CCL places new ship order, none for HAL

[HappyInVan]

9 minutes ago, BermudaBound2014 said:

Half of Holland America's fleet will be more than 25 years old by 2032. (Eurodam, Noordam, Westerdam, OOSterdam, Zuiderdam, Zaandam, and Volendam). As far as I know (and please will correct me if wrong), that would make HAL operating both the oldest and most expensive fleet in the mainstream category. 

 

 

 

Thanks for the detailed analysis. Yes, it is an eye opener.

Edited July 24 by HappyInVan

[TRLD]

50 minutes ago, BermudaBound2014 said:

 

I don't believe I'm pushing an agenda as I believe everything I have posted is factual not speculation. At this time the company IS putting all their new build orders in the Carnival Brand basket. It's undeniable. But regardless, please help me to understand your logic.

 

Negating that the cost to operate a cruise ship rises at 25 years, the current average age of a cruise ship is approximately 30 years. New ships orders take 1-2 years to build IF the company can find a building dock. If HAL placed an order today, the soonest it could start building is 2027 (highly unlikely) making the ship finished in roughly 2029 (again highly unlikely). 

 

But lets give your theory the benefit of the doubt and say CCL will order a new ship for HAL in 2026/2027, find a dock to build it, and complete the build by when, 2030?. Again, I believe this is highly unlikely and any new build orders placed in 2026/27 would be completed in 2033/34 as more realistic timeframe (that part is speculation on my part, but it seems logical, no?). Since you expect CCL to place an order for a HAL ship in 2026/27, when do you speculate that ship would be completed? Not trying to be argumentative, just wanting to understand your logic.

 

By your generous timeline for new builds, the Volendam and Zaandam will be 'aged out' by industry standards before the new ship can be built, and the Zuiderdam, Oosterdam, and Westerdam will all be older than 25 years. 

 

 

 

 

 

 

 

Help me to understand this. The two oldest ships in Carnival are small ships about the same age/size as Zaandam and Volendam. The spirit, pride, legend, and conquest are also older ships but ironically they are about the same age as the vista class.  In terms of percentage of the fleet over 25 years, doesn't HAL and Carnival have about the same capacity needing replacement? 

 

 

 

Half of Holland America's fleet will be more than 25 years old by 2032. As far as I know (and please correct me if wrong), that would make HAL operating both the oldest and most expensive fleet in the mainstream category. 

 

 

 

Am agenda in that you seem to spin any piece of information in a way that is negative to HAL and seem to ignore information that is positive. Your post have been consistent along the theme of CCL will fail, HAL will get shutdown, etc. Either by statement or inference.

 

HAL will need the equivalent of 3 of their most recent class ships by 2030, a little over 7000 to maintain capacity.

 

CCL will need over 30,000 to maintain capacity. About the same as their new orders.

 

The other problem Carnival has is its oldest ships are really not competitive in a family market that wants the bells and whistles. Easier to keep older ships in HAL Cunard and Princess. Expect a few of the older Carnival ships will end up in Australia back filling when they retire the current P&O ships.in the next 3 years or so, after they aew rebranded Carnival.

 

The size ships that CCL needs, require longer lead times and have limited construction slips available. Similarly with NCL they need placeholders on that space. The lead time for HAL size ships is much shorter and even in the massive construction boom of the 2010 to 2019 they have had about a year lead time for construction.

 

CCL lines are keeping ships a bit longer. P&O Australia has been the place where old Princess ships go to die. With Princess keeping it's ships a couple of years longer no ship for them. With all three of their ships aging out in a few years pretty much no other choice. So while they transferred that capacity to Carnival it is capacity that will vanish in a couple of years.

 

At the speed CCL is paying off debt they will be in position for ordering ships for Princess and HAL in 2026. 

 

Costa has had troubles since the sinking. They are the line that is most at risk of shutting down.

 

 

 

Edited July 24 by TRLD

[BermudaBound2014]

Still not following your logic, but that's ok. I'll bookmark this post and revisit in 2026 to see if HAL has actually ordered three new ships to be operational by 2030 (I think that's a super lofty goal so we will just have to agree to disagree and let time tell the story). 

 

 

 

1 hour ago, TRLD said:

CCL will need over 30,000 to maintain capacity. 

 

Side note; with the 5 new ship orders on the books for Carnival, they are already committed to increasing capacity by 34,000. 

 

Edited July 24 by BermudaBound2014

[HappyInVan]

There's a misunderstanding that CCL is unable to launch new ships because of its debt load. Sometime ago, CCL said that they had no plans to order new ships citing the amount of debt. In reality, they lost the appetite for risk after a period of expansion ended by COVID.

 

Very quickly, CCL found that the competition is launching new ships that are more competitive. CCL has to follow or perish.

 

IMHO, CCL will be able to finance new ships that are profitable. However, CCL has to make choices. Which brands have the best opportunities for growth and profits? Which have the least?

 

To reduce debt, CCL can sell/retire ships and brands? Which brands have the least growth opportunities and profitability?

 

To be honest, I'm sure that HAL would have the new ships if its cruise fare were 50% higher than that of today.

 

[TRLD]

21 minutes ago, BermudaBound2014 said:

Still not following your logic, but that's ok. I'll bookmark this post and revisit in 2026 to see if HAL has actually ordered three new ships to be operational by 2030 (I think that's a super lofty goal so we will just have to agree to disagree and let time tell the story). 

 

 

 

 

Side note; with the 5 new ship orders on the books for Carnival, they are already committed to increasing capacity by 34,000. 

 

Be sure and mark along  with your comments not too long ago about how bad CCL was doing and that they had not ordered ships, when NCL placed some new orders. Now a couple of months later they have. So you turn from that track to but they have not ordered any for HAL.

 

 

Just as the post in this stream where you said that CCL had said that they were reducing HAL and Princess capacity only to admit that they had not said that.

Sure the new ships would increase by that amount, if they do not retire any ships. The same as their comments about how the ships they are moving from P&O was increasing Carnival capacity. Without stating that the ships from P&O Australia were old Princess ships, very close to retirement age.  That while they will be rebranded their use will most likely be in the same market until they are retired in 3 to 4 years meaning that the boost is temporary.

 

Will see what their next 10Q has to say.

 

The logic is largely because of the competitive placement of each line. Carnival ships need the bells and whistles to compete with their direct competitors in Royal Caribbean and NCL. HAL does not. They can keep their older ships a bit longer and it actually helps them because a number of their passengers like the older smaller ships. They retire them because of increased costs, but could keep them longer if they need to. Same with Princess.

Edited July 24 by TRLD

[Petronillus]

3 hours ago, howiefrommd said:

What is articulated within your parentheses is its own answer.  CCLs primary responsibility is to it's stockholders.   Albeit we wish it would be different, but as cruisers we are customers.  Customers are solely the revenue stream for this or any other public corporation.  If HAL was generating the type of return on investment that the Carnival oriented ships are, there would be new builds or repurposing of other ships.   As the present fleets continues to mature, the clock is definitely ticking.

 

I applaud those who shape their investment portfolios around the principles of SRI (socially responsible investing), but I applaud from the sidelines. SRI does not figure much if at all in my investment decisions. And yet, . . .

 

I'm struck by the high-brow ads that Viking appends to Masterpiece Theatre on PBS (in the US). I'm not so naive as to imagine that corporations will nakedly highlight their profit motives in advertising, but the Viking ads (featuring the grandfatherly CEO from central casting) leave me thinking, "Here's a company that is out to do well by doing good."

 

[BermudaBound2014]

It took 19 months to build kdam. Working backward on the timeline proposed, HAL would need to get 3 new builds on the shipyard calendar in 2026/27 to be completed and in service by 2030. Seems lofty 

 

Like I said, time will tell.

 

 

 

Edited July 24 by BermudaBound2014

[Mary229]

Princess just announced a new ship

https://www.carnivalcorp.com/news-releases/news-release-details/princess-cruises-reveals-epic-2026-alaska-season

[TRLD]

40 minutes ago, HappyInVan said:

There's a misunderstanding that CCL is unable to launch new ships because of its debt load. Sometime ago, CCL said that they had no plans to order new ships citing the amount of debt. In reality, they lost the appetite for risk after a period of expansion ended by COVID.

 

Very quickly, CCL found that the competition is launching new ships that are more competitive. CCL has to follow or perish.

 

IMHO, CCL will be able to finance new ships that are profitable. However, CCL has to make choices. Which brands have the best opportunities for growth and profits? Which have the least?

 

To reduce debt, CCL can sell/retire ships and brands? Which brands have the least growth opportunities and profitability?

 

To be honest, I'm sure that HAL would have the new ships if its cruise fare were 50% higher than that of today.

 

Really kind of funny. Retiring and selling ships raises very little money. Retoring brand at best might save some future operational costs. RCL got very little for Azamara when compared to their overall debt. The entire line sold for 201 million.

 

Very clearly CCL has to pick and choose where to buy new ships. The market Carnival competes in requires it. Not so much for HAL. Other lines continue to sail ships HAL has sold off. Unlike pre covid where the economics were clearly sell at 24/25 and build new. The current number would tilt towards keep a few years longer until debt levels are down.

[BermudaBound2014]

4 minutes ago, Mary229 said:

Princess just announced a new ship

https://www.carnivalcorp.com/news-releases/news-release-details/princess-cruises-reveals-epic-2026-alaska-season

 

Just for clarity, The star princess isn't new in terms of ordering. It's been on the order books for several years. I believe that ship was ordered right after covid (or maybe it was ordered before covid and postponed? I forget, but I'm sure someone can answer definitively when the order was placed for the Star Princess. They have been taking reservations for the ship since 2023.

 

It is a new ship set to come into service in 2025 for Princess. It's 4,300 passengers and 175K G/T. Not super big, but not small either.

 

Here is a list of new build orders if anyone is interested:

https://cruiseindustrynews.com/cruise-ship-orderbook/

 

 

 

 

 

[TRLD]

56 minutes ago, BermudaBound2014 said:

 

Just for clarity, The star princess isn't new in terms of ordering. It's been on the order books for several years. I believe that ship was ordered right after covid (or maybe it was ordered before covid and postponed? I forget, but I'm sure someone can answer definitively when the order was placed for the Star Princess. They have been taking reservations for the ship since 2023.

 

It is a new ship set to come into service in 2025 for Princess. It's 4,300 passengers and 175K G/T. Not super big, but not small either.

 

Here is a list of new build orders if anyone is interested:

https://cruiseindustrynews.com/cruise-ship-orderbook/

 

 

 

 

 

The Star and Sun were both ordered pre Covid. I believe that the orders were placed in 2019. They were ordered about the time the Sky Princess was delivered. Originally to be delivered in 23 and 24. With the Sun coming a year after the delivery after the last Royal class. They were each delayed for a year due to Covid.

 

[Gail & Marty sailing away]

1 hour ago, BermudaBound2014 said:

It took 19 months to build kdam. Working backward on the timeline proposed, HAL would need to get 3 new builds on the shipyard calendar in 2026/27 to be completed and in service by 2030. Seems lofty 

 

Like I said, time will tell.

 

 

 

I hope so.

[TRLD]

35 minutes ago, TRLD said:

The Star and Sun were both ordered pre Covid. I believe that the orders were placed in 2019. They were ordered about the time the Sky Princess was delivered. Originally to be delivered in 23 and 24. With the Sun coming a year after the delivery after the last Royal class. They were each delayed for a year due to Covid.

 

a little off on the order date it was July 2018.

[TRLD]

2 hours ago, BermudaBound2014 said:

It took 19 months to build kdam. Working backward on the timeline proposed, HAL would need to get 3 new builds on the shipyard calendar in 2026/27 to be completed and in service by 2030. Seems lofty 

 

Like I said, time will tell.

 

 

 

If they order in 26 take the first order in 29, with the time between delivery 12 to 18 months or so for the other 2 deliver would be 31 or 32. Hold on to a couple of ships until year 26 instead of 24. All works out fine.

 

Cruise lines that purchased old HAL have run them to 30 and in some cases beyond.

 

Just as Carnival might have to do to maintain capacity while waiting for their later builds.

Edited July 24 by TRLD

[Desert Cruisers]

A few weeks ago, CNL [not CCL] held its quarterly analyst call.  After boasting about their crown jewel - Carnival Cruise Line [CCL] - an analyst asked about Princess, Holland America, and Costa specifically.  According to the CFO, none of these lines are currently meeting return-on-investment targets.  I would expect that corporate executives, before agreeing to any new builds,  would want HAL to have a game plan to improve its financial performance.

[TRLD]

27 minutes ago, Desert Cruisers said:

A few weeks ago, CNL [not CCL] held its quarterly analyst call.  After boasting about their crown jewel - Carnival Cruise Line [CCL] - an analyst asked about Princess, Holland America, and Costa specifically.  According to the CFO, none of these lines are currently meeting return-on-investment targets.  I would expect that corporate executives, before agreeing to any new builds,  would want HAL to have a game plan to improve its financial performance.

Not sure where you are getting CNL, Since Carnival Corp trades as CCL in the US and CUK in the UK.   I would guess that you are talking about the Q2 earnings call. 

 

https://www.fool.com/earnings/call-transcripts/2024/06/25/carnival-corp-ccl-q2-2024-earnings-call-transcript/

 

The text would indicate something a bit more optimistic.  Josh Weinstein the CEO, not the CFO stated that they were at different levels in their recovery from restart.  Which makes sense since the family brands such as Carnival and Royal built their business back faster, than the older demographic adult focused line.  Was the same with Celebrity vs Royal.  He then said that one was doing better compared to 2019, one the same and one worse. He did not say which was which.  He did say that the ROIC for all 3 are improving and that while none of the 3 are at 12% all of them have the potential to reach that number.

 

The exact quote is here

 

Brandt Montour -- Barclays -- Analyst

That's super helpful. My follow-up is on three brands, Costa, Princess, and Holland America. Those are three that we've been watching you guys talk about in your -- in sort of improving ROICs across those three brands. I know that you've been focused on them.

 

How would you describe the success or versus your own benchmarks on those three brands improvement? And are any three of them outperforming the others at this point along those guidelines?

 

Josh Weinstein -- President and Chief Executive Officer

Sure. Well, I'll start with the fact that every single one of them is showing significant improvement year over year in ROIC which I'd expect. They were all coming from a different starting point back in the pre-pause world. So, one of them is actually above where they were, one of them is at where they were and one of them is below where they were.

 

But I'd say it's a little bit irrelevant because of the brand that's actually higher. I expect it to be even higher because 2019 wasn't very good for them. So, from my perspective, the good news in this is none of them yet are at 12% ROIC. All of them have the potential to do that and we've got plans in place for them to do that over time.

 

So, progress across the board.

 

 

Edited July 24 by TRLD

[HappyInVan]

This is a situation of half-full/full-empty.

 

Those loyal to CCL believe that the cup is half full. Naturally, the CEO has to talk up their prospects.

 

The realists have to be skeptical. After 2 years of recovery, the CEO still has no solid plans to rebuild three important brands. Will CCL down-size Princess and HAL too if their ROI does not meet expectations? How will HAL improve ROI without large new investments? Will the new ships arrive in time?

 

Closing P&O Australia and down-sizing Costa is just the beginning. What is the strategic corporate strategy; beyond deploying more ships, larger ships and more economical ships?

 

[TRLD]

28 minutes ago, HappyInVan said:

This is a situation of half-full/full-empty.

 

Those loyal to CCL believe that the cup is half full. Naturally, the CEO has to talk up their prospects.

 

The realists have to be skeptical. After 2 years of recovery, the CEO still has no solid plans to rebuild three important brands. Will CCL down-size Princess and HAL too if their ROI does not meet expectations? How will HAL improve ROI without large new investments? Will the new ships arrive in time?

 

Closing P&O Australia and down-sizing Costa is just the beginning. What is the strategic corporate strategy; beyond deploying more ships, larger ships and more economical ships?

 

Funny that in your post realists seem to mean those that seem to have a grudge with HAL and cherry pick data to show a negative slant and loyalists are those that find  that CCL has a business is doing well, that HAL has a cruiseline is doing well and is selling well.

 

Im

 

Kind of interesting how some tend to go to labels like loyalist and realists, instead of debating the actual facts.

 

Upon what are you basing your claims that the CEO does not have plans?

 

Give the details upon which you base your claims.

 

His comments would indicate that in general the 3 are doing as well as  2019 (one better, one the same, one worse). A time when the lines were ordering and building new ships.  That all three have improved their ROIC year over year in the past year. While they have not reached the new 12% ROIC goal the CEO indicated that those goals are reachable.

Edited July 24 by TRLD

[Mary229]

55 minutes ago, HappyInVan said:

This is a situation of half-full/full-empty.

 

Those loyal to CCL believe that the cup is half full. Naturally, the CEO has to talk up their prospects.

 

The realists have to be skeptical. After 2 years of recovery, the CEO still has no solid plans to rebuild three important brands. Will CCL down-size Princess and HAL too if their ROI does not meet expectations? How will HAL improve ROI without large new investments? Will the new ships arrive in time?

 

Closing P&O Australia and down-sizing Costa is just the beginning. What is the strategic corporate strategy; beyond deploying more ships, larger ships and more economical ships?

 

Rarely do we agree but look it is happening!  I think HAL particularly is suffering from an identity crisis and a lack of focus.  They need to define their brand, create a plan and move forward.  Anecdotally and coincidentally my loyalist DH just commented it is time to move on after our currently booked plans.  I did cancel two this week, they just seemed lackluster, no other reason.  No excitement, no anticipation. Travel is discretionary, there must be spark.  

[Hlitner]

5 hours ago, Petronillus said:

 

I applaud those who shape their investment portfolios around the principles of SRI (socially responsible investing), but I applaud from the sidelines. SRI does not figure much if at all in my investment decisions. And yet, . . .

 

I'm struck by the high-brow ads that Viking appends to Masterpiece Theatre on PBS (in the US). I'm not so naive as to imagine that corporations will nakedly highlight their profit motives in advertising, but the Viking ads (featuring the grandfatherly CEO from central casting) leave me thinking, "Here's a company that is out to do well by doing good."

 

Wow, talk about cynical :).  First off, the Viking ads that show Torstein Hagen is showing the real thing.  He is actually a very interesting person in that he personally founded Viking River cruises and later Viking Ocean cruises.  He is also a hands-on CEO/owner.  When the Viking Sky had its disaster off of Norway, he quickly flew into the area to deal, face to face, with the passengers who had been evacuated off his ship (we had a relative on the ship who told us the tale).  I am also not sure what you mean by "high brow" although my own limited experience with Viking (and its fellow passengers) has all been positive.

 

The cruise industry is quite interesting with some folks, like Torstein Hagen, who have shaped the industry.  With Carnival Corp you have the Arison family (Ted and Micky), NCL has a long history with Knut Kloster, and MSC has the amazing Aponte family.  For those of us who love cruising, we have those folks to thank for much of what exists today.  Funny how folks that are fans of specific cruise lines (such as HAL) will say nasty things about the "mother company" and refuse to accept without the CCLs, NCLH, and RCI, there would be several less cruise lines.  In a sense, these companies rode to the rescue of companies that were failing (financially).  Do not think, for one minute, that cruise lines do not go out of business as we have companies like Regency, Renaissance, and CMV to show us what happens when nobody "rides to the rescue."

 

As to the future of HAL, I am concerned.  For more than a decade I have posted my belief that HAL has been operating like a ship without a rudder.  They seem to waffle all over the place on their target customer and the type ships they want to operate.  Lately, it seems like they are trying to position themself as a budget cruise line for the elderly and the type of gamblers who line-up for cheap bus trips to Atlantic City (sorry for being so harsh).  The truth is that "casino specials" are a growing trend on HAL (and we also see it on Princess).  By the way, since Viking has been mentioned it is interesting that is one of the few cruise lines (along with Disney) does not even have casinos or offer near free cruises to gamblers.

 

Hank

[Petronillus]

2 hours ago, Hlitner said:

Wow, talk about cynical :).  First off, the Viking ads that show Torstein Hagen is showing the real thing.  He is actually a very interesting person in that he personally founded Viking River cruises and later Viking Ocean cruises.  He is also a hands-on CEO/owner.  When the Viking Sky had its disaster off of Norway, he quickly flew into the area to deal, face to face, with the passengers who had been evacuated off his ship (we had a relative on the ship who told us the tale).  I am also not sure what you mean by "high brow" although my own limited experience with Viking (and its fellow passengers) has all been positive.

I don't know what I wrote to trigger such a vitriolic reaction.

I was attempting to address the contention that maximizing profit must be the driver of all business enterprises, cruiselines included. I thought the term "high-brow" was complimentary. The Vikings ads I referred to match the refined and cultured tone and quality of the Masterpiece Theatre productions they support. By "doing well by doing good" I meant that the underlying message of the Viking ads, it seems to me, is that while providing a fair return to their shareholders, Viking is striving to lift up the minds, hearts, and spirits of its customers and thereby make the world a better place.

Finally, I did not mean to belittle Mr. Thorstein Hagen in remarking that he projects the very image of a wise and benevolent CEO.

[Kay S]

5 hours ago, Hlitner said:

 

 

  Lately, it seems like they are trying to position themself as a budget cruise line for the elderly and the type of gamblers who line-up for cheap bus trips to Atlantic City (sorry for being so harsh). 

Wow.

[SusieKIslandGirl]

I'm wondering where all these mega ships are going to sail to-so many ports are complaining about being overrun with people when ships are in port and some even banning large ships. I just read about Barcelona planning to raise their tax on cruisers. 

[Desert Cruisers]

9 hours ago, TRLD said:

Not sure where you are getting CNL, Since Carnival Corp trades as CCL in the US and CUK in the UK.   I would guess that you are talking about the Q2 earnings call. 

 

https://www.fool.com/earnings/call-transcripts/2024/06/25/carnival-corp-ccl-q2-2024-earnings-call-transcript/

 

The text would indicate something a bit more optimistic.  Josh Weinstein the CEO, not the CFO stated that they were at different levels in their recovery from restart.  Which makes sense since the family brands such as Carnival and Royal built their business back faster, than the older demographic adult focused line.  Was the same with Celebrity vs Royal.  He then said that one was doing better compared to 2019, one the same and one worse. He did not say which was which.  He did say that the ROIC for all 3 are improving and that while none of the 3 are at 12% all of them have the potential to reach that number.

 

The exact quote is here

 

Brandt Montour -- Barclays -- Analyst

That's super helpful. My follow-up is on three brands, Costa, Princess, and Holland America. Those are three that we've been watching you guys talk about in your -- in sort of improving ROICs across those three brands. I know that you've been focused on them.

 

How would you describe the success or versus your own benchmarks on those three brands improvement? And are any three of them outperforming the others at this point along those guidelines?

 

Josh Weinstein -- President and Chief Executive Officer

Sure. Well, I'll start with the fact that every single one of them is showing significant improvement year over year in ROIC which I'd expect. They were all coming from a different starting point back in the pre-pause world. So, one of them is actually above where they were, one of them is at where they were and one of them is below where they were.

 

But I'd say it's a little bit irrelevant because of the brand that's actually higher. I expect it to be even higher because 2019 wasn't very good for them. So, from my perspective, the good news in this is none of them yet are at 12% ROIC. All of them have the potential to do that and we've got plans in place for them to do that over time.

 

So, progress across the board.

 

 

Thanks for correcting me on the correct designation for Carnival Corporation and that the comments were made by the CEO rather than the CFO.

 

I actually got up at the crack of dawn on the West Coast to listen to the analyst call.  I've also listened to previous calls as I'm a shareholder. The CEO & CFO are always adept at putting the most positive spin on results.  My comments were not meant to indicate that HAL is on its deathbed.  However, HAL leadership still needs to successfully implement whatever plans there are for HAL to improve its financial performance. Meeting HAL's "potential" & exceeding the ROI target would encourage Carnival Corporation to invest further in new-builds.

[ellieanne]

16 hours ago, howiefrommd said:

What is articulated within your parentheses is its own answer.  CCLs primary responsibility is to it's stockholders.   Albeit we wish it would be different, but as cruisers we are customers.  Customers are solely the revenue stream for this or any other public corporation.  If HAL was generating the type of return on investment that the Carnival oriented ships are, there would be new builds or repurposing of other ships.   As the present fleets continues to mature, the clock is definitely ticking.

Ahh yes, but some passengers are stockholders as well. Keeping those passengers happy is doubly important.