Wonder Why Celebrity is accused of cutting corners and raising rates?

[ChucktownSteve]

Because they do!

 

Royal Caribbean Beats Amid Falling Costs -- Market Talk

 

BY Dow Jones & Company, Inc.

— 8:54 AM ET 07/24/2014

8:54 EDT - Royal Caribbean (RCL) easily tops its upbeat 2Q profit forecast and gives another for 3Q as the cruise-ship operator sees solid revenue gains. Net yields rose 2.4% last quarter amid higher prices for soon-to-depart European sailings while costs excluding fuel fell 4.7%, helping earnings surge from a year ago. Meanwhile, onboard revenue continued to rise, increasing 3% to mark RCL's 10th-straight quarter of increases.

[FLACRUISER99]

Because they do!

 

Royal Caribbean Beats Amid Falling Costs -- Market Talk

 

BY Dow Jones & Company, Inc.

— 8:54 AM ET 07/24/2014

8:54 EDT - Royal Caribbean (RCL) easily tops its upbeat 2Q profit forecast and gives another for 3Q as the cruise-ship operator sees solid revenue gains. Net yields rose 2.4% last quarter amid higher prices for soon-to-depart European sailings while costs excluding fuel fell 4.7%, helping earnings surge from a year ago. Meanwhile, onboard revenue continued to rise, increasing 3% to mark RCL's 10th-straight quarter of increases.

Nothing unAmerican about that.

[Phxazzcruisers]

That is what the shareholders expect. It seems to be working, costs are down and booking revenue is up. As a shareholder and frequent cruiser we are very pleased

[Cruising89143]

The last time that I checked RCCL was not a charity so raising prices is not out of the norm. As far as cutting corners I have enjoyed my cruises on X. I guess those that do not can look at other options and cruise lines.

[TheBeeSea]

Seems normal commercial activity to me.

 

Ummm how does one cut corners on a cruise...thought ships went around things!

[NLH Arizona]

If they didn't make money, they would be out of business. I don't see an issue with this.

[ChucktownSteve]

Seems normal commercial activity to me.

 

Ummm how does one cut corners on a cruise...thought ships went around things!

 

Well usually but the Concordia didn't. :eek:

 

Regarding the other posts, I concur. I'm a pleased Celebrity cruiser and shareholder benefit user. Especially happy with the 8% jump in price this morning. :D

[USVI-4-me]

If they didn't make money, they would be out of business. I don't see an issue with this.

 

 

If they continue cutting corners they won't appeal to passengers.

That leads to not making money. It is an issue.

 

-Marisa

[Honeybearhollow]

It may be business as usual, but many businesses have gone under when companies begin to put profits above customer satisfaction. There are choices out there when it comes to cruising. If the balance tips, people will go somewhere else. Just saying...

[wvufan]

Stock is over 60. I bought at six bucks a few years ago and sold when it was in the 40s. Never thought it would climb this high. I am happy they are making money, but would like to know how they achieved the 4.7 reduction in non fuel costs.

 

I emailed a couple friends who are still shareholders. I skipped you, Steve, as I knew you would be aware.

 

Happy Sails to You

 

OOOEEE Baby :D:D Bob and Phyl

[hcat]

Some may go elsewhere but what I gather from reading cruise critic is that there are many others who love the ships Celeb has to offer (who wouldn't) , love the alcohol perks, and do not mind what some of us would call a more no frills experience...less fancy dining, recorded music, DJ instead of more live music..pre-plated breakfast buffet, no sorbet, no flowers in staterooms, fewer staff including bar and wine servers, etc.....less pampering, fewer free parties/events..more pay as you go venues..

 

Even with some of the changes that we do not like, X is still very appealing at present price point, for now has a nice passenger mix, and has brought on a great spa company as an added bonus to AQ and BLU. We are going to enjoy our next few booked cruises on X but may also try Azamara etc..

 

If we leave, others will take our place so I doubt the cruise line will lack paying customers And, if they lose us another line will gain.

[NLH Arizona]

If they continue cutting corners they won't appeal to passengers.

That leads to not making money. It is an issue.

 

-Marisa

I guess it is all perception...I don't see that many corners being cut, I see more changes than cuts, but that is just me, you might feel differently. I don't want to go back to the "good old days", with the gloved waiters, higher prices, etc....I want to go forward. For everyone who leaves, there will be new passengers to take their place. Celebrity is obviously doing something right or their stock would not have had the showing it did.

[coolmom]

I don't want to go back to gloved waiters, but would it hurt to have a few flowers on the table at dinnertime? Even my local Thai joint manages to put a long lasting astroemeria in a cheap Ikea bud vase. On some nights the flameless votive wasn't even in a holder but just plopped on the table. It was cheap and tacky.

[Quo Vadis?]

If they continue cutting corners they won't appeal to passengers.

 

"Cutting corners" will make for well-rounded passengers.. :D

[boogs]

It may be business as usual, but many businesses have gone under when companies begin to put profits above customer satisfaction. There are choices out there when it comes to cruising. If the balance tips, people will go somewhere else. Just saying...

 

And there have been many companies that went out of business because their profit levels couldn't support their existence. Mom and pop type stores have typically provided better customer service, but most have gone out of business due to higher prices, not being able to compete with the competition, and resulted in profits being too low to survive on. There needs to be a balance. It can't all be for the customer's benefit. The company must gain a benefit as well to survive. Just saying....

Edited July 24, 2014 by boogs

[Ma Bell]

I agree they need to stay in business and make a reasonable profit. I also know when they are pushing it as far as they can until the customers are unhappy. I have been a happy Celebrity customer for many years but I'm not a fool.

 

I've seen lots of changes through the years but a great part of Celebrity's success is because of the fine product they delivered while making changes. I'm keeping an open mind but I saw a considerable difference in the product on my last cruise and it wasn't just change, it was a decline. I'll be on Equinox for a month in October/November and will decide if it's the cruise line for me any more. Maybe it's true that they won't miss the customers who have been extremely loyal to them and then again, they may find that they have pushed things just a little too far and it will be difficult to replace those customers.

[NLH Arizona]

I don't want to go back to gloved waiters, but would it hurt to have a few flowers on the table at dinnertime? Even my local Thai joint manages to put a long lasting astroemeria in a cheap Ikea bud vase. On some nights the flameless votive wasn't even in a holder but just plopped on the table. It was cheap and tacky.

I guess this is where someone's perception comes into play. I've dined at some of the best restaurants in many states and most don't have flowers on the table, so it is not something I would equate to fine dining.

 

The best thing about cruising is that we, as consumers, have so many lines/experiences to chose from. If one doesn't suit someone, there are always others to go to.

Edited July 24, 2014 by NLH Arizona

[Cruising89143]

And there have been many companies that went out of business because their profit levels couldn't support their existence. Mom and pop type stores have typically provided better customer service, but most have gone out of business due to higher prices, not being able to compete with the competition, and resulted in profits being too low to survive on. There needs to be a balance. It can't all be for the customer's benefit. The company must gain a benefit as well to survive. Just saying....

 

Nice post.

[ChucktownSteve]

A lot of companies have been beating the bottom line estimates but the top line has remained flat. They made profit by streamlining goods/services and laying off people. That's the economy we've been in for the past several years.

 

But if you read the original post, RCL beat top and bottom lines. So apparently they haven't chased off that many who couldn't be replaced by those willing to pay more/buy more. If you build value in a product, people are willing to pay for it.

 

RCL doesn't exist in a vacuum. I'm sure they're keeping a close eye on what their competitors are doing. If the other lines are adjusting the same way, then where else are the customers going to go?

[Orator]

Many of us commented when Dan Hanrahan gave his last report as President that Celebrity would be moving in a direction that would place an emphasis on increasing profit margins. We also projected increased fares and more income producing venues as the market strengthened. I believe that we are seeing the results of that projection. The commentator on CNBC said to Fain that it appears that the ships will continue to sail full even with increased prices. Fain did not disagree. It means that some will need to adjust their frequency of cruises if they wish to cruise Celebrity. For others it might mean that the Celebrity product will be out of their budget. For others if might mean more choices and an even higher level of service. Naturally this will come at a cost.

[phoenix_dream]

I agree they need to stay in business and make a reasonable profit. I also know when they are pushing it as far as they can until the customers are unhappy. I have been a happy Celebrity customer for many years but I'm not a fool.

 

I've seen lots of changes through the years but a great part of Celebrity's success is because of the fine product they delivered while making changes. I'm keeping an open mind but I saw a considerable difference in the product on my last cruise and it wasn't just change, it was a decline. I'll be on Equinox for a month in October/November and will decide if it's the cruise line for me any more. Maybe it's true that they won't miss the customers who have been extremely loyal to them and then again, they may find that they have pushed things just a little too far and it will be difficult to replace those customers.

 

I couldn't agree more. I am not a fool either. Nor am I naïve - I worked in the business world for more than 30 years before I retired, as a mid-level manager at a very large corporation. Of course companies need to make money. No reasonable person has an issue with that. But people do start to object when companies are perceived as being greedy. I mentioned on another thread that my upcoming fall sailing is 40% higher in price for a comparable room than two years ago for an identical trip (slightly less of a percentage increase in consideration of adding an alcohol package, but nevertheless way, way above inflation).

 

Celebrity is still a great cruise line, but there have been many cut-backs small and not quite so small. Among these are a good deal of real estate lost to those who book higher level suites or who are willing to pay for meals and such. People argue that this helps keep prices down but facts do not support this theory as prices are not only not down , they are substantially higher. Many of the other changes are minor, but they all add up and they do not go unnoticed to those who are loyal to the line.

 

People say - if you don't like it go elsewhere. Not so simple. I love to cruise. With all it's cut-backs, Celebrity still ranks as #1 in mainstream cruise lines IMHO. I certainly could not afford to jump to a luxury cruise line and hate when people suggest that as an option - it is just not logical as most people who cruise non-suite cabins on Celebrity could never afford to do that. And the fact is, there seems to be a trend overall for most cruise lines to go for not just a good profit, but an increasingly greedy profit. Sad to say they are not alone in this endeavor - at least in the US. The saddest part is that people seem to accept it without push back. If you recognize it for what it is you are chastised with 'hey they're in the business to make money', as if this was something you didn't already know:eek:. Yes, they are. But when their profit jumps in a very substantial way, it is on the backs of their customers plain and simple.

[coolmom]

I guess this is where someone's perception comes into play. I've dined at some of the best restaurants in many states and most don't have flowers on the table, so it is not something I would equate to fine dining.

 

The best thing about cruising is that we, as consumers, have so many lines/experiences to chose from. If one doesn't suit someone, there are always others to go to.

 

How about a naked flameless votive, is that something you'd equate to fine dining?

 

Ambiance plays an important part of the dining experience. If you look at google images for the best restaurants in the US, they all have either flowers or interesting candles. The San Marco on the Connie was dreary and rather sad, the most disappointing part of our cruise.

[mrjim]

Many of us commented when Dan Hanrahan gave his last report as President that Celebrity would be moving in a direction that would place an emphasis on increasing profit margins. We also projected increased fares and more income producing venues as the market strengthened. I believe that we are seeing the results of that projection.

 

Good point. Contrary to the impression some posters have RCCL was not very profitable over the last couple of years. So it's not surprising that they put an increasing focus on profitability.

 

I've heard/read on the board that the financial performance of X was far worse than the performance of RCI. I don' t know if it's true but it would not be surprising. The brand new Solstice sailed along the river Ems when the world economy collapsed. And all her sisters came out in a very difficult economic environment. The pricing level in general (there are exception of course) was relatively low.

 

But I would like to also add that X did/does a very bad job to market their excellent product. There were many missed opportinities especially when all the new ships came out. What they are doing with their website especially when it comes to the e-commerce (booking something) is not just bad. It's abysmal.

[bhughey]

Anyone who has ever managed any budget first must understand the need to control costs. Controlling costs and reducing unnecessary expenses does not always mean "cutting corners". Anyone remember that story from the 80's when an airline exec calculated that removing an olive from a salad served on flights would save the airline something like $100,000? While there are a few minor changes ie: absence of ice in the rooms, flowers etc... none of these changes should affect the overall enjoyment of your cruise or the product that X delivers.

 

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[phoenix_dream]

Not moaning and groaning at all. Joining a conversation and giving an opinion that perhaps happens to disagree with yours. No need for sarcastic remarks and roll eyes icons.