Is Holland America Line falling behind?

[HappyInVan]

47 minutes ago, Gail & Marty sailing away said:

HAL is #2 in revenue for CCL. 😄😄😄😄

 

That sounds rather unlikely. HAL has 11 ships? While Princess Cruises (also a CCL subsidiary) has 16 larger ships.

 

Its good news that HAL profitability is recovering. However, how does profitability improve if fares are not rising significantly? By cutting costs! Is HAL in a downwards spiral?

 

The other problem is that accounting profitability may look good with old ships that have been depreciated. Is profitability still good when you write down new ships? What does it mean when HAL is reluctant to order new ships? When Princess gets the new ships?

 

Finally, there's the issue that concerns many HAL pax. Will HAL ever order new medium ships to replace the R class? Even the venerable Zuiderdam is almost at retirement age.

 

Stay tuned.

[BermudaBound2014]

10 minutes ago, HappyInVan said:

 

 

I agree with @ltdr and suspect @Mary229 report from onboard is based on ROCI figures.

 

One way to improve Return on Capital investment numbers is simply to invest less as this strategy would absolutely improve financial performance.

 

HAL is doing right by me in offering longer itineraries at a price point I'm comfortable with. It's their niche. It is my belief that this niche is HAL's best marketing.

Edited Tuesday at 04:39 PM by BermudaBound2014

[Gail & Marty sailing away]

35 minutes ago, BermudaBound2014 said:

 

There is absolutely no way that HAL is #2 in revenue for CCL. 

 

This is how rumors are started :-D.

 

Please think about it. Based on size alone HAL is a distant competitor. 

 

 

It's profit per passenger.

[Mary229]

The words used were “financial performance”.  That, I am sure, is an internal metric composed of profitability, efficiencies, selling specific targeted product classes, etc…. 
 

I think HAL has been experimenting with just what they can cut before the customer screeches.  This is also proving to be the clean slate technique.  They are getting rid of some items and services that clearly cost more than the goodwill they generated.  I have done over 120 days on HAL this year on 4 ships.  Two things that are being returned to former levels are food quality and service and they have reopened their two training institutes, one in Indonesia and one in Philippines.  Their training of new recruits is definitely having a positive impact.

 

i have also noted a lot more officer concerns with efficient fuel consumption, it is often mentioned 
 

 

Edited Tuesday at 04:43 PM by Mary229

[HappyInVan]

1 minute ago, BermudaBound2014 said:

 

I suspect @ltdr is correct and @Mary229 report from onboard is based on ROCI figures.

 

One way to improve Return on Capital investment numbers is simply to invest less. 

 

Not saying that's what HAL is doing, but it would absolutely improve their financial performance.

 

HAL is doing right by me in offering longer itineraries at a price point I'm comfortable with. It's their niche. It is my belief that this niche is HAL's best marketing.

 

The problem with ROCI is that it is easy to manipulate this measure. You could sell your assets and lease it back (operating cost). 

 

The problem with investing less is that it only improves short term profitability. For example, we have discussed how the $8m drydock for Volendam is only a drop in the bucket for an old ship. How much longer will you be willing to sail their old ships for long itineraries? 

[ldtr1]

20 minutes ago, BermudaBound2014 said:

 

I agree with @ltdr and suspect @Mary229 report from onboard is based on ROCI figures.

 

One way to improve Return on Capital investment numbers is simply to invest less as this strategy would absolutely improve financial performance.

 

HAL is doing right by me in offering longer itineraries at a price point I'm comfortable with. It's their niche. It is my belief that this niche is HAL's best marketing.

I expect the major improvement between the two most recent quarters is due to occupancy and more efficiency in inventory management. 

 

Overall it appears that CCL lines averaged 112% occupancy during the last quarter. Pretty much back to pre covid numbers. Overall CCL showed very nice profitability.

[shiner6]

32 minutes ago, Mary229 said:

The words used were “financial performance”.  That, I am sure, is an internal metric composed of profitability, efficiencies, selling specific targeted product classes, etc…. 
 

I think HAL has been experimenting with just what they can cut before the customer screeches.  This is also proving to be the clean slate technique.  They are getting rid of some items and services that clearly cost more than the goodwill they generated.  I have done over 120 days on HAL this year on 4 ships.  Two things that are being returned to former levels are food quality and service and they have reopened their two training institutes, one in Indonesia and one in Philippines.  Their training of new recruits is definitely having a positive impact.

 

i have also noted a lot more officer concerns with efficient fuel consumption, it is often mentioned 
 

 

I agree, the last 2 HAL cruises were back to a step up from previous ones. The food is much better than either Carnival or Princess since Covid changes.  The service has always been wonderful on both Princess and HAL.  I have sailed all 3 lines and Now I will give HAL and Princess another comparison.

[ldtr1]

33 minutes ago, HappyInVan said:

 

The problem with ROCI is that it is easy to manipulate this measure. You could sell your assets and lease it back (operating cost). 

 

The problem with investing less is that it only improves short term profitability. For example, we have discussed how the $8m drydock for Volendam is only a drop in the bucket for an old ship. How much longer will you be willing to sail their old ships for long itineraries? 

Sure, but they are not selling and leasing back. They are running the same methodology across all of their brands.  

 

8 million is not a drop in the bucket. It is in the ball park for a normal drydock including some refurb work.

 

Funny how you mention the amount of the dry dock, but do not accept that they might do some work between dry docks with some rooms taken out servic3 if scheduling requires it.

 

It is not the major full remodel that celebrity and NCL did on their ships which is what some what to compare to.

 

The only major complete remodels of in CCL lines that i can find is the 3 ships in Carnival that were sister ships. Those remodels started with the Triumph after the infamous Poop cruise and resulted in a complete redo of the class including renaming in an attempt to get away from the bad press related to that cruise.

Edited Tuesday at 05:23 PM by ldtr1

[BermudaBound2014]

1 hour ago, Mary229 said:

The words used were “financial performance”.  That, I am sure, is an internal metric composed of profitability, efficiencies, selling specific targeted product classes, etc…. 

 

I suspect it may mean more than that. The suits are very adept at the spin game (but admittedly I'm more cynical than you). 

 

With that, I do believe that HAL is doing well. I'll be listening to the next conference call. I do wish CCL would provide performance reports for each individual cruise line in the family, but I understand exactly why they don't.

 

I vote with my dollar and HAL is getting 57 days worth of my travel dollar in the first quarter of 25'. I can't be alone. They have a very solid niche in the longer itinerary market and those of us sailing on longer itineraries are willing to pay more per day, thus increasing 'financial performance" (however it's defined).

 

Again, thanks for sharing what's being reported onboard.

Edited Tuesday at 05:57 PM by BermudaBound2014

[BermudaBound2014]

1 hour ago, Gail & Marty sailing away said:

It's profit per passenger.

 

Can you please provide a reference? There is absolutely nothing in this conversation that states HAL is making more per passenger than others lines under the umbrella. "Financial Performance" can mean a LOT of things. 

[cruiser man 60]

57 minutes ago, ldtr1 said:

I expect the major improvement between the two most recent quarters is due to occupancy and more efficiency in inventory management. 

 

Overall it appears that CCL lines averaged 112% occupancy during the last quarter. Pretty much back to pre covid numbers. Overall CCL showed very nice profitability.

How can they average 112% occupancy, were 12% of passengers sleeping on the deck?😂

[SkyCaptain220]

8 minutes ago, cruiser man 60 said:

How can they average 112% occupancy, were 12% of passengers sleeping on the deck?😂

Occupancy is based on 2 passengers per room. If traveling with children, that can push occupancy above 100

[ldtr1]

38 minutes ago, cruiser man 60 said:

How can they average 112% occupancy, were 12% of passengers sleeping on the deck?😂

Apparently you so not know that occupancy is measured using the ships occupancy at 2 per cabin, lower bunk capacity. Since have 3/4 capacity cabins occupancy is usually over 100%

[ldtr1]

46 minutes ago, BermudaBound2014 said:

 

I suspect it may mean more than that. The suits are very adept at the spin game (but admittedly I'm more cynical than you). 

 

With that, I do believe that HAL is doing well. I'll be listening to the next conference call. I do wish CCL would provide performance reports for each individual cruise line in the family, but I understand exactly why they don't.

 

I vote with my dollar and HAL is getting 57 days worth of my travel dollar in the first quarter of 25'. I can't be alone. They have a very solid niche in the longer itinerary market and those of us sailing on longer itineraries are willing to pay more per day, thus increasing 'financial performance" (however it's defined).

 

Again, thanks for sharing what's being reported onboard.

Considering that this is an internal metric comparing performance between different brands according to the same criteria rather unlikely to be be gamed or spun. Doing so when corporate has access to all of the same numbers likely to result in loss of confidence/job of the one trying to game the results.

[ldtr1]

2 hours ago, Gail & Marty sailing away said:

It's profit per passenger.

Where did that come from?

 

Very unlikely metric for comparing performance between lines since cruise links very widely. Profit per passenger day possibly, but little meaning in profit per passenger.

 

Even at profit per passenger day the value of that metric would be very little, without combing a bunch of other metrics into it. 

 

Not a metric CCL has talked about in the past, unlike ROCI which they have mentioned as being a key metric in previous quarters.

[BermudaBound2014]

15 minutes ago, ldtr1 said:

Considering that this is an internal metric comparing performance between different brands according to the same criteria rather unlikely to be be gamed or spun. Doing so when corporate has access to all of the same numbers likely to result in loss of confidence/job of the one trying to game the results.

 

How do you know it's an internal metric comparing performance between different brands according to the same criteria and not just the word salad used by the guy with the mic? 

[ldtr1]

Just now, BermudaBound2014 said:

 

How do you know it's an internal metric comparing performance between different brands according to the same criteria and not just the word salad used by the guy with the mic? 

Who knows what an individual might say. Coild be just making something up.

 

Only if they reported coming in number 2 in a comparison between lines, the data would have to be a corporate data and metric. No other way for them, especially on board ship, to have that view into other lines metrics unless it came from corporate.

 

So that gives 2 possible scenerios  1. a totally made up result

2. Corporate feedback after their emphasis on comparison in the analyst meeting last quarter.

 

No benefit to 1, substantial benefit to 2 if corporate provided said feedback after processing this quarters numbers.

 

 

[BermudaBound2014]

21 minutes ago, ldtr1 said:

Who knows what an individual might say. Coild be just making something up.

 

Only if they reported coming in number 2 in a comparison between lines, the data would have to be a corporate data and metric. No other way for them, especially on board ship, to have that view into other lines metrics unless it came from corporate.

 

So that gives 2 possible scenerios  1. a totally made up result

2. Corporate feedback after their emphasis on comparison in the analyst meeting last quarter.

 

No benefit to 1, substantial benefit to 2 if corporate provided said feedback after processing this quarters numbers.

 

 

Quite a leap on multiple fronts.

 

I’ll wait for some actual evidence, preferably  in writing 🙂

[Gail & Marty sailing away]

30 minutes ago, ldtr1 said:

Who knows what an individual might say. Coild be just making something up.

 

Only if they reported coming in number 2 in a comparison between lines, the data would have to be a corporate data and metric. No other way for them, especially on board ship, to have that view into other lines metrics unless it came from corporate.

 

So that gives 2 possible scenerios  1. a totally made up result

2. Corporate feedback after their emphasis on comparison in the analyst meeting last quarter.

 

No benefit to 1, substantial benefit to 2 if corporate provided said feedback after processing this quarters numbers.

 

 

You guessed correct # 2 

[CNSJ]

3 hours ago, HappyInVan said:

 

The problem with ROCI is that it is easy to manipulate this measure. You could sell your assets and lease it back (operating cost). 

 

The problem with investing less is that it only improves short term profitability. For example, we have discussed how the $8m drydock for Volendam is only a drop in the bucket for an old ship. How much longer will you be willing to sail their old ships for long itineraries? 

Well, Fred Olsen Cruise line bought two R class ships, refurb'd them and are selling cabins at about 50% higher cost than HAL does.  

[cruiser man 60]

1 hour ago, ldtr1 said:

Apparently you so not know that occupancy is measured using the ships occupancy at 2 per cabin, lower bunk capacity. Since have 3/4 capacity cabins occupancy is usually over 100%

if occupancy is 6000 based on 3/4 in a cabin then I would class 6000 as full

occupancy and 100%

[ldtr1]

Just now, cruiser man 60 said:

if occupancy is 6000 based on 3/4 in a cabin then I would class 6000 as full

occupancy and 100%

Except that is not how occupancy is reported. you have normal capacity which is lower berth counts, 2 people per cabin. Then you have maximum capacity which is the maximum number of passengers that a ship can legally carry.

 

For example Volendam is listed as a passenger capacity of 1432, which is its 2 per cabin normal capacity. It maximum passenger capacity is 1839. So if it was absolutely full its occupancy would be 128%.  All lines report the numbers in the same fashion.

[3rdGenCunarder]

4 minutes ago, cruiser man 60 said:

if occupancy is 6000 based on 3/4 in a cabin then I would class 6000 as full

occupancy and 100%

 

But the cruise lines don't count it that way. I'm not sure they ever sail at full capacity counting all the bedhs. Quads may have only 3 people in them (I think the rules allow that), so there's an empty bed. Singles travel in a double cabin, so there's a cabin sold but not "full." I suspect guarantees will be getting quads on ships that have a lot of quads, especially If it isn't a school holiday with lots of kids. HAL won't sell quads to couples, but when quads are left over, HAL might put couples with a guarantee into a quad.

[HappyInVan]

3 hours ago, ldtr1 said:

8 million is not a drop in the bucket. It is in the ball park for a normal drydock including some refurb work.

 

Funny how you mention the amount of the dry dock, but do not accept that they might do some work between dry docks with some rooms taken out servic3 if scheduling requires it.

 

It is not the major full remodel that celebrity and NCL did on their ships which is what some what to compare to...

 

 

Sorry! I'm not drinking the Kool-Aid!!!

 

The V will have had 27 years of service in 2025. When will they renew the ship if they don't do it in 2025???

 

Reality is that Carnival will run their ships until they are scrapped. Perhaps, their customers don't mind. But, pax paying real money have alternatives. That's the point that this thread's OP is making.

 

In any case, Carnival and Princess are able to replace the ships with new builds. That's why experienced people are asking the When and If questions to HAL?

 

Anyone can have an opinion. But, management is a hard discipline. Its easy to cut corners in the short term. But, a brand's value will only survive if you nurture and invest continuously.

[ldtr1]

10 minutes ago, HappyInVan said:

 

Sorry! I'm not drinking the Kool-Aid!!!

 

The V will have had 27 years of service in 2025. When will they renew the ship if they don't do it in 2025???

 

Reality is that Carnival will run their ships until they are scrapped. Perhaps, their customers don't mind. But, pax paying real money have alternatives. That's the point that this thread's OP is making.

 

In any case, Carnival and Princess are able to replace the ships with new builds. That's why experienced people are asking the When and If questions to HAL?

 

Anyone can have an opinion. But, management is a hard discipline. Its easy to cut corners in the short term. But, a brand's value will only survive if you nurture and invest continuously.

They will not remodel it, they will continue to refurb existing decor as needed. The same as Princess will do with the Grand, Coral and Island. Eventually they will time it out probably in 27 - 29 depending upon exactly when they make their next order, which will probably be in 2026.  

 

You keep trying to say HAL is failing by doing comparisons that do not make sense based upon their normal business practices.

Edited Tuesday at 09:11 PM by ldtr1