" or some 3rd party buyer the risk of it going upside down is high.  The ideas bandy about here of ending free shoreEx, free air, no butlers, reduced menus would just kill Regents success model.

 

I doubt cruising, as we knew it, will return within the next 2 years, if at all.

 

J

 

 

[greykitty]

44 minutes ago, Pcardad said:

 

Is it any different than Regent offering a credit instead of airfare (which is also a profit center for them)?

I was under the impression that cruise lines buy air and hotel in bullk (often via an consolidator).  And that the hotel or airplane will have all sorts of customers on it other than, let's say, Regent clients.  And, I'm just guessing here, not only does Regent have it pretty refined as to the number of clients that will actually use air from their gateway cities, or use hotel and transportation, if their clients do not use the air or hotel, they can 'return' the unused space to the aggregator for sale to those nice tourists taking, oh, a CCL cruise, or traveling business, or whatever.  I'm sure there are all sort of fun contractual issues involved, but bottom line the plane or hotel can be filled to the brim with customers from everywhere.

 

Now, unless I misunderstood, if Regent contracts for a tour, no one other than Regent clients are on that tour.  So if seats suddenly go unused, the tour guide doesn't have the option of filling the bus with these nice folks from the CCL ship.  If I'm a tour guide, I'm certainly not taking losses on my contracts with Regent unless I knew I could resell those empty spots. 

 

Regent is giving me, the tour company, some amount of money for X amounts of noncancellable seats. Sure, Regent pads their cost on all of this, and sure Regent knows pretty much exactly how many clients will tour, use the air/hotel, or drink like fish, but they still have bottom line costs.  

 

And especially nonrefundable OBC is a wonderful thing for the owner, I'm thinking - here, I' m giving you, the customer, $300 in play money so you can buy something marked to $300 that I, the owner, paid $50 for. I think I got that right.

Edited April 26, 2020 by greykitty

[Pcardad]

Regent promises the tour operators a minimum.

[Pcardad]

ANd in other news, Carnival will not be going under.

 

https://www.wsj.com/articles/how-fed-intervention-saved-carnival-11587920400

 

Neither will either of the other 2.

[greykitty]

2 minutes ago, Pcardad said:

Regent promises the tour operators a minimum.

But would still take a hit to the bottom line if they gave tour credits out without otherwise raising some part of the base fare to cover those credits?

[greykitty]

4 minutes ago, Pcardad said:

ANd in other news, Carnival will not be going under.

 

https://www.wsj.com/articles/how-fed-intervention-saved-carnival-11587920400

 

Neither will either of the other 2.

As a travel professional, how do you think the private equity groups would modify operations to meet financial arrangements?  The majors haven't had the best set of financials even before COVID-19, to be honest.

[Pcardad]

Not if they retain their profit and credit back the cost. They have enough data to determine % capacity vs. cost and come up with a number that still is a profit even if opted out of.

 

[rallydave]

7 minutes ago, greykitty said:

And especially nonrefundable OBC is a wonderful thing for the owner, I'm thinking - here, I' m giving you, the customer, $300 in play money so you can buy something marked to $300 that I, the owner, paid $50 for. I think I got that right.

Yup, got that correct plus if Regent simply doesn't gete enough people for an excursions, they simply cancel it .   A lot depends on the Contract with the tour operator but, have seen and heard of excursions cancelled for lack of passengers  booking the excursions and sure Regent will take the lower cost option for themselves whether to ancel or run the tour at a loss to Regent.  Some excursions are per person and there the risk is on the tour operator.

[Pcardad]

1 minute ago, greykitty said:

As a travel professional, how do you think the private equity groups would modify operations to meet financial arrangements?  The majors haven't had the best set of financials even before COVID-19, to be honest.

 

I have no idea. I am not really a TA in the classic sense. I provide a specialized service to a small group of clients. I facilite all aspects of the travel experience on a 24x7 basis if required. 

 

The finance guy in me actually sees fairly strong financials, especially over the past few years. A private equity group simply buys a piece of the pie....they usually do not run the company.

[greykitty]

6 minutes ago, Pcardad said:

Not if they retain their profit and credit back the cost. They have enough data to determine % capacity vs. cost and come up with a number that still is a profit even if opted out of.

 

But what number is increased to guarantee that same profit while allowing opt outs?  Base fare?  

[Travelcat2]

greykitty - Regent only contracts for a certain number seats on each contracted flight.  This is why so many of us deviate (or to use the "new" term Custom Air).  There are obviously more contracted seats available 270 days prior to the cruise than there are 90 or 75 days prior to the cruise.  The word "contracted" here is important.  While we have deviated and been on Cathay Pacific to Asia (contracted), it is likely not contracted to some other places in the world where they may fly.  Another example is Emirates.  Regent used to allow passengers on the east coast to fly Emirates to Dubai without an uncharge while those of us on the west coast had a $1,500/person uncharge.  I am not certain that this is still in effect.