What do Celebrity do to manage their financial situation

[Oceangoer2]

23 hours ago, Los_Pepes said:

Excellent points. One thing to consider is that they are paying a much higher interest rate with lower passenger loads. Until occupancy gets to Pre-Covid levels and they restructure to an overall lower interest rate, they will struggle to pay down $2b per year. Until then the only other recourse is reduction in services. 

Or maybe selling some older ships?

[Oceangoer2]

18 hours ago, LB_NJ said:

Mine is to stop cruising/making future cruise reservations (there are alternatives) until service quality levels out and I can make an informed decision about whether I think the quality justifies the price.

Sometimes service quality is subjective, so you have to sail to form an opinion on current service and quality.  These comments are unique to each poster although educated opinion is worth weighing.

[LB_NJ]

26 minutes ago, Oceangoer2 said:

Sometimes service quality is subjective, so you have to sail to form an opinion on current service and quality.  These comments are unique to each poster although educated opinion is worth weighing.

Before I knew Celebrity was going to make all these changes I booked a B2B for this month based on a Summit cruise last June.  If the quality (in my opinion) has gone down since June why should I book another cruise if Celebrity is on a downward trend.  Who knows where they will be in 2024.

[Oceangoer2]

18 minutes ago, LB_NJ said:

Before I knew Celebrity was going to make all these changes I booked a B2B for this month based on a Summit cruise last June.  If the quality (in my opinion) has gone down since June why should I book another cruise if Celebrity is on a downward trend.  Who knows where they will be in 2024.

Wouldn't you form an opinion during your cruise this month whether to book in 2024?  

[LB_NJ]

1 minute ago, Oceangoer2 said:

Wouldn't you form an opinion during your cruise this month whether to book in 2024?  

In part, if the whole cruise experience is the same or better than what we had in June then what we had last June I would consider 2024 based on price.

 

If the experience has at all cheapened, then I would not consider 2024 at this time no matter what.

[Ipeeinthepools]

6 minutes ago, LB_NJ said:

In part, if the whole cruise experience is the same or better than what we had in June then what we had last June I would consider 2024 based on price.

 

If the experience has at all cheapened, then I would not consider 2024 at this time no matter what.

 

I'll be looking forward to your report.  I only have 1 B2B cruise booked this year on Celebrity and nothing in 2024.  It's a unique itinerary so I'll probably keep it but I'm not booking any more cruises as long as we have the proposed cost cuts.

[KikisDad]

very interesting topic. a lot of good opinions.

During the pandemic, it seems that strategy that the Royal Caribbean Group embarked on was to sell Azamara, fully purchase Silversea, and upgrade Celebrity from Princess/HAL to Azamara/Oceania/Cunard. This being achieved leveraging the advances in facilities and service on the soon to be five Edge class ships. This goal, however, has met with the reality they are in. Service cuts damage the plan to move up in class and plants them firmly, and maybe permanently at the lower level. The saving grace is Princess and HAL are doing service cuts also. 

I do have four cruises booked this year with Celebrity and will work around the cuts.

[CruiseRQA]

58 minutes ago, LB_NJ said:

Before I knew Celebrity was going to make all these changes I booked a B2B for this month based on a Summit cruise last June.  If the quality (in my opinion) has gone down since June why should I book another cruise if Celebrity is on a downward trend.  Who knows where they will be in 2024.

Here's the thing.   Your story is an anecdote.

The financial fact is that RCL (parent company of X) has record bookings and record price/booking for 2023.   They must think they are doing something right and so must the majority of their customers. 

[LB_NJ]

9 minutes ago, CruiseRQA said:

Here's the thing.   Your story is an anecdote.

The financial fact is that RCL (parent company of X) has record bookings and record price/booking for 2023.   They must think they are doing something right and so must the majority of their customers. 

The bookings were made before the changes took effect.  After the changes it will be a couple of months before we see how bookings are going forward.  Because of very high non-refundable deposits there won't be that many cancellations.

 

Corporate management always think they are doing things right, that is why they are doing them.  I assume the management of Pan Am, Eastern Airlines, etc. thought they were doing the right thing.

[RD64]

2 hours ago, CruiseRQA said:

Here's the thing.   Your story is an anecdote.

The financial fact is that RCL (parent company of X) has record bookings and record price/booking for 2023.   They must think they are doing something right and so must the majority of their customers. 

Record bookings are just bookings - people took advantage of good Black Friday deals. All the cruise lines recorded phenomenal bookings. Princess had $1 deposits and HAL had $25 deposits all refundable - not sure about other lines.

 

It is very easy for people to hold multiple bookings, and play the price game of waiting / watching for the price to go down until the final payment date. If those bookings donot translate into fully paid (at the original higher prices) cruises, RCL is just playing a game of public relations smoke and mirrors.

[Ken the cruiser]

6 hours ago, Ken the cruiser said:

 

Thanks for clearing the fuel costs issue up. Then I guess I'll move on to my original thinking for the increase in cruise line booking costs, Supply and Demand. With COVID now clearly moving to the rearview mirror, restrictions no longer applicable in many parts of the cruising world, and with all of the pent-up demand created by the pandemic, Demand definitely has the upper hand in the equation. Pure and simple. 

 

6 hours ago, chengkp75 said:

I think more than supply and demand, it is rising cost (primarily debt service) that has led cruise lines to raise prices to cover the cost.  Prices were held low to "prime the pump" and get the cruises rolling again.  They will continue to raise prices until the demand slows down (there's your supply and demand), and hold there until either debt service becomes more manageable, or they feel they can try another rise in prices.

Makes sense. Here's a fun fact. We just booked a Prime Aqua cabin (with a refundable deposit) on the following 12-day cruise when it first appeared Dec 27. Our cruise price at that time, which wasn't cheap by any means, was $4,478 pp excluding taxes and fees. Today, 3 weeks later, it's now $5,623 pp, or more to the point $1,145 pp higher than what we booked it for.

 

The Demand for this Mar 2025 cruise must be huge!! I realize it's an awesome cruise, as we spend 3 days in New Orleans and then a day in Key West before heading to 3 commonly visited western Caribbean ports. But that's quite the jump for such a short time being available for booking. I'm sure glad we booked this cruise when we did. 😃

 

 

 

Update: Nope! I just checked and there are plenty of the Prime Aqua cabins as well as regular Aqua cabins. 🤔

 

 

Edited January 9, 2023 by Ken the cruiser

[CrazyTrain2]

5 hours ago, Oceangoer2 said:

Or maybe selling some older ships?

To who and for pennies on the dollar?  These ships have a useful life and if the ship is still booking revenue then it pays to keep it afloat.

 

The Big 3 will just slow spiral into debt death.  Execs will continue to be well compensated until the end - and perhaps beyond depending on their contract.

 

3 Years? 5 years?  Maybe they are hoping for a MEME Stock moment to dump shares?

[mpdog42]

19 hours ago, NorthStarStateCruiser said:

I can't tell if you're being passive aggressive or just can't put together a discernable message. Please try again

Cute....Let's try English...Your post sounds like a press release from Celebrity....WWCD...."Would would Cheerleaders do"

Edited January 9, 2023 by mpdog42

[NorthStarStateCruiser]

1 minute ago, mpdog42 said:

Cute....Let's try English...Your post sounds like a press release from Celebrity....WWCD...."Would would Cheerleaders do"

There you go, a little better. Although "would would Cheerleaders do" doesn't make much sense either. One more time.

[mpdog42]

7 minutes ago, NorthStarStateCruiser said:

There you go, a little better. Although "would would Cheerleaders do" doesn't make much sense either. One more time.

No It's cool.....Kind of tired of talking with a "Civilian".....try figuring what out what that means....

[NorthStarStateCruiser]

17 minutes ago, mpdog42 said:

No It's cool.....Kind of tired of talking with a "Civilian".....try figuring what out what that means....

A very condescending post from someone who served as a military police officer and is trying to demean someone posting an opinion on a public message board. That's what I see.

[mpdog42]

22 minutes ago, NorthStarStateCruiser said:

A very condescending post from someone who served as a military police officer and is trying to demean someone posting an opinion on a public message board. That's what I see.

Really.....I think its the other way around...I am not trying to demean you or anybody....I just disagree with posters who (In my Opinion) try to suck up to billion dollar corperations...or did i read you post totally wrong    Please correct me.......by the way i was a Military policeman....not a officer

I actually had to work😁

[NorthStarStateCruiser]

16 minutes ago, mpdog42 said:

Really.....I think its the other way around...I am not trying to demean you or anybody....I just disagree with posters who (In my Opinion) try to suck up to billion dollar corperations...or did i read you post totally wrong    Please correct me.......by the way i was a Military policeman....not a officer

I actually had to work😁

Message received. Thanks for your service. It's just that the terms "cheerleader" and "civilian" come across as condescending. You're welcome to have a different opinion. Please just express that in a more meaningful way next time.

[Ipeeinthepools]

5 minutes ago, NorthStarStateCruiser said:

Message received. Thanks for your service. It's just that the terms "cheerleader" and "civilian" come across as condescending. You're welcome to have a different opinion. Please just express that in a more meaningful way next time.

 

I don't think so,  NorthStar's message was perfect and nt condescending in the least.  Anytime someone disagrees and wants to shut down the discussion they label it condescending and that's just not right.  The "cheerleader" label was most appropriate.

[mpdog42]

1 hour ago, NorthStarStateCruiser said:

Message received. Thanks for your service. It's just that the terms "cheerleader" and "civilian" come across as condescending. You're welcome to have a different opinion. Please just express that in a more meaningful way next time.

Thanks for your support. I understand what you’re trying to say but you’re not explaining your post that’s what I’m interested in. Please explain to me your original post and the opinion you have !!!!as I’ve said it sounds like.post straight from Celebrity…. And that’s not some kind of attack.

Edited January 10, 2023 by mpdog42

[RobertoF]

The best way to find out what is really going on is to listen to the quarterly conference calls for RCL, CCL, and NCLH.  They are all doing some cost cutting.  Right now bookings are pretty strong for 2023, although the next few months tend to be a little weak.  The cruise lines make better money when they move ships to Europe and Alaska.  They should all have a strong summer 2023.  The question then will be how strong will the bookings be for the fall 2023.  The cruise lines still think they are a value proposition relative to land vacations and I tend to agree.  I am OK with some cost cutting that results in slight service reductions and perhaps reduces some of the more extravagent and wasteful passenger behavior.  I think some cost cutting and some increased pricing is appropriate, and better than no cost cutting and bigger price increases.  If onboard spending per passenger and bookings continue to be strong, there is no reason why the cruise industry cannot slowly reduce its debt to manageable levels.  RCL/Celebrity is the strongest of the group with newer and more efficient ships and stronger brand recognition.  So it should recover the fastest.  Carnival serves more of the mass market so it should be fine as well.  NCLH is in a bit more trouble because it has a fairly good fleet but weaker brand recognition.  I think NCLH will struggle the most.  Hopefully if inflation can be brought under control the cost cutting can stop and the cruise lines can all make a better profit.  We all want low fares and great service but more than anything we need the cruise lines to survive so cut them some slack on the service reductions.

[bnurick]

RCL and CCL will ultimately file for bankruptcy, wipe out stockholders and cut a deal with bond holders (haircut) because the collateral (the ships) have no other use. It’s a unique situation versus other corporate debt where the collateral can be sold at a high percentage of the loan value.  Just have to get from today, to the endgame, and then post the workout.

 

Six Flags had $2.7B in debt and emerged from bankruptcy in 2010.

Edited January 10, 2023 by bnurick

[BermudaBound2014]

1 hour ago, bnurick said:

RCL and CCL will ultimately file for bankruptcy, wipe out stockholders and cut a deal with bond holders (haircut) because the collateral (the ships) have no other use. It’s a unique situation versus other corporate debt where the collateral can be sold at a high percentage of the loan value.  Just have to get from today, to the endgame, and then post the workout.

 

Six Flags had $2.7B in debt and emerged from bankruptcy in 2010.

 

Since we are speculating. I think CCL is big enough to piece out their line. The Saudi Sovereignty already owns about 10% off CCL. Huge port going in at Dubai. I see CCL selling off the entire Seabourn line and maybe one of their smaller lines. They already are piecing out Costa ships and adding Costa ships to Carnival and calling it something like Carnival Italiano (I forget the exact name).

 

IMO: NCL is in the weakest position to survive. They are a step ahead of RCL and CCL in terms of layoffs. They are just so small in comparison. They have also had the largest insider trading lately.

 

For what it's worth (and since we are speculating); I see MSC coming off as the big winner here. They have very minimal debt thanks to a nice bail out from momma and daddy MSC Shipping (which is one of the worlds largest container shipping companies). Therefore they aren't strapped to the interest payments and they are positioned with a beautiful fleet. If I'm not mistaken, they nudged out NCL  and is officially the third largest cruise company. They are privately held, so no rushing off to buy their stock lol 🙂 

 

I still see shorts as the play. 

[LMaxwell]

10 hours ago, CruiseRQA said:

Here's the thing.   Your story is an anecdote.

The financial fact is that RCL (parent company of X) has record bookings and record price/booking for 2023.   They must think they are doing something right and so must the majority of their customers. 

 

Tell the posters who are claiming the cut backs are necessary to fend off BK😁

[LMaxwell]

1 hour ago, BermudaBound2014 said:

I still see shorts as the play. 

Me too.  Columbia.  Hurley. Vans. Element.  A different one each night in the MDR specifically just to anger some traditionalist that was happy to see the buffets reduced to insults. 

 

Oh shorting cruise line stocks. Yes, prob money there with volatility ahead.