Is Silversea in financial trouble?

[CruisinGerman]

Anybody care to comment about the following quote from the Seabourn thread about the two new Seabourn ships?

 

"Also, the posts about Silversea are wildly inaccurate. Silversea is in financial trouble. It has tried to sell itself, but was/is asking too much money. It sought financing (apparently for new ships) and came away without any. (If that was because it couldn't get it or the terms didn't work I don't know.) Silversea is sailing far below capacity. It raised its prices because it needs revenue and had to either discount to get more passengers or count on the passengers that would normally sail with them to pay a bit more. Discounting could have been seen as a death nell. [i am not saying Silversea is about to go under, but to claim it is doing great is just not true.]"

 

There is widespread rumour (due to the ships' similarities to the Whisper and Shadow) that the two new Seabourn ships were originally meant for Silversea, but that Silversea couldn't go through with the deal for whatever reason.

 

Is it true that prices have all gone up and Silver sailings mostly eliminated to give a false impression that the line is doing extremely well, while the opposite is actually true?

 

Silversea has always been our favorite line for small ship cruising, and Crystal for the traditional large ship experience.

 

I would hate to see something happen to Silversea.

 

Kind regards,

 

Gunther and Uta

[xplrcrzn]

Silversea is not a public company and there is no way anyone outside the top levels of the company is going to have this information. Anything on this board would be pure speculation.

[CruisinGerman]

Is Silversea Cruises a U.S. company? Or is it incorporated in Europe or some other country?

 

In most European countries, for example, all companies, whether or not listed on a stock exchange, must file their annual financial statements with the Commercial Register, which means that it becomes public information.

 

I guess everything is for sale if the price is right, so even if Silversea is not in financial trouble, time will tell what happens ......

 

In any case, I think it is good news for the future (and competition) of luxury cruising that there will be two new sheets coming onto the scene, no matter what line they go to.

 

Kind regards,

 

Gunther and Uta

[neviboy]

I did mention, some time ago, that I had compared like sailings between RSSC and Silversea, for 2007. SS were much higher, all items considered, such as discounts available, etc. I considered the NET cost per person per day.

I am certainly going to wait until I book our Sept. cruise.

[cechase]

I would take the opinions expressed above with a "grain of salt". Our experience up to this date has been quite different. We are taking our first SilverSeas cruise on Silver Shadow on 12/12/2006 out of Barbados for 9 nights. Checking various web TAs, our cruise is sold out, and has been sold out for months.

 

Now for some cost comparisons: We had a Royal Suite on Celebrity's Infinity for a 10 night cruise to Alaska in September. The fare on Celebrity including insurance was over $2,000.00 more than our fare on Silver Shadow for a Silver Suite including insurance [which is larger than our Royal Suite on Infinity]. On Infinity, we departed with a ship board charge on our SeaPass in excess of $900.00 for drinks, wine, etc., and gave $400.00 in tips. Those items are included in the fare for SilverSeas. When considering higher end cabins, the comparison is decidedly in SilverSeas favor.

 

I would be interested in hearing the data which would suggest that SilverSeas's vessels are traveling at less than full capacity - i.e., 85%, 90% or full.

[neviboy]

cechase, we have been using RSSC for 8 cruises in past years. We enjoyed two SS cruises, last year and found the NET cost, with a veranda, to be only slightly higher than RSSC Voyager or Mariner. But the 2007 cruses' NET cost are much higher than the equivalent cruises of RSSC. especially the Med. cruises. Does anyone agree with this cost comparison ?

 

We have enjoyed all of our cruises and never found any major difference in any of these luxury style ships.

[lord of the seas]

neviboy,

Your sums are correct

[cechase]

Neviboy and lord of the seas, I certainly do not dispute your opinions. My comparison was of the higher end suites on two different lines. One would think that the lower end suites or veranda cabins on SilverSeas would be higher because of the "all-inclusive" nature of SilverSeas.

[Signor John]

I don't see much value in repeating anonymous rumors that aren't supported by evidence. In my opinion, such rumors are likely to be spread by people who:

 

- Are holding a grudge.

 

- Have an axe to grind.

 

- Have a sports-fan mentality ("I love X, so it's my duty to spread fear, uncertainty, and doubt about Y").

 

- Are simply credulous.

[uk1]

From personal experience, all very senior SS people were behaving as though their plans were unchanged a couple of months ago. I don't think - but cannot be sure - that things have changed since. If the rumour were true, the change of sourceing for the ships would have been gloated on and released to the press. It hasn't been.

 

The challenge for all of them ie Seabourn, Seadream, Silverseas and those that see themselves in this niche will be the introduction of several new vessels at the same time. The real skill then will be demarking further by going further up-market with offerings with higher quality and consistency and prices to match. However the mistake they'll all fall into is to lower prices to fill the ships lazilly. This will inevitably take them down-market where the quality offerings will sink against price competition in larger markets.

 

The owner of SS wants to enhance and protect the product and increase diems to protect the product rather than reduce both diems and cost-base, but it's his team that will have to carry that out - and there's the problem.

 

The strategy to move in that direction takes tremdous nerve, great courage and extraordinary skill, patience and very high cash reserves whilst that market at the top end becomes established.

[UKCruiseJeff]

Do discussions change?

 

:)

[Emtbsam]

Plus ça change, plus c'est la même chose!

[UKCruiseJeff]

There was an equally interesting discussion about how SS might change with the introduction of Spirit. ;)

[Herman The Cat]

Wow, resuscitating a thread from 2006? Or shouLd I say raising a dead thread from 2006? Looking to "stir up the dust" or are you just bored??? :D

[Stumblefoot]

...The owner of SS wants to enhance and protect the product and increase diems to protect the product rather than reduce both diems and cost-base, but it's his team that will have to carry that out - and there's the problem.

 

The strategy to move in that direction takes tremdous nerve, great courage and extraordinary skill, patience and very high cash reserves whilst that market at the top end becomes established.

The author of this post sounds very familiar to you UKCruiseJeff. Any relation?

 

Our first voyage on SS was in 2008, nearly 2 years after UK1's post. I'd say that if the owner's goal at the time was to enhance and protect the product and per diems, his team failed miserably based on the prices we're paying 6 years after that first cruise.

[UKCruiseJeff]

The author of this post sounds very familiar to you UKCruiseJeff. Any relation?

 

Our first voyage on SS was in 2008, nearly 2 years after UK1's post. I'd say that if the owner's goal at the time was to enhance and protect the product and per diems, his team failed miserably based on the prices we're paying 6 years after that first cruise.

 

:D

 

They did ... but you may be interested in some of the posts about the potential impacts of expansion of the fleet by the introduction of a new ship way back in December 2005.

 

http://cruiseforums.cruisecritic.co.uk/showthread.php?t=266961

 

It is interesting how the risks outlined in "some of the posts" appear to be uncannily accurate. ;)

 

How full or how empty SS ships currently are, is totally irrelevant.

 

You can fill a ship by giving cruises away at below cost price. SS have filled ships by offering discounts of up to 75% including TA margins. It is the revenue per sailing day ie the total amount billed for each ship each day for the whole fleet that is relevant. It is possible to have a full ship and make a significant loss or have a ship 25% empty and make a profit. The "price promise" makes the occupancy level even more irrelevant.

 

On the face of it, the building of a new ship is a good sign and something to be welcomed. The fear however is that, based on previous behaviour, SS will need to fill the ships by lowering both prices and the associated costs (ie lowering costs by lowering quality) to fill the ship. This will succeed because markets tend to get bigger the more you lower the price, but that approach will dissapoint many core customers that want to see SS maintain standards (and higher prices) or even move up-market with higher prices and quality rather than the other direction. When they remove the "price promise", as they did by offering better prices to new customers, their existing customer base - expensively secured - will erode as customers who have paid full prices by booking early, fill that their loyalty has been misplaced and as they are also expecting very high standards, will start to defect to other lines as they see standards lower and other customers on the same ship pay lower prices. High quality and prices has been a niche position held by small companies in virtually all industries and expanding nearly always changes the niche. The recent attempt to bar TA's from discounting - which is illegal under European competition and "restrictive trade" laws - is yet another sign of things yet to return to roost.

 

Also, sod's law being as predictable as it is, the moment the ship hits the water, an event might happen that will cause Americans to stop traveling, and prices in the cruise business will tumble. 25% more capacity to fill will be a challenge. It is easy to move down market - and takes the blink of an eyelid - but takes years to move back up market.

 

I hope they become bold and move up market and reverse the current SS trend we've seen over the last 12 months.

 

Jeff

Edited May 8, 2014 by UKCruiseJeff

[Stumblefoot]

Thanks for the historical perspective and your link.

 

It was interesting to read a Seatrade article from Tue, Dec 06, 2005 where then SS CEO, Albert Peter, was quoted as saying SS was talking with five separate shipyards to build a new ship, with an option for a second one. He went on to say that the size would be similar (28,500 ton) as the Shadow and Whisper, but might carry up to 50 passengers more than the 382 those ships carry, since "our feedback tells us that passengers believe ultra-luxury cruising can only be delivered on ships carrying no more than 500 passengers." Pretty amazing to think the CEO at the time made such a statement and then the company moved forward with the 540 passenger Spirit, over a 40% increase in passengers.

 

When I began searching for my first cruise, SS received high praise from a TA I spoke with. He referred to SS as a "boutique" cruise line and I remember asking him how the word "boutique" was defined. He said that initially it was ships that held less than 300 people, but over time, in the new millennium, the definition had increased to 400 people. When I learned about the Spirit, I knew "boutique" was nothing more than a marketing term, i.e. moving target, and not some industry standard.

 

My wife and I never wanted to cruise. Couldn't fathom being "tied" to a ship, unable to move/go when we fancied, or being "forced" to eat at a "required" dining time at large tables "shared" with other passengers. I distinctly remember when we were engaged, talking about travel and how neither of us wanted to cruise. But, maybe, if we ever did, we'd try out one to Alaska someday, like when we were old to celebrate our 20th anniversary. And, I'll be damned, if that isn't just what we did.

 

With all of the above said, obviously, I didn't know the old SS. I only came to know them in '08 on the Shadow, the first cruise of our lives, and we honestly couldn't believe what we had been missing for the first 20 years of our married lives together. We enjoyed it immensely and since that first cruise, we've enjoyed every voyage since. It is hard to imagine what the old SS must have been like. And, as frustratingly goofy as the offline experience can be dealing with their land based personnel, we sure have enjoyed the online experience when aboard their ships, which ultimately brings us back.

 

So, I too, like the OP "CruisinGerman" would hate to see 'something' happen to Silversea, whatever that "something" might be.

[specialcruisegirl]

Well if they were/are in trouble they certainly didn't show it on the Wind in April when the top brass, owner and various red carpet VIPs were on board for a very lavish evening to celebrate the 20th Anniversary.

The owner hosted a private party in Champagne, CEO's and others were entertained in La T and the rest were invited to a Gala dinner in the restaurant....myself included.

There were very mixed feelings on board amongst some of the veteran SS cruisers as the whole ship went formal apart from the Gala bash which was casual.

I personally love the ship and have found my niche with Silversea after many many years sailing Cunard, so long may they sail :)

 

Sophia

[wripro]

This thread was started in 2006. Why even continue it now?

[UKCruiseJeff]

This thread was started in 2006. Why even continue it now?

 

If a thread is of no interest to you, why post in it?

[Travelcat2]

I started a thread with the same topic a few months ago -- not based on an old post but based on rumors onboard Regent. When I hear a rumor once or twice I ignore it....... but I have heard about "difficulties" (nothing specific) at Silversea a few times. It didn't make sense since Silversea was buying ships but at the same time is not keeping their existing ships up to the standards that passengers on a luxury cruise line would expect. It appears that the owners have plenty of money but are not spending it on their ships. Perhaps the younger generation is getting involved in decisions? Something does seem a bit off.

 

We like Silversea (as an alternative to Regent - depending upon itinerary) but do not have anything booked at the moment. Our last cruise (September, 2013 on the Shadow) was wonderful but hearing that the carpets still have not been replaced -- even after a supposed refurbishment has me a bit concerned.

 

Do agree that people who do not want to be part of this discussion should avoid the thread. I do not feel that anyone is putting Silversea down, just discussing issues that are questionable in our minds. :)

[UKCruiseJeff]

I started a thread with the same topic a few months ago -- not based on an old post but based on rumors onboard Regent. When I hear a rumor once or twice I ignore it....... but I have heard about "difficulties" (nothing specific) at Silversea a few times. It didn't make sense since Silversea was buying ships but at the same time is not keeping their existing ships up to the standards that passengers on a luxury cruise line would expect. It appears that the owners have plenty of money but are not spending it on their ships. Perhaps the younger generation is getting involved in decisions? Something does seem a bit off.

 

We like Silversea (as an alternative to Regent - depending upon itinerary) but do not have anything booked at the moment. Our last cruise (September, 2013 on the Shadow) was wonderful but hearing that the carpets still have not been replaced -- even after a supposed refurbishment has me a bit concerned.

 

Do agree that people who do not want to be part of this discussion should avoid the thread. I do not feel that anyone is putting Silversea down, just discussing issues that are questionable in our minds. :)

 

I agree .... the boards went through a bad time some time ago when a few ill-mannered people felt they should decide not only what should and shouldn't be discussed but bullied those with whom they disagreed. It was a bit of a gang. I hope it doesn't slip back. it is now and friendlier.There's room enough for everyone. One just ignores what one isn't interested in :)

 

I thought it was interesting for two reasons. Firstly the discussions about viability have been around for a long while and SS are still here. That is good for both the customers they currently attract and the company and it's staff and the industry.

 

I was also reading some of the trip report threads and there is no doubt that it is a different line now than it was then. Everyone has different needs. What makes one person happy will not necessarily be a fit for others. It isn't black and white by any means but many of the original customers have been replaced by people with different needs and expectations. There is clearly not a cruise line meeting the needs of many of those that use to be happy on SS.

[specialcruisegirl]

As someone relatively new to Silversea l rather like to look back on the threads of old to compare. It's obvious that things are not the same as they used to be and some of us tend to dwell upon the old times...as l indeed did with Cunard for a long time until l woke up and smelled the coffee.

Before l embarked on my first SS cruise on the Wind last November l read and read this board and took everything in...advice both good and bad, various comments about the difference in ships et al and the opinions of those who know the line well. I didn't feel the need to post and ask questions because all the information is here for one to browse through.

 

So, as a newbie to SS l do hope that those ill mannered sarcastic bullies do not return as this kind of behaviour doesn't really represent the ships in reality.

 

Just my opinion :) Sophia