Fain Comments

[Baron Barracuda]

Speaking with Jim Cramer on CNBC last night. Cramer hypothesized that in the aftermath of the great recession vacationers became more value focused and discovered cruises. Fain's response:

 

"It's a great value that people used to think is too expensive. Our objective is to make it a little bit less of a great value because frankly we're a bit too cheap today"

 

He also defended no last minute discounting, saying that customers had been turned off by "used car lot pricing". Now customers, ta's much happier.

 

Really?

Edited November 5, 2015 by Baron Barracuda

[loubetti]

I think Fain just needed to look at booking and revenue levels to make that determination. If you're not happy, RCI will find someone who is.

[cot427]

While his statement may not appeal to customers, don't forget that his job is to make the board and shareholders happy and what makes them happy? Profit.

[SelectSys]

When I hear that they have no more last minute discounting it suggests to me that they have better yield management software like the airlines. My current cruise leaving next week is completely sold out as is the following cruise. No need for last minute discounts.

 

I will be curious to see how quality has diminished on board given Fain's statement about being, "too good a value".

[monctonguy]

He is quite cocky and assuming in his interview and speeches I find.

 

Its ok to be like that while things are going well. Eventually the high prices, no perks included, no last min deals and building one massive ship after another will catch up with RCI...see what he's saying then if he's still around.

 

But as long as ppl are booking and spending I guess he is right for now.

 

My cruise next week is 100% sold out...but I did rebook it 3 times and got it for a steal..and it want a "last min" discount or sell off....

 

But cruises for 2016 that I have booked are now double what I booked them for over the past few months so...

[poncho1973]

"You're so Fain, you probably think this song is about you. You're so Fain..."

[cruisinfanatic]

He is quite cocky and assuming in his interview and speeches I find.

 

Its ok to be like that while things are going well. Eventually the high prices, no perks included, no last min deals and building one massive ship after another will catch up with RCI...see what he's saying then if he's still around.

 

But as long as ppl are booking and spending I guess he is right for now.

 

My cruise next week is 100% sold out...but I did rebook it 3 times and got it for a steal..and it want a "last min" discount or sell off....

 

But cruises for 2016 that I have booked are now double what I booked them for over the past few months so...

you sound like all the doubters that were complaining about how in the world were they going to fill the huge ship Oasis. Now look how many there are plus new builds.

I think fain knows a whole lot more than you and I so why call him cocky?

Royal fills their ships at mostly premium prices. You don't sit on your hands when there is such demand

Edited November 5, 2015 by SeaUs

[TheTruthCanHurt]

it's all just hype. If a ship is not selling they will surely discount it.

 

They have been discounting (largely) the december 7 night caribbean sailings for the last month. I have seen suites drop over $2,000

 

junior suite gty on monday was 2100.00

of course now it's back up to 4k

 

you just have to watch. Disregard all the talk. there are still plenty of really good deals to be found

[Big_G]

it's all just hype. If a ship is not selling they will surely discount it.

 

They have been discounting (largely) the december 7 night caribbean sailings for the last month. I have seen suites drop over $2,000

 

junior suite gty on monday was 2100.00

of course now it's back up to 4k

 

you just have to watch. Disregard all the talk. there are still plenty of really good deals to be found

 

I'm curious who you think he is hyping. He never said there wouldn't be any discounting.

 

http://www.cruisecritic.com/v-4/news/news.cfm?ID=6311

[nbsjcruiser]

Ahhhhh, the CEO bubble where every thing you do is right. I can see now why my last few cruises on RCI have not been up to par. When your CEO says dumb it down and jack up the prices, what follows is cost cutting and nickelling and diming at levels Carnival would be proud of. The things I left Carnival for have been slowly creeping into RCI and Fain is right - its not as good a value as it once was but not because of just price increases, they also decreased their quality - quality in service and quality in the product.

 

Well done Mr Fain, well done.

 

As far as last minute discounts? Yeah, well, your full of it buddy. Last minute discounts are there every week. So while it sounds good its a pile of crapola.

[TheTruthCanHurt]

I'm curious who you think he is hyping. He never said there wouldn't be any discounting.

 

http://www.cruisecritic.com/v-4/news/news.cfm?ID=6311

 

 

Actually there are several threads about this. The overall comments were, with the exception of the short bahamas/ carribean cruises that they would hold to the no last minute discounting. However, based on what I have seen online in the last two months. Including the crossing. His statement seems to be mostly hype because There have indeed been many discounts.

 

Thats what I was talking about and that was my personal experience that I was sharing.

 

I was originally worried because it truly did start to look like the best pricing for the new structure was to book the second the itenerary came out. (something I just cant do) fortunately based on what I am seeing, I am starting to believe that there we still be some aggressive last minute prices.

[monctonguy]

you sound like all the doubters that were complaining about how in the world were they going to fill the huge ship Oasis. Now look how many there are plus new builds.

I think fain knows a whole lot more than you and I so why call him cocky?

Royal fills their ships at mostly premium prices. You don't sit on your hands when there is such demand

 

You can be right and smart...and still COCKY. One doesn't have to preclude the other.

 

Saying they are too cheap and need to make it less of a great value, certainly is COCKY in every sense of the word.

 

I am not arguing or stating he is wrong, I said he is right for now.

Edited November 5, 2015 by monctonguy

[setsail]

Actually there are several threads about this. The overall comments were, with the exception of the short bahamas/ carribean cruises that they would hold to the no last minute discounting. However, based on what I have seen online in the last two months. Including the crossing. His statement seems to be mostly hype because There have indeed been many discounts.

 

Thats what I was talking about and that was my personal experience that I was sharing.

 

I was originally worried because it truly did start to look like the best pricing for the new structure was to book the second the itenerary came out. (something I just cant do) fortunately based on what I am seeing, I am starting to believe that there we still be some aggressive last minute prices.

 

http://boards.cruisecritic.com/showthread.php?t=2276820

[Goodtime Cruizin]

Actually there are several threads about this. The overall comments were, with the exception of the short bahamas/ carribean cruises that they would hold to the no last minute discounting. However, based on what I have seen online in the last two months. Including the crossing. His statement seems to be mostly hype because There have indeed been many discounts.

 

Thats what I was talking about and that was my personal experience that I was sharing.

 

I was originally worried because it truly did start to look like the best pricing for the new structure was to book the second the itenerary came out. (something I just cant do) fortunately based on what I am seeing, I am starting to believe that there we still be some aggressive last minute prices.

 

I would have to respectfully disagree. While there have been some price drops, I have not witnessed any drops that go below the original prices when the itineraries were introduced.

[TheTruthCanHurt]

I would have to respectfully disagree. While there have been some price drops, I have not witnessed any drops that go below the original prices when the itineraries were introduced.

 

 

While they may not go below the original prices... My experience has been that there has been a deep discount over what the prices have been (perhaps 6 months out) which directly contradicts the "no last minute discounts" speaches

 

so.... Original price might be best.... Then it goes way up. Then when they see they are not sold that well. They seem to be discounting a lot. So for me..... While it may or may not be as cheap as when they roll it out 2 years in advance. It is certainly better then the 6 month out pricing.

 

this have been what I have observed....

 

My real concern was that there would never be any good deals a few months out and I am finding that this is simply not true, ( at least for the iteneraries I prefer)

Edited November 5, 2015 by TheTruthCanHurt

[Biker19]

[Biker19]

http://www.seatrade-cruise.com/news/news-headlines/fain-sees-cultural-shift-people-move-on-from-bad-events.html

 

 

In the past, unusual events—be they weather-related or geopolitical—caused people to freeze. Cruise bookings suffered as everyone waited out a return to normalcy.

 

That's no longer true, Royal Caribbean chairman and CEO Richard Fain said Tuesday, as he spoke of a cultural shift that has relevance to the recent hurricane season.

 

Five major hurricanes in a row that 'exactly matched our trading routes' caused 'heart-wrenching devastation' in ports, and scrambling to revise itineraries—with more special berthing requests in September than in a normal three-year-period. For a stretch of five to six weeks, 'Caribbean bookings dropped precipitously.'

But as rapid as the drop-off, so was the recovery.

 

'Today, virtually all our bookings are back to pre-hurricane levels,' Fain said.

Destinations, and Royal Caribbean, are resilient, he continued. Islands want ships back, seeing cruise tourism as key to recovery, and their recovery has been impressive. Though residential areas may still be struggling, in many places the tourist areas 'suffered less damage and have mostly been cleaned up.'

Travel agents, Fain added, have been a 'very positive force' in getting the word out that most Caribbean destinations are open.

 

The projected $55m impact on RCL's earnings, or 26 cents per share for the year, reflects the most expensive hurricane season in the company's history, by far. And yet 2017 has been a remarkably strong year for cruising.

 

RCL was 'pleased and a little surprised' to be able to keep its 2017 profit forecast, whch it had somewhat aggressively raised a few months ago, Fain told analysts during the third quarter earnings call. Today's $7.35 to $7.40 range is a just nickel lower at the top end than previous guidance.

The RCL chief cited 'an important cultural change' in how people respond to unusual events.

'Years ago a bad incident would have a strong and lasting impact. Whenever something happened, bookings would fall and they would stay down for an extended period. People seemed to curl up in a ball and obsess about whatever the issue was,' Fain said. Eventually, everyone moved on and bookings would recover, but that 'seemed to take forever.

 

'More recently, we've seen a sanguine response. Instead of the incident lingering for a long time, the recovery seems much quicker ... The public seems inurred to such one-off events ... They move on.'

From a societal view that's disheartening, Fain said. On the other hand, it may be constructive to get moving, he added, and from a commercial point of view, it's very helpful.

The fact that RCL is able to withstand a $55m impact from the recent storms 'shows how strongly the market is performing this year,' Fain said.

In conference call opening remarks that stretched 25 minutes, Fain also presented a new view of the industry's supply-demand equation.

 

People today are more interested in buying experiences than things. That's very good for cruising, and while society has changed, so has the industry, building ships that now resemble cities in their 'cornucopia' of activities and venues.

 

Still, misperceptions about cruising persisted, however Fain said 'We've reached a tipping point and are moving beyond ... Cruising has firmly established itself as adventurous and relevant.'

That's especially true for younger travelers. Over the past six years, Harris Polls have tracked an increasing—almost doubled—percentage of consumers who agree that cruising provides a very good or perfect fit for them. Currently, 31% of the market polled said that, with even more millennials concurring: 40%.

During the call Michael Bayley, president and CEO, Royal Caribbean International, reported that in the past three years, all RCL brands but especially his, have focused on the new-to-cruise market and millennials, making 'good progress.'

 

According to EVP and CFO Jason Liberty, about 30% to 33% more millennials are now cruising with RCL than several years ago.

[Biker19]

Some interesting comments in there.

[BNBR]

The amount of money Fain is making me.... I have no problem with this. It's standard business. You always sell for as much as you can and maximize profits. Good for Royal. Their stock is up DOUBLE over Carnivals in the last year. And for some reason, I keep preferring to sail Royal. My Oct cruise next year was cheaper on Allure compared to an old Carnival ship. I think Fain is right that they are too cheap. Let's get more profits... buy more RCL Stock.

 

I had 100 shares of Carnival just for the shareholder OBC. Ended up dumping those and just using that money to buy RCL last year. It's up $4,000 already... in a year. Couple of cruises Fain has essentially paid for with his leadership. Thanks!

[setsail]

The amount of money Fain is making me.... I have no problem with this. It's standard business. You always sell for as much as you can and maximize profits. Good for Royal. Their stock is up DOUBLE over Carnivals in the last year. And for some reason, I keep preferring to sail Royal. My Oct cruise next year was cheaper on Allure compared to an old Carnival ship. I think Fain is right that they are too cheap. Let's get more profits... buy more RCL Stock.

 

I had 100 shares of Carnival just for the shareholder OBC. Ended up dumping those and just using that money to buy RCL last year. It's up $4,000 already... in a year. Couple of cruises Fain has essentially paid for with his leadership. Thanks!

 

 

So to make money, you must have sold your stock?

[deliver42]

You can't judge the discounts for this year. The Caribbean was rocked by Irma, and a lot of people cancelled their cruises industry wide. I believe the majority of cruisers like the Eastern to the Western, so they didn't want to go Western again. As we get later in the season, and the ships start returning to the Eastern ports, they will fill up again without the deep discounts. As an example of other lines discounting, I booked the Regal Princess for Dec 10th for $1398.00 for 2, including free grats. That is for a balcony, which normally goes for almost $3000.00 for 2.

[Snit13]

If I read the post correctly, he sold his Carnival stock and bought Royal Caribbean stock and made $$$$$ by doing so. Good for you.