Could the HAL Brand be sold off?

[BermudaBound2014]

1 hour ago, MustBCruzn said:

I wish I had seen this thread sooner. I recently booked the Feb 2024 35 day Hawaii-Tahiti-Marquesas cruise on the Koningsdam which required a heafty deposit. Now instead of being excited, I'm worried. 😬

 

This thread is pretty doom and gloom. I am also pretty gloomy when it comes to the cruise industry but I would advise you to just double check with the credit card company you put the deposit down on to see if you are protected in a worse case scenario. Credit cards are known to have little niggles which give them lots of room to not fulfill under FTC laws. That should help you swing more to being excited again :). 

[rkacruiser]

4 hours ago, BermudaBound2014 said:

It's pretty common knowledge in the industry that HAL is attempting to attract a younger crowd

 

It may not be "common knowledge" among many of those outside the cruise industry, but it is my experiences that the discussion about the age of guests on any cruise line is not productive.  Do senior citizens sail on Carnival?  Do young solos, couples, and families sail on HAL?  Do families with school age children sail on a HAL world cruise?  They do!  End of discussion!  Does a cruise line attract one age/type of cruiser?  Well, of course.  That only makes marketing sense.  But, I am fed up with HAL being portrayed as mainly attracting those who have made funeral arrangements and are only waiting.  

 

The differences among cruise lines has nothing to do with the demographics of those who sail on their ships.  It was everything to do with the experiences that each of the individual cruise lines offer.  A Grandma may thoroughly enjoy a water slide on a Carnival ship and find Lincoln Center Stage to be uninteresting on a HAL ship.  Yet, that same Grandma may find an afternoon sitting in a HAL's Crow's Nest observing the ship's scenic cruising followed by an hour or two in the Greenhouse Spa's Hydrothermal Pool and Thermal Suite to be just "right".  

 

Classification of cruisers is as inaccurate as such that takes place in our society in many situations.  

[iancal]

We are in our 70's.

 

It is all down to ship, itinerary, date, and price for us.  Do we care if the logo on the funnel is HAL, Celebrity, Princess, RCI...whatever?  No.

 

Besides, we like to enjoy the differences between cruise lines and brands.  Breaks the boredom.

 

 

Edited July 5, 2022 by iancal

[rkacruiser]

2 minutes ago, iancal said:

Besides, we like to enjoy the differences between cruise lines and brands.  Breaks the boredom.

 

For me, never bored.  But, I understand what you are saying.  And, that can be a negative if one's expectations due to prior cruises are not then met.  

 

One of my best recent cruise decisions that I have made was to book Yacht Club on MSC Meraviglia.  That opened a vista to a cruise experience that I had not experienced.  

[BermudaBound2014]

21 minutes ago, rkacruiser said:

 

It may not be "common knowledge" among many of those outside the cruise industry, but it is my experiences that the discussion about the age of guests on any cruise line is not productive.  Do senior citizens sail on Carnival?  Do young solos, couples, and families sail on HAL?  Do families with school age children sail on a HAL world cruise?  They do!  End of discussion!  Does a cruise line attract one age/type of cruiser?  Well, of course.  That only makes marketing sense.  But, I am fed up with HAL being portrayed as mainly attracting those who have made funeral arrangements and are only waiting.  

 

 

Productive or not, HAL knows it's customer ages and HAL appears to also be fed up with that image which is why they have entire marketing teams studying the age of their passengers and making changes onboard to attract a 'younger' demographic. Heck; there are entire University Courses being offered in how to 'Market to Millennials'. 

 

Demographics matter. 

 

 

[iancal]

33 minutes ago, rkacruiser said:

 

For me, never bored.  But, I understand what you are saying.  And, that can be a negative if one's expectations due to prior cruises are not then met.  

 

One of my best recent cruise decisions that I have made was to book Yacht Club on MSC Meraviglia.  That opened a vista to a cruise experience that I had not experienced.  

Good for you!.  Far better than being stuck in a rut of the same old same old.

[Guest ldtr]

10 hours ago, OmarOak said:

Not necessarily true. A "sale" could happen in many ways.

 

In thee event of the sale of the operating company, there is likely debt on the ships and an operating capital line of credit. A Cruise lines could be "sold" in a transaction where the seller receives $0 cash, the Buyer assumes the debt on the hard assets and the seller is left holding the operating line of credit. Essentially the business is "sold" but the seller's return is negative.

 

I brokered this type of transaction a few weeks ago in a different capital intensive industry. It can be ugly for the seller of a distressed business.

Certainly I have been involved in such transactions, as well as cases of asset purchased to minimize liabilities.

 

The pointbi am making is that the way that a lot of the debt is set up, country loan guarantees tied to ship construction  other loans  secured bu ships, with the ships themselves residing in their own wholely owned subsidiaries. Pretty tight lean covenants on even the unsecured loans makes it unlikely that the associated debt would not go with the ships in case of a sale of a line.  You are more likely to see a line given away with its debt than to see a line sold without that debt going with the company.

 

The question is more about the potential revenue to debt ratio of the parent before and after the sale.

 

Again it is very unlikely that you would see a sale of a line without that li es associated debt being included.

[Guest ldtr]

6 hours ago, BermudaBound2014 said:

From CLIA, 2019. Pre covid. Data for HAL will be skewed younger post covid since they aren't running all their longer itineraries. 

 

 

 

Who said anything about princess? You may want to reread post #144 😉 

 

 

Sure, fine. Let's use 57 as the average age of HAL passengers. That is still a full decade older than the average cruise passenger (which is 47). Thanks for making my point, again ;).

 

Why do you keep comparing to Princess? I mentioned nothing about Princess, I stated that HAL demographics would "lean toward" less tech savoy experiences and even mentioned that was a guess. 

 

 

For reference, this was the post you quoted in both responses above. 

 

 

 

Again, thank you for making my point :). Happy cruising. 

You made a comment about HAL having the oldest demographic, but then they to compare it to the entire industry, not to its competition.

 

Subtract the family focused lines of Disney, Royal and Carnival, and look at the remaining lines that HAL competes with Celebrity, Princess, etc and the average age is now similar. HAL has not only made the effort to change its demographics to attract a younger audience, it has succeeded to  degree that it now lines up with the lines it competes with. This is considerably different that the 65 average of 5 years ago.

[BermudaBound2014]

32 minutes ago, ldtr said:

Subtract the family focused lines of Disney, Royal and Carnival, and look at the remaining lines that HAL competes with Celebrity, Princess, etc and the average age is now similar. HAL has not only made the effort to change its demographics to attract a younger audience, it has succeeded to  degree that it now lines up with the lines it competes with. This is considerably different that the 65 average of 5 years ago.

 

Do you have any type of link to support this position? What I'm seeing still shows HAL skewing much older than both Celebrity and Princess. I am looking at data from 2018. I think 2019 would be better data. Any data since the resumption is pretty much irrelevant since HAL has not resumed it's normal itineraries (which also skew older). 

 

PS: This isn't a slam on HAL or it's customers.  HAL has done a great job marketing toward a younger audience. I'm just talking demographic facts with no judgement other than from a business seat.

Edited July 6, 2022 by BermudaBound2014

[BermudaBound2014]

53 minutes ago, ldtr said:

You made a comment about HAL having the oldest demographic…

I never made any such claim.. 🙂

Edited July 6, 2022 by BermudaBound2014

[OmarOak]

4 hours ago, ldtr said:

Certainly I have been involved in such transactions, as well as cases of asset purchased to minimize liabilities.

 

The pointbi am making is that the way that a lot of the debt is set up, country loan guarantees tied to ship construction  other loans  secured bu ships, with the ships themselves residing in their own wholely owned subsidiaries. Pretty tight lean covenants on even the unsecured loans makes it unlikely that the associated debt would not go with the ships in case of a sale of a line.  You are more likely to see a line given away with its debt than to see a line sold without that debt going with the company.

 

The question is more about the potential revenue to debt ratio of the parent before and after the sale.

 

Again it is very unlikely that you would see a sale of a line without that li es associated debt being included.

I presume you've heard the term "cram down"?

 

You are possibly correct in the event of a line selling a single asset (one ship) but selling a company, not likely. 

 

The probable scenario would be the asset debt holder accepting an asset value cram down rather than wading through years of the morass of a bankruptcy.

 

From the buyer side, most ships and cruise lines are currently worth less than the underlying debt. For any transaction to happen, somethings got to give. The cruise line and debt holder are both stuck. The buyer is unconstrained - it's simply not their problem. 

[Guest ldtr]

15 hours ago, OmarOak said:

I presume you've heard the term "cram down"?

 

You are possibly correct in the event of a line selling a single asset (one ship) but selling a company, not likely. 

 

The probable scenario would be the asset debt holder accepting an asset value cram down rather than wading through years of the morass of a bankruptcy.

 

From the buyer side, most ships and cruise lines are currently worth less than the underlying debt. For any transaction to happen, somethings got to give. The cruise line and debt holder are both stuck. The buyer is unconstrained - it's simply not their problem. 

Certainly know about many techniques companies used when faced with trying to offloading debt. The point is that most of them would not make sense in this case.

 

After all the limes were all profitable pre covid, if Carnival expects them all to return to profitability then it needs the capacity and size to generate the revenue to pay off the existing debt.

 

If they did make a sale of a line and the debt holders were willing to change the covenants and accept a cram down on the portion of the debt associated with that line, then the associated portion of the debt to that line would be removed from Carnivals books with the sale of the line.  Which is back to the original point I name that it is unlikely the Carnival would sell a line without the associated debt also getting transfered off there books.

 

The one thing they will not do is a transactiin that leaves them with a higher debt to revenue ratio afrer the transaction.

 

With any of the lines it is unlikely that one would be sold if at the end of the transaction The holding company were to end with a worse potential debt to revenue ratio, because it would be even more difficult for them to recover. In the case of Seaborne they have not exactly been building a large number of new ships and as such the relative amount of debt is pretty low. Thus the reason why it might actually get sold, along with any debt it does have, if it raises enough cash.  

 

As far as HAL goes, it has less new ship debt, than Carnival or Princess. But it has built enough that it has a fair amount of debt. It does not make sense for CCL to sell any line if it leaves them in worse shape debt wise. They have been building enough new shios that debt is spread pretty heavily throughout the lines.

 

Might be more likely to see something done with one of the foreign focused lines such as Costa or Aida than to see HAL sold.

[Guest ldtr]

19 hours ago, BermudaBound2014 said:

 

Do you have any type of link to support this position? What I'm seeing still shows HAL skewing much older than both Celebrity and Princess. I am looking at data from 2018. I think 2019 would be better data. Any data since the resumption is pretty much irrelevant since HAL has not resumed it's normal itineraries (which also skew older). 

 

PS: This isn't a slam on HAL or it's customers.  HAL has done a great job marketing toward a younger audience. I'm just talking demographic facts with no judgement other than from a business seat.

Frommers is one example that is stating that HAL has been successful in reducing its aver age to 57. 

 

Which is in line with its competition. Princess and Celebrity. Princess also at 57. Celebrity running 55 to 56.

 

Other sources are paid for statistics companies and not publicly accessable.

 

As far as CLIA numbers Disney, Carnival and Royal all run below that average and largely is what pulls the numbers down.

 

 

[Guest ldtr]

19 hours ago, BermudaBound2014 said:

I never made any such claim.. 🙂

You claimed that HAL averaged over 64 which would have made it easily the oldest of the mainstreamlines.

[BermudaBound2014]

12 minutes ago, ldtr said:

Frommers is one example that is stating that HAL has been successful in reducing its aver age to 57. 

 

Which is in line with its competition. Princess and Celebrity. Princess also at 57. Celebrity running 55 to 56.

 

Other sources are paid for statistics companies and not publicly accessable.

 

As far as CLIA numbers Disney, Carnival and Royal all run below that average and largely is what pulls the numbers down.

 

 

 

I would love to see an actual link to your claim that Frommer's stating Princess average age is 57 and Celebrity is 55/56. All I can find from Frommers is a general statement saying Celebrity caters to 35 and up and "Princess passengers are less boisterous than those aboard Carnival and not quite as staid as those aboard Holland America.".  A link please or you just made it up :). 

 

In the meantime, this is the data I'm working off of:

MSC: Average age 52.1

Tui: Average age 58.5

NCL: Average age 52.5

Costa: Average age 52.2

Carnival: Average age 44.9

Royal Caribbean: Average age 48.8

Holland America: Average age 64

Oceania: Average age 64.1

Seabourn: Average age 66.3

 

"Among major ocean cruise lines, Holland America Line also attracted an older passenger base, with an average age of 64. " (2018)

 

 https://www.cruise1st.co.uk/blog/cruise-holidays/how-old-is-the-average-cruise-passenger/#:~:text=For cruise lines that targetted,an average age of 48.8.

 

 

[Guest ldtr]

1 hour ago, BermudaBound2014 said:

 

I would love to see an actual link to your claim that Frommer's stating Princess average age is 57 and Celebrity is 55/56. All I can find from Frommers is a general statement saying Celebrity caters to 35 and up and "Princess passengers are less boisterous than those aboard Carnival and not quite as staid as those aboard Holland America.".  A link please or you just made it up :). 

 

In the meantime, this is the data I'm working off of:

MSC: Average age 52.1

Tui: Average age 58.5

NCL: Average age 52.5

Costa: Average age 52.2

Carnival: Average age 44.9

Royal Caribbean: Average age 48.8

Holland America: Average age 64

Oceania: Average age 64.1

Seabourn: Average age 66.3

 

"Among major ocean cruise lines, Holland America Line also attracted an older passenger base, with an average age of 64. " (2018)

 

 https://www.cruise1st.co.uk/blog/cruise-holidays/how-old-is-the-average-cruise-passenger/#:~:text=For cruise lines that targetted,an average age of 48.8.

 

 

You can find the Frommers link for HAL using the search terms frommers Holland America age

 

It is in the same set of cruise line references where the Celebrity one talks about appealing to ahesover 35

 

The points guy posted Princess also being 57 average on his analysis of Princess.

 

Even with the data you posted clearly Carnival is well below the CLIA average and just happens to carry the most passengers. Your data on Royal shows it around the clia avg,  mine shows it a bit lower. Disney is also quite a bit lower but relatively small number of passengers.

 

The data I am using is from a purchased industry analyst report and not public.

 

But other than the number for HAL not too much different.

 

HAL has been successful in bringing their numbers in line with their competition of Celebrity and Princess.

 

Of course of the 3 lines the average length of cruises has Celebrity the shortest, then Princess, then HAL doing the most longer cruises.

[BermudaBound2014]

If you go back and reread my original statement, you will see that I never suggested HAL was out of line with Celebrity or Princess (since I never mentioned either). You made that up also 😉 

 

 Still waiting for a link 😄 

[iancal]

If Carnival Corp decides to unload any subsidiary cruise lines I would think their target would be the one than gives them the most revenue (or the least loss) and retires the most debt.

 

And one that over time does not fit with their long term strategy or the one that has a history of financial performance that falls well short of best in class financial returns.

 

Without access to any of the subsidiary financials it would be almost impossible to discern what the likely short list might look like.

 

The deal structure could be anything.  Brand and ships, brand but not all ships, just ships.  Who knows.  Lots of creative financing and deal structure options out there.  

 

One thing for certain.  It is a buyers market.  The buyer is completely unfettered and will be in the driver's seat on any sale.  Major debt holders may also have a say depending on how under water the deal might be.

 

 

Edited July 7, 2022 by iancal

[john2003]

  In the case of Seaborne they have not exactly been building a large number of new ships and as such the relative amount of debt is pretty low. Thus the reason why it might actually get sold, along with any debt it does have, if it raises enough cash.  

 

Except that they replaced their entire fleet a few years ago which now sail for Windstar. Relative to their revenue they may still have quite a debt load but tiny in the overall picture.

[Guest ldtr]

18 hours ago, BermudaBound2014 said:

If you go back and reread my original statement, you will see that I never suggested HAL was out of line with Celebrity or Princess (since I never mentioned either). You made that up also 😉 

 

 Still waiting for a link 😄 

do thr search I am currently on a Princess ship with a very slow internet that takes minutes to bring up a page so not spending the time. Gave the terms that bring up the HAL information on Frommers if you really wanted it.

 

The data is on frommers.com They have a table of a several cruise.

 

Actually quite funny you post a data set that shows HAL the oldest and then say that you never indicated hal was the oldest. You say that hal leans older, but then say that you never claimed it was older that the other mainstream lines.

 

 

[BermudaBound2014]

Just now, ldtr said:

do thr search I am currently on a Princess ship with a very slow internet that takes minutes to bring up a page so not spending the time. Gave the terms that bring up the HAL information on Frommers if you really wanted it.

 

The data is on frommers.com They have a table of a several cruise.

 

Actually quite funny you post a data set that shows HAL the oldest and then say that you never indicated hal was the oldest. You say that hal leans older, but then say that you never claimed it was older that the other mainstream lines.

 

 

 

I can not believe you wish to continue this silly debate while you are on a cruise ship, however I'll play along since we seem to be playing rather nicely and I am very curious to see the actual research set you have drawn you claims from (because it isn't Frommer's).

 

I have been on the frommers site numerous times over the years. I was able to easily find the 57 age number related to HAL that you referenced.  However; you mentioned more than one site indicating HAL's demographic were 57. I'd like that other link please. 

 

What I am more curious about is your claim that Princess is also 57 and Celebrity is 55 to 56. I am requesting a link for that data because that is not in Frommers. If you read through the Princess and Celebrity pages on Frommers, they spins Celebrity and Princess as younger than HAL.

 

Short answer: Please reference this claim you made in #188. You wrote: 

 

 

[Guest ldtr]

10 hours ago, BermudaBound2014 said:

 

I can not believe you wish to continue this silly debate while you are on a cruise ship, however I'll play along since we seem to be playing rather nicely and I am very curious to see the actual research set you have drawn you claims from (because it isn't Frommer's).

 

I have been on the frommers site numerous times over the years. I was able to easily find the 57 age number related to HAL that you referenced.  However; you mentioned more than one site indicating HAL's demographic were 57. I'd like that other link please. 

 

What I am more curious about is your claim that Princess is also 57 and Celebrity is 55 to 56. I am requesting a link for that data because that is not in Frommers. If you read through the Princess and Celebrity pages on Frommers, they spins Celebrity and Princess as younger than HAL.

 

Short answer: Please reference this claim you made in #188. You wrote: 

 

 

As I have mentioned several times which, you choose to ignore. I did give a reference to an article by the points guy when he covered Princess in depth. Both of those sources Frommers and The Points Guy are in agreement with a non public analyst reports that I subscribe to  They are public so I referenced them. 

 

 

 

[BermudaBound2014]

1 minute ago, ldtr said:

As I have mentioned several times which, you choose to ignore. I did give a reference to an article by the points guy when he covered Princess in depth. Both of those sources Frommers and The Points Guy are in agreement with a non public analyst reports that I subscribe to  They are public so I referenced them. 

 

 

 

Lol- Now I understand. The data for celebrity being 55-56 comes from a “non public” secret reference only you have access to. Enjoy your cruise and thanks for the giggles :). 

[LocoLoco1]

My reply to original question: It could be. Selling older vessels (with dated layout and 1114,

[LocoLoco1]

3 minutes ago, LocoLoco1 said:

My reply to original question: It could be. Selling older vessels (with dated layout and 1114,

MyApologies: It could be. Selling older vessels across the lines with dated layouts and fewer cabins is more likely.