Future of Carnival fleet - 2027 and beyond.

[jimbo5544]

1 hour ago, JMAE said:

The industry is anticipating strong growth for the next few years.  When we see price moderation, we will know the cruise lines are forecasting a softening of the market.  Currently, the market is strong, and demand is very high.  When there is a market downturn it may become difficult to sail a fill the mega ships and the smaller ships may be more profitable since they would be able to fill them in a down market and their cost of operation is less.  With that said, I believe CCLs has 9 cruise lines in their portfolio, with CCL being the largest and most attractive to new cruises due to price, departure ports, etc. In the future I believe CCL we come up with a corporate loyalty program to introduce CCL guests to their other brands (some with smaller ships) and CCL will build ships the market dictates and may include smaller ships to maintain their drive to the port marketing.         

The market is flush, there is no doubt.  While I do not have a lot of facts to base this on, I would not be surprised to find that they are not the price leader presently.  Of course, things change, but when demand is so high, normal is a strange word.  

 

I would love to see a cross line loyalty program, they have tried and tried.  I have serious reservations that we will ever see it.  Hope I am wrong.  

 

Lastly, the economics of larger ships compared to smaller ships will never cross for pricing, simply not feasible.  On the same note, my view is, Carnival building a Spirit class ship again is slightly higher chance of happening than me winning Powerball, the economics just plain do not work.  Could there be another Excel class, you betcha, come 27 ((or thereabouts)  we will see the follow on to the Excel class, not smaller BTW.🤔  Could they repurpose other line ships like Luminosa (HAL ships as well)?  Sure.  From my humble view, that would be absolute best scenario.

[toad455]

6 hours ago, UPNYGuy said:

This is highly speculative, but this does not bode well for the future of the fantasy class. Those are the smallest ships in the fleet. I can see carnival repurposing two spirit class ships to fill the void. 
 

Plus, those that like the fantasy class really love them. The flipside is those that hate them absolutely despise them. It seems those ships are extremely polarizing because of the lack of features, and the age. 

 

Paradise and Elation will be 30 years old in 2028. I wonder if any of the Costa ships might bounce over to Carnival by then. Costa seems to be slowly disappearing.

[UPNYGuy]

3 minutes ago, toad455 said:

 

Paradise and Elation will be 30 years old in 2028. I wonder if any of the Costa ships might bounce over to Carnival by then. Costa seems to be slowly disappearing.

It wouldn’t surprise me to see more costs ships move over, and Carnival to become “Cosnival” so to speak. 

[Cushing985]

I'm a fan of smaller ships (the Spirit, I think, is the perfect size).  We all know they are old now without much in the way of modern conveniences but I think a newly designed ship around the size of the Spirit with Cove balconies would be a hot seller.

[CarnivalShips480]

delete

Edited April 12 by CarnivalShips480

[tidecat]

On 4/9/2024 at 11:49 AM, toad455 said:

 

Paradise and Elation will be 30 years old in 2028. I wonder if any of the Costa ships might bounce over to Carnival by then. Costa seems to be slowly disappearing.

Not much left Costa can hand down that fits for the height restricted ports - just Deliziosa. I think Costa has the fleet they want for the foreseeable future to serve Europe, Asia (sans China), and Latin America. If they wanted to part with more ships it would have likely already happened.

 

Now if a non-vertically challenged port needs a new ship, Costa could be used to free up a Spirit-class ship from Mobile, Brisbane, or Galveston. But sometime in the 2030s or 2040s, Baltimore, Jacksonville, and Tampa are going to run out of options without relocating their port or raising their bridges.

[toad455]

Costa has 9 ships left in their fleet with no new builds planned. Their oldest ship, the Fortuna, is now 21 years old. Maybe they get the old Mediterranea from Adora cruises in a few years if that cruise line doesn't start to get off the ground?

[kwokpot]

On 4/9/2024 at 10:03 AM, JMAE said:

When there is a market downturn it may become difficult to sail a fill the mega ships and the smaller ships may be more profitable since they would be able to fill them in a down market and their cost of operation is less

I don't think that is the case AT ALL. Everything written has made the case that larger ships are more profitable since there's more cabin types that can charge higher fees even though there's more cabins to fill than a smaller ship (AND they are VASTLY more fuel efficient vs the older ships). I haven't read anything written by any cruiseline that supports your statement above and actually what's written is exactly the opposite, hence cruiselines building larger ships. NCL's newest Prima Class set out to build smaller ships and everyone is complaining they aren't big enough (Even NCL's CEO felt the same), so the next several Prima Class ships are bigger and then NCL just announced they will build a whole fleet of a new class of ships that will be their largest ever. 

Edited April 13 by kwokpot

[jimbo5544]

16 minutes ago, kwokpot said:

I don't think that is the case AT ALL. Everything written has made the case that larger ships are more profitable since there's more cabin types that can charge higher fees even though there's more cabins to fill than a smaller ship (AND they are VASTLY more fuel efficient vs the older ships). I haven't read anything written by any cruiseline that supports your statement above and actually what's written is exactly the opposite, hence cruiselines building larger ships. NCL's newest Prima Class set out to build smaller ships and everyone is complaining they aren't big enough (Even NCL's CEO felt the same), so the next several Prima Class ships are bigger and then NCL just announced they will build a whole fleet of a new class of ships that will be their largest ever. 

Certainly no argument where the industry is going, or the reason why.  Market saturation is a given.  Larger ships going fewer places charging absorbent rates to cruise.  Sure sounds like paradise to me.😂 

[kwokpot]

13 minutes ago, jimbo5544 said:

Certainly no argument where the industry is going, or the reason why.  Market saturation is a given.  Larger ships going fewer places charging absorbent rates to cruise.  Sure sounds like paradise to me.😂 

That's not to say that smaller ships aren't being built. But for economies of scale they are for higher end cruiselines that charge much, much, much more than Carnival does. The only mainstream cruiselinethat's building new, smaller ships is Virgin, and as you can see they are struggling. 

On the other end you have MSC's new Explora cruiseline with their brand new SMALL ship at 64,000 tons which offers a 7 day Caribbean cruise this November starting at $4,000/pp.

[jimbo5544]

24 minutes ago, kwokpot said:

That's not to say that smaller ships aren't being built. But for economies of scale they are for higher end cruiselines that charge much, much, much more than Carnival does. The only mainstream cruiselinethat's building new, smaller ships is Virgin, and as you can see they are struggling. 

On the other end you have MSC's new Explora cruiseline with their brand new SMALL ship at 64,000 tons which offers a 7 day Caribbean cruise this November starting at $4,000/pp.

Carnival, like the industry, is still recovering.  Some here said not all that long ago, they were down and out, specifically in the new ship market.  I disagreed as I knew they simply HAD to compete, and they did, at least the way that they do.  VV is struggling for more reasons than size, but the reasons are what they are.  Excel class is their future, at least for now.

 

All that said, the clock is ticking on some of their hardware.  They have some unique (compared to their competition) issues, they have a number of home ports that they will have to either abandon when their smaller ships are gone, or come up with a different approach.  From where I sit now, I do not see them abandoning the ports with the height. Issues, unless they have to.  If tur the options are new builds….doubt it… that fit or redistribute sub lines ships that do fit.   We will see how it all works out.

[JMAE]

4 hours ago, kwokpot said:

I don't think that is the case AT ALL. Everything written has made the case that larger ships are more profitable since there's more cabin types that can charge higher fees even though there's more cabins to fill than a smaller ship (AND they are VASTLY more fuel efficient vs the older ships). I haven't read anything written by any cruiseline that supports your statement above and actually what's written is exactly the opposite, hence cruiselines building larger ships. NCL's newest Prima Class set out to build smaller ships and everyone is complaining they aren't big enough (Even NCL's CEO felt the same), so the next several Prima Class ships are bigger and then NCL just announced they will build a whole fleet of a new class of ships that will be their largest ever. 

I agree, large ships are more profitable when sailing full. As I said in a market downturn it may become difficult to fill the mega ships to 100% capacity. Yes, the cruise industry has a good forecast.  There were about 20 million worldwide passengers in 2022, about 31 million in 2023 and the forecast for 2024 is about 36 million or about a 5 million increase from 2023.  The 2025, 2026 and 2027 industry forecast slows to an increase to about a 1 million passengers year over year, which falls back in line to the yearly increases prior to the shutdown.  Based on their forecast, demand is going to soften (downturn) in the coming years compared to this year.  I believe coupled with USA household (HH) credit card debt of $1.13 trillion as reported in Q4/2023 (not including vehicles or mortgages), which is an increase of $50 billion from the previous report.  So, based on the industry forecast and the current economic conditions I believe the market will soften in the coming year(s) and it will take more for cruise lines to fill their ships, mega ships will be more difficult to fill compared to their smaller fleet of ships.  

 

Assuming a full ship, 100% capacity, the industry states about 70% of cruise line income comes from fares and 30% from onboard spending.  At 100% cap. they make about 15% "profit", so if the ship does not sail at 100% cap. it reduces the 15% projection.  In the current market, ships are being filled months prior to the sailing and all is good.  However, we will know when the market softens when we start seeing mainstream cruise lines discounting sailings close to their sailing dates.  I enjoy cruising and hope the industry remains strong, but think more changes are coming as berths increase and the cruise lines fight for the consumer's dollars.  Changes may include ship size, charging for eating in the MDR (this transition started with a charge for additional meals), and charging for shows, etc., remember room service was once free 24/7.                               

[tidecat]

15 hours ago, JMAE said:

The 2025, 2026 and 2027 industry forecast slows to an increase to about a 1 million passengers year over year, which falls back in line to the yearly increases prior to the shutdown.  

Even if Carnival's 2027 and 2028 ships wind up being replacements instead of additional vessels, Carnival Cruise Line basically has to capture over 12% of the industry's growth worldwide, and that's assuming the new ship even does just week-long cruises (52 x (5,380 - 2,980) = 124,800 additional lower berths). By the time you throw in third and fourth passengers this is probably more like 15% or 16%. If Carnival winds up shifting inventory more towards shorter cruises, the requisite percentage could be higher still.

[kwokpot]

15 hours ago, JMAE said:

I agree, large ships are more profitable when sailing full.

I guess my issue is with this statement you make. Do you have any facts to support this assertion? 

[kwokpot]

https://skift.com/2015/09/23/why-cruise-lines-are-building-so-many-new-ships/

[kwokpot]

https://www.travelweekly.com/Cruise-Travel/Insights/When-it-comes-to-profitability-ship-size-matters

[kwokpot]

Here's a brand new article that puts it in perspective with regard to Carnival. IT can't AFFORD to build alot of new, bigger ships. Carnival's CEO admitted it as so and also conceded that his competitors aren't WRONG for placing such large advanced orders for new builds. 

 

https://www.seatrade-cruise.com/people-opinions/buoyant-state-industry-outlook-cruisings-top-leaders

[jimbo5544]

49 minutes ago, kwokpot said:

Here's a brand new article that puts it in perspective with regard to Carnival. IT can't AFFORD to build alot of new, bigger ships. Carnival's CEO admitted it as so and also conceded that his competitors aren't WRONG for placing such large advanced orders for new builds. 

 

https://www.seatrade-cruise.com/people-opinions/buoyant-state-industry-outlook-cruisings-top-leaders

Thanks for the link.  I agree on the 30 bill being a factor.  It gets way more gray after that.  How would it look for the company that maintains the best fiscal policy after a forced shutdown and is 30 (thought it was 32, but lets not squabble over 2 bill) billion in th hole and then state that new builds are wrong when you are getting outpaced by the competition (and recently add several to the books.  Does that make it appear the RCCL is doing the right thing?  Not in my book.  The math does not work.

[kwokpot]

33 minutes ago, jimbo5544 said:

Thanks for the link.  I agree on the 30 bill being a factor.  It gets way more gray after that.  How would it look for the company that maintains the best fiscal policy after a forced shutdown and is 30 (thought it was 32, but lets not squabble over 2 bill) billion in th hole and then state that new builds are wrong when you are getting outpaced by the competition (and recently add several to the books.  Does that make it appear the RCCL is doing the right thing?  Not in my book.  The math does not work.

As a RCL stockholder for 16 years paying $9.99/share and having it recently reached it's all time high of $141.66 (currently down to $127.70) and it's considered a BUY with all analysts with a target of $154 it's obviously doing something right.

[JMAE]

2 hours ago, kwokpot said:

I guess my issue is with this statement you make. Do you have any facts to support this assertion? 

Yes, how the cruise industry makes money.  If a ship sails with empty staterooms/berths they cannot make up that lost revenue.  With the current demand CCL recently hit 100 capacity, fleet wide. Their (and all cruise lines) next goal should be to sail at >100 capacity fleet wide.      

 

45 minutes ago, kwokpot said:

As a RCL stockholder for 16 years paying $9.99/share and having it recently reached it's all time high of $141.66 (currently down to $127.70) and it's considered a BUY with all analysts with a target of $154 it's obviously doing something right.

Since you appear to be a long-time stockholder you should understand the buy recommendation is a prediction and their targeted value may or may not come true.  Remember Enron, all was good until it wasn't.  Not saying any cruise company is equivalent to Enron, but things are all good until something happens like economic downturn, world unrest, and we cannot forget what happened during the pandemic two weeks turned into a year. and all the positive outlooks turn negative.               

[jimbo5544]

1 hour ago, kwokpot said:

As a RCL stockholder for 16 years paying $9.99/share and having it recently reached it's all time high of $141.66 (currently down to $127.70) and it's considered a BUY with all analysts with a target of $154 it's obviously doing something right.

Which has absolutely nothing to do with what Carnival does.  Thanks for the stock tip though…..    Where will they be when the 30 bill they will owe (and are leveraging up) and the market (at an all time high flattens out.  If you choose to the Monstrosity of each year at absorbent rates (butt ugly by the way, looks like a joke cartoon that we would see on the Super-bowl add) then do it.  I will pass, not even sure I would sail it for free, unless it had open bar.  Is their stock position better than Carnival? Sure. Does that have anything at all to do with Carnivals new build or what Weinstein commented and your interpretation…..no.  I will repeat it again, spending 2 billion every 10 months for a ship that absolutely needs to sail full and at the highest market rates in a almost saturated market is a fools folly, the math does not work.  You may think differently…which is fine.  Oh….Icon is butt ugly. which has just as much to do with this thread topic as RCCL stock price does to adding another excel class ship. 

[jimbo5544]

11 minutes ago, JMAE said:

Yes, how the cruise industry makes money.  If a ship sails with empty staterooms/berths they cannot make up that lost revenue.  With the current demand CCL recently hit 100 capacity, fleet wide. Their (and all cruise lines) next goal should be to sail at >100 capacity fleet wide.      

 

Since you appear to be a long-time stockholder you should understand the buy recommendation is a prediction and their targeted value may or may not come true.  Remember Enron, all was good until it wasn't.  Not saying any cruise company is equivalent to Enron, but things are all good until something happens like economic downturn, world unrest, and we cannot forget what happened during the pandemic two weeks turned into a year. and all the positive outlooks turn negative.               

Any market turn down (and there will absolutely be one this year) will have a devastating effect on the company (the potential negative variables in our world are just the upper crust of possibilities).  The market is at an all time high in terms of berth backlog.  They are 30 bill in the hole and growing (estimated 8 BILLION more coming in the next 3 years).

[kwokpot]

47 minutes ago, JMAE said:

Yes, how the cruise industry makes money.  If a ship sails with empty staterooms/berths they cannot make up that lost revenue.  With the current demand CCL recently hit 100 capacity, fleet wide. Their (and all cruise lines) next goal should be to sail at >100 capacity fleet wide.

I understand that. What I was alluding to is the assumption that when business is not as good a cruiseline should have smaller ships so they can fill those ships up to 100%. My point was filling the Spirit and Miracle to 100% isn't going to be more profitable to Carnival than if the Jubilee sailed with the same amount of passengers at a 60% load factor. That's all I'm saying. No mainstream cruiseline is going to build a new class of sub 100,000 ton ships which many mainstream passengers, at least here on CC, seem to want not just on Carnival but many other lines too. TBH I personally love the 90,000 ton class of ships from any cruiseline . It's the perfect size to offer a bit of everything but not too much of anything. 

[JMAE]

3 hours ago, kwokpot said:

I understand that. What I was alluding to is the assumption that when business is not as good a cruiseline should have smaller ships so they can fill those ships up to 100%. My point was filling the Spirit and Miracle to 100% isn't going to be more profitable to Carnival than if the Jubilee sailed with the same amount of passengers at a 60% load factor. That's all I'm saying. No mainstream cruiseline is going to build a new class of sub 100,000 ton ships which many mainstream passengers, at least here on CC, seem to want not just on Carnival but many other lines too. TBH I personally love the 90,000 ton class of ships from any cruiseline . It's the perfect size to offer a bit of everything but not too much of anything. 

Using your example if a mega ship sails at 60% cap the cruise line would not produce an income to cover the expense for that sailing.  For a cruise line to make their projected 15% profit it must be filled to their 100% cap.  In your example the 40% passenger loss on a sailing would reduce their projected income from reduced fares and onboard spending by that percentage.  If a cruise line invested in new smaller ships with similar technology of the mega ships, the smaller ships would be cheaper to sail due to the size (less fuel), less maintenance and operation costs due to reduced activities, dining options, etc. and far fewer staff (Carnival Excel class crew size 1,735, Carnival Spirit class crew size 930).  I know one thing; the market will be the driving force and if the numbers show large number of seasoned cruises moving to other non-mainstream cruise lines, changes will occur. No cruise line can survive with new guest only, that is why loyalty programs exist. 

 

This is just my guess, but based on your example of 60% cap, I would bet the current Fantasy and Spirit classes would have a lower percentage of loss vs a mega ship.  Since they are over 20 years old, they probably bought and paid for many years ago.  I understand they may be considered an asset for securing loans.          

[kwokpot]

31 minutes ago, JMAE said:

This is just my guess, but based on your example of 60% cap, I would bet the current Fantasy and Spirit classes would have a lower percentage of loss vs a mega ship.  Since they are over 20 years old, they probably bought and paid for many years ago.  I understand they may be considered an asset for securing loans.   

Based on all that I have read that's not correct. The reason for this is the Jubilee's cabins can command a higher fare and because there's more amenities onboard the per passenger spend while be higher on the mega ships than on an older smaller ship. All the articles written confirm that. The fuel efficiency on one new mega ship makes up for sailing two, smaller ships, so there less fuel cost. And staffing costs will be less too since you'll only need more lower level employees vs duplicative higher level management when sailing 2 smaller ships vs one mega ship. And cost of scale to build two smaller ships vs one mega is more even before the 1st passengers step onboard.

Again just look at NCL. They tried what you're suggesting with the Prima Class and everyone, from passengers to NCL management has admitted that the original Prima class at 143,000 tons is too small to meet what current cruise passengers want on a mainstream cruiseship. So it's not even  hypothetical discussions about smaller vs larger new builds; we have current ,real world results via what happened with NCL. 

Edited April 15 by kwokpot