Can They Ride It Out and What Will It Look Like

[bajathree]

If you have been recently watching any type of news out there (which is pretty hard to escape nowadays) you we know that almost all predictions are now for a deep prolonged recession. With RCCL stock falling over 80% from it's high...with others following.... it appears there is falling faith on how this industry is going to fair. With so many cruise lines and the explosion of spending over the last 10 years the cruise industry is in full expansion gear....so many more ships are either just being delivered or currently underway....not good news as that only means greater expenditure.....I am sure that most cruise lines wish they can turn the production switch off and save the cost right now. Atlantis in the Bahamas has closed down one of their towers and are yet to reopen it. So how do you see the future of the cruise line industry....do you think we are going to see contraction....consolidation... cruise ships sitting at port:confused:

[Gator0178]

Your guess is as good as any.

[want2seaitall]

I kidded with my husband this morning that if this keeps up, we'll be eating pop tarts for breakfast, spam for lunch, and chicken nuggets for dinner on our cruise next month due to budget cuts. But seriously, all kidding aside, it is looking a little scary.

[pmshirl]

IMO, I think we are going to see a lot of Ship's sailing NOT FULL!

 

A lot of cruiser's are retired and may or may not be affected as much as the younger generation. But a least they don't have the worry of loosing their job or getting laid off. They all may have to worry about losses from the stock market overall!:(

 

RC is marketing towards new pax ( to save on reducing benefits). In todays economy situation, most of the new pax are affected with this recession more so than the retired pax.

 

The retired pax are most of RC's Loyal customer's ( who have cruised throught their years with RC) and with the reduction in benefits, may be loooking to other cruiselines for better deals.

 

I see a lot less of the younger generation, not being able to afford to cruise, the cruiselines hurting from this, and I don't know what to expect for the future with the cruiselines! It doesn't look too good. Look at just the CC poster's who have had to cancel ( and CC posters are a very little % of the total passengers that cruise) due to the economy.

 

All of us are affected one way or another by this recession, it will take a long time to recover if we ever do. The travel industry will also take a toll . I don't think the cruisline's will be looking to build new ship's for a long while!

[cruisinfanatic]

The expansion is for years down the road when times will be better. If nothing was being built now, they would lose out in the end. Just because there is a downturn doesnt mean RCL is losing much if any money.

[Cruising89143]

The expansion is for years down the road when times will be better. If nothing was being built now, they would lose out in the end. Just because there is a downturn doesnt mean RCL is losing much if any money.

 

Bingo.

 

Also, RCI IS going after new customers. How do you grow your business if you don't? Also, families are now the main target that RCI is going for. Just look at the ships that they have been turning out for the last ten years. They are no longer just your grandparents cruise line. That should come as no surprise to anyone.

 

RCI still offers some of the best past guest perks. They still give you the price reductions right up to the sailing date in most cases. Can't say that about some of the other cruise lines. For those that think RCI has passed them by due to their changes in the past guest program, move on. Find another line that gives you what you want. If this were affecting RCI's bookings as bad as some on here want others to believe, I think that they would be making changes to turn that around.

[Rancher Dave]

If you have been recently watching any type of news out there (which is pretty hard to escape nowadays) you we know that almost all predictions are now for a deep prolonged recession. With RCCL stock falling over 80% from it's high...with others following.... it appears there is falling faith on how this industry is going to fair. With so many cruise lines and the explosion of spending over the last 10 years the cruise industry is in full expansion gear....so many more ships are either just being delivered or currently underway....not good news as that only means greater expenditure.....I am sure that most cruise lines wish they can turn the production switch off and save the cost right now. Atlantis in the Bahamas has closed down one of their towers and are yet to reopen it. So how do you see the future of the cruise line industry....do you think we are going to see contraction....consolidation... cruise ships sitting at port:confused:

 

 

I'd put RCCL ahead of CCL in terms of being prep'd for the recession. With CCL sailing lots of old boats and RCCL really spiffing the fleet up, the older ships can be turned into artificial reefs for divers to explore in Haiti etc...adding to possible shore excursions...:D Really the newer ships offer more for everyone and are more efficient, that is the long term key.

 

The idea of poptarts for breakfast is not so bad, no bread here, no milk here and I don't want to go to the store to get any this morning, so may eat a poptart...agree though on the ship I would expect more. Spam for lunch...yuk...reminds me of the gift my cat left in my office last night, one of them got sick!

 

The economic times may yield a full time ship in Texas, where so far the economic situation in terms of employment is better than most areas of the country. Of course if the oil prices keep falling, that could begin to hurt employment in Texas. A full time ship here likely would at least now sail mostly full every week, or every cruise if they ran it on shorter curises. It'd a great way to without more than an hour drive for me get on the ship for more credits when they have some awesome sales...especially for short 4-5 night cruises where enjoying the ship would be the key to that trip.

 

I expect to see RCCL survive. The lenders who loan on the ships would be hard pressed to take over the ships (they could send a band of pirates to do so) and resell them to other lines where they would make all their money back...better generally to work out new terms on the loans and get paid back for the loan in full later...which would keep the ship operating for RCCL. Factor in that likely several of the ships are paid off, so they could be sold to help retire other new debt.

 

Oh well, time to go out and get the mega animated Christmas Light show installed...probably will be 20 hours of that kind of work this weekend.

[want2seaitall]

Oh well, time to go out and get the mega animated Christmas Light show installed...probably will be 20 hours of that kind of work this weekend.

 

Is it going to be a Griswold Christmas?

[Cruising89143]

Is it going to be a Griswold Christmas?

 

One of my favorite holiday movies to watch. It's a must.:)

[Loyal2RCCL]

NCL has had spam for lunch in their buffets for a few years now (and the food their chef's put out isn't much better)-- NO THANKS!!

[want2seaitall]

One of my favorite holiday movies to watch. It's a must.:)

 

Clark Griswold is my husband's Idol :D. He already has his lights spread out all over the garage. He's got a system. It usually involves a lot of cursing, ladders flying and trips to get more lights. I try to make myself scarce. But, the end product is beautiful.

[Rev. Joe]

I'd put RCCL ahead of CCL in terms of being prep'd for the recession. With CCL sailing lots of old boats and RCCL really spiffing the fleet up, the older ships can be turned into artificial reefs for divers to explore in Haiti etc...adding to possible shore excursions...:D Really the newer ships offer more for everyone and are more efficient, that is the long term key.

 

The idea of poptarts for breakfast is not so bad, no bread here, no milk here and I don't want to go to the store to get any this morning, so may eat a poptart...agree though on the ship I would expect more. Spam for lunch...yuk...reminds me of the gift my cat left in my office last night, one of them got sick!

 

The economic times may yield a full time ship in Texas, where so far the economic situation in terms of employment is better than most areas of the country. Of course if the oil prices keep falling, that could begin to hurt employment in Texas. A full time ship here likely would at least now sail mostly full every week, or every cruise if they ran it on shorter curises. It'd a great way to without more than an hour drive for me get on the ship for more credits when they have some awesome sales...especially for short 4-5 night cruises where enjoying the ship would be the key to that trip.

 

I expect to see RCCL survive. The lenders who loan on the ships would be hard pressed to take over the ships (they could send a band of pirates to do so) and resell them to other lines where they would make all their money back...better generally to work out new terms on the loans and get paid back for the loan in full later...which would keep the ship operating for RCCL. Factor in that likely several of the ships are paid off, so they could be sold to help retire other new debt.

 

Oh well, time to go out and get the mega animated Christmas Light show installed...probably will be 20 hours of that kind of work this weekend.

 

I was about to say that CCL is in much better condition for the ressesson than RCCL. When RCCL builds a new ship, they make it the best they can be, but going millions in debt and wait to repay for it later in the year. CCL, when they make a new ship, they do it in the cookie cutter mode, making them much cheaper. Thats why CCL has cheaper prices and can afford beter food than RCCL. To me, if I'm an avid cruiser in this economy, I would go for the cheaper cruise that takes me to the ports that I want to sail to. Right now we are looking at an 8 day Carnival or a 9 Day RCCL. The prices are about the same, RCCL being a little higher since its a day long. But a 9 day RCCL and a 7 day RCCL on Freedom of the Seas is 1500 more for a shorter cruise going to boringer ports. Its a no brainer for people who are not loyal to any line, go for the cheaper option. Now don't get mad at me here, but im just saying who I think is better off in the Resession.

[Rancher Dave]

Is it going to be a Griswold Christmas?

 

 

More like this: http://www.youtube.com/watch?v=q5aU4Dj58es The folks who own the home in the video did a fantastic yard...have more space than I... My links will be up in a week or two. Thanksgiving day is the slated go live date. Now I am dressed in long clothes for the cold weather out here today. Out I go!!!

[rubrrick]

From a business standpoint, I think that CCL could outlast RCCL thru a heavy recession or depression. I think that they have deeper pockets, and run a tighter ship........so to speak.

 

RCCL, on the other hand, has, IMHO, a better product. It's just being able to attract the right type of people to fill that product.

 

I also think that the Oasis of the Seas is a huge gamble.........it's own destination, rather than the more traditional style cruising. Only time will tell if this is a "great" decision........or something that should be moved to, or sold to a country like Dubai, where I feel that it would fit right in.

 

Rick

[Ocean Boy]

I was about to say that CCL is in much better condition for the ressesson than RCCL. When RCCL builds a new ship, they make it the best they can be, but going millions in debt and wait to repay for it later in the year. CCL, when they make a new ship, they do it in the cookie cutter mode, making them much cheaper. Thats why CCL has cheaper prices and can afford beter food than RCCL. To me, if I'm an avid cruiser in this economy, I would go for the cheaper cruise that takes me to the ports that I want to sail to. Right now we are looking at an 8 day Carnival or a 9 Day RCCL. The prices are about the same, RCCL being a little higher since its a day long. But a 9 day RCCL and a 7 day RCCL on Freedom of the Seas is 1500 more for a shorter cruise going to boringer ports. Its a no brainer for people who are not loyal to any line, go for the cheaper option. Now don't get mad at me here, but im just saying who I think is better off in the Resession.

 

However, for people like me the ship means everything. I would most likely choose a less expensive cruise on a Voyager class ship rather than spend a lot more for a Freedom class ship. Maybe I could be tempted to try certain Princess ships. But as far as Carnival goes, I think that I would prefer to not cruise at all rather than save money by booking CCL over RCI. I have not liked the look of any Carnival ship that I have seen so far. And I can't stand NCL's whacky paint jobs.

 

 

No matter what is going on inside the ship, if I were on a ship that I did not find aesthetically pleasing I would not be happy. Of course that is just me and people cruise for many different reasons. And I think that RCI has the most beautiful ships in the business.

[FL_Cruiser64]

I was about to say that CCL is in much better condition for the ressesson than RCCL. When RCCL builds a new ship, they make it the best they can be, but going millions in debt and wait to repay for it later in the year. CCL, when they make a new ship, they do it in the cookie cutter mode, making them much cheaper. Thats why CCL has cheaper prices and can afford beter food than RCCL. To me, if I'm an avid cruiser in this economy, I would go for the cheaper cruise that takes me to the ports that I want to sail to. Right now we are looking at an 8 day Carnival or a 9 Day RCCL. The prices are about the same, RCCL being a little higher since its a day long. But a 9 day RCCL and a 7 day RCCL on Freedom of the Seas is 1500 more for a shorter cruise going to boringer ports. Its a no brainer for people who are not loyal to any line, go for the cheaper option. Now don't get mad at me here, but im just saying who I think is better off in the Resession.

 

I agree with you. CCL and Arison (and I sure have no love for either) are much better prepared. They debt load is minimal compared to RCI. While RCCL is still having a positive balance sheet this is mainly due to smaller and older ships (Pullmantur, Azamara, Celebrity). RCI is carrying a debt load of double digit billions, accumulated over the last 10 years. The loan payments alone must be a killer.

 

Most medium and large business use short term financing in combination with cash flow for payroll, immediate cost etc. If one dries up, the other has to pick up. The most recent changes affect the immediate cash flow of RCI (onboard revenue) so there is a huge problem with either short term financing or the cash flow, I put a bet on both.

 

The notion that bigger and newer is always better and more efficient is slaughtered by the fact that many cruise lines out there cruising on old ships or smaller or a combination of both and making their money.

 

CCL is more spread out with their older fleet. They recently upgraded their Fanatsy Class. They also build ships out of the cokkie cutter and you said it so nicely. The latest Costa ships are pretty much identical to Carnival's fleet and Princess and P & O share the same basic design now.

 

RCI going all family could be a killer for them in these times. How will a family be able to afford a cruise on those mega ships including flights? All cruises taken now have been paid off when the finacial distress was not as great as it is now or will become soon. Even though you can cancel with full refund RCI already admitted a slow booking future for next year. What happens if the recession continues and cancelations will come in right around final payment time? Smaller, older ships, even so they maybe less efficient are easier to fill and a full small ship is always more efficient (per passenger) than a 3/4 filled mega ship.

 

But RCI is intend of dumping them small ones and will become one dimensional eventually.

 

CCL is better equipped to survive. I sure hope that RCI will continue to sail with smaller ships (Vision Class, Radiance Class). I don't even mind the Voyager Class but if they change dramatically I too shall seek out another cruise line in a few years. By change I mean 'cruising experience' not the loyalty benefits. I could care less about the latter.

[Ocean Boy]

From a business standpoint, I think that CCL could outlast RCCL thru a heavy recession or depression. I think that they have deeper pockets, and run a tighter ship........so to speak.

 

RCCL, on the other hand, has, IMHO, a better product. It's just being able to attract the right type of people to fill that product.

 

I also think that the Oasis of the Seas is a huge gamble.........it's own destination, rather than the more traditional style cruising. Only time will tell if this is a "great" decision........or something that should be moved to, or sold to a country like Dubai, where I feel that it would fit right in.

 

Rick

 

I agree with you that Oasis is a gamble. I'm not sure if more traditional cruisers will take to something that less and less resembles a ship. I also suspect that folks who are looking for a "resort" may decide to try a floating resort once. The question is will they tolerate issues that we cruisers regularly put up with and become repeat guests? Examples include checking in and out at the same time as 5000 other people, flying in a day early or rushing back from excursions to make sure that your resort does not leave without you, finding that your Caribbean resort will be located somewhere in Canada due to weather issues.

 

As you said, only time will tell.

[Cruising89143]

Carnival Corp has 88 ships to fill week in and week out of which many of those ships are still not paid for. That is a lot of ships for Carnival to fill every week. Their debt load may not be as high but if they stop filling those 88 ships each week, things will go south for them quickly too. RCI has 39 including the Oasis and Equinox.

 

As far as the Oasis, many of the traditionalists said the same thing about the Voyager class class ships. Those ships along with the Freedom class have been the most profitable ships in the fleet. It has also grown RCI's business. The Oasis will do the same thing. It's obvious which direction RCI is moving. Many will move on to other cruise lines. Such is life.;)

[Ocean Boy]

Carnival Corp has 88 ships to fill week in and week out of which many of those ships are still not paid for. That is a lot of ships for Carnival to fill every week. Their debt load may not be as high but if they stop filling those 88 ships each week, things will go south for them quickly too. RCI has 39 including the Oasis and Equinox.

 

As far as the Oasis, many of the traditionalists said the same thing about the Voyager class class ships. Those ships along with the Freedom class have been the most profitable ships in the fleet. It has also grown RCI's business. The Oasis will do the same thing. It's obvious which direction RCI is moving. Many will move on to other cruise lines. Such is life.;)

 

I'm not quite sure if that was directed at me or not. Either way, I won't be going anywhere as long as RCI owns the Voyager sisters. It is no secret around here that they are my favorite ships. As far as Oasis "doing the same thing" it is interesting that you can predict what do one else can. But I do hope that you are right. RCI's continued existance is certainly something that I want very much to see. I also think it is great that RCI's different classes of ships actually give folks a choice of very different types of cruise experiences. Hopefully, Oasis will just expand on those choices. Having so many different choices of experiences within one company may work to their advantage.

 

But, again, only time is going to tell.

[Tanker4]

More like this: http://www.youtube.com/watch?v=q5aU4Dj58es The folks who own the home in the video did a fantastic yard...have more space than I... My links will be up in a week or two. Thanksgiving day is the slated go live date. Now I am dressed in long clothes for the cold weather out here today. Out I go!!!

 

Hey Dave,

 

I've got the long clothes on also (here in central Florida). Got down to 34 last night. What's with this whacky weather? Hope your decorating goes good. Think mine is on a smaller scale than yours but at least it's already done.

 

Take care buddy

 

Tanker

[Cruising89143]

I'm not quite sure if that was directed at me or not. Either way, I won't be going anywhere as long as RCI owns the Voyager sisters. It is no secret around here that they are my favorite ships. As far as Oasis "doing the same thing" it is interesting that you can predict what do one else can. But I do hope that you are right. RCI's continued existance is certainly something that I want very much to see. I also think it is great that RCI's different classes of ships actually give folks a choice of very different types of cruise experiences. Hopefully, Oasis will just expand on those choices. Having so many different choices of experiences within one company may work to their advantage.

 

But, again, only time is going to tell.

 

My comments were directed at no one in particular. If they had been directed at you, then I would have quoted you directly. It just seems that some want to point to the finger at the Oasis for the current situation with RCI. What if the situation were different and RCI had ordered five new Radiance class ships at 750 million bucks a piece in place of two Oasis class ships. Would the old timers still be poo-pooing RCI? I doubt it.

[Cruising89143]

But, again, only time is going to tell.

 

You are correct here. Only time is going to tell.:)

[Rev. Joe]

I think that the Oasis of the Seas (or a ship of her size) some time or other, and RCCL just got unfortunate with the timing. Carnivals 88 ships are mostly small and RCCL's main ships are larger making them sailing in fewer parts of the world with a larger number of passengers. For example, 3 Fantasy class ships - look scary haha- could hold the number of passengers on 1 oasis sailing. Carnival can also position these ships in different parts of the world or the U.S. while the oasis can only be docked at one port. And also, your paying for the newer, larger, better, ship and with money becoming less and less accecible, people will just want to get on a ship going to tropical or historic destinations. Also RCCL is right now just focused on Family and Celebrity focused on Adults while Carnival has them and Princess for kids, HAL, Seadream, Cunard, and Windjammer for adults, and PandO and Costa for European cruisers.

[Rev. Joe]

You are correct here. Only time is going to tell.:)

 

So right

[FL_Cruiser64]

My comments were directed at no one in particular. If they had been directed at you, then I would have quoted you directly. It just seems that some want to point to the finger at the Oasis for the current situation with RCI. What if the situation were different and RCI had ordered five new Radiance class ships at 750 million bucks a piece in place of two Oasis class ships. Would the old timers still be poo-pooing RCI? I doubt it.

 

I would. There is something called over-expanding and over-investing.

 

Having build the entire Radiance Class, Voyager Class and Freedom Class in less than 10 years it put RCI into an 8 billion dollar expansion hole. A further expansion could have waited for a few years. Let the company sail for a few years, refurb the older ships and see where you stand 3 or 4 years down the road.

 

RCI comes out with a new ship on the average every 9 months. That is not necessary.

 

Expansion does not equal growth and success by default.

 

I certainly hope that Oasis will be a huge success because if not......