Could the HAL Brand be sold off?

[Sir PMP]

A merger with Seabourn and new management would be great for both lines.

[Kamloops50]

20 hours ago, BermudaBound2014 said:

 

We've been discussing this in the stock forum thread for months. It's an interested thread if this is your jam. We're a fun group :). 

 

I do respectfully disagree with future bookings being safe. You absolutely could be correct, but it's still up in the air. Take a look at the Crystal forum. Lots of guests out to the tune of $10,000+ dollars. We don't have any evidence that if this happens it will be a gradual change anymore than we have evidence there will be a hostile take over (which is on the table). Chapter 7/11/et all. It's simply still too early to know.

 

What we do know is that the buyer will likely purchase for pennies on the dollar given the current financial state of CCL. And any buyer needs to be SUPER cash flush. CCL is still hemorrhaging money at an alarming rate.

You cant compare Crystal to HAL is its sold . Crystal's parent company went into bankruptcy which isn't the same as a HAL being sold . Bankruptcy and selling is like comparing apple to oranges.  The purchaser would want to keep the current client base and market to a new demographic. 

[iancal]

It is just business.   Carnival Corp will do, and should do, what is best for Carnival shareholders.

 

We are not cruising at the moment. Perhaps in 2023.  Last thing we want is to be quarantined on a ship.

 

We are traveling though.   Just got back from Portugal.  A negative antigen test was a requirement of boarding the plane and entry.   We did not view is as a big deal or particularly onerous.  Fifteen minutes at the pharmacy and it was done.

 

Masks were required, and enforced, on all public transport.  Taxis, buses, planes and trains.  We were aware of this before  we made the decision to go.  It really was not such a big deal either.   We were just happy to travel.  Planning another European  land trip for the fall.  Who knows what other countries will impose or lift restrictions by then.

Edited June 27, 2022 by iancal

[Tampa Girl]

4 hours ago, SargassoPirate said:

 

What about scooters, wheelchairs, and walkers clogging up the corridors on HAL?  

 

Those are not "promenade" decks.  Corridors are intended to get from one place to another.  However, you have a point, particularly as to skooters.  But you missed my point, i.e. that young families with babies and strollers are not high on the average HAL cruiser's list of preferences.   If I wanted to coo over babies, this cruiser would not be booking HAL.  

[SargassoPirate]

5 hours ago, Tampa Girl said:

 

Those are not "promenade" decks.  Corridors are intended to get from one place to another.  However, you have a point, particularly as to skooters.  But you missed my point, i.e. that young families with babies and strollers are not high on the average HAL cruiser's list of preferences.   If I wanted to coo over babies, this cruiser would not be booking HAL.  

 

Didn't miss your point.  Lack of feral children is one of the reasons we choose HAL, Cunard, and Celebrity.  Princess seems to have fewer feral children and RCI.  RCI - depending on the time of year and itinerary -can be a floating grade school recess.

 

We don't cruise to be on an alcohol-fueled county fair with carnival rides.  But, there's a cruise line and/or ship for every taste.

 

Mobility devices parked in the corridors - paths of exit travel - is a constant issue that cruise line staff seem to be reluctant to enforce.

Edited June 27, 2022 by SargassoPirate

[BermudaBound2014]

7 hours ago, Kamloops50 said:

You cant compare Crystal to HAL is its sold . Crystal's parent company went into bankruptcy which isn't the same as a HAL being sold . Bankruptcy and selling is like comparing apple to oranges.  The purchaser would want to keep the current client base and market to a new demographic. 

Of course a comparison can be made. Crystal is under new ownership and the topic of this thread is whether or not HaL will be under new ownership. 

 

i would hope everyone here understands the difference between bankruptcy and a sale 😉 

[Kamloops50]

6 minutes ago, BermudaBound2014 said:

Of course a comparison can be made. Crystal is under new ownership and the topic of this thread is whether or not HaL will be under new ownership. 

 

i would hope everyone here understands the difference between bankruptcy and a sale 😉 

There are people here who probably dont understand the difference.

[Mary229]

9 minutes ago, Kamloops50 said:

There are people here who probably dont understand the difference.

I really don’t understand how they can’t see the difference between a company that tries to pay its bills and one that runs like a fugitive so it doesn’t have to pay at the pump.  Serving me caviar doesn’t blind me to reality. 
 

I have a great Travel Agency where they do their best to keep tabs on the financial condition of the companies whose products they offer.  That means I don’t sail, tour or fly with some but it probably saves me grief 

Edited June 27, 2022 by Mary229

[AFNavigator]

8 hours ago, Sir PMP said:

A merger with Seabourn and new management would be great for both lines.

I'm not so sure such a merger would work.  Seabourn ships are so different from HAL ships--half to 1/3 the size and 1/3 to 1/4 the number of passengers--that the two products would be very difficult to merge.  Seabourn is all about all-inclusive luxury suite cruising--that's not how HAL ships are designed.  Seabourn would be a far better fit merging with a line like Oceania than with HAL.

[oaktreerb]

8 hours ago, Sir PMP said:

A merger with Seabourn and new management would be great for both lines.

Both are part of CCL.  Are you saying that someone would buy both HAL and Seabourn as a “package”, thus splitting them off from CCL?   Before Covid I could see HAL with the EXC experiences getting closer to the Seabourn adventure cruises but HAL has fallen back to the more sedate market.  Having sailed both, I still like HAL best.  In my experience stateroom service as well as dining service is better on HAL.  Entertainment is better on Seabourn.  

[Stateroom_Sailor]

I am definitely in favor of HAL being purchased by someone with a clean slate, with the proper focus and financial backing.  The sooner the better for both HAL's future, and Carnival's debt burden (interest rates aren't getting any better).  Maybe the corporation that purchased Azamara would be a contender?

[Kamloops50]

8 minutes ago, Stateroom_Sailor said:

I am definitely in favor of HAL being purchased by someone with a clean slate, with the proper focus and financial backing.  The sooner the better for both HAL's future, and Carnival's debt burden (interest rates aren't getting any better).  Maybe the corporation that purchased Azamara would be a contender?

Anyone who buys it probably won’t have any experience on how to run a cruise line. 
A hedge fund or even the Saudis don’t have experience to run a cruise line. They would have to hire someone who had experience just like they did with their airlines. They hired executives from other airlines to run them.

[Stateroom_Sailor]

35 minutes ago, Kamloops50 said:

Anyone who buys it probably won’t have any experience on how to run a cruise line. 
A hedge fund or even the Saudis don’t have experience to run a cruise line. They would have to hire someone who had experience just like they did with their airlines. They hired executives from other airlines to run them.

 

Carnival pays people to run HAL now.  Even if management costs increase, It is more important to get the cruise line into solvent hands, free of 80 - 90% debt to assets, which goes up every quarter.  

[BermudaBound2014]

18 hours ago, AFNavigator said:

Of these factors, I suspect the "petri dish" perception is the greatest obstacle and is one that may take years to fully overcome.  

 

Up until the last Federal interest rate hike of .75 a couple weeks ago I would agree with you. In fact, public perception is what I've been preaching since April of 2020. The 'image' of cruising in the eyes of Johnny Public has taken a blow. Perhaps fatal.  It's more than tough to recover from the picture the media painted.

 

With that; I do believe the game has changed and rising inflation rates are a more immediate threat to the industry. Sure some analysts are predicting lower interest rates by the end of the year, but have you spoken with a farmer lately? Their costs have risen 200% and those costs won't be fully passed along to the consumer until this years crop is harvested. Take a look at corn, wheat, and soy commodities on the DOW. The 5 year trend is scary stuff. Not to mention housing cost. Without making this political (just the facts) large chunks of Americas Farmland is being purchased by Bill Gates and Blackrock is buying the single family homes. One must pay attention to who is pulling the puppet strings. Inflation is a one/two punch to the cruise industry. First in the form of interest rates and Second in the form of lower occupancy.

 

I could be wrong, lots of analysist disagree with me, but the debt here is astronomical. I no longer see a way out without restructuring (which could mean many different things). 

[BermudaBound2014]

15 hours ago, Mary229 said:

As I have said before, this is a self inflicted injury.  Two things first the program in the US is voluntary and secondly the cruise lines really have not mounted a lobbying or public relations campaign against these protocols. They just keep playing along to get along.   When the judge overturned the airplane mask mandate, the cdc came out and said they would pursue having it overturned back to masking and the airlines quite bluntly said,go ahead, we aren’t  enforcing it.  That would be a good start, the cruise lines could say “CDC, if you want testing come on down here and enforce it, we aren’t your police”

 

 

More and more articles are being published which confirm your statement and are 'hinting' that testing is on it's way out the door. While this article doesn't contain more details than what we already know, the headline appears to be getting the public ready for change. 

 

 

https://www.thestreet.com/investing/royal-caribbean-carnival-could-drop-covid-testing-rules

 

 

[Host Jazzbeau]

Two and a half points (somewhat contradictory):

(1) An analysis I read shows that CCL has the lowest debt ratio of the big three.

That suggests they have less need to hold a 'yard sale' to raise cash.

 

OTOH:

(2a) They also have the most brands and ships, which gives them more flexibility to sell off assets and retire debt.

(2b) Sycamore Partners hired Orlando Ashford as Chief Executive of Azamara – I believe he has some familiarity with HAL. 😉

I can see a three-tier cruise line with HAL (premium), Azamara (upper premium), and Seabourn (luxury) – all touting small ships for their class, longer journeys, destination focus.

Not sure how this would leave CCL, with only Carnival and Princess [and ~Cunard] in the US market – IMHO it would make more sense to ditch HAL and keep Seabourn.  But the folks on the Seabourn forum are excited about getting out from under CCL management!

 

[BermudaBound2014]

It's absolutely true, the company with the highest debt ratio (by far) is NCLH. And that's a whole different discussion for another board but I have some speculation there too lol. 

 

However; as you say, CCL is behemoth. And since all lines are currently losing money (adding to their debt), CCL is going in the black at a faster rate than the others. 

 

Based on everything I've read, the luxury lines have the largest appeal right now in terms of staying power. However; Aronld Donald did not deny that they are in talks with the Saudis. He didn't admit it either, but he did say that CCL would consider offing brands in the same interview.

 

Since we are all speculating...what if... Seabourn goes off on it's own. Perhaps Saudis' pick up HAL as the 'medium' brand with Costa becoming their line for budget conscious. As I said, total speculation.

 

I do think there are some issues with Princess also, since their name is most closely associated with the Covid Pandemic, and the 253 passenger quarantine on the Ruby a few weeks ago brought Princess back in the spotlight at the covid cruiseline. 

 

I wish it was time to start speculating about which cruise lines will survive this mess in tact, but we just aren't there yet. No one knows how this will play out.

 

[AFNavigator]

33 minutes ago, Host Jazzbeau said:

Two and a half points (somewhat contradictory):

(1) An analysis I read shows that CCL has the lowest debt ratio of the big three.

That suggests they have less need to hold a 'yard sale' to raise cash.

 

OTOH:

(2a) They also have the most brands and ships, which gives them more flexibility to sell off assets and retire debt.

(2b) Sycamore Partners hired Orlando Ashford as Chief Executive of Azamara – I believe he has some familiarity with HAL. 😉

I can see a three-tier cruise line with HAL (premium), Azamara (upper premium), and Seabourn (luxury) – all touting small ships for their class, longer journeys, destination focus.

Not sure how this would leave CCL, with only Carnival and Princess [and ~Cunard] in the US market – IMHO it would make more sense to ditch HAL and keep Seabourn.  But the folks on the Seabourn forum are excited about getting out from under CCL management!

 

Hmmm...if HAL were spun off, I wonder if they would retain ownership of their Half Moon Cay lease?  That's a pretty valuable asset which was probably one of the reasons CCL bought HAL.  That and HAL's great Alaska reputation.

[Sir PMP]

4 hours ago, AFNavigator said:

I'm not so sure such a merger would work.  Seabourn ships are so different from HAL ships--half to 1/3 the size and 1/3 to 1/4 the number of passengers--that the two products would be very difficult to merge.  Seabourn is all about all-inclusive luxury suite cruising--that's not how HAL ships are designed.  Seabourn would be a far better fit merging with a line like Oceania than with HAL.

No, Oceania would be worse, not a great reputation and their ships don't look like any Seabourn ship. Hal would get a couple of Prinsendam type ships, and yes they might become the more expensive arm of Hal, but their passenger base would pay for  the extra expense.

[Sir PMP]

3 hours ago, oaktreerb said:

Both are part of CCL.  Are you saying that someone would buy both HAL and Seabourn as a “package”, thus splitting them off from CCL?   Before Covid I could see HAL with the EXC experiences getting closer to the Seabourn adventure cruises but HAL has fallen back to the more sedate market.  Having sailed both, I still like HAL best.  In my experience stateroom service as well as dining service is better on HAL.  Entertainment is better on Seabourn.  

That's why I believe this merger could work.

[AFNavigator]

3 minutes ago, Sir PMP said:

No, Oceania would be worse, not a great reputation and their ships don't look like any Seabourn ship. Hal would get a couple of Prinsendam type ships, and yes they might become the more expensive arm of Hal, but their passenger base would pay for  the extra expense.

Yeah, I figured there would be issues comparing to Oceania.  I just tried to pick a more comparable upscale line with smaller ships closer in size to Seabourn.  Not sure what the best match would be to Seaborne but it almost certainly wouldn't be HAL.  Plus, as someone else noted, HAL and Seaborne are both CCL lines so, other than potential long-term administrative savings, a HAL/Seaborne merger wouldn't be of much benefit to CCL.

[BermudaBound2014]

42 minutes ago, BermudaBound2014 said:

However; as you say, CCL is behemoth. And since all lines are currently losing money (adding to their debt), CCL is going in the black (should read red) at a faster rate than the others. 

 

 

Too late to edit. This should obviously read... CCL is going in the red at a faster rate than others. 

 

https://www.fool.com/investing/2022/06/27/why-cruise-line-stocks-dropped-today/

 

[Nymich]

I posted back in May of 2020 that it would not surprise me at all to see Princess and HAL merge and now we have a good idea how that would work.  Looking at  Carnival and Costa kind of proves the point.  They will also discard the older ships and become leaner to survive the obstacles with testing, vaccinations and inflation.  I have no doubt CCL at their highest levels is looking at everything very closely.

Edited June 28, 2022 by Nymich

[Hlitner]

13 hours ago, Sir PMP said:

A merger with Seabourn and new management would be great for both lines.

Egads, a merger between HAL and SB?  Surely you jest.  We routinely cruise on both lines (which are both part of the HAL Group) and there is no way a merger would benefit anyone.  The two lines are completely different in terms of space ratios, quality, operations, etc.  HAL is now a lower end mass market line (almost a budget line with lots of nickel and diming) while Seabourn is a high end luxury line.  There is some cross fertilization between staff (especially at the senior officer level) but the lines have little in common.  Just consider that even the smaller SB ships have Production Shows (with an onboard case of 4 singers, two dancers, and live musicians that are Produced by Belinda King Productions (a decent English entertainment company) while HAL does not even have Production Shows.  Staffing requirements are also quite different with Seabourn staff generally working 3 month contracts compared to HAL where staff generally work much longer contracts.  There are also big differences in customer service.  If I call Seabourn I will generally get right through or perhaps be on hold for only a few minutes.  Call HAL and you would likely have time to eat a meal and do a manicure while cooling your heels on hold.  And we have also noticed that when we talk to SB folks they actually have some idea about what they speak while HAL staff sometimes do not know answers to the most simple questons.

 

We have seldom heard complaints of SB management when we cruise that line.  That being said, SB has recently gotten some very negative reviews (from even very loyal patrons) which we think is related to staffing issues resulting from recently activating more ships of their fleet.  In the past we used to comment that the onboard staff on Seabourn did not have the word "No" in their vocabulary.  Ask just about anything within reason and it was done.   While HAL has wonderful crew, it is a different world then what we experience on SB.

 

Hank

 

Hank

[OmarOak]

4 hours ago, Host Jazzbeau said:

Two and a half points (somewhat contradictory):

(1) An analysis I read shows that CCL has the lowest debt ratio of the big three.

That suggests they have less need to hold a 'yard sale' to raise cash.

 

OTOH:

(2a) They also have the most brands and ships, which gives them more flexibility to sell off assets and retire debt.

(2b) Sycamore Partners hired Orlando Ashford as Chief Executive of Azamara – I believe he has some familiarity with HAL. 😉

I can see a three-tier cruise line with HAL (premium), Azamara (upper premium), and Seabourn (luxury) – all touting small ships for their class, longer journeys, destination focus.

Not sure how this would leave CCL, with only Carnival and Princess [and ~Cunard] in the US market – IMHO it would make more sense to ditch HAL and keep Seabourn.  But the folks on the Seabourn forum are excited about getting out from under CCL management!

 

Sycamore Partners is not a "builder", they are asset strippers.  

 

Research what they have done to Staples, Chateau St. Michelle and others in their portfolio...