Carnival’s Next Class of Ship

[jimbo5544]

13 minutes ago, n6uqqq said:

Internet searches show a long term debt of 32-35 billion currently. Maybe I am missing something here?

No , it appears I am.  It has grown since the time i had looked at it.

[Old Fart Cruisers]

18 minutes ago, BasicSailor said:

To me if you retire a ship, then the name should be retired as well.

Just a though to share but my opinion is a drop in the bucket. 

 

That was my thought (sort of).  Why couldn't they have just used 'Mardi Gras II' or 'Jubilee II' ?

Edited April 3, 2023 by Old Fart Cruisers

[staceyglow]

1 hour ago, Old Fart Cruisers said:

 

That was my thought (sort of).  Why couldn't they have just used 'Mardi Gras II' or 'Jubilee II' ?

I believe that  Holland America uses "Nieuw" (New) in front of the original names, such as "Nieuw Amsterdam".

[BlerkOne]

12 minutes ago, staceyglow said:

I believe that  Holland America uses "Nieuw" (New) in front of the original names, such as "Nieuw Amsterdam".

HAL has had 4 ships named Nieuw Amsterdam. 

[n6uqqq]

3 hours ago, jimbo5544 said:

No , it appears I am.  It has grown since the time i had looked at it.

Okay I wasn't trying to be sarcastic, I didn't know if there was a mitigating factor I was missing. Looks like I will be holding my 1000 shares for quite some time. The next class of ships can wait a while! 

[tidecat]

4 hours ago, Old Fart Cruisers said:

 

That was my thought (sort of).  Why couldn't they have just used 'Mardi Gras II' or 'Jubilee II' ?

Because the value is in the nostalgia for the original. Although the original Jubilee and Celebration predated the Carnival prefix, so technically Mardi Gras is the only true repeat.

[jimbo5544]

6 hours ago, n6uqqq said:

Okay I wasn't trying to be sarcastic, I didn't know if there was a mitigating factor I was missing. Looks like I will be holding my 1000 shares for quite some time. The next class of ships can wait a while! 

The ship race does help sell cabins. The holding company has other issues (like Costa’s market in China dried up).  If new builds are the arbiter for which cruise line wins, then Carnival will lose.  I am betting that will not be true five or ten years from now.  

[MagnoliaBlossom]

A little sarcasm here, in reference to Carnival’s financial straights - could it be their next ship is receivership? 🤔

[BlerkOne]

15 hours ago, jimbo5544 said:

The ship race does help sell cabins. The holding company has other issues (like Costa’s market in China dried up).  If new builds are the arbiter for which cruise line wins, then Carnival will lose.  I am betting that will not be true five or ten years from now.  

Mebbe. Carnival still has a partnership in China with two new builds underway. Adora Cruises is still alive and sounds like it will be innovative 

 

https://cruiseindustrynews.com/cruise-news/2023/01/construction-of-second-adora-cruises-newbuild-progressing-in-china/

[jimbo5544]

8 hours ago, BlerkOne said:

Mebbe. Carnival still has a partnership in China with two new builds underway. Adora Cruises is still alive and sounds like it will be innovative 

 

https://cruiseindustrynews.com/cruise-news/2023/01/construction-of-second-adora-cruises-newbuild-progressing-in-china/

I am sure there will still be options for the market.  I am just referring what I was told when I asked some insides why the Costa ships scheduled tp sail from there were moved.

[Lee Cruiser]

RCI definitely has an advantage over Carnival when it comes to new ships coming on, with four ships (one Oasis Class and three new Icon Class ships) by 2026.  The full corp is adding 11 new ships.  These four new ships will give RCI an advantage over Carnival in the next few years as new ships generate excitement and allow the line to charge more.

 

https://cruiseindustrynews.com/cruise-news/2023/04/royal-caribbean-groups-10-billion-orderbook-includes-11-ships/

Edited April 4, 2023 by Lee Cruiser

[BlerkOne]

Royal's long term debt is over $20 billion. The ships on order will add another $10 billion. I guess they want to challenge Carnival for the title.

[jimbo5544]

5 hours ago, Lee Cruiser said:

RCI definitely has an advantage over Carnival when it comes to new ships coming on, with four ships (one Oasis Class and three new Icon Class ships) by 2026.  The full corp is adding 11 new ships.  These four new ships will give RCI an advantage over Carnival in the next few years as new ships generate excitement and allow the line to charge more.

 

https://cruiseindustrynews.com/cruise-news/2023/04/royal-caribbean-groups-10-billion-orderbook-includes-11-ships/

You had me until the math equation at the end.  The mega liners have lots of drawbacks.  Will they have more new ships? Without a doubt.  Will that allow them premium pricing….up for debate, esp what history has shown us.

[Lee Cruiser]

1 hour ago, jimbo5544 said:

You had me until the math equation at the end.  The mega liners have lots of drawbacks.  Will they have more new ships? Without a doubt.  Will that allow them premium pricing….up for debate, esp what history has shown us.

It's more anecdotal on my part, but I've been researching some RC cruises for late next year and early 2025.  Because it's Saturday to Saturday, Icon out of Miami works better for us.  However, because it's the newest ship coming, it is several hundred dollars higher than comparable cabins on their other ships like Symphony and Oasis.  Carnival has certainly done this in the past as well.

[Lee Cruiser]

5 hours ago, BlerkOne said:

Royal's long term debt is over $20 billion. The ships on order will add another $10 billion. I guess they want to challenge Carnival for the title.

Perhaps, but even if all of it is debt, they would still have less than Carnival and have new ships producing a good revenue stream.

[tidecat]

27 minutes ago, Lee Cruiser said:

Perhaps, but even if all of it is debt, they would still have less than Carnival and have new ships producing a good revenue stream.

It's actually possible Royal's debt would exceed Carnival's. Carnival should be around $33 Billion at the end of 2023, then around $31 Billion at the end of 2024.

 

While Royal could have more revenue coming in with all of the new builds, their new ships cost around $50,000 more per lower berths than the Excel class - which when you multiply that out by as many as 6,000 berths, becomes a nut of around $300 million per ship.

 

Royal may also be facing a rash of disposals sometime after 2026 as the Vision class ships reach age 30. This could be especially painful in the early 2030s as the Voyager and Radiance classes had 9 vessels enter service between 1999 and 2004.

 

There's also the risk of creating too much new capacity - it ultimately hurts everyone in the industry, but Royal would have the most exposure given the size of its newer vessels 

[Lee Cruiser]

10 minutes ago, tidecat said:

It's actually possible Royal's debt would exceed Carnival's. Carnival should be around $33 Billion at the end of 2023, then around $31 Billion at the end of 2024.

 

While Royal could have more revenue coming in with all of the new builds, their new ships cost around $50,000 more per lower berths than the Excel class - which when you multiply that out by as many as 6,000 berths, becomes a nut of around $300 million per ship.

Possibly.  With $10 Billion of new debt across the brands, or at least not being able to pay down that much more, they could be in the $31 Billion range themselves. Even with new ships, they should be able to pay down some of that,  Again, they will have four new ships in RC by 2026, and 11 across all the brands.  Given that it takes a couple of years to build a ship, Carnival would have to order in the next couple of years to have ships available by 2027.  It certainly sounds like they are not planning on adding any ships before then, if they do then.  That will be four years or so without a new ship.  This should help them pay down debt, but only time will tell which strategy works out best.

 

Unfortunately, I don't think Carnival really has a choice.  With $36 billion of debt, they have to get this down as fast as possible.

[BlerkOne]

25 minutes ago, tidecat said:

It's actually possible Royal's debt would exceed Carnival's. Carnival should be around $33 Billion at the end of 2023, then around $31 Billion at the end of 2024.

 

While Royal could have more revenue coming in with all of the new builds, their new ships cost around $50,000 more per lower berths than the Excel class - which when you multiply that out by as many as 6,000 berths, becomes a nut of around $300 million per ship.

 

Royal may also be facing a rash of disposals sometime after 2026 as the Vision class ships reach age 30. This could be especially painful in the early 2030s as the Voyager and Radiance classes had 9 vessels enter service between 1999 and 2004.

 

There's also the risk of creating too much new capacity - it ultimately hurts everyone in the industry, but Royal would have the most exposure given the size of its newer vessels 

Higher costs per lower berth equals higher fixed costs - Royal will have to charge more and sail at higher occupancy just to break even which leaves nothing to service debt.

 

Royal already sold off Azamara. Who's next?

[tidecat]

13 minutes ago, BlerkOne said:

Higher costs per lower berth equals higher fixed costs - Royal will have to charge more and sail at higher occupancy just to break even which leaves nothing to service debt.

 

Royal already sold off Azamara. Who's next?

Yet Royal acquired Silversea in 2020 - while that might be the glass that gets broken in case of an emergency, I think they'd just part with their half of TUI - then they'd be free to compete against them in certain markets to try to reallocate any excess capacity (barring any noncompete agreements).

 

[jimbo5544]

11 hours ago, Lee Cruiser said:

It's more anecdotal on my part, but I've been researching some RC cruises for late next year and early 2025.  Because it's Saturday to Saturday, Icon out of Miami works better for us.  However, because it's the newest ship coming, it is several hundred dollars higher than comparable cabins on their other ships like Symphony and Oasis.  Carnival has certainly done this in the past as well.

Do not really have a dog in this fight (if it really even is one) but I agree there is the premium of pricing when a ship comes out.  My post was that your post I was quoting was implying that premium would stay because they were all Royal new ships and history simply has not proven that to be true.  All that said, we can move on.

Edited April 5, 2023 by jimbo5544

[jimbo5544]

9 hours ago, tidecat said:

Yet Royal acquired Silversea in 2020 - while that might be the glass that gets broken in case of an emergency, I think they'd just part with their half of TUI - then they'd be free to compete against them in certain markets to try to reallocate any excess capacity (barring any noncompete agreements).

 

His post has def relevance, RCCL did sell Azamara, their crown gem.  Their is no overlap between a royal ship and an Azamara.  It was def for cash because of the covid forced shutdown.  

[mz-s]

Carnival's best option is to stick with their home port strategy of putting ships where their competitors aren't. They should be giving every concession conceivable to Charleston to keep that port open if it is possible (and it probably isn't, I'm sure they've tried for 10 years to make that port work and the NIMBYs are bound and determined to block it). Expand operations in Mobile as much as feasible. Put a newer ship, maybe an additional ship in Norfolk. Could Savannah, GA support a cruise ship? How about Corpus Christi, TX? There is enough interest in cruising right now that they could probably fill a ship every 4-8 hour's drive down the coastline.

 

They cannot compete against their competitor's when both are at the same port, except on price. Look at what happened when RCL came back to Long Beach - those Radiance and Panorama cruises are consistently some of the cheapest in the fleet despite being their newest non-Excel concepts. And competing on price won't pay down debt.

[jimbo5544]

15 minutes ago, mz-s said:

Carnival's best option is to stick with their home port strategy of putting ships where their competitors aren't. They should be giving every concession conceivable to Charleston to keep that port open if it is possible (and it probably isn't, I'm sure they've tried for 10 years to make that port work and the NIMBYs are bound and determined to block it). Expand operations in Mobile as much as feasible. Put a newer ship, maybe an additional ship in Norfolk. Could Savannah, GA support a cruise ship? How about Corpus Christi, TX? There is enough interest in cruising right now that they could probably fill a ship every 4-8 hour's drive down the coastline.

 

They cannot compete against their competitor's when both are at the same port, except on price. Look at what happened when RCL came back to Long Beach - those Radiance and Panorama cruises are consistently some of the cheapest in the fleet despite being their newest non-Excel concepts. And competing on price won't pay down debt.

Me thinks your view is jaded, but that is just me.  I agree in the homeport discussion, but in terms of ships and the draw if them….not so much.  

[CarnivalShips480]

I don't think Carnival needs to run away from the ports Royal Caribbean is in.

 

An ironic thing is that Royal Caribbean made Icon for families with all the things it has, but it is so expensive I can't see how an average family can afford it.

[Lee Cruiser]

1 hour ago, mz-s said:

Carnival's best option is to stick with their home port strategy of putting ships where their competitors aren't. They should be giving every concession conceivable to Charleston to keep that port open if it is possible (and it probably isn't, I'm sure they've tried for 10 years to make that port work and the NIMBYs are bound and determined to block it). Expand operations in Mobile as much as feasible. Put a newer ship, maybe an additional ship in Norfolk. Could Savannah, GA support a cruise ship? How about Corpus Christi, TX? There is enough interest in cruising right now that they could probably fill a ship every 4-8 hour's drive down the coastline.

 

They cannot compete against their competitor's when both are at the same port, except on price. Look at what happened when RCL came back to Long Beach - those Radiance and Panorama cruises are consistently some of the cheapest in the fleet despite being their newest non-Excel concepts. And competing on price won't pay down debt.

I've been hoping they would add a third ship to New Orleans doing Saturday-Saturday cruises.  The shorter itineraries there get old. I certainly believe that the N.O. market could support three ships.