Royal Caribbean posts 2Q loss, slashes forecast

[Big_G]

I have too agree 100%. Flying out of a small airport with limited choice the airfare is more than the cruise costs. We are booked in the Med. next summer and we are staring at a airfare cost of $4500.00. And all we get is a crappy airline meal coupled with a huge hassel. The 16 hour airfare costs the same as a 2400 hour cruise. Something is wrong.:eek:

 

Hey Joe,

 

Just curious if it would be cheaper to fly out of Logan? We face the same problem here in Providence. Unless you're flying to FLL, it's not cheap and even that's gone up.

[negc]

Bringing back a ship to the west coast doesn't look like such a bad gamble hopefully now ;)

What has changed that makes the west coast more attractive when there are so many other areas besides Europe where they can deploy their ships and offer a wider range of itineraries. Has the economy on the West Coast dramatically improved, have they discovered a number of new itinerary options, has public perception of crime and other problems associated with Mexico suddenly changed? IMO a lot more things beyond problems in Europe, will have to happen first. RCI and other lines have already begun reducing their presence in Europe and they are moving their ships to many other locations which, so far at least, don't include the West Coast.

[cjdixon4]

Does that mean even cheaper cuts of meat in the MDR???

 

 

KathyPet.....LOL:D As if the MDR meat could get any WORSE?:eek:

[negc]

Hey Joe,

 

Just curious if it would be cheaper to fly out of Logan? We face the same problem here in Providence. Unless you're flying to FLL, it's not cheap and even that's gone up.

It might well be less expensive and you would most likely have a wider range of choices since more airlines serve Logan than TF Green. Last I read, TF Green has experienced a loss in travelers using that facility, due perhaps to the fact that Southwest is now operating out of Logan as well as Green. Check both airport websites and see what you find.

We are flying to London next month and got a British Air daytime flight from Boston to Heathrow for about $400-500. That is a pretty good one-way fare and since we are cruising from the UK to Boston, a one way flight is all we will require.:)

[Big_G]

It might well be less expensive and you would most likely have a wider range of choices since more airlines serve Logan than TF Green. Last I read, TF Green has experienced a loss in travelers using that facility, due perhaps to the fact that Southwest is now operating out of Logan as well as Green. Check both airport websites and see what you find.

We are flying to London next month and got a British Air daytime flight from Boston to Heathrow for about $400-500. That is a pretty good one-way fare and since we are cruising from the UK to Boston, a one way flight is all we will require.:)

 

Nice. Enjoy your cruise.

[grand isle joe]

Hey Joe,

 

Just curious if it would be cheaper to fly out of Logan? We face the same problem here in Providence. Unless you're flying to FLL, it's not cheap and even that's gone up.

 

 

BigG, the only problem for me is "I can't get there from here".:eek: No air service from Burlington to Logan. We usually fly out of JFK or Newark just for the fact that we can connect. If we drove to Logan (4 hours) and then the hassels of parking plus fees than .....well you know....AGHHHHH!!! They got us by the short hairs. Last year for us Jet Blue in Feb vacation to fly to Orlando the cost was ....drum roll please....$745.00 A PIECE!!!!....It still hurts.....:eek:

[Motorman23]

In addition to other economic factors, I think the skyrocketing cost of flying is taking a toll on the cruise industry. When it costs more to get to the ship than it does for the cruise itself, something is awry; thus we've seen prices plummet on Med and Alaska cruises this season. Even the ever popular northeast/south Florida flights, a staple of the cruise industry, have doubled and in some cases have close to tripled in price recently. When pax have to spend significantly more dollars to get there, they have fewer dollars to spend on the ship or they decide not to go at all.

 

I agree, thats why they need to homeport more ships in large metropolitan areas instead of just FL. Put an additional ship in Bayonne or Balt Or Philly, lower prices a bit and they would be full all the time. People prefer to drive to avoid the cost and hassle of flying these days. I live in western NY and it is 6 hrs to drive to Bayonne, 6.5 hrs to Balt, 6 hrs to Phli. Not a bad days drive, it takes that long with connections and security for me to fly to Fla and the cost is less for driving and parking esp when 4 of us go. I recognize that the big ships don't fit in Balt and Phili but other sized ones will.

 

Mike

[Big_G]

BigG, the only problem for me is "I can't get there from here".:eek: No air service from Burlington to Logan. We usually fly out of JFK or Newark just for the fact that we can connect. If we drove to Logan (4 hours) and then the hassels of parking plus fees than .....well you know....AGHHHHH!!! They got us by the short hairs. Last year for us Jet Blue in Feb vacation to fly to Orlando the cost was ....drum roll please....$745.00 A PIECE!!!!....It still hurts.....:eek:

 

Ouch! That will leave a mark.

 

I agree, thats why they need to homeport more ships in large metropolitan areas instead of just FL. Put an additional ship in Bayonne or Balt Or Philly, lower prices a bit and they would be full all the time. People prefer to drive to avoid the cost and hassle of flying these days. I live in western NY and it is 6 hrs to drive to Bayonne, 6.5 hrs to Balt, 6 hrs to Phli. Not a bad days drive, it takes that long with connections and security for me to fly to Fla and the cost is less for driving and parking esp when 4 of us go. I recognize that the big ships don't fit in Balt and Phili but other sized ones will.

 

Mike

 

This is just my opinion but I have no desire to cruise out of those ports. I'd rather get off the plain in warm weather, stay a day in warm weather, and then get on a ship in warm weather. Some people don't mind the cold start of a cruise. I'm not one of them.

[UNV-IT!!!]

Slashes? I think not.

 

http://travel.usatoday.com/cruises/post/2012/07/royal-caribbean-new-cruise-ship/813312/1

[UNV-IT!!!]

CAPTIONCourtesy Royal Caribbean

Could a new ship be on the way for Royal Caribbean or sister line Celebrity Cruises? The top executive of the parent company of the brands hinted as much on Thursday during a conference call with Wall Street analysts.

 

"We clearly are looking at that sort of thing," Royal Caribbean Cruises chairman and CEO Richard Fain said in response to a question about whether a new ship order could come in the next few months. "I think what we're looking at is, we see that even in this market, we could get some very attractive returns from some of our vessels that have performed well."

 

Fain wouldn't give specifics about the size of the vessel the company might order or whether it would be for the Royal Caribbean or Celebrity brand. The Royal Caribbean brand currently has 22 ships in its fleet, with two more on order for delivery in 2014 and 2015. Celebrity has 10 ships in its fleet, with one more debuting this fall.

 

RELATED: *Royal Caribbean orders second "Sunshine" ship

PHOTO TOUR: *Look inside the world's biggest cruise ship

 

Fain noted the company's capacity growth has been slowing due to fewer orders in recent years.

 

"From 2012 through 2016, our berth capacity growth is less than 3%, and in fact, we don't have any ship deliveries in 2013 at all," he said. "But as we said before, we also can't stagnate. Given the long lead time for a new vessel, we're approaching the point where a new order could not be delivered until the middle to late 2016, by which time, we will be enjoying much better profitability and much improved credit metrics."

 

At least one Wall Street analyst voiced concern over the idea of another ship order, noting the cruise industry has struggled in recent years with overcapacity in some regions such as Europe. Goldman Sachs' Steven Kent suggested that Royal Caribbean could command higher rates if it rolled out fewer ships.

 

Fain responded by saying that new capacity is needed to expand into new markets. "A lot of what we are doing with our (new) capacity is shifting it to new markets, and in essence, opening up new demand," Fain said, noting that the company this year moved one of its larger ships, the 3,114-passenger Voyager of the Seas, from Europe to Asia. "That actually brought down our capacity in the existing markets."

 

Nearly two years have passed since the debut of Royal Caribbean's latest ship, the 5,400-passenger Allure of the Seas. Along with sister Oasis of the Seas, which debuted in 2009, it is the largest cruise vessel in the world. The two additional Royal Caribbean ships on order will be somewhat smaller vessels that carry 4,100 passengers. Take our photo tour of Royal Caribbean's Allure of the Seas.

[Gordo]

In addition to other economic factors, I think the skyrocketing cost of flying is taking a toll on the cruise industry. When it costs more to get to the ship than it does for the cruise itself, something is awry; thus we've seen prices plummet on Med and Alaska cruises this season. Even the ever popular northeast/south Florida flights, a staple of the cruise industry, have doubled and in some cases have close to tripled in price recently. When pax have to spend significantly more dollars to get there, they have fewer dollars to spend on the ship or they decide not to go at all.

 

We agree. We are on a Mediterranean sailing in September and our flights were about $1200 per person. The sad thing is only $555 of it was actually for the air portion, the rest is taxes and surcharges. We couldn't believe the breakdown on the receipt we received it after we booked our flight.

[dz9yvr]

"The company posted a loss of $3.7 million, or 2 cents per share, compared with net income of $93.5 million, or 43 cents per share, a year earlier.

Revenue rose 3 percent to $1.82 billion.

Analysts polled by FactSet expected net income of 3 cents per share on revenue of $1.84 billion."

 

http://finance.yahoo.com/news/royal-caribbean-posts-2q-loss-145844448.html

 

In other news, Celebrity's Dan Hanrahan resigned earlier this month.

http://finance.yahoo.com/news/regis-signs-royal-ceo-173011488.html

 

 

So let's do some rough math to see what it takes foor RCCL to break even,

 

$3,700,000 / 90 days per quarter= $41,111 - RCCL is losing $41k/day.

 

So if RCCL and Celebrity have a total of 33 ships then each ship is losing $1,245 per day.

 

If each ship has an average of 4000 passengers then RCCL is losing 31 cents per day per passenger.

 

So RCCL doesn't need to dramatically change the menu make up the difference but expect to see them continue to eliminate some little things. If RCCL eliminates mints on the pillows, increase drink prices by a nickel or dime, eliminating little shampoo bottles it can go a long way to getting them to the break even point. So you should expect to see RCCL to focus eliminating even the smallest amount of waste or eliminating even the smallest frills so they can balance their books.

[grand isle joe]

We agree. We are on a Mediterranean sailing in September and our flights were about $1200 per person. The sad thing is only $555 of it was actually for the air portion, the rest is taxes and surcharges. We couldn't believe the breakdown on the receipt we received it after we booked our flight.

 

 

......and the E.U. has imposed that assinine CARBON TAX......But the Chinese are the only ones to say "SHOVE IT!!!!"

[The Big Booper]

We agree. We are on a Mediterranean sailing in September and our flights were about $1200 per person. The sad thing is only $555 of it was actually for the air portion, the rest is taxes and surcharges. We couldn't believe the breakdown on the receipt we received it after we booked our flight.

 

......and the E.U. has imposed that assinine CARBON TAX......But the Chinese are the only ones to say "SHOVE IT!!!!"

 

Elections have consequences.

[foxesden1]

Bringing back a ship to the west coast doesn't look like such a bad gamble hopefully now ;)

 

Your mouth to gods ears

[klingoncruiser]

Pretty much NOT a shock. :rolleyes: The big bet on Europe came back to bit them in the arse. Air fare as well as the declining economy world wide really stuck it to all the cruise line. Pile on continued high fuel and the Costa disaster and this was inevitable.

 

Time to bring a lot of tonnage back to the states and scatter them out to several ports, not just pile them on top of each other out of Florida. There are some forlorn ports out there that could offer some sweet deals to get even a part time ship back. Fuel is also much cheeper here in the states as well.

[aurelius180]

So let's do some rough math to see what it takes foor RCCL to break even,

 

$3,700,000 / 90 days per quarter= $41,111 - RCCL is losing $41k/day.

 

So if RCCL and Celebrity have a total of 33 ships then each ship is losing $1,245 per day.

 

If each ship has an average of 4000 passengers then RCCL is losing 31 cents per day per passenger.

 

So RCCL doesn't need to dramatically change the menu make up the difference but expect to see them continue to eliminate some little things. If RCCL eliminates mints on the pillows, increase drink prices by a nickel or dime, eliminating little shampoo bottles it can go a long way to getting them to the break even point. So you should expect to see RCCL to focus eliminating even the smallest amount of waste or eliminating even the smallest frills so they can balance their books.

 

 

They already eliminated the mints. I bring my own shampoo so I'll return it to the room stewart ;) at the beginning of the cruise and save $0.10 there for them. :)

 

Thanks for bringing some logic to the CC boards. I'm sure lgt42, or whatever, will be upset when he comes back from bolivian. ;):D

[Iluvcruising2]

Maybe RCI will move more ships to Asia!

[VFL Cruiser]

I have to agree with the previous posters about the higher costs of airfare. We live in Knoxville and the airfares to fly to any of RCL's departure ports is outrageous! We have been on 3 southern Carib cruises out of San Juan, PR but no more. In fact our next cruise is an eastern Carib out of Port Canaveral and we will be driving 12 hours to get there.

We have even tried to fly out of Atlanta, Nashville, Charlotte, Chattanooga...but still too expensive. I would rather spend my dollars on the cruise than on the airlines.

 

Jim

[lysolqn]

Time to bring a lot of tonnage back to the states and scatter them out to several ports, not just pile them on top of each other out of Florida. There are some forlorn ports out there that could offer some sweet deals to get even a part time ship back. Fuel is also much cheeper here in the states as well.

 

There just aren't that many US ports that accommodate pax ships, thus scattering ships to new home ports would likely require a sizeable investment on the part of the cruise lines to make existing cargo ports pax-friendly. Unfortunately, ports that aren't located within a reasonable distance from densely populated areas which would allow pax the option to drive rather than fly, would do nothing to ameliorate the spiraling cost of flying which is surely at least one of the factors adversely affecting bookings and/or onboard spending.

[negc]

Maybe RCI will move more ships to Asia!

 

Only if they believe that the Asian market will support more ships. They have decided that Europe will no longer support as many cruise ships as was previously the case and are lowering the number of their ships in the region in 2013. One of the advantages that cruiselines have is their ability to redeploy their ships on relatively short notice as circumstances require. They are already moving two large capacity ships to Asia so that may be sufficient to satisfy the current demand. What will happen as they develop the Asian market is something we will all have to wait and see, but it is probably much too early to jump to any conclusions, although perhaps we could start a rumor that one of the Sunshine project ships will be based in Singapore;):D

 

As far as high airfares being a concern, this is almost as huge a problem with US fares as it is with international fares and is something pretty much controlled by the airlines, not the cruiselines. There are still some good fares out there if you look hard enough and I know someone heading for a Med cruise in October who found a $748 r/t fare through Choice Air.:)

[onyourtoes]

Time to buy! ;)

 

 

Crazy question - How does one go about buying shares? Thanks.

[traveler/]

I think RCL monitors some of these threads, so posting your suggestions may be noticed!

Here's several more:

Don't print all those photos. Simply tag them to the seapass card so they can be viewed, ordered, and purchased that way. I've been able to view the pictures on at least 1 ship. Also saves the hassle of trying to find all your pictures.

Reduce printing costs by having more information available on screens throughout the ship or on tablets provided to cruisers. Already have the screens on some ships.

Establish FOCUS groups or Suggestion programs where cruisers, TA's, etc. are invited to participate to help suggest changes/improvements.

[grand isle joe]

 

As far as high airfares being a concern, this is almost as huge a problem with US fares as it is with international fares and is something pretty much controlled by the airlines, not the cruiselines. There are still some good fares out there if you look hard enough and I know someone heading for a Med cruise in October who found a $748 r/t fare through Choice Air.:)

 

 

That's a great airfare but the airlines all know when most people vacation so they price accordingly.....It's all in their spread sheets:eek::)

[UCF_Knight]

Crazy question - How does one go about buying shares? Thanks.

 

Royal Caribbean is traded on the New York Stock Exchange. Just contact any stock broker (real-life or online) and put in a buy order for stock symbol RCL. The stock closed Friday at 24.62 per share.