No new ships beyond those already on the books

[Barek]

This is the biggest impact I've seen so far at the Carnival brands ... no new ship beyond those already on the books. http://www.cruisebusiness.com/news.php?u=20080403224002

 

I can understand the reasoning, my guess is that CCL wanted to show the markets as much financial solidity and responsibility as possible so that the their credit rating isn't cut in the same way as what happenned to RCCL yesturday. http://www.forbes.com/2008/04/03/royal-caribbean-closer-markets-equity-cx_mp_0403markets35.html?partner=yahootix

 

So enjoy the Eurodam! I'm not sure if her announced sister ship is affected by this (is it "on the books" now?, if no construction has begun, can they back out of the arrangement?)

[RedmondCruiser]

Very interesting. I know that RCI went deep into debt to purchase Celebrity but with all the tonnage that they have on order their debt picture is not pretty.

 

A comment attributed to Mickey Arinson said that Carnival could maintain its current fleet levels indefinitely.

 

It will be interesting to see how all this shakes out.

[localady]

And it appears that HAL is putting the dollars into retrofitting the current fleet now to add cabins and upgrade for the future. The 'S' ships may be around for many years to come!! :D :D :D

[hammybee]

I saw this on the Azamara board a few weeks ago.

 

According to a reliable industry source, RCCL has formally withdrawn from negotiations with major European shipyards to build new ships for its Azamara. The poor financial performance of the Azamara brand was cited as the reason.

 

I guess competing against Oceania has not proven to be easy, though given high demand for this type of product I am frankly rather surprised to hear that Azamara is apparently not doing to well. (Then again, Celebrity traditionally hasn't....)

__________________

Doug Newman (the Artist Formerly Known as Host Doug)

 

Perhaps this is the begining of the end of cruise line star wars.

[RevNeal]

This really isn't a surprise, and certainly not given the present economy. My guess is that, beyond the Signature ship(s) HAL has long projected a fleet of 14/15 ships, with no more additional vessels for at least several years. It has been a long expansion-cycle, and it wouldn't hurt HAL to do some consolidation and fine-tuning with the fleet and crew-size which they've already got ... working on quality, not just volume. As most of us are aware, it has been hard for the Line to maintain the quality of the cruise experience while pushing a massive expansion of it's volume with a new ship every year to a year-and-a-half.

 

My thoughts about HAL not planning any immediate newbuilds beyond the Signature(s) is also based upon HAL's announcement that it is going to do some re-construction on the S-Class ships and at least one of the Rs to give them a full "features and technological" re-fresh. This reconstruction effort, post the Signature of Excellence Upgrades, will not only add cabins on the the four S-class ships and the Rotterdam, but will, almost certainly, update their nautical technology (propulsion, etc), thus extending their in-fleet life expectancy by another decade, or more. This gives HAL time to consolidate their holdings, pay down the debt they've accrued with all the new builds, and define their identity as a large-fleet (though not large-ship) Line.

 

When this process began in the early 1990s HAL was a small-fleet Line (4 ships) which appealed to an up-scale clientele; with the addition of the S and Rs to the fleet, and the sell-off of the older ships, the Line quickly doubled its size and passenger-capacity while maintaining, in large-part, its character. Then, with the addition of the Vistas the line doubled, yet again, its passenger capacity while increasing the number of ships by yet another third. All of these expansions required a massive increase in staff size, an impressive expansion of itinerary options, and a manifold multiplication of logistical requirements for operating a fleet of this size and one that is so wide-ranging. The "growing pains" of expansion, combined with the travel-complexity of a post 9-11 world, and the economic realities of trying fill that many cabins every cruise, has forced HAL to refocus its target "down" to the mid-range of the market. HAL still markets themselves as "five star" and "elegant" and "up-scale," and while their product CAN offer this kind of experience on occasion, and particularly-so on the smaller ships and the longer cruises, for the most part they've slipped on all points with the expansion process. They need to take the time to consolidate their operation, build up a larger mass of highly-trained staff members, and all in the course of re-focusing their efforts on the product's quality rather than just on its volume.

 

Just my take.

[u4ea]

Excellent comments.:)

Don't forget these factors as well as economic.

 

http://www.census.gov/main/www/popclock.html

http://www.census.gov/cgi-bin/ipc/pcwe

 

Mark...

[kryos]

So enjoy the Eurodam! I'm not sure if her announced sister ship is affected by this (is it "on the books" now?, if no construction has begun, can they back out of the arrangement?)

I could be wrong, but I think HAL only has an "option" on another ship beyond the Eurodam. So, yes, they can choose not to exercise that option.

 

I think the cruise lines maybe are starting to get wise. They're wondering how they're gonna manage to keep all these huge ships full every week ... at least without having to pretty much give cruises away.

 

With the economy buckling, I think pulling back on new builds is probably a smart thing. After all, when the economy is not doing well, what's the first thing that goes? Vacations and other luxuries, of course. Cruising will be more hard hit that many other segments of the economy and the cruise lines are probably gonna be stuck with a lot of unsold berths.

 

So, at least for the short-term (next five years or so), I think Carnival Corp. is making a smart move. Let the economy start to show some strong indications of an upturn, and then think about new builds.

 

Blue skies ...

 

--rita

[kryos]

My thoughts about HAL not planning any immediate newbuilds beyond the Signature(s) is also based upon HAL's announcement that it is going to do some re-construction on the S-Class ships and at least one of the Rs to give them a full "features and technological" re-fresh.

Also, who's to say that new builds are the only way to go?

 

There are lots of existing ships that HAL could probably buy ... smaller ships from struggling smaller cruise lines, and retro-fit to HAL's standards for probably a heck of a lot cheaper than building a new ship from scratch. True, those ships are probably much smaller than what HAL would normally build, but then HAL has a very definite segment of their customer base who loves the smaller ships. Just look at the prices sailings on the Prisendam command.

 

Blue skies ...

 

--rita

[Taxguy7]

I saw this on the Azamara board a few weeks ago.

 

According to a reliable industry source, RCCL has formally withdrawn from negotiations with major European shipyards to build new ships for its Azamara. The poor financial performance of the Azamara brand was cited as the reason.

 

I guess competing against Oceania has not proven to be easy, though given high demand for this type of product I am frankly rather surprised to hear that Azamara is apparently not doing to well. (Then again, Celebrity traditionally hasn't....)

I'm not. We sailed on the Quest in Nov. of last year, having booked while it was still in the Celeb name. The ship was beautiful but everything was higher including drink tips (18% on $5 beer compared to 15% on $3 for the same barand on Celeb a year before):mad: . The dining room was not a happy place either. We always enjoy cruises, but I wouldn't consider Az again, that's why I booked my 1st with HAL.

[RedmondCruiser]

One thing that comes to mind is that the ship yards, in Europe, will suffer from a sudden lack of business. This will effect the viability of ship yards in Italy, France and Finland. I wonder if we will see ship yards open up in India and Indonisia ? Will they be producing the next class of ships? The poor economy and the fall of the dollar will have far reaching effects.

I agree with the Rev. -- This may be a good time for HAL to consolidate and fine tune its product. They may well want to return to some basics. The product that I found twenty years ago has been deluded, to the detriment of the line. Maybe the downturn can find a silver lining.

[docksider21]

Also, who's to say that new builds are the only way to go?

 

 

If and when a ship need to be replaced, why does new have to mean big?

 

The Vista ships, to have enough seatings in the dining room, have shrunk

the open space between the two levels so much, that the open feeling is destroyed.

 

Also, less square foot per PAX is public space, and less open feel?

 

And lots of cabins that have to be filled week after week after week ......

 

A "new" S class size ships, with the newer features, may be just the

ticket, in a few years.

 

And RevNeal, excellent observations, as usual.

[Captain Rhone]

The second ship in the Signature class (Fall 2010) was officially ordered on June 11, 2007 so they are going to build it.

[TCF]

CCL has not grown to the dominant player in the cruise industry just because they offer a good product that spans the, 'disposable income chart'.

What Revneal has outlined is right on the money, so to speak, at least in my opinion.

The American economy is slipping into a very deep hole and all the 'whistling past the graveyard' pontificating by policitians and conservative economists isn't going to change that. But, what many don't understand, and what has been pointed out here, is that the sagging American economy is going be felt worldwide in many primary industries...and the feeling is going to be one of severe hurt!

The CCL CEO announces no more new-builds, and three European shipyards shake to their foundations. For countries like Finland and Italy the ship building industry is a very important part of their economies. When the largest cruise line conglomerate says, 'that's it, no more new-builds', that is a major economic threat to more than a couple of European countries.

But, as has already been pointed out, it is probably not a bad thing for HAL, Princess, and even Carnival to take some time to spiff up their product, make themselves even more attractive, and, available , to their target markets.

Before this thing is over I think we will see CCL grow by at least one more cruise line...maybe even one more with the initials RCCL!!???

[Barek]

Keep in mind, CCL is only saying no more new builds for their US brands. The CCL brands based in other countries still have the authorization from corporate to add additional capacity if it's warranted. The reason they give is the weak US dollar, which means it now costs more in US dollar to get the same amount of work done in other currencies.

 

Because of this, I suspect that the European shipyards will not be as drastically impacted as some are suggesting. Even among CCL, not all cruise lines will necesarilly stop making new orders; and last I heard, the shipyards had sizeable backlogs of work that will last them at least through 2010. Granted, if cruise lines pay a penalty for cancelling or start filing for bankruptcy then they could get out of existing ship contracts. Or if they go out of business then there could be abandoned partially built ships. But best case scenarios are saying that the economy will improve by Q3, and even the more cautious predictions are saying it will rebound by early/mid 2009. Once things improve, new orders are quite possible again.

[localady]

If and when a ship need to be replaced, why does new have to mean big?

 

The Vista ships, to have enough seatings in the dining room, have shrunk

the open space between the two levels so much, that the open feeling is destroyed.

 

Also, less square foot per PAX is public space, and less open feel?

 

And lots of cabins that have to be filled week after week after week ......

 

A "new" S class size ships, with the newer features, may be just the

ticket, in a few years.

 

And RevNeal, excellent observations, as usual.

 

David- I had a very interesting conversation about that very issue with a HAL HM in the last couple of years, and was told that it's an "economy of size" issue that keeps them building bigger. The cost per berth for a smaller ship doesn't make economic sense.

Many of us would love to see smaller ships again, but I am not sure that will happen....:o

[Coco Creek]

Very interesting. I know that RCI went deep into debt to purchase Celebrity but with all the tonnage that they have on order their debt picture is not pretty.

 

A comment attributed to Mickey Arinson said that Carnival could maintain its current fleet levels indefinitely.

 

It will be interesting to see how all this shakes out.

 

RCL's big issue are existing contracts for 4 Solstice Class ships (11,000 beds to fill) and 2 Genesis Class ships (another 11,000 beds to fill). I do not have first hand knowledge of the contracts, but if I was a betting man (and I am not), my money would go down on RCL cancelleing 1-2 Solstice ships and 1 Genesis ship. With the credit rating dropped to junk level, the financial cost of buidling all the ships will be tremendous.

[InTheWASide]

RCL's big issue are existing contracts for 4 Solstice Class ships (11,000 beds to fill) and 2 Genesis Class ships (another 11,000 beds to fill). I do not have first hand knowledge of the contracts, but if I was a betting man (and I am not), my money would go down on RCL cancelleing 1-2 Solstice ships and 1 Genesis ship. With the credit rating dropped to junk level, the financial cost of buidling all the ships will be tremendous.

 

Celebrity actually increased the Solstice class to 5... so... maybe they'll drop 3 of em :)

[SoCal Cruiser78]

Well said, revneal! I was on the Ryndam back in '02 the week that the first Vista-class entered service. A senior crew member confided in me that he felt service would slip on the larger ships and he wouldn't want to be assigned to one.

[florisdekort]

RCL's big issue are existing contracts for 4 Solstice Class ships (11,000 beds to fill) and 2 Genesis Class ships (another 11,000 beds to fill). I do not have first hand knowledge of the contracts, but if I was a betting man (and I am not), my money would go down on RCL cancelleing 1-2 Solstice ships and 1 Genesis ship. With the credit rating dropped to junk level, the financial cost of buidling all the ships will be tremendous.

 

RCI ordered a 5th Solstice class ship 3 weeks ago, for delivery in 2012.

 

That said - when the Solstice class was first announced, it was to grow the Celebrity brand. However, with Galaxy now set to leave Celebrity's fleet for RCI's new German joint venture with TUI, and Mercury possible to follow, it is starting to look like the first 2 S-class ships will not grow the line, but modernize it.

 

Floris