Should RCL spinoff Celebrity?

[Orator]

Just for debate: Celebrity was an independent cruise line until 1997 when RCL took them over. At first X acted independently, but over the years has appeared to more and more drew closer to RCCL. In the light of the current financial crisis should RCL spin off Celebrity?

[UnorigionalName]

Lol, and with what money will Celebrity be able to operate without revenue generating cruises.

[Fouremco]

I'll let the RCCL bean counters work that one out. I've no idea how Celebrity compares to the other lines under the RCCL umbrella when projecting profits and losses over the near future, or how RCCL assesses the management cadre of the individual lines and their ability to turn things around.  

[davekathy]

37 minutes ago, Orator said:

Just for debate: Celebrity was an independent cruise line until 1997 when RCL took them over. At first X acted independently, but over the years has appeared to more and more drew closer to RCCL. In the light of the current financial crisis should RCL spin off Celebrity?

Way above my pay grade.  We are just along for the ride and to have a good time. 🍷🍷🍻🥂

Edited July 2, 2020 by davekathy

[cruisestitch]

Or should RCL work to incorporating Silversea into Celebrity ? Or into Azamara?

[Mike981]

31 minutes ago, Orator said:

In the light of the current financial crisis should RCL spin off Celebrity?

 

Since I wasn't sure on what "Spin Off" means, I did a quick check with mother google. And I am still unsure. The one that seems to show up most often, is RCCL would spin off Celebrity and create a separate company to 'try' to create  more value. I was thinking it meant to sell it off to another company. And I have no idea who would take any price tag in today's current environment.

 

I am sure there are some folks  who would love to see Celebrity get out from under RCCL. 🙂

[Life Buoy]

As a potential passenger the key question to me would be if a separation would make for a better cruise experience. Sometimes spin offs work, sometimes they don't. 

[hcat]

Celebrity before Royal was a superior smaller cruise line...in every way on every day!

 

But not sure this is the time to go back or even if  it would be possible.  ..esp with LLP at the helm and Royal C staff, & culture firmly established on X...

 

But it was a nice thought...good memories!

[Mike981]

40 minutes ago, hcat said:

 

Celebrity before Royal was a superior smaller cruise line...in every way on every day!

 

 

Agree, our first two cruises were on the the Mercury and the next year on the Millennium. Mercury is still our favorite, but it's hard to beat your first cruise, especially if it was excellent.

 

I don't know if I want to go back to how formal it was, but I would love to get back to that level of service.

[jalves]

No.  I think Celebrity has a place in the RCI portfolio.  

[ECCruise]

1 hour ago, cruisestitch said:

Or should RCL work to incorporating Silversea into Celebrity ? Or into Azamara?

Silversea/Celebrity....not even close to the same demographic.

Not even so sure that Silversea fits comfortably with Azamara.  Except for price point, a pretty different vibe IMHO.

[4774Papa]

I hope not, we cruise on Celebrity and Royal C. and enjoy their elite and diamond loyalty programs.

 

[hcat]

32 minutes ago, Mike981 said:

 

Agree, our first two cruises were on the the Mercury and the next year on the Millennium. Mercury is still our favorite, but it's hard to beat your first cruise, especially if it was excellent.

 

I don't know if I want to go back to how formal it was, but I would love to get back to that level of service.

Agree...The formality is passe   but eveything else was above and beyond the Royalized experience.  Mercury was perfect.. enjoyed  Century...M Class and even S and E....but Royal  is  just not at the level that X offered! And never will be...

Edited July 2, 2020 by hcat

[grandgeezer]

30 minutes ago, hcat said:

Agree...The formality is passe   but eveything else was above and beyond the Royalized experience.  Mercury was perfect.. enjoyed  Century...M Class and even S and E....but Royal  is  just not at the level that X offered! And never will be...

Though the Mercury wasn’t our first cruise, the three cruises we took on it ranks as our three favorite cruises. We’ve bee on most of the “s” class ships an RCL’s “Oasis class ships and none of them even come close to our experiences on the Mercury.

I’m glad there are other who appreciated it as much as we did,

[shipshape sam]

4 hours ago, Mike981 said:

 

Since I wasn't sure on what "Spin Off" means, I did a quick check with mother google. And I am still unsure. The one that seems to show up most often, is RCCL would spin off Celebrity and create a separate company to 'try' to create  more value. I was thinking it meant to sell it off to another company. And I have no idea who would take any price tag in today's current environment.

 

I am sure there are some folks  who would love to see Celebrity get out from under RCCL. 🙂

As I understand a spin off, Celebrity would become a stand alone company.  It would have its own stock, board, assets and liabilities and there would be none of the typically overhead consolidation savings that mergers/take overs tout.  Celebrity would be on its own  and whatever debt it had to take on in this scenario would have to be Celebrity's and not shared.  

 

Not sure why anyone would want to do this at this time.  The argument must be that there is hidden/untapped 'value' in the Celebrity brand that could be leverage to provide more value to shareholders AND there is so much of this 'value' to take the risk of a spinoff. Secondly, spinoffs are done typically with very different businesses if not always with different businesses under one corporate umbrella organization. This would not be the case here.  

 

Unfortunately, I think a lot of unique features and their benefits have been removed from Celebrity Brand/cruise line as it was when it was independent.  Clearly if they were separate and independent and wholly on their own, they would be closer to the consumer and could make decisions that would be best for them and not have to worry about Royal Caribbean, et al for setting a precedent not in line with the overall corporation.

 

A spinoff that I remember was when Circuit City Stores, Inc spun off CarMax, Inc.  in the USA to gain value. CarMax flourished and Circuit City went under! So much for getting more value.  

Edited July 3, 2020 by shipshape sam

[TommyD3]

This would be the worst time to try that!!!

I believe that there are common core teams that service all of the RCL brands to save money.

If you remember the only reason that Celebrity joined RCL was to get the financial backing to expand their fleet.

That started with the Century and includes EVERY new ship since!!!

[Cruising89143]

Don’t see it happening. It’s hard for the smaller lines to make it on their own.
 

We outgrew RCI. Entertainment on the Oasis class was the best that I have experienced but that’s where it ends for us. Too many people/kids. We love X but our next cruise is on Azamara. We could not find the right itinerary on X. We did on Azamara. Should be interesting.

[Happy Cruiser 6143]

The service on Mercury was what hooked me on Celebrity.  It was amazing.

[hcat]

8 hours ago, TommyD3 said:

This would be the worst time to try that!!!

I believe that there are common core teams that service all of the RCL brands to save money.

If you remember the only reason that Celebrity joined RCL was to get the financial backing to expand their fleet.

That started with the Century and includes EVERY new ship since!!!

 

For awhile RCL  let Celebrity flourish on its own, but little by little they became more alike than  they were different in some key areas...dining, website, mgmnt style, client service, advertising.   I think most of the Celebrity mgmnt is long gone.....Perhaps a deal with the devil! 

 

Ships are still different..no big malls on X,  a saving grace.

[TeeRick]

17 hours ago, Life Buoy said:

As a potential passenger the key question to me would be if a separation would make for a better cruise experience. Sometimes spin offs work, sometimes they don't. 

A spin off will not happen for the benefit of the passengers.  It would be to reduce debt and generate cash flow for RCCL. I'm not sure Celebrity could be in a position for a spin off anyway.  But if it happens some day I would not count on it to emerge as the Celebrity that many remember from the old days prior to RCCL.  No going back.

[4774Papa]

18 hours ago, hcat said:

Agree...The formality is passe   but eveything else was above and beyond the Royalized experience.  Mercury was perfect.. enjoyed  Century...M Class and even S and E....but Royal  is  just not at the level that X offered! And never will be...

We have done 11 Celebrity and 2 Royal C. cruises.   We didn't try Royal until they allowed our elite status to transfer to Royal's diamond class.

 

We still prefer Celebrity, but like Royal's ships that are similar in size to Celebrity's S class ships.

 

Clearly, we found Celebrity to have the edge over Royal C. in service and dining, but the difference is not huge.

 

We like the cheaper specialty restaurants on Royal and found the MDR for Royal to be rate an 8 while Celebrity rates an 8.5.

Regarding the buffet, we found that there is a more significant gap with Celebrity's 8.5 and Royal's 7.

 

Further, Royal's entertainment is better than Celebrity's.

 

Also, Diamond benefits are better than elite.   The Diamond happy hour runs from 5-8:30 PM and that allows us to NEVER have to purchase an alcoholic drink on either of our Royal cruises.

[omeinv]

Everyone talking of the Mercury should remember that It joined the fleet AFTER Celebrity was part of Royal Caribbean.  The point of the merger was to make Celebrity's growth financially viable.  My first cruise was also on Mercury, and I too have fond memories.  However, I also recognize that one tends  to remember the good and forget the bad.  I was on the last cruise on the Century, and while it was still wonderful, the design that we all look back on now; had in fact become quite dated.  For example that class of ship had a much smaller ratio of balcony rooms, and those balconies were much smaller than we would want today.  The Mercury had no specialty restaurant, and the Century only one.  My point is newer ships have the features the cruising public has become accustomed to. 

 

Keeping the fleet current requires tremendous financial resources.  Norwegian Cruise Lines is a company many times larger than Celebrity (alone) now, let alone Celebrity back when it was it's own company.  Norwegian is viewed as the most threatened of the companies by the current financial difficulties.  Cruise lines have a a huge fixed cost aspect, and the best - sometimes only - way to deal with that is spreading that high fixed cost against the largest number of sources of income.  

 

My point is that while it may be nice to think of a small, "boutique" cruise line; it's wholly impractical.  The two companies trying it now, Disney and Virgin, have otherwise large companies to support the cruise operation.  I hardly imagine that people would expect Celebrity to get better if it was somehow acquired by a large corporation that had nothing to do with cruising. 

 

Harris

Denver, CO

[BEAV]

On 7/2/2020 at 1:29 PM, Mike981 said:

 

Agree, our first two cruises were on the the Mercury and the next year on the Millennium. Mercury is still our favorite, but it's hard to beat your first cruise, especially if it was excellent.

 

I don't know if I want to go back to how formal it was, but I would love to get back to that level of service.

 

Same here. Virgin =X= cruise on Mercury in 2000. Disembarked with jaws dropped and OMG is about all we could say. 

 

Then Millie in 2001.....

 

Mercury was a sleek, CLASSY lady......

[Straughn]

21 hours ago, Happy Cruiser 6143 said:

The service on Mercury was what hooked me on Celebrity.  It was amazing.

For us, it was our first Celebrity Cruise on Century, followed by one on Mercury. We. Were. Impressed. compared to Royal.

[Lonedaddy]

They have better purchasing and negotiating leverage as a group.  As long as the customer side branding is separate And distinct and run with autonomy it works as a whole.