Arnold Donald Stepping Down

[tring]

Just picked up the news that Arnold Donald is Stepping Down.  I fleetingly wondered if that will make a difference to the direction of travel of P&O, regards the concentration on attracting younger, family, cruisers at the expense of ignoring the traditional, older clientele.  It did not take me long to dispense with that hope though, but may be interesting to see if any small changes do take place.

 

[davecttr]

41 minutes ago, tring said:

Just picked up the news that Arnold Donald is Stepping Down.  I fleetingly wondered if that will make a difference to the direction of travel of P&O, regards the concentration on attracting younger, family, cruisers at the expense of ignoring the traditional, older clientele.  It did not take me long to dispense with that hope though, but may be interesting to see if any small changes do take place.

 

Shareholders objected to his $15 million salary.

[tring]

1 hour ago, davecttr said:

Shareholders objected to his $15 million salary.

 

Yeah, picked that up as well.  That is one cutback that will be worthwhile doing.

 

[twotravellersLondon]

3 hours ago, davecttr said:

Shareholders objected to his $15 million salary.

 

Institutional shareholders are the key.

 

It's also the case that Arnold was unwaveringly optimistic about the prospects of the cruise industry while his institutional investors were increasingly more concerned that their shares were worth only $17 against a pre-covid $73 high... 

 

Arnold Donald being side-lined... is all about extracting as much profit from the company and in so doing raising the share price. That can only be achieved by greater economies and by attracting in the high spending, younger family and group orientated customers who want a resort experience.

 

Significant changes are inevitable. It's very likely that the new regime will feel that the economies lie in the bigger, newer hight-tec ships and ,unless smaller ships can exploit a lucrative specialist niche market which will yield a much higher profit, it's likely that the older small vessels will soon be history.

 

Pre-covid, the Golden Pound of the Baby Boomer market was already well on the wane. In the UK cruise market between 2016 and 2018 the average age of cruiser increased from 56 to 57 but the numbers of 70+ passengers fell from 27% to 23%. The real growth sector was in the 30 to 50-year-old group who looked for cruises of two weeks or less to the Mediterranean or Northern Europe. The more mature demographic increasingly dominated the longer Grand Voyage and the exploration market... not P&O's thing really.

 

So what of the frequent budget cruisers who like to travel as often an as economically as possible... where will the mass-market mega giants of the cruise industry like Carnival and its subsidiaries likely put them? The chances are... to help fill cabins on the larger ships at the less  busy times of the year. 

 

And if the declining market of "traditional cruisers" (cruise industry definition... not mine) chose not to cruise? The very simple answer is that the cruise-lines would not be carrying so many people at less than cost price. What about the empty cabins? The very simple answer is to reduce capacity by removing older, smaller ships from the fleet... Carnival have recently let 17 ships "go"... more may be earmarked.

 

Arnold Donald was an industrial titan who personally controlled almost half of the global cruise industry and he still leads the World Travel & Tourism Council. In stepping down from his previous role in Carnival, Arnold will allow institutional investors to make very significant changes which are likely to have major ramification on the global  cruise industry as a whole.

 

Very much a case of wait and see... with bated breath.

 

[Britboys]

Well, either this site has been playing up again or I've slipped into a parallel universe this afternoon. I'm sure I liked some posts earlier which I don't seem to have now and certain I posted a reply on this topic earlier too. Let's try again...

Josh Weinstein was Carnival's Treasurer for 10 years, so may have been chosen for his proven financial acumen.

He also spent some time heading up Carnival UK - which may be either a good or bad thing for P&O and Cunard...

[Angel57]

12 minutes ago, Britboys said:

Well, either this site has been playing up again or I've slipped into a parallel universe this afternoon. I'm sure I liked some posts earlier which I don't seem to have now and certain I posted a reply on this topic earlier too. Let's try again...

Josh Weinstein was Carnival's Treasurer for 10 years, so may have been chosen for his proven financial acumen.

He also spent some time heading up Carnival UK - which may be either a good or bad thing for P&O and Cunard...

Quite a few posts disappeared when site crashed. I assume they had to reset it……

[terrierjohn]

49 minutes ago, Britboys said:

Well, either this site has been playing up again or I've slipped into a parallel universe this afternoon. I'm sure I liked some posts earlier which I don't seem to have now and certain I posted a reply on this topic earlier too. 

I was just thinking the same, some of my very uncontroversial posts seem to have been axed.

[molecrochip]

@twotravellersLondon Clearly not fan?

 

AD wasn't ousted by any means even if the Institutional Shareholders did object to his compensation package but then this move had been on the cards. Additionally, his replacement JW has been with the Corporation for 20 years, and for the last few years been a keen sidekick to AD. If there was going to be wholesale change, its not happening bring JW into the key role of CEO/President. Additionally, AD is staying on as Vice Chair.

 

The share price remains low for non of the reasons you said.

• Underlying political instability
• Continuance of Covid
• Higher fuel price
• Carnivals debt pile to repay before making dividends

is why the share price remains low. Only one of the three of those is within their control.

 

You are right about the Grey pound but P&O had already started to make this move back in 2017/2018 and it was always going to take time - that was before Covid happened.

 

You mention empty cabins and reducing capacity by removing 17 ships. (its actually 19 ships by the way). Empty cabins were not the story of 2019 with basically the strongest capacity levels and bookings ever. The new ship deliveries of 2020-2024 were set to provide a 10% rise in capacity to cope with growing demand however Covid hit. By removing the smaller ships (and the new ships still entering service), capacity actually still increases by 2-3% but across fewer ships, with fewer overheads and less environmental impact.

 

I know this industry well, and JW, a qualified lawyer, has been carefully groomed as replacement having been treasurer and Carnival UK President. This is no surprise internally and will be no surprise to external shareholders. The timing marks the end of Carnival's court monitoring in Florida, the resumption of the full fleet, and the point when Carnival Corp is expected to begin declaring profits again post Covid.

 

Its the end of one chapter, and the start of another.

[twotravellersLondon]

14 hours ago, molecrochip said:

Clearly not fan?

 

AD wasn't ousted by any means even if the Institutional Shareholders did object to his compensation package but then this move had been on the cards. Additionally, his replacement JW has been with the Corporation for 20 years, and for the last few years been a keen sidekick to AD. If there was going to be wholesale change, its not happening bring JW into the key role of CEO/President. Additionally, AD is staying on as Vice Chair.

 

The share price remains low for non of the reasons you said.

• Underlying political instability
• Continuance of Covid
• Higher fuel price
• Carnivals debt pile to repay before making dividends

is why the share price remains low. Only one of the three of those is within their control.

 

You are right about the Grey pound but P&O had already started to make this move back in 2017/2018 and it was always going to take time - that was before Covid happened.

 

You mention empty cabins and reducing capacity by removing 17 ships. (its actually 19 ships by the way). Empty cabins were not the story of 2019 with basically the strongest capacity levels and bookings ever. The new ship deliveries of 2020-2024 were set to provide a 10% rise in capacity to cope with growing demand however Covid hit. By removing the smaller ships (and the new ships still entering service), capacity actually still increases by 2-3% but across fewer ships, with fewer overheads and less environmental impact.

 

I know this industry well, and JW, a qualified lawyer, has been carefully groomed as replacement having been treasurer and Carnival UK President. This is no surprise internally and will be no surprise to external shareholders. The timing marks the end of Carnival's court monitoring in Florida, the resumption of the full fleet, and the point when Carnival Corp is expected to begin declaring profits again post Covid.

 

Its the end of one chapter, and the start of another.

 

Many thanks for your detailed observations. Intelligent and well-informed comment is always a great advantage to any debate.

 

As folks who are enthusiastic travellers... by both sea and land...  (at times we use cruises as a convenient and comfortable means of transport). Sometimes we'll sample a place on a cruise and then arrange a land-based holiday there. We've no strong feelings for or against Carnival. We've enjoyed the Carnival experience. We're by no means Carnival detractors.

 

"Side-lined" is not the same as "ousted" but that might simply be a matter of semantics.

 

We've not exactly attempted to explain the reasons for the low share price but fully accept that some inference may have been implied. We do, however, agree with your analysis on why the share price has been low. However the point is that all cruise companies have the same problems but, unlike Carnival, some of those other rival companies have seen their share price bounce back.

 

We do know that analysts who do spend their time poring through the entrails of corporate reports have commented with concern that shares of Carnival have struggled to keep pace with rivals like Royal Caribbean. Carnival shares are down nearly 13% in 2022, and they are off more than 35% over the past 12 months. Royal Caribbean shares are up almost 3% on the year and down only roughly 9% over the past 12 months.

 

We also know that in the coming weeks, institutional shareholders will want to hear from Weinstein, about his game plan for the cruise line and how it may differ from Donald’s approach. Many are impatient to see their investment grow and see worthwhile dividends.

 

Your feeling seems to be that the new regime will move "full ahead and steady as she goes." On the other hand, our feelings are that we're probably in for significant change, perhaps unsettling change, in the global cruise industry as a whole. We think that we'll just have to wait and see.

 

As you "know this industry well", It would be very interesting to see your take on just how Carnival and the P&O fleet and business plan might look like in 18 month’s-time... especially in light of the latest CLIA figures which show that, post-covid,  only 73% of cruising traditionalists intend to book another cruise in the next few years. 
 

[molecrochip]

11 hours ago, twotravellersLondon said:

 

Many thanks for your detailed observations. Intelligent and well-informed comment is always a great advantage to any debate.

 

As folks who are enthusiastic travellers... by both sea and land...  (at times we use cruises as a convenient and comfortable means of transport). Sometimes we'll sample a place on a cruise and then arrange a land-based holiday there. We've no strong feelings for or against Carnival. We've enjoyed the Carnival experience. We're by no means Carnival detractors.

 

"Side-lined" is not the same as "ousted" but that might simply be a matter of semantics.

 

We've not exactly attempted to explain the reasons for the low share price but fully accept that some inference may have been implied. We do, however, agree with your analysis on why the share price has been low. However the point is that all cruise companies have the same problems but, unlike Carnival, some of those other rival companies have seen their share price bounce back.

 

We do know that analysts who do spend their time poring through the entrails of corporate reports have commented with concern that shares of Carnival have struggled to keep pace with rivals like Royal Caribbean. Carnival shares are down nearly 13% in 2022, and they are off more than 35% over the past 12 months. Royal Caribbean shares are up almost 3% on the year and down only roughly 9% over the past 12 months.

 

We also know that in the coming weeks, institutional shareholders will want to hear from Weinstein, about his game plan for the cruise line and how it may differ from Donald’s approach. Many are impatient to see their investment grow and see worthwhile dividends.

 

Your feeling seems to be that the new regime will move "full ahead and steady as she goes." On the other hand, our feelings are that we're probably in for significant change, perhaps unsettling change, in the global cruise industry as a whole. We think that we'll just have to wait and see.

 

As you "know this industry well", It would be very interesting to see your take on just how Carnival and the P&O fleet and business plan might look like in 18 month’s-time... especially in light of the latest CLIA figures which show that, post-covid,  only 73% of cruising traditionalists intend to book another cruise in the next few years. 
 

I think its easy to compare the share price movements however there are some differences. For example, RCI sold off Azamara for $201, in cash in the middle of the pandemic. RCI had also been years ahead in transitioning to bigger ships by way of disposals, usually to its Joint Venture with Tui/Marella.

 

The other big difference is cash v equity. RCI decided to burn through some of its cash but doesn't now have large debt repayments to deal with. Conversely Carnival decide to take the financing offered, initially at an expensive price, although most has now been refinanced to more reasonable historical market terms. Carnival started with circa $10bn liquid assets and currently still has $7bn despite making substantial losses.

 

It does however mean that Carnival has a large interest expense on its books and has publicly said that its priority is paying down that financing instead of paying dividends. I believe Carnival were thinking 2024/25 before dividends return but when they do, they expect them to be as strong as previously.

 

That decision not to pay dividends will keep the share price down as it makes Carnival a bad buy for short term investors. Additionally, the extra debt will keep the share price artificially low as someone else has charges over the business until its repaid.

 

Looking to the future:

 

I do think JW will accelerate the older smaller ships leaving the fleet due to environmental concerns as much as anything else. But what it does leave is a gap between the ultra-small Seaborn and the mass market of Carnival and Princess. This is where Holland America sits but its coverage is currently limited. I think HA will get new ships ordered next to expand their fleet and look to pick up some of the traditional small ship (2k passengers) cruisers worldwide.

 

JW has shaped P&O and Cunard's future with his own hands so I don't expect to much change. P&O is on a journey to broaden its appeal and will do so with every new ship that arrives. Its probably was a 10 year journey before Covid hit, started by the launch of Britannia. Its difficult to see if Covid has increased or decreased the impact of that. My sense is that it will shake off the older cruisers quicker but I don't see it ordering any super size ships that RCI has. I expect by 2030 that P&O may have another one nearing two ships entering service as growth.

 

By then Aurora and Arcadia will be gone however I muse that a single Grand class or Royal class ship from Princess could replace their capacity (probably dependant upon when P&O Australia want to replace Pacific Explorer with a Grand class ship, in relation to Princess new-builds due in 2023 & 2025). I muse this as Princess currently have one to many ships given Majestic Princess isn't permanently based in China as planned. This means that by the time she is likely to take that deployment Carnivals JV with China for a new domestic cruise company is likely to have 2 or 3 ships ready to go.

 

To that effect, cruising traditionalists are being consolidated into the Cunard brand this side of the Atlantic, hence their ability to grow with a fourth ship. If the increasing popularity of Cunard continues, it won't surprise me to see them get a 5th ship around 2030. Normally this would replace QM2  and keep the fleet at 4. However, QM2 will be 28 however adjust for Covid and I suspect she may hang on until 2033/2035.

 

I think we are also going to see more of a Princess presence this side of the Atlantic. Regal and Sky last year were popular, and Emerald, Sky and Enchanted are again proving popular for 2022 bookings. I think the at present that's slightly too much capacity but Enchanted wasn't due to be in Southampton! I think Southampton can handle Sky & Enchanted with good use of capacity.

 

Good debate.

[molecrochip]

To add, the big thing the industry needs to do is sort more LNG or 'next gen power' ships. This is a big thing.

 

Once this gets cracked, I suspect we'll see an acceleration of ship replacements, certainly for pre 2010 ships in order for cruise lines to hit the 50% mark and show that they are doing their bit.

[davecttr]

42 minutes ago, molecrochip said:

......RCI sold off Azamara for $201, in cash in the middle of the pandemic......

Drat, missed the sale, i would have offered up to $1000 😉

[molecrochip]

30 minutes ago, davecttr said:

Drat, missed the sale, i would have offered up to $1000 😉

Oops $201m!

[wowzz]

Thanks Moley for your insider analysis.

In many ways, you have just reinforced what many of us  have thought for some time.  P&O will go down the mass market,  family route, with Princess being the more adult orientated brand. 

You could also suggest that Cunard,  Princess and P&O could be merged into an over arching single brand (Carnival UK), with concomitant cost savings,  which would cover 90% of the UK cruising market.

And, perhaps,  in due course,  buy Saga Cruises, so as to mop up the remaing 10%.  

 

 

[molecrochip]

Cunard, Princess and P&O in the UK share a lot of resource so the cost savings would not be as high as you expect.

 

P&O is something like 98% British passengers whereas Cunard is predominantly UK, US, German and Japanese and Princess is truly worldwide.

[terrierjohn]

10 hours ago, molecrochip said:

To add, the big thing the industry needs to do is sort more LNG or 'next gen power' ships. This is a big thing.

 

Once this gets cracked, I suspect we'll see an acceleration of ship replacements, certainly for pre 2010 ships in order for cruise lines to hit the 50% mark and show that they are doing their bit.

LNG might have less particle deposits but it still generates CO2 along with residual methane, so not entirely clean. Have any cruise lines considered using one of the RR marine nuclear generators, they would certainly be 100% CO2 and particulate free.

[twotravellersLondon]

13 hours ago, molecrochip said:

I think its easy to compare the share price movements however there are some differences. For example, RCI sold off Azamara for $201, in cash in the middle of the pandemic. RCI had also been years ahead in transitioning to bigger ships by way of disposals, usually to its Joint Venture with Tui/Marella.

 

The other big difference is cash v equity. RCI decided to burn through some of its cash but doesn't now have large debt repayments to deal with. Conversely Carnival decide to take the financing offered, initially at an expensive price, although most has now been refinanced to more reasonable historical market terms. Carnival started with circa $10bn liquid assets and currently still has $7bn despite making substantial losses.

 

It does however mean that Carnival has a large interest expense on its books and has publicly said that its priority is paying down that financing instead of paying dividends. I believe Carnival were thinking 2024/25 before dividends return but when they do, they expect them to be as strong as previously.

 

That decision not to pay dividends will keep the share price down as it makes Carnival a bad buy for short term investors. Additionally, the extra debt will keep the share price artificially low as someone else has charges over the business until its repaid.

 

Looking to the future:

 

I do think JW will accelerate the older smaller ships leaving the fleet due to environmental concerns as much as anything else. But what it does leave is a gap between the ultra-small Seaborn and the mass market of Carnival and Princess. This is where Holland America sits but its coverage is currently limited. I think HA will get new ships ordered next to expand their fleet and look to pick up some of the traditional small ship (2k passengers) cruisers worldwide.

 

JW has shaped P&O and Cunard's future with his own hands so I don't expect to much change. P&O is on a journey to broaden its appeal and will do so with every new ship that arrives. Its probably was a 10 year journey before Covid hit, started by the launch of Britannia. Its difficult to see if Covid has increased or decreased the impact of that. My sense is that it will shake off the older cruisers quicker but I don't see it ordering any super size ships that RCI has. I expect by 2030 that P&O may have another one nearing two ships entering service as growth.

 

By then Aurora and Arcadia will be gone however I muse that a single Grand class or Royal class ship from Princess could replace their capacity (probably dependant upon when P&O Australia want to replace Pacific Explorer with a Grand class ship, in relation to Princess new-builds due in 2023 & 2025). I muse this as Princess currently have one to many ships given Majestic Princess isn't permanently based in China as planned. This means that by the time she is likely to take that deployment Carnivals JV with China for a new domestic cruise company is likely to have 2 or 3 ships ready to go.

 

To that effect, cruising traditionalists are being consolidated into the Cunard brand this side of the Atlantic, hence their ability to grow with a fourth ship. If the increasing popularity of Cunard continues, it won't surprise me to see them get a 5th ship around 2030. Normally this would replace QM2  and keep the fleet at 4. However, QM2 will be 28 however adjust for Covid and I suspect she may hang on until 2033/2035.

 

I think we are also going to see more of a Princess presence this side of the Atlantic. Regal and Sky last year were popular, and Emerald, Sky and Enchanted are again proving popular for 2022 bookings. I think the at present that's slightly too much capacity but Enchanted wasn't due to be in Southampton! I think Southampton can handle Sky & Enchanted with good use of capacity.

 

Good debate.

 

 

Many thanks for one of the most well informed, carefully considered and insightful posts for a very long time.

 

We can well understand why you say that RCI had also been years ahead in transitioning to bigger ships and certainly that would help to explain the difference in share prices.

 

Looking to the future we certainly agree that JW will accelerate the older smaller ships leaving the fleet due to environmental concerns The new rules... Energy Efficiency Existing Ship Index coming into force on 1 January 2023 and the plans to make it more stringent year after year will certainly focus corporate minds.

 

On the other hand, we don't think that shaking off the older cruisers quicker is the full answer. It's not so much the age of cruisers that's a problem for the cruise industry... more a case of spend per head. Even pre-covid, Carnival wasn't break even on the cruise fare alone... it relied on on-board spend. The careful budget cruiser who avoided extra charges, took their own drinks onboard, explored independently etc had a good deal but... they were travelling at less than cost price. 

 

Recently, the non-carnival UK based cruise lines have aimed ensure that the fare covers the cost of the cruise.... SAGA all inclusive, FOCL c25% uplift in fares and Ambassador a combination of all-inclusive and pack 'em in... up to four per cabin.

 

More of a Princess presence this side of the Atlantic. Well... a recent cruise comparison of a Iceland & Greenland cruise this summer looking at Princess and three UK bases lines... Princess came out remarkable good value for money.

 

So many thanks for taking the time and trouble to be so helpful and generous with your insights.

[Britboys]

8 minutes ago, twotravellersLondon said:

 

 

...Recently, the non-carnival UK based cruise lines have aimed ensure that the fare covers the cost of the cruise.... SAGA all inclusive, FOCL c25% uplift in fares and Ambassador a combination of all-inclusive and pack 'em in... up to four per cabin...

I don't think Ambassador will be planning to "pack 'em in". Yes, there are quite a number of 4 berth cabins but aiming at a 50+ passenger demographic, it is unlikely that there will be many of those actually occupied by 4 pax. In fact, a number of those cabins are set aside for solo travellers. I believe the capacity when with P&O Princess was 1700+ but Ambassador state their operating capacity will be 1400.

Also, standard fares are not all-inclusive with Ambassador. There are add-on options to include gratuities and a drinks package.

[twotravellersLondon]

1 hour ago, Britboys said:

don't think Ambassador will be planning to "pack 'em in". Yes, there are quite a number of 4 berth cabins but aiming at a 50+ passenger demographic, it is unlikely that there will be many of those actually occupied by 4 pax. In fact, a number of those cabins are set aside for solo travellers. I believe the capacity when with P&O Princess was 1700+ but Ambassador state their operating capacity will be 1400.

Also, standard fares are not all-inclusive with Ambassador. There are add-on options to include gratuities and a drinks package.

 

That's all absolutely true but, of course, the "Ambassador Fares" are all inclusive. 

 

In addition, there are deals to increase capacity. For instance, if four people chose to have two cabins between them the total cost might be £6,176 per cabin and a total of £12,352 overall... but if four people were to share the same cabin, the cost might only be £6,832.

 

It will be very interesting to see how things pan out.... and what the knock-on effect might be on other cruise companies sailing out of the UK.

 

It's interesting that this summer Princess, Ambassador, SAGA and Fred Olsen are doing a head-to-head Greenland and Iceland cruise. SAGA has been booked up for ages but the others all seem to have cabins available.

 

I wonder if this is the Princess effect.

[tring]

15 hours ago, molecrochip said:

I think its easy to compare the share price movements however there are some differences. For example, RCI sold off Azamara for $201, in cash in the middle of the pandemic. RCI had also been years ahead in transitioning to bigger ships by way of disposals, usually to its Joint Venture with Tui/Marella.

 

The other big difference is cash v equity. RCI decided to burn through some of its cash but doesn't now have large debt repayments to deal with. Conversely Carnival decide to take the financing offered, initially at an expensive price, although most has now been refinanced to more reasonable historical market terms. Carnival started with circa $10bn liquid assets and currently still has $7bn despite making substantial losses.

 

It does however mean that Carnival has a large interest expense on its books and has publicly said that its priority is paying down that financing instead of paying dividends. I believe Carnival were thinking 2024/25 before dividends return but when they do, they expect them to be as strong as previously.

 

That decision not to pay dividends will keep the share price down as it makes Carnival a bad buy for short term investors. Additionally, the extra debt will keep the share price artificially low as someone else has charges over the business until its repaid.

 

Looking to the future:

 

I do think JW will accelerate the older smaller ships leaving the fleet due to environmental concerns as much as anything else. But what it does leave is a gap between the ultra-small Seaborn and the mass market of Carnival and Princess. This is where Holland America sits but its coverage is currently limited. I think HA will get new ships ordered next to expand their fleet and look to pick up some of the traditional small ship (2k passengers) cruisers worldwide.

 

JW has shaped P&O and Cunard's future with his own hands so I don't expect to much change. P&O is on a journey to broaden its appeal and will do so with every new ship that arrives. Its probably was a 10 year journey before Covid hit, started by the launch of Britannia. Its difficult to see if Covid has increased or decreased the impact of that. My sense is that it will shake off the older cruisers quicker but I don't see it ordering any super size ships that RCI has. I expect by 2030 that P&O may have another one nearing two ships entering service as growth.

 

By then Aurora and Arcadia will be gone however I muse that a single Grand class or Royal class ship from Princess could replace their capacity (probably dependant upon when P&O Australia want to replace Pacific Explorer with a Grand class ship, in relation to Princess new-builds due in 2023 & 2025). I muse this as Princess currently have one to many ships given Majestic Princess isn't permanently based in China as planned. This means that by the time she is likely to take that deployment Carnivals JV with China for a new domestic cruise company is likely to have 2 or 3 ships ready to go.

 

To that effect, cruising traditionalists are being consolidated into the Cunard brand this side of the Atlantic, hence their ability to grow with a fourth ship. If the increasing popularity of Cunard continues, it won't surprise me to see them get a 5th ship around 2030. Normally this would replace QM2  and keep the fleet at 4. However, QM2 will be 28 however adjust for Covid and I suspect she may hang on until 2033/2035.

 

I think we are also going to see more of a Princess presence this side of the Atlantic. Regal and Sky last year were popular, and Emerald, Sky and Enchanted are again proving popular for 2022 bookings. I think the at present that's slightly too much capacity but Enchanted wasn't due to be in Southampton! I think Southampton can handle Sky & Enchanted with good use of capacity.

 

Good debate.

 

Thank you a lot for both this post and other information/personal opinions which you are so good at providing.

 

What I am thinking about are the longer journeys currently done by P&O ships, such as World Cruises and their segments, round South America, the 30 night cruises to both New York and back and up the St. Lawrence to Quebec.  Do you envisage these being discontinued after Aurora and Arcadia have gone, or would you expect another ship take on at least some of those itineraries?  There are a number of Caribbean round trip cruises as well of course, but since some of those are currently done by Ventura, I am thinking they may continue but would be interesting to hear your opinion of those itineraries in the long term.

 

I appreciate that some of those itinerary options may be available on Cunard and Princess, but as you say they are more international in their flavour so not to everyone's taste.  We tried Princess last autumn and, whilst it was undoubtedly a very cheap option (and IMO explains the popularity of Princess), it was not for us, mainly because of the lack of peaceful areas to sit inside the ship, such as a crow's nest and the restful atmosphere on other ships.  We had a lovely mini suite on Sky Princess, but we do not cruise to confine ourselves to a cabin.  HAL is a cruise line we have not used as yet, but given the interesting locations of some of their fly cruises and reports I have seen about their ships, I do think it is something we will try once long haul travel becomes easier.

 

Edited May 3, 2022 by tring

[Megabear2]

15 hours ago, molecrochip said:

Cunard, Princess and P&O in the UK share a lot of resource so the cost savings would not be as high as you expect.

 

P&O is something like 98% British passengers whereas Cunard is predominantly UK, US, German and Japanese and Princess is truly worldwide.

Cunard is limited at present in the ex UK market when Elizabeth returns to Japan/Australia.  I recall when that move was originally made a lot of Cunard UK guests were upset at the sudden lack of choice thrust upon them.  Assumedly the gamble is Queen Anne filling the hole but reading the Cunard purists and officianado comments there may still be troubles ahead with the traditionalists for that ship.

 

If P&O are going to be all bucket and spade(!) Princess will need to step up quite quickly.  It still remains that the itineraries, particularly the enormous amount of Norway cruises, need to be addressed if P&O intend to entice these families to stay with them long term.  When I first travelled to Disney World in 1988 it was a special holiday that very few did, now it's so common people were visiting from the UK four or five times a year.  Covid has hit Disney and the prices are now sky high with extras/speciality events and the UK punters aren't so keen - been there done that seems to be the mantra. P&O will have to be very careful they don't go the same way. Too much repetition at a time of inevitable price rises may put Curt Cobain & Co looking for other places to spend their money. 

[molecrochip]

On 5/3/2022 at 4:13 PM, Megabear2 said:

Cunard is limited at present in the ex UK market when Elizabeth returns to Japan/Australia.  I recall when that move was originally made a lot of Cunard UK guests were upset at the sudden lack of choice thrust upon them.  Assumedly the gamble is Queen Anne filling the hole but reading the Cunard purists and officianado comments there may still be troubles ahead with the traditionalists for that ship.

 

If P&O are going to be all bucket and spade(!) Princess will need to step up quite quickly.  It still remains that the itineraries, particularly the enormous amount of Norway cruises, need to be addressed if P&O intend to entice these families to stay with them long term.  When I first travelled to Disney World in 1988 it was a special holiday that very few did, now it's so common people were visiting from the UK four or five times a year.  Covid has hit Disney and the prices are now sky high with extras/speciality events and the UK punters aren't so keen - been there done that seems to be the mantra. P&O will have to be very careful they don't go the same way. Too much repetition at a time of inevitable price rises may put Curt Cobain & Co looking for other places to spend their money. 

Very much however Norway is still seen as a very good introduction to cruising. It has the Wow factor, new ship, no shuttle busses, no tenders, generally very polite nation and once you get on shore, you realise exactly how cheap it is to buy alcohol on board!

On 5/3/2022 at 12:07 PM, twotravellersLondon said:

On the other hand, we don't think that shaking off the older cruisers quicker is the full answer. It's not so much the age of cruisers that's a problem for the cruise industry... more a case of spend per head. Even pre-covid, Carnival wasn't break even on the cruise fare alone... it relied on on-board spend. The careful budget cruiser who avoided extra charges, took their own drinks onboard, explored independently etc had a good deal but... they were travelling at less than cost price. 

 

Recently, the non-carnival UK based cruise lines have aimed ensure that the fare covers the cost of the cruise.... SAGA all inclusive, FOCL c25% uplift in fares and Ambassador a combination of all-inclusive and pack 'em in... up to four per cabin.

 

More of a Princess presence this side of the Atlantic. Well... a recent cruise comparison of a Iceland & Greenland cruise this summer looking at Princess and three UK bases lines... Princess came out remarkable good value for money.

I see in the press yesterday, NCL being touted to order $4bn of new ships. I'll predict that JW will arrive and one of his first big things will be to lay a big order of new greener ships for delivery from 2026 onwards. Shipyards are heading quickly towards the end of their orderbooks. Get into early next year and the steel cutting will begin on the final ships on their books (deliveries late 2024/25). Now would be a good point to negotiate new-build ship prices.

 

As a company, you're correct that they weren't hitting break-even from cruise fare however with 17 smaller ships exiting the fleet, I believe that balance has now tipped.

 

Prices will go up. Some of the bargains which are out there are capacity fillers which are more prevalent at present whilst post-Covid confidence returns.

 

Re Princess, see my final comment below.

On 5/3/2022 at 2:17 PM, tring said:

What I am thinking about are the longer journeys currently done by P&O ships, such as World Cruises and their segments, round South America, the 30 night cruises to both New York and back and up the St. Lawrence to Quebec.  Do you envisage these being discontinued after Aurora and Arcadia have gone, or would you expect another ship take on at least some of those itineraries?  There are a number of Caribbean round trip cruises as well of course, but since some of those are currently done by Ventura, I am thinking they may continue but would be interesting to hear your opinion of those itineraries in the long term.

I do think that some of these will continue by I suspect it will be the Grand class ships (Ventura, Azura, maybe another once the two ships leave) which would undertake them. What is interesting is that since 2019, Ventura has done, or be scheduled to do, at least one 35 night Caribbean/US trip in early January. These cruises have been selling out therefore despite these being bigger ships there is still the interest.

On 5/3/2022 at 2:17 PM, tring said:

I appreciate that some of those itinerary options may be available on Cunard and Princess, but as you say they are more international in their flavour so not to everyone's taste.  We tried Princess last autumn and, whilst it was undoubtedly a very cheap option (and IMO explains the popularity of Princess), it was not for us, mainly because of the lack of peaceful areas to sit inside the ship, such as a crow's nest and the restful atmosphere on other ships.  We had a lovely mini suite on Sky Princess, but we do not cruise to confine ourselves to a cabin.  HAL is a cruise line we have not used as yet, but given the interesting locations of some of their fly cruises and reports I have seen about their ships, I do think it is something we will try once long haul travel becomes easier.

Princess is currently cheap in the UK, but I do expect prices to rise. The UK has been very easy to add capacity too during the pandemic recovery. Additionally, the UK has been the testbed for the Princess plus package which has gone down very well.

[jaydee6969]

41 minutes ago, molecrochip said:

Very much however Norway is still seen as a very good introduction to cruising. It has the Wow factor, new ship, no shuttle busses, no tenders, generally very polite nation and once you get on shore, you realise exactly how cheap it is to buy alcohol on board!

I see in the press yesterday, NCL being touted to order $4bn of new ships. I'll predict that JW will arrive and one of his first big things will be to lay a big order of new greener ships for delivery from 2026 onwards. Shipyards are heading quickly towards the end of their orderbooks. Get into early next year and the steel cutting will begin on the final ships on their books (deliveries late 2024/25). Now would be a good point to negotiate new-build ship prices.

 

As a company, you're correct that they weren't hitting break-even from cruise fare however with 17 smaller ships exiting the fleet, I believe that balance has now tipped.

 

Prices will go up. Some of the bargains which are out there are capacity fillers which are more prevalent at present whilst post-Covid confidence returns.

 

Re Princess, see my final comment below.

I do think that some of these will continue by I suspect it will be the Grand class ships (Ventura, Azura, maybe another once the two ships leave) which would undertake them. What is interesting is that since 2019, Ventura has done, or be scheduled to do, at least one 35 night Caribbean/US trip in early January. These cruises have been selling out therefore despite these being bigger ships there is still the interest.

Princess is currently cheap in the UK, but I do expect prices to rise. The UK has been very easy to add capacity too during the pandemic recovery. Additionally, the UK has been the testbed for the Princess plus package which has gone down very well.

Some interesting thoughts in there.

 

We are returning to the Fjords again on Iona this month, and booked up to go again in 2024 on Britannia which is visiting Flam and Bergen.

 

Azura/Ventura doing a worldie would be right up our street, if only!!

 

We are new to Princess, partly to price and part to F&F offers, and thought the Plus package with the medallion app was great.  In fact our next two cruise are on Iona, 7 nights no drink package and Enchanted in July 14 nights with the plus package.