Investing in Cruising

[Aloise]

I have been lurking around this board for a number of weeks now in anticipation of my own upcoming cruise and have been impressed by the enthusiasm, and dedication exhibited by cruise posters. Have also been astonished by the number of cruises some posters have taken.

Still, for all the enjoyment cruising provides, it is merely another way to spend money on a vacation. A thought occurs: Is there a way to make money out of cruising?

I am not expecting the distinguished members of this board to comment on the balance sheet of Carnival COrporation and so on . There is enough "learned" and not so learned discourse on this already.

My questions are more general. I understand that by the time December 31 rolls by, about 10 million people will have taken cruises this year world wide. Do posters think that 10 mil is a peak number or is this industry set to grow to 12m or 15m or even 20m over the next decade. If so, where will these cruisers come from - North America, Europe, China, Japan, Korea, Russia, Brazil? And where will they cruise? My own observation is that the Caribbean is just about saturated

Any opinions?

[xpcdoojk]

I, personally, have decided to make a smallish investment in RCI and CCL, and I will benefit with OBC on all of my future cruises on HAL, Cunard, Princess, Windstar, RCI, Celebrity, and any of the other cruiselines that are under these two umbrellas.

In the future when people accuse me of being a shill for the cruiselines or a cruiseline employee, I will just tell them I am an owner! My credibility will be shot all to heck, but heck a $250 on board credit doesn't suck completely.:D

jc

[Krazy Kruizers]

You are right -- the Caribbean is saturated with tons of passengers and mega ships during the winter months.

And during the summer months, Alaska is saturated as well.

I can remember when there would be only 2 or 3 ships in a port in Alaska -- not that way now.

[jhannah]

I can't think of any way to make money by cruising, other than indirectly by the purchase of of stock jc mentioned. Most cruise lines do not allow solicitations onboard their ships, so you can't come and pass out your Tupperware or candle catalogs. But if there were a way to make a cruise profitable, instead of the other way, I'd be first in line! ;)

I don't see any major shift in passenger nationalities. Demographics may change a bit over the years, but I don't think HAL will spend much money marketing in Moscow or Sao Paulo.

[Krazy Kruizers]

Each year more and more people are attracted to cruising by the lure of ads showing rock walls, golf, you name it.

Some of these people will continue to cruise but others are only able to cruise every few years.

It's a growing industry all over the world.

[kryos]

I can't think of any way to make money by cruising, other than indirectly by the purchase of of stock jc mentioned.
Barring becoming a travel agent and actively selling cruises (something that I've found can actually be a great deal of work), I've found a smallish way to make a bit of cash with cruising. You can work with a travel agent on groups. If you can get a group together, and the group is of a decent size, you can "negotiate" with the agent for a finder's fee based on the number of folks who actually book. The agent does all the work ... handling the bookings and such ... your only job is to locate the groups ... sell them on a group cruise ... and then refer the booking to the agent.

It's not a lot of money, but at least it's something that will offset your own cruise habit.

Another option ... though you need some time for this ... is to try to set yourself up as a group leader. You won't get referral fees, but you'll get a free cruise out of the deal if enough people book. Now, I don't particularly like this arrangement because most group cruises are seven or less days in length. The environment on the boat is entirely different and not to my liking on a seven-day cruise. Also, when you're onboard as the group leader, you're the one everyone will come to when something isn't to their liking ... so the group leader winds up doing a lot of work during the cruise ... getting a lot of phone calls ... that sort of thing.

So, in my case, I'd prefer to locate a group, sell them on the "idea" of a cruise and then put them together with another travel agent who is better equipped than I to handle their group booking. One of the things I use to "sell" the cruise idea to the group is that the group leaders will get to cruise for free, assuming enough cabins are sold in the group. So, since I need the tour conductor cabins for the group leaders, it doesn't make sense for me to try and go along, taking up an entire cabin ... or two tour conductor berths. I'd rather just take the finders fee and let the group use those available free berths for their own people.

But, other than this ... I can't see any other way to make money off of cruising other than to invest money in a cruise line's stock. There are better stocks, in my opinion, for making money ... so I'd prefer to use this little "arrangement" for making a few dollars off cruising ... a few dollars that will offset my next cruise a bit.

Blue skies ...

--rita

[kryos]

One idea that I am surprised the cruise lines have not looked into is selling blocks of cruise space by the year. Of course, I have no idea how this would work ... more experienced minds in HAL's marketing department would have to figure it out ... but it's perfect for people like us ... true cruise addicts.

The cruise line would offer say 100 days for a set amount of money. The 100 days has to be used within one year and could be on any cruise ... a set cabin category depending upon what you paid for. Obviously the block would be cheaper if you bought inside cabin space than if you bought space in a luxury suite.

Of course, since the customer is committing upfront to cruise for a minimum of 100 days next year ... or 50 days or 200 days or whatever ... the price per diem would be very attractive. Obviously it would be lower the bigger block of time you committed for. The customer would have to pay in full for those 100 or whatever days when they purchased the "plan," so the cruise line would have their money to play with for the year ... or even longer. You could purchase plans maybe as much as two years ahead of time. The "plan" would start at a minimum of 50 cruising days a year ... and what you are paying for with it would be merely cruise fare (accommodations). Port charges and taxes, of course, would be extra, as would onboard spending; i.e., tipping, drinks, shore excursions, etc. This fact would provide the cruise line with the added incentive that the customer may be one who spends lots of cash onboard.

I guess this scenario is similar to a timeshare, but without the yearly maintenance fee.

Frankly, I'm shocked the cruise lines haven't thought of this. Think of the options for "upselling." Longer voyages could be opened up for booking for a couple of days to these "reserved" cruisers before they are opened to the general public. Let's say a voyage was 65 days (as in the Pacific Rim voyage being done on the Amsterdam in 2008). A customer only purchased a 50-day plan, but decides he wants to take this voyage. Rather than just charging him a separate per diem for the extra 15 days, HAL could try to upsell him to a 75-day plan ... thus lowering the customer's per diem on the 65-day voyage even lower than his 50-day plan gave him. The opportunities here for the cruise lines would be endless! The savings for that group of cruisers who could take cruises of this length each year would be breathtaking.

Now surely this type of program wouldn't work on all cruise lines. I somehow can't see Carnival doing it or Royal Caribbean. Too many of their customers are first-time and occasional cruisers and are not gonna buy blocks of days on a cruise ship. If you don't use them, you lose them ... so for these younger travelers, many of whom are actively engaged in building careers and raising families, the option is just not feasible ... especially since the blocks of time would probably start at 50 days in a calendar year.

But I can surely see HAL passengers ... long-time Mariners jumping on a program such as this. Ditto for some of the luxury lines ... Regent or Crystal. Their customer base is ready made for a program such as this one ... older with more disposable time AND money.

Surely I, with no experience in the cruise industry wondered about it long ago. While it's not a program for everybody, it is very well suited to those people who are definitely cruise addicts and who have the time to cruise say a minimum of 50 days a year.

What do you think? And ... HAL, are you listening?

Blue skies ...

--rita

[bdcbbq]

I suppose somoene could make a little money via photography or writing about, during, a cruise. Of course, that person could make the same money anywhere else.

Or as a tax deduction if it met the legal criteria.

[Grumpy1]

Or as a tax deduction if it met the legal criteria.
Eureka! As a stockholder (i.e. owner of the company), I must make regular inspections of my properties to make sure they are being maintained properly, etc. So, if I write a detailed report of my findings and send them to the proper people for their review and actions, this would be a legitimate business expense... Right?:D

[kryos]

Eureka! As a stockholder (i.e. owner of the company), I must make regular inspections of my properties to make sure they are being maintained properly, etc. So, if I write a detailed report of my findings and send them to the proper people for their review and actions, this would be a legitimate business expense... Right?:D
Careful. There are some IRS rules that prohibit deductions taken for cruises that go outside of the country. I pulled this one on a writer's conference back in 2004. Said that the reason I was taking the cruise was to further my writing and publishing (my company is called kryos Publishing) and it is the company through which my book was published. The IRS got me on it in an audit and I wound up having to pay the shorted taxes. The reason they gave me was that the cruise left U.S. waters and thus was not eligible as a work-related deduction. That might also apply to your case, though ... of course ... you would have to check with your tax accountant. Just giving you a "heads up" here.

Blue skies ...

--rita

[Grumpy1]

Careful. There are some IRS rules that prohibit deductions taken for cruises that go outside of the country. I pulled this one on a writer's conference back in 2004. Said that the reason I was taking the cruise was to further my writing and publishing (my company is called kryos Publishing) and it is the company through which my book was published. The IRS got me on it in an audit and I wound up having to pay the shorted taxes. The reason they gave me was that the cruise left U.S. waters and thus was not eligible as a work-related deduction. That might also apply to your case, though ... of course ... you would have to check with your tax accountant. Just giving you a "heads up" here.

Blue skies ...

--ritaArrrrrrgggghhhh! SPOIL SPORT!:p Not you, Rita, the IRS....

[kryos]

Arrrrrrgggghhhh! SPOIL SPORT!:p Not you, Rita, the IRS....
They are lower than pond scum ... no question about that. :(

Blue skies ...

--rita

[hammybee]

One idea that I am surprised the cruise lines have not looked into is selling blocks of cruise space by the year. Of course, I have no idea how this would work ... more experienced minds in HAL's marketing department would have to figure it out ... but it's perfect for people like us ... true cruise addicts.

The cruise line would offer say 100 days for a set amount of money. The 100 days has to be used within one year and could be on any cruise ... a set cabin category depending upon what you paid for. Obviously the block would be cheaper if you bought inside cabin space than if you bought space in a luxury suite.

Of course, since the customer is committing upfront to cruise for a minimum of 100 days next year ... or 50 days or 200 days or whatever ... the price per diem would be very attractive. Obviously it would be lower the bigger block of time you committed for. The customer would have to pay in full for those 100 or whatever days when they purchased the "plan," so the cruise line would have their money to play with for the year ... or even longer. You could purchase plans maybe as much as two years ahead of time. The "plan" would start at a minimum of 50 cruising days a year ... and what you are paying for with it would be merely cruise fare (accommodations). Port charges and taxes, of course, would be extra, as would onboard spending; i.e., tipping, drinks, shore excursions, etc. This fact would provide the cruise line with the added incentive that the customer may be one who spends lots of cash onboard.

I guess this scenario is similar to a timeshare, but without the yearly maintenance fee.

Frankly, I'm shocked the cruise lines haven't thought of this. Think of the options for "upselling." Longer voyages could be opened up for booking for a couple of days to these "reserved" cruisers before they are opened to the general public. Let's say a voyage was 65 days (as in the Pacific Rim voyage being done on the Amsterdam in 2008). A customer only purchased a 50-day plan, but decides he wants to take this voyage. Rather than just charging him a separate per diem for the extra 15 days, HAL could try to upsell him to a 75-day plan ... thus lowering the customer's per diem on the 65-day voyage even lower than his 50-day plan gave him. The opportunities here for the cruise lines would be endless! The savings for that group of cruisers who could take cruises of this length each year would be breathtaking.

Now surely this type of program wouldn't work on all cruise lines. I somehow can't see Carnival doing it or Royal Caribbean. Too many of their customers are first-time and occasional cruisers and are not gonna buy blocks of days on a cruise ship. If you don't use them, you lose them ... so for these younger travelers, many of whom are actively engaged in building careers and raising families, the option is just not feasible ... especially since the blocks of time would probably start at 50 days in a calendar year.

But I can surely see HAL passengers ... long-time Mariners jumping on a program such as this. Ditto for some of the luxury lines ... Regent or Crystal. Their customer base is ready made for a program such as this one ... older with more disposable time AND money.

Surely I, with no experience in the cruise industry wondered about it long ago. While it's not a program for everybody, it is very well suited to those people who are definitely cruise addicts and who have the time to cruise say a minimum of 50 days a year.

What do you think? And ... HAL, are you listening?

Blue skies ...

--rita Someone is doing this on CCL. For the life of me, I cannot remember the name. There are many threads on this topic on the CCL board.

[richwmn]

I believe it is just called the Vacation Club. I have read many posts both for and against it. My nephew and his wife are members and seem happy with it. From what I remember, you have to be careful or you end up spending more than paying for individual cruises. Most of the posts about it also mentioned high pressure sales on board the ships.

[Aloise]

Guys you have got the wrong end of the stick.

I wasn't thinking about selling Tupperware on board or leading groups of ornery cruisers.

My question was intended to be more general: Does cruising have a growth future and is it a good idea to invest in Companies that run these ships or Companies that provide services to the Cruise Companies?.

[kryos]

I believe it is just called the Vacation Club. I have read many posts both for and against it. My nephew and his wife are members and seem happy with it. From what I remember, you have to be careful or you end up spending more than paying for individual cruises. Most of the posts about it also mentioned high pressure sales on board the ships.
I've heard of this ... but it is not the same thing I'm talking about. The blocks of time would not be sold onboard ... other than perhaps through the future cruise consultant. Rather they would be sold by HAL via their own marketing department, or perhaps by selected travel agents.

The thing Carnival is doing, I believe, is different. They give people a real cheap cruise in return for those people agreeing to attend a "timeshare" presentation onboard. Talk about high pressure sales. They've got you as a captive audience not just for a few hours, but rather for three days or so. Betcha there's not too many people who disembark without buying.

Blue skies ...

--rita