Would Carnival Corp consider converting one of its lines to river cruising

[Mary229]

For a speculative discussion

 

It seems river cruising seems to be on trend as a safer alternative to large ship ocean cruising.  Do you think HAL/CCL will venture into fresh waters? It seems to me small ship expedition cruising is a far more complicated and expensive venture though American/Victory lines is introducing new fairly affordable small ship cruising 

 

thoughts?

[DFD1]

They might consider anything which would generate revenue at the moment, although river cruising is pretty far afield for them. I think it highly unlikely.

[rkacruiser]

I doubt that such a transition is in CCL's future.  The European market for such is well served, I think.  The American market has many products available already and, I think, more in the planning stage.  

[Mary229]

CCL has a history of buying other lines, maybe that is how they will do it.   I can’t see them sitting idly by while others are sailing.  The American consumer trusts and knows them, that is their greatest advantage 

[rkacruiser]

11 minutes ago, Mary229 said:

CCL has a history of buying other lines, maybe that is how they will do it.   I can’t see them sitting idly by while others are sailing.  The American consumer trusts and knows them, that is their greatest advantage 

 

Seeing a boat called "Carnival Fantasy" sailing on a cruise from Cincinnati to New Orleans or on a European river cruise is a "fantasy".  Where are the dollars going to come from to finance such a start-up adventure?

[kazu]

The only ship I know of that could get under the bridges in Europe or on the Kiel Canal was the Prinsendam.  It also got into different ports that others couldn’t because of the way she was built.  HAL sold it, sadly.

That ship could have possibly done it but I doubt the others in the fleet could.  

 

I I were to river cruise, I would choose an experienced line that knows what they are doing.  I certainly wouldn’t go on a larger ship than the standard river cruise.

 

Caveat - we haven’t done one yet but it certainly is something I have been researching.
 

[Horizon chaser 1957]

1 hour ago, Mary229 said:

  I can’t see them sitting idly by while others are sailing.  

 

They may not have to. The CDC no sail order only applies to US jurisdictional waters. If it gets extended, again, past September, we may see HAL sailings begin elsewhere. 
Heaven knows, in a normal year, several Dam ships do cruise after cruise in Asia or Europe without coming near North America.

[rafinmd]

1 hour ago, kazu said:

The only ship I know of that could get under the bridges in Europe or on the Kiel Canal was the Prinsendam.  It also got into different ports that others couldn’t because of the way she was built.  HAL sold it, sadly.

That ship could have possibly done it but I doubt the others in the fleet could.  

 

I I were to river cruise, I would choose an experienced line that knows what they are doing.  I certainly wouldn’t go on a larger ship than the standard river cruise.

 

Caveat - we haven’t done one yet but it certainly is something I have been researching.
 

Sorry to burst your bubble but Prinsendam is WAY too big for a river cruise, at least in Europe or the US.  I was on the Rhine and the locks held 4 ships (2 across and 2 bow to stern) but the Prinsendam was about 4 meters wider than 2 riverboats combined.  She would have fit into most of the locks lengthwise

 

The draft is under 10 feet and at our safety briefing the Captain said we didn't need lifeboats because the ship could merely settle on the bottom.

Bridge clearance is the biggest hitch, while the Prinsendam had a draft of 130 feet to get through the Kiel Canal,

 

 

Roy

[CJcruzer]

you would be surprised the number of locks on the rivers in Europe

 

http://www.rivercruiseinfo.com/content/list-locks-along-rivers

 

We have done 8 river cruises, one being  the Grand European from Amsterdam to Budapest (15 days).... we were on the Rhine, Main, and Danube rivers..... 34 locks on the Main river alone!

 

Carol

 

[Aquahound]

4 hours ago, Mary229 said:

 It seems to me small ship expedition cruising is a far more complicated and expensive venture though American/Victory lines is introducing new fairly affordable small ship cruising 

 

I disagree.  A major RCCL line, Celebrity, not only ventured in to expedition cruising but judging by the fact they recently grew from 1 ship to 4, it seems to be successful.  

[chengkp75]

As others have noted, none of Carnival Corp's lines have any ships suitable for river cruising, anywhere in the world.  So, you are talking about either acquiring a river cruise company, or building suitable ships.  The problems with this are:

1.  Capital.  With no money coming in, and bushel baskets going out, where does Carnival get the money to build river boats

2.  The lead time involved to build ships, complicated by the workplace social distancing required at the shipyard.

 

But, long term, no, I still don't see Carnival Corp venturing into river cruising, it is just plain outside their business model.  European river cruising would face well established competition with a new inexperienced venture, and US river cruising would face the PVSA.

[Mary229]

For those who are worried about capital.   I think CCL is selling old ships to take advantage of tax considerations (recapture) which is income.  If you have a loss year there is no better time to deal with recapture.   CCL has the type of track record that financiers will back.  They may junk status but their expertise does give them access to credit.   I think a buyout is more likely than a build out.  

[chengkp75]

2 minutes ago, Mary229 said:

For those who are worried about capital.   I think CCL is selling old ships to take advantage of tax considerations (recapture) which is income.  If you have a loss year there is no better time to deal with recapture.   CCL has the type of track record that financiers will back.  They may junk status but their expertise does give them access to credit.   I think a buyout is more likely than a build out.  

Since Carnival is incorporated in Panama, any tax recapture would be based on Panamanian tax law (if there is any recapture), not US taxes, and I doubt that the sale price is more than the depreciated basis, again based on Panamanian tax law.  And, with Carnival hemorrhaging money, any capital raised by sale of ships will be used for operating expenses until operations resume. 

[Roz]

I've done 3 European river cruises, and the lines that cater to English-speaking passengers are at a standstill due to US passengers not being able to enter.  And river cruise boats are going to have the same problems as ocean going vessels - how to social distance, what to do about buffets, extra cleaning,  varying rules in different countries, etc.  

[aliaschief]

With Viking River cruises entering the US market one wonders how many other River boat lines will follow.

 

Viking starts Mississippi River Cruises in 2022.

[rafinmd]

Roy

 

[Paulinda]

We love river cruises.  More intimate than ocean cruises and the ports are much more interesting.  Our opinion is the food is better too because they are only cooking for 100-150 passengers.  And wine is usually free at dinner time.   With a smaller number of travelers you also get to know almost everyone on board.    Looking forward to our next Danube Cruise.  

[chengkp75]

1 hour ago, aliaschief said:

With Viking River cruises entering the US market one wonders how many other River boat lines will follow.

 

Viking starts Mississippi River Cruises in 2022.

It will depend on how Viking deals with the challenges of US flag operations.

[AtlantaCruiser72]

2 hours ago, chengkp75 said:

It will depend on how Viking deals with the challenges of US flag operations.

 

Viking is building the ship in the US (at the Edison Chouest shipyards in Louisiana)and will staff it with crew that are US citizens or legally able to work in the US.  Much the same as American Queen and American Cruise Lines have done.

 

The Viking consumer is accustomed to paying a fare commensurate with the operating costs and attendant price point Viking will need to charge to operate these sailings profitably.  With a large loyal base from existing Ocean and River cruisers they will have no problems sailing at maximum capacity with high fares. 

[Mary229]

not only the Mississippi River but the Great Lakes, The Saint Lawrence Seaway, the Puget Sound, Columbia River, The Tennessee River and I am sure there are others in North America

 

 

[AtlantaCruiser72]

11 minutes ago, Mary229 said:

not only the Mississippi River but the Great Lakes, The Saint Lawrence Seaway, the Puget Sound, Columbia River, The Tennessee River and I am sure there are others in North America

 

 

 

The great lakes and St. Lawrence river cruises will all be operated by Viking's expedition grouping of vessels which will NOT be US flagged and all will operate an open-jaw itinerary that begins or ends in a Canadian port.

 

If the Mississippi is successful and they have enough demand from their loyalty base I am in no doubt Viking will build/flag additional vessels in US shipyards to sail other US  waterways as you described

Edited July 20, 2020 by AtlantaCruiser72

[chengkp75]

24 minutes ago, AtlantaCruiser72 said:

 

Viking is building the ship in the US (at the Edison Chouest shipyards in Louisiana)and will staff it with crew that are US citizens or legally able to work in the US.  Much the same as American Queen and American Cruise Lines have done.

 

The Viking consumer is accustomed to paying a fare commensurate with the operating costs and attendant price point Viking will need to charge to operate these sailings profitably.  With a large loyal base from existing Ocean and River cruisers they will have no problems sailing at maximum capacity with high fares. 

The most recent MARAD study showed that it is 2.7 times as expensive to operate a US flag ship (albeit a cargo ship, not a passenger vessel) than a foreign flag ship. A passenger vessel will only be even more expensive, and that is not all in crew costs, but in inspections and equipment costs.  And the cost to build the boats will be higher than their European or Asian cruises, so that cost has to be covered as well.  The other challenge will be obtaining trained crew.  Unlike foreign flag ocean cruise ships or river cruises,  where only the deck and engine departments are credentialed mariners, the USCG requires all crew, whether a cabin steward or a dishwasher to be fully credentialed, and unlike foreign flag operations, there is not a ready pool of credentialed hotel staff just waiting for a job, which means frequently sailing short handed, as NCL has found with their POA US crew.  Also, the crew can walk off the ship and quit at any time, unlike foreign crew in a US port.  Then there is the maritime labor unions that Viking will have to learn to live with.  As NCL found, and continues to struggle with, there are vast challenges presented by operating US flag over foreign flag.

 

And crew on US vessels must be US citizens, or 25% of the unlicensed crew (not the deck/engine officers) can be Green Card holders, but not foreigners on work visas.

[AtlantaCruiser72]

@chengkp75 I understand exactly where you are coming from and hear what you are saying.  Viking has a history of hiring and attracting top quality hospitality staff on their current river and Ocean vessels, and is know to pay well and have good working conditions.  With a launch not scheduled until 2022 there is nothing to prevent them from scouting and recruiting US hospitality workers, training them on the European River vessels (of which they have aplenty to spread them out across for training), and then transfer them to the Viking Mississippi.  They potentially may be able to recruit some staff away from existing US based riverboat operators.

 

As far as pricing - I'm sure they have carefully assessed the operating costs and built that into the business model for the US based sailings.  Viking know what they are doing and have a proven track record of success.  I have no doubt this will be any different.

[chengkp75]

34 minutes ago, AtlantaCruiser72 said:

@chengkp75 I understand exactly where you are coming from and hear what you are saying.  Viking has a history of hiring and attracting top quality hospitality staff on their current river and Ocean vessels, and is know to pay well and have good working conditions.  With a launch not scheduled until 2022 there is nothing to prevent them from scouting and recruiting US hospitality workers, training them on the European River vessels (of which they have aplenty to spread them out across for training), and then transfer them to the Viking Mississippi.  They potentially may be able to recruit some staff away from existing US based riverboat operators.

 

As far as pricing - I'm sure they have carefully assessed the operating costs and built that into the business model for the US based sailings.  Viking know what they are doing and have a proven track record of success.  I have no doubt this will be any different.

And, while I am not familiar with Viking's pricing or business models, of that 2.7 times the expense for US flag operations, the crewing cost is nearly 5 times as high as foreign flag.  Add to that the cost of documentation, which requires a Merchant Mariner Credential, which in itself requires a 40 hour Basic Safety Training course at a USCG approved facility, and a TWIC, which requires an FBI background check, and NCL found that it cost $8-10,000 just to get a new crew member to walk up the gangway for his/her first day of work.  The major problem is not the original hiring of crew, it is that there is not a pool of that crew available, with the proper documentation, just standing by to take over a position when someone on the boat gets sick or injured, or quits.  Foreign flag operations can call and have a dishwasher on the next flight from the Philippines, but getting a dishwasher with all the credentials (takes about 6 months to get them all, for an entry level job) for a US flag boat will be a challenge, one that even the existing US flag operators experience all the time.   There are, as I've said, union agreements that limit what work crew can do, and when, and how they get paid for it, and as long as the boats use public docks, the longshoremen's unions will require a fully unionized boat.

 

NCL thought they knew what they were doing with US flag operations in Hawaii, but ended up losing $174 million a year, the last year they had 3 ships operating there.  Their HR vice president, when he hired me for the original POA crew, admitted that they had "no clue how to deal with US maritime labor".

Edited July 20, 2020 by chengkp75

[Sir PMP]

19 hours ago, rafinmd said:

Sorry to burst your bubble but Prinsendam is WAY too big for a river cruise, at least in Europe or the US.  I was on the Rhine and the locks held 4 ships (2 across and 2 bow to stern) but the Prinsendam was about 4 meters wider than 2 riverboats combined.  She would have fit into most of the locks lengthwise

 

The draft is under 10 feet and at our safety briefing the Captain said we didn't need lifeboats because the ship could merely settle on the bottom.

Bridge clearance is the biggest hitch, while the Prinsendam had a draft of 130 feet to get through the Kiel Canal,

 

 

Roy

What about the Seabourn ships?