NCL and financial problems?

[Ms belp]

When I started looking into booking a cruise for six I tried AAA and the travel agency that Costco goes through. They both were against booking with NCL. The Costco agency flat out told me that they do not book NCL. According to them they have subpar service. I decided to research on my own and came across these boards which have provided a wealth of information. I decided to book with NCL their Freestyle crusin appeals to the type of vacation that we are looking for. I think it is up to the person to decide what is best for them. I am crusin on NCL on the 28th of this month and look forward to reporting back on what I hope to be the best vacation ever!

Liza

 

What a wonderful father you have, Liza! Happy Graduation. You will not believe the scenery in Alaska. We are still trying to process all that we saw. Have a wonderful cruise; come back and tell us how it was.

 

You can see by my signature that I love NCL. Freestyle is the way to go for me!

[pixiedustdawn]

Also in my experience, travel agencies try to get you to book a different cruise other than NCL. Like many others have said, it may be the commission?

I went on AAA travel website and NCL is still listed. I didn't see Disney, though I just saw it last week. Thought that was strange.

[cruzeluver]

Personally I find it reprehensible that ANY TA (AAA or any other) would provide inaccurate information just to protect commissions. If the reason they are directing people away from NCL is because of lower commisssions, then say so! Don't make up some cock and bull story abour financial problems or that NCL service is sub-par.

[Sea Hound]

I heard AAA is having financial difficulties!:eek:

 

Is that true?:confused:

 

Sea Hound:D

[mylesf]

Then, please share your "finer details";)

 

Are they a "secret":confused:

 

I did share the "finer details" on a different post and my comments were completely edited out. Given all the comments about the issue this thread had the big picture why AAA sells away from NCL. There is another post that indicated they went to a AAA website and NCL was on there but not Disney. Based on AAA's lack of national agreement with NCL they should not be on there. However, some AAA clubs have their own niche agreement with NCL and can push NCL. Disney has a national agreement with Disney and they should have some sort of presence on the website. That is not too "magical" of AAA!

[G'ma]

AAA goes by just that, three capital A's, not Triple A.

 

There is so much more to the lack of relationship between AAA and NCL. NCL is not a public company and does not answer to stockholders. Granted, Hawaii was a difficult product to launch and it was draining on the bottom line but they knew it would be, given how expensive the start up costs are. They did not intend to go down to one ship and look for a second ship to re-enter that market. Although AAA has a large membership, second only to the Catholic church, overall, very few of their members buy travel from them. In addition, most AAA's will sell you a third party insurance travel policy, which cover if a vendor should go bankrupt. This list is updated by the insurance company and if a company is unstable the insurance company will drop them from the policy. NCL has always been covered by this third party insurance company.

 

Sorry but maybe you should do some more research as you suggested we should.

 

Oh, Really? Then, explain this:

 

 

NCL Corporation Ltd., parent company of Norwegian Cruise Line and Honolulu-based NCL America, should know by the middle of next year if its U.S.-flagged ship operation is viable, the company's top official said yesterday.

A $1 billion investment from private-equity group Apollo Management LP to NCL Corp. has bought the struggling Hawaii operation a little more time to turn its performance around, said NCL Corp. President and Chief Executive Colin Veitch.

"We haven't drawn a specific line in the sand or set any absolute thresholds; however, it will be apparent to shareholders at some time in the future that (NCL America) will be a good business or it won't be a good business," Veitch said yesterday.

While NCL has maintained that NCL America is well-anchored in Hawaii, the U.S.-flagged company's future has been uncertain since it was blamed by its parent company for a threefold widening of losses in the fourth quarter of last year. NCL indicated at the time that it would consider "all options" to stem financial bleeding, and later followed up that ominous announcement with news that it planned to send Pride of Hawaii, its newest member of NCL America's fleet, to Europe in February 2008.

"It's been a challenge, but now is not the time to throw in the towel. We're optimistic and the new shareholder has said that this business has potential," Veitch said. "The people in Hawaii should recognize that nothing is forever and everything needs to be worked on, but this company has committed in a way that no one has before. And, we're running the business much better now than we were before."

Hawaii's high labor costs, as well as inconsistent product delivery and booking prices, have created challenges for NCL, a subsidiary of Star Cruises Ltd. of Hong Kong. Star Cruises, controlled by Malaysia's Genting Bhd., posted losses last year.

Also, NCL America's competition in the Hawaii market has quadrupled since the company began its U.S.-flagged operations in 2004, Veitch said.

"There is a total of four million capacity days or bed nights being sold in the market as Hawaii cruises by ourselves and our competitors," he said. "When we began in 2004 there was just one million, so there has been a quadrupling of the market in the last three years and it has had a downward impact on the pricing." The new investment, in the form of common stock alongside NCL's existing sole shareholder, Star Cruises, is designed to strengthen NCL's balance sheet and support its continuing expansion plans, Veitch said. The agreement is expected to finalize during the fourth quarter of this year, he said.

 

AND

 

"NCL and NCL America are owned by the Genting Group of Malaysia (which also owns the Asian cruise line Star Cruises). I mentioned that you cannot buy their stock directly in the United States."

 

You can find the annual report to the stockholders if you look around.

 

As for the use of "triple a", it is a commonly used shortcut in the retail travel industry from which I retired after 32 years...... In airline reservation systems used by many offices "AAA" or "aaa" have different meanings....so triple a is used a lot.

 

As for research, I suggest looking around at Star Cruises and Apollo LP. Apollo bailed NCL out with a billion dollar investment. Apollo LP is active in several hospitality venues including Oceania cruises and Wyndham hotels as well as Sirius radio and many others....all having stockholders.....

 

http://sec.edgar-online.com/2008/03/13/0000950144-08-001868/Section27.asp

[G'ma]

But don't forget that like I said, AAA gave my mother "trouble" in 2002, before the first of the NCLA ships even set sail.

 

It is not unusual for retail travel agencies sell what is known as "preferred" vendors. These vendors have an agreement with the agency concerning bonus commissions and other perks for selling their product. These contractual agreements have revenue targets and goals. If the agency doesn't meet those goals, the override commissions are lost and renewing the contract is in jeopardy.

 

All cruise lines (and airlines - and other hospitality vendors) operate this way. The agency community depends upon these agreements to pay their bills. If you don't like working with AAA, or if they don't offer to book what you want, then find another agency. It's a free market.

 

There is no grand conspiracy by AAA to book away from NCL. They simply prefer to sell those vendors with whom they have agreements.

[mylesf]

Oh' date=' Really? Then, explain this:

 

 

[b']NCL Corporation Ltd.[/b], parent company of Norwegian Cruise Line and Honolulu-based NCL America, should know by the middle of next year if its U.S.-flagged ship operation is viable, the company's top official said yesterday.

A $1 billion investment from private-equity group Apollo Management LP to NCL Corp. has bought the struggling Hawaii operation a little more time to turn its performance around, said NCL Corp. President and Chief Executive Colin Veitch.

"We haven't drawn a specific line in the sand or set any absolute thresholds; however, it will be apparent to shareholders at some time in the future that (NCL America) will be a good business or it won't be a good business," Veitch said yesterday.

While NCL has maintained that NCL America is well-anchored in Hawaii, the U.S.-flagged company's future has been uncertain since it was blamed by its parent company for a threefold widening of losses in the fourth quarter of last year. NCL indicated at the time that it would consider "all options" to stem financial bleeding, and later followed up that ominous announcement with news that it planned to send Pride of Hawaii, its newest member of NCL America's fleet, to Europe in February 2008.

"It's been a challenge, but now is not the time to throw in the towel. We're optimistic and the new shareholder has said that this business has potential," Veitch said. "The people in Hawaii should recognize that nothing is forever and everything needs to be worked on, but this company has committed in a way that no one has before. And, we're running the business much better now than we were before."

Hawaii's high labor costs, as well as inconsistent product delivery and booking prices, have created challenges for NCL, a subsidiary of Star Cruises Ltd. of Hong Kong. Star Cruises, controlled by Malaysia's Genting Bhd., posted losses last year.

Also, NCL America's competition in the Hawaii market has quadrupled since the company began its U.S.-flagged operations in 2004, Veitch said.

"There is a total of four million capacity days or bed nights being sold in the market as Hawaii cruises by ourselves and our competitors," he said. "When we began in 2004 there was just one million, so there has been a quadrupling of the market in the last three years and it has had a downward impact on the pricing." The new investment, in the form of common stock alongside NCL's existing sole shareholder, Star Cruises, is designed to strengthen NCL's balance sheet and support its continuing expansion plans, Veitch said. The agreement is expected to finalize during the fourth quarter of this year, he said.

 

AND

 

"NCL and NCL America are owned by the Genting Group of Malaysia (which also owns the Asian cruise line Star Cruises). I mentioned that you cannot buy their stock directly in the United States."

 

You can find the annual report to the stockholders if you look around.

 

As for the use of "triple a", it is a commonly used shortcut in the retail travel industry from which I retired after 32 years...... In airline reservation systems used by many offices "AAA" or "aaa" have different meanings....so triple a is used a lot.

 

As for research, I suggest looking around at Star Cruises and Apollo LP. Apollo bailed NCL out with a billion dollar investment. Apollo LP is active in several hospitality venues including Oceania cruises and Wyndham hotels as well as Sirius radio and many others....all having stockholders.....

 

http://sec.edgar-online.com/2008/03/13/0000950144-08-001868/Section27.asp

 

I have too many thoughts on your post to explain in this thread. Sometimes phone calls are better! When have you ever seen a

AAA office hang a their brand logo as Triple A? It is and always has been AAA.

[smeyer418]

No one disputes that NCL America has been problematic from day one. Many people said that home porting in NY was foolish yet it turned out very profitable...although times and fuel prices change. But the fact that one home state port is not doing well is much different than the whole line being in financial problems. I have been told that the one ship left in Hawaii has been turning a profit and has been sailing close to full with minimal service issues(that doesn't mean none)...whether that means its making enough to keep it there I don't know but the overall company is in much better shape that any airline by far. If finances were the only or major issue AAA would stop writing United, US air and Alitilia at the very least...

The issue is the AAA isn't paid what it feels it deserves so it decides not to highlight AAA or Disney. its a private company and can do what it wants...

[halos]

I've heard that AAA won't sell NCL because they want a higher commission than NCL will give them. Whether this is true or not, I wouldn't believe what your mother was told.

 

I've been told that for a while now...that AAA won't sell NCL.

HOW DARE they state something like that!

Unbelievable! :rolleyes:

 

I used them for Travel ONCE...never will again....got no deal and didn't think they even knew what they were doing. Hell, even having maps made up by them didn't work out for us. You ask for shortest driving route and they still added unnecessary hours to our trip. Went home a different way and saved 3 hours!

useless I tell ya!

I use my membership for auto emergencies only now.

[G'ma]

If you believe everything you read in the papers, the US would be heading back to the stone ages and we lost WWII. NCL just received a billion dollar infusion of money from an investment house. NCL America still has one ship and its true that Hawaii was a financial bust but overall NCL has been profitable. Some of the financial issues are proforma interest charges but the line has been profitable before interest charges. a half million dollar settlement of a racial case is almost a nuisance value considering attorney's fees. Tavern on the Green-much smaller than NCL just has a 2 million plus settlement.

 

NO supplier has put NCL on a cash only basis and the Travel Insurance companies who have a list of acceptable carriers for Bankruptcy purposes haven't removed NCL from the insurable list....These are much better indicators of financial trouble...

 

What you say is true. However, AAA and any other agency has the right to avoid any vendor or supplier at any time for any reason. Many agencies don't do business with any company that isn't completely solvent. AAA is one of them.

 

The fact that Apollo LP had to bail Star Cruises out with 1 billion dollars would send up a flag to many agencies. Same with an airline. Most agencies won't book an airline who is exhibiting financial difficulties either. These agencies are protecting their client base.

 

I worked 32 years in the trave industry; from 1974 until 2006... I saw the great airlines fall and saw the destruction of the hospitality industry. Travel professionals recognize the warning signs...we've seen hundreds of them. Professionals will simply avoid those suppliers with financial problems - including those who need huge investments of money to stay afloat (no pun intended).

[G'ma]

Personally I find it reprehensible that ANY TA (AAA or any other) would provide inaccurate information just to protect commissions. If the reason they are directing people away from NCL is because of lower commisssions, then say so! Don't make up some cock and bull story abour financial problems or that NCL service is sub-par.

 

Apollo LP just gave Star Cruises a 1 BILLION dollar shot in the arm to keep NCL solvent. NCL's failed Hawaii market was draining the company. No reputable travel agency will do business with a company that has a questionable financial condition.

[smeyer418]

What you say is true. However' date=' AAA and any other agency has the right to avoid any vendor or supplier at any time for any reason. Many agencies don't do business with any company that isn't completely solvent. AAA is one of them.

 

The fact that Apollo LP had to bail Star Cruises out with 1 billion dollars would send up a flag to many agencies. Same with an airline. Most agencies won't book an airline who is exhibiting financial difficulties either. These agencies are protecting their client base.

 

I worked 32 years in the trave industry; from 1974 until 2006... I saw the great airlines fall and saw the destruction of the hospitality industry. Travel professionals recognize the warning signs...we've seen hundreds of them. Professionals will simply avoid those suppliers with financial problems - including those who need huge investments of money to stay afloat (no pun intended).[/quote']

 

 

I disagree with you characterization of "bailed out" but that is my opinion. Also the AAA agent who said its in financial difficulty is open to a liable/slander lawsuit. This has happened in the past. Disney is not in financial difficulty--it may not be as profitable as some people like(including me who own shares) but that isn't the same. This has nothing to do with NCL's finances. Its simply that AAA as a large TA wants higher commissions and perks for its members and free bees and NCL has said no. AAA can then say we won't work with you but if AAA says its because NCL is insolvent-which it isn't- they can be successfully sued. A business can be liabled just as an individual can.

 

No investment banker forks over a billion dollars(that was taken out-not put backed into NCL) if they felt the company was insolvent...

[halos]

I did share the "finer details" on a different post and my comments were completely edited out.

 

 

Well then, I guess your posts are nothing but useless to us. Cryptic paragraphs help us in no way at all.

[mbisson]

Well then, I guess your posts are nothing but useless to us. Cryptic paragraphs help us in no way at all.

 

 

OUCH! Some things are not allowed-not the posters fault. For instance I'm not allowed to discuss my means of booking a cruise.

[newmexicoNita]

First, my husband and I are going on the Star on 6/21. My mother went to AAA today in Washington (where we live) to book a cruise for her and was told they will NO LONGER book with NCL because they are having "financial problems". Does anyone know if this is true or was it just a misinformed TA trying to get my mom to book with another line? I hope it is not true. Thanks - Laura

I haven't read the responses to this, but AAA not booking NCL has nothing to do with financual problems. Many of the AAA companies do not work with NCL or certainly prefer not to because of an ongoing fued having to do with advertising. I believe the TA was misinformed or told to say this. I have been in the business for many years and seen cruise lines go under, normally we are not told to stop selling a cruise line, this is the easiest way to see it go under and guess what? When a cruise line goes under, commissions stop. Unless there is true evidence that NCL is in trouble such as not paying commissions I think what your mom was told could have serious reprocussions. Beleive me when a company is having serious problems they do not continue to build.

 

Nita

[newmexicoNita]

I've heard that AAA won't sell NCL because they want a higher commission than NCL will give them. Whether this is true or not, I wouldn't believe what your mother was told.

Actually NCL pays a pretty good commission. Only a couple of lines pay better. Of course some of this is based on how much an agency books with a particular line.

 

AAA may prefer to sell Princess or other lines because they are at at teir where they do get a larger commisssion. Someone did mention agreements agencies have with certain vendors, I am not sure what you mean by that? We have no agreements except for the level we reach with different lines each year which can affect our commission.

 

Gma, first of all I do agree a company has the right to sell whatever product they choose, but they do not have the right to lie. Talk about damaging, I hope this backfires on AAA. I also disagree with you on seeing the signs of finanual trouble. Other than not paying commissions what other signs did you see from being in a travel agent all those years?

Nita

[smeyer418]

OUCH! Some things are not allowed-not the posters fault. For instance I'm not allowed to discuss my means of booking a cruise.

really? You can't say whether you use a TA or direct or on line whatever. I though it was WHO not WHAT that you couldn't say...(as in which TA nit a TA in general or the Casino etc..) so you can discuss the means but not the specific TA...

 

Sid

[mylesf]

Actually NCL pays a pretty good commission. Only a couple of lines pay better. Of course some of this is based on how much an agency books with a particular line.

 

Nita

 

All cruise lines have a tiered commission structure. Those that have national agreements with the cruiselines will have a higher commission tier. NCL and AAA do not have a national agreement so their commission levels are lower than if AAA books Princess, HAL, RCI or Carnvial, ect. However, the exception is some AAA Clubs have a niche agreement with NCL and their have the higher commission levels. When you book through one of those branches NCL is a prefered cruise line and they have no problem selling NCL.

[mbisson]

really? You can't say whether you use a TA or direct or on line whatever. I though it was WHO not WHAT that you couldn't say...(as in which TA nit a TA in general or the Casino etc..) so you can discuss the means but not the specific TA...

 

Sid

 

So did I. The note I got left little doubt that "even if I didn't name them" I'm not to do it.

 

Seriously, I'm a bit concerned that I could be in trouble for even saying this.

[smeyer418]

So did I. The note I got left little doubt that "even if I didn't name them" I'm not to do it.

 

Seriously, I'm a bit concerned that I could be in trouble for even saying this.

learn something every day....thanks

 

Sid

[newmexicoNita]

All cruise lines have a tiered commission structure. Those that have national agreements with the cruiselines will have a higher commission tier. NCL and AAA do not have a national agreement so their commission levels are lower than if AAA books Princess, HAL, RCI or Carnvial, ect. However, the exception is some AAA Clubs have a niche agreement with NCL and their have the higher commission levels. When you book through one of those branches NCL is a prefered cruise line and they have no problem selling NCL.

Of course I know that, remember I am an agent, I am simply saying, even NCLs bottom line is pretty good compared to some. I can assure you, the problems with AAA and NCL go a little deeper than commission levels plus regardless, outright lies should not be tolerated.

 

Nita

[mylesf]

Well then, I guess your posts are nothing but useless to us. Cryptic paragraphs help us in no way at all.

 

Really, for us? Did you take a poll and hands down EVERYONE voted this way. I have made several posts on this site and your response is the first to tell me that they are useless. Move on and don't read mine. I will be happy to do the same! :cool:

[mylesf]

Of course I know that, remember I am an agent, I am simply saying, even NCLs bottom line is pretty good compared to some. I can assure you, the problems with AAA and NCL go a little deeper than commission levels plus regardless, outright lies should not be tolerated.

 

Nita

 

I think we are on the same page here. I too have a travel background and a lot of it was with AAA. So I do know, first hand, what the relationship is and why there is no agreement.

[cruizinwithkids]

So speaking of financial issues, did the Apollo investment mean a change in ownership? I've just been waiting for recent financial results and they haven't appeared as a press release. Why?

 

Thank you in advance.