Another cruise line bites the dust

[banzaii]

4 hours ago, Biker19 said:

 

Biker who doesn't mind the occasional zombie thread!😜

[Cruise a holic]

On 7/5/2020 at 11:13 PM, Merion_Mom said:

 

Oh please.  Not this crap again.

 

I do NOT want the CDC to "relax their requirements".  I want a safe and healthy environment, if the cruise ships go out again.

 

 

  🙄

Some cruise lines have increased their fares.  I also choose science- I love cruising, but my safety and the safety of others so much more important. today the death total is over 225.000 and growing- Hopefully it will return to  some type of normal in a few months.

[Dennis#1]

4 hours ago, Cruise a holic said:

Some cruise lines have increased their fares.  I also choose science- I love cruising, but my safety and the safety of others so much more important. today the death total is over 225.000 and growing- Hopefully it will return to  some type of normal in a few months.

Agree.  Sure hope you are correct in that cruising will return to pre-COVID normal ASAP.

[Brucemcdou]

3 hours ago, Dennis#1 said:

Agree.  Sure hope you are correct in that cruising will return to pre-COVID normal ASAP.

I dunno; cruising at 50% capacity sounds pretty darn nice to me!  only sell the balcony cabins and up and leave the outside and interior cabins empty.  more space for those of us who get on.   But big picture I agree: "normal" can't come soon enough!

[Blizzard54]

As I recall Royal has stated that the break even rate for sailing is about 30% for large ships and 50% for the smaller ones.

Under those conditions getting rid of the smaller ones makes sense.

[chengkp75]

4 hours ago, Blizzard54 said:

As I recall Royal has stated that the break even rate for sailing is about 30% for large ships and 50% for the smaller ones.

Under those conditions getting rid of the smaller ones makes sense.

I always love that folks quote this figure, when he didn't say that the "break even" point was there, he said it "kinda" was there, if you look at EBITDA earnings, which don't count interest, taxes, depreciation, or amortization as costs.  Kind of like saying, "yes, my paycheck will cover my expenses, if I don't pay the mortgage or my taxes".  They would break even on operating costs, not total expenses.

[Ourusualbeach]

1 hour ago, chengkp75 said:

I always love that folks quote this figure, when he didn't say that the "break even" point was there, he said it "kinda" was there, if you look at EBITDA earnings, which don't count interest, taxes, depreciation, or amortization as costs.  Kind of like saying, "yes, my paycheck will cover my expenses, if I don't pay the mortgage or my taxes".  They would break even on operating costs, not total expenses.

True,  but it’s still a relevant comparison as those large ships then contribute more to EBITDA than the smaller ones.   Bottom line is the newer larger ships are more profitable with fewer people than the older smaller ships. 

[chengkp75]

24 minutes ago, Ourusualbeach said:

True,  but it’s still a relevant comparison as those large ships then contribute more to EBITDA than the smaller ones.   Bottom line is the newer larger ships are more profitable with fewer people than the older smaller ships. 

Wellll, I don't know about that.  They may be more profitable to operate than the older, smaller ships, but I don't think they are more profitable at reduced capacity.  I will base my discussion on the generally accepted fact that fares cover expenses, and onboard revenue is the profit.

 

Take my example.  Two people, who both just make ends meet at the end of the month (ships sailing full capacity, but with no onboard revenue).  One (A) makes $5000/month, one (B)make $10,000/month (relative revenue from a 3000 vs 6000 person ship).  Now, A has a mortgage of $2500/month (so leaving 50% EBITDA).  B has a mortgage of $7000/month (so leaving 30% EBITDA).  So, when A's income is reduced to $2500/month (50% capacity), he is covering his EBITDA, but losing $2500/month.  B, when his income is reduced to $3000/month (30% capacity), he is covering his EBITDA, but losing $7000/month.  B may be bringing in $500/month more than A, but is paying out $4500/month more.

Edited October 25, 2020 by chengkp75

[Milwaukee Eight]

I couldn’t understand the math with old point conversion, how the heck will I understood this. 😂

 

M8

[Ourusualbeach]

7 minutes ago, chengkp75 said:

Wellll, I don't know about that.  They may be more profitable to operate than the older, smaller ships, but I don't think they are more profitable at reduced capacity.  I will base my discussion on the generally accepted fact that fares cover expenses, and onboard revenue is the profit.

 

Take my example.  Two people, who both just make ends meet at the end of the month (ships sailing full capacity, but with no onboard revenue).  One (A) makes $5000/month, one (B)make $10,000/month (relative revenue from a 3000 vs 6000 person ship).  Now, A has a mortgage of $2500/month (so leaving 50% EBITDA).  B has a mortgage of $7000/month (so leaving 30% EBITDA).  So, when A's income is reduced to $2500/month (50% capacity), he is covering his EBITDA, but losing $2500/month.  B, when his income is reduced to $3000/month (30% capacity), he is covering his EBITDA, but losing $7000/month.  B may be bringing in $500/month more than A, but is paying out $4500/month more.

You are comparing 2 people with separate scenarios.  This is one company that has mortgages on both ships.  In your scenario add the two together and run the numbers and the large ship contributes more. 
 

all the EBITDA figures are relatively fixed whether the ship sails or not.  The larger ship will have more passengers, even at a reduced capacity and contribute more towards corporate expenses. 
 

I’m not even sure how you came up with the disproportionate mortgage figures in your example other than to make your numbers work. 
 

 

[John&LaLa]

Generally, the bigger, newer ships have a lot more onboard revenue generators as well.

 

That's kind of important 

[mugtech]

Then there are those of us who cruise for the itineraries, happy to have inside cabin to shower and sleep, spend our time elsewhere.  Not willing to pay more for a balcony just to sail on a less crowded ship.  Certainly won't be taking any cruises on which one is forced to take a cruise line excursion or stay on the ship.

[Blizzard54]

6 hours ago, chengkp75 said:

I always love that folks quote this figure, when he didn't say that the "break even" point was there, he said it "kinda" was there, if you look at EBITDA earnings, which don't count interest, taxes, depreciation, or amortization as costs.  Kind of like saying, "yes, my paycheck will cover my expenses, if I don't pay the mortgage or my taxes".  They would break even on operating costs, not total expenses.

You are correct that those are for operating costs but the fixed costs are still there when they are not operating.

[Hoopster95]

6 hours ago, Ourusualbeach said:

The larger ship will have more passengers, even at a reduced capacity and contribute more towards corporate expenses. 

Does anyone go to work to come home with a $0.00 paycheck for their family?

Is a business in  business to make $0.00 profit every day? 

 

I totally agree with your points, and others, above in this thread. I think all of it pretty much aligns to agree that  not one single cruise line will be able to survive long term at 50% occupancy, unless, of course, all cruise fares go up 200% to compensate.

And having said that, I think all of the above reasonings also align with my thoughts that if sailings are not going to happen until Q2 and later, and at reduced capacity to boot only on larger ships, then both Vision and Radiance Class are in jeopardy of not remaining in the RCL fleet.

 

I suspect everyone with sailings booked in 2021 (Q1 and Q2 at the very least) to expect further ship redeployments, ships to be sold/scrapped, ships to change/swap, and especially many itineraries will be cancelled and/or changed

[Biker19]

Here's the outcome of CMV ship sales:

 

https://www.cruiseindustrynews.com/cruise-news/23829-here-s-what-an-entire-cruise-fleet-sold-for-at-auction.html

[Roger88]

7 minutes ago, Biker19 said:

Here's the outcome of CMV ship sales:

 

https://www.cruiseindustrynews.com/cruise-news/23829-here-s-what-an-entire-cruise-fleet-sold-for-at-auction.html

Well, it was all way too predictable. I understand the feeling among many people in this regard but we have to accept the new economic realities of these days. I hope the situation will change soon 

[KirkNC]

Doubt it’s the last one.  If this goes on long enough some big ones may join them.

[Biker19]

Two of CMV's ships (Columbus and Magellan) have left Gibraltar for Greek waters - will be interesting to see what Seajets does with them.

[Biker19]

https://www.cruisedeck.de/ocean-dream-unterwegs-zur-abwrack-werft/?fbclid=IwAR2pUiscH7s8AvMR1nu7VXaWW_Iza6wtIwrYylsOfqwW1cwam5p8XTxKujU

 

The end for another cruise ship

The OEAN DREAM (IMO 7915096), most recently en route for Peace Boat, has apparently been on her journey to the scrapping yard for a few days. Although coming from Japan, the destination appears to be Aliaga in Turkey rather than Alang in India. This emerges from reports from the Turkish media.

History of the ship

The OCEAN DREAM was built in 1981/1982 on the Danish Aalborg Værft as TROPICALE for Carnival Cruise Lines. It was the first newbuilding for Carnival and the first ship to have the funnel shape typical of Carnival. The ship is 204.75 meters long and measured with a gross tonnage of 35,265. From 2001 to 2005 the cruise liner operated as COSTA TROPICALE for Costa Cruises, after which it was sold to P&O Australia, who used the ship under the name PACIFIC STAR for cruises from Brisbane until 2008. When the cruise ship was taken over by the Spanish Pullmantur Cruises, the name was changed to OCEAN DREAM. This name was retained when the Japanese organization Peace Boat took over the liner in 2012.

The end

With the purchase of the SUN PRINCESS by Peace Boat this year, the OCEAN DREAM was no longer needed. Now she is apparently on her last journey towards the scrapping yard.

[Cruise a holic]

On 10/25/2020 at 11:36 AM, mugtech said:

Then there are those of us who cruise for the itineraries, happy to have inside cabin to shower and sleep, spend our time elsewhere.  Not willing to pay more for a balcony just to sail on a less crowded ship.  Certainly won't be taking any cruises on which one is forced to take a cruise line excursion or stay on the ship.

I believe for the next year or so, itineraries will not matter to us,  until this pandemic is under control worldwide- it's all up in the air.  I would definitely suggest you consider at least a balcony cabin to avoid any possible claustrophobia .  In the event the cruise has a problem and you are quarantined in your cabin, I would probably not want to have no access to fresh air and a view.  

 

In addition, I agree in order to control crowds, perhaps inside cabins will be reserved for staff or empty.  Since we missed so many cruises during this period, we can spend a more for a more comfortable cabin in the future.  We consider the ship like an all inclusive resort and it will be our destination.

Edited December 5, 2020 by Cruise a holic

[mugtech]

9 hours ago, Cruise a holic said:

I believe for the next year or so, itineraries will not matter to us,  until this pandemic is under control worldwide- it's all up in the air.  I would definitely suggest you consider at least a balcony cabin to avoid any possible claustrophobia .  In the event the cruise has a problem and you are quarantined in your cabin, I would probably not want to have no access to fresh air and a view.  

 

In addition, I agree in order to control crowds, perhaps inside cabins will be reserved for staff or empty.  Since we missed so many cruises during this period, we can spend a more for a more comfortable cabin in the future.  We consider the ship like an all inclusive resort and it will be our destination.

I will consider not cruising.  Not addicted.  Want to enjoy myself, ship will only be our destination on our first Oasis class cruise, maybe in 2022.

[SRF]

On 7/5/2020 at 4:08 PM, livingonthebeach said:

 

You have a point.  Many retailers and restaurants will use restructuring to their advantage and resurface in a different reorganized form.  This could be true of cruise lines as well.  Only thing that worries me is, as in the case of Pullmantur, looks like all their three ships are headed to the scrapper, so if they do come back they will have 0 ships in their fleet.  They will either have to buy more ships from other lines or cease to exist.  It looks like the industry is facing a major shift, for sure.  

 

Grandeur was supposed to go to them.  So they may have ships coming to replace those they are scrapping and not sailing.

[travelhound]

On 7/5/2020 at 1:27 PM, livingonthebeach said:

After Pullmantur, comes another casualty.  This time it's the Swedish cruise line Birka Cruises.  Granted, these two were small cruise lines but the idea that they could only last for 3 1/2 months without revenue is a scary thing for the industry.

 

https://thepointsguy.com/news/birka-cruise-line-shuts-down/

The big 3 will probably benefit from some of these small companies going out of business.

[Dennis#1]

2 hours ago, SRF said:

 

Grandeur was supposed to go to them.  So they may have ships coming to replace those they are scrapping and not sailing.

Thought Grandeur was going to permanently stay with RCCL.

[legaljen1969]

On 7/6/2020 at 1:12 PM, scpirate said:

That's very true but you have to love your kids the rest of us don't.

 I don't even have kids, but the worst behavior I see from cruisers is usually from adults- the super drunk, the super old and the super entitled.   By entitled, I am NOT talking about those with lots of loyalty status. I am talking about the ones in general who believe the entire world must fall at their feet for whatever reason.