NCL stock down on mixed earnings results.

[tartan cruiser]

ProkerPro5, I don't disagree Del Rio's responsibility is to his shareholders. At this point I don't think his shareholders or customers are very happy. The NCL model "Freestyle" set it apart from most other lines. NCL is not Freestyle anymore. They've abandoned their signature concept. You need reservation for just about everything. Informal dress and anytime dining has been adopted by other cruise lines too. They are moving away from what people liked about NCL and continue to add things most don't like. Just doesn't seem to be heading in the right direction.

Edited August 31, 2016 by tartan cruiser

[Sizzlechest]

The above is generally correct, but I think you might be missing the fact that the thrifty cruiser has not been actively thwarted by any line up until recently. The cruise industry has long hated the value cruiser, but accepted them as an unavoidable expense, similar to how a land-based buffet accepts the fact that small percentage of their clientele will be huge eaters and actually cost them money.

 

It's similar to the story of American car companies. They became masters at maximizing revenue while minimizing costs. They provided the bare minimum in quality, but stayed competitive as far as outward appearances are concerned. Remove a relay from the ignition system? That saves a few pennies per car that turns into millions when multiplied over an entire fleet. Will our customers care? Do they see that relay? Do they even know it exists? Probably not. However, adding that bigger cup holder provides a ROI that's tangible. Of course, when the ignition switch fails and the current overload causes a fire, you might then appreciate the relay more...which is precisely what happened. Ah, well, but that's just one little example that only affected a tiny fraction of customers. Sure. Now add up all the other tiny little cuts that affected a tiny fraction of customers. After a while, customers begin to feel dissatisfied. Even worse, they notice their friends driving Hondas and Toyotas don't seem to have all these problems. The loyalists dismiss all these minor issues thanks to cognitive dissonance. But over time, the customer base gets whittled away. Now, the company is in a tough spot because it's MUCH harder to get people to try your product again after they've moved on to the alternative.

[tartan cruiser]

Sizzlechest, you hit the nail on the head. My husband would buy nothing but GM cars for 30 years. We could barely get 50,000 miles out of them without problems. Our current car is a Honda! Will not buy a GM product again.

Edited August 31, 2016 by tartan cruiser

[sparks1093]

It's similar to the story of American car companies. They became masters at maximizing revenue while minimizing costs. They provided the bare minimum in quality, but stayed competitive as far as outward appearances are concerned. Remove a relay from the ignition system? That saves a few pennies per car that turns into millions when multiplied over an entire fleet. Will our customers care? Do they see that relay? Do they even know it exists? Probably not. However, adding that bigger cup holder provides a ROI that's tangible. Of course, when the ignition switch fails and the current overload causes a fire, you might then appreciate the relay more...which is precisely what happened. Ah, well, but that's just one little example that only affected a tiny fraction of customers. Sure. Now add up all the other tiny little cuts that affected a tiny fraction of customers. After a while, customers begin to feel dissatisfied. Even worse, they notice their friends driving Hondas and Toyotas don't seem to have all these problems. The loyalists dismiss all these minor issues thanks to cognitive dissonance. But over time, the customer base gets whittled away. Now, the company is in a tough spot because it's MUCH harder to get people to try your product again after they've moved on to the alternative.

 

I am sure NCL applied some of this reasoning when they changed final payment from 75 days to 90 days- they know exactly how much they will earn in a year getting the customer's money 15 days sooner.

[RDC1]

I think you are focusing a bit too much on the room service thing.

 

I'm not saying you're incorrect. There is a good chance they analyzed room service usage and realized that it wasn't a good utilization of their resources -- at least not for free. There is also a good chance that the customers using room service the most were ones they'd prefer not to have anyway.

 

However, the room service charge (as well as the ill-fated "no bringing food back to your room" rule) are all part of a bigger plan by Del Rio to drive away "value cruisers" and fill each room with customers who spend the targeted amount of money for each room category.

 

Del Rio is trying very hard to transform NCL into an experience where no customer gets away cheap.... and if they do, it will be unpleasant enough of an experience to where they probably won't want to come back.

 

You are probably correct that NCL is slowly pushing toward a pay-per-use model with food onboard, which contradicts the traditional "all you can eat for your base fare" model that has long been associated with cruising. He may very well be successful at some point in achieving this, too.

 

But again, it's all about pushing out the value cruiser. The value cruiser has forever been the enemy of cruise lines. Sure, they almost always sail full, but does that mean a profit? Not necessarily.

 

The whole "Free At Sea" long-running promo exists to punish value cruisers. Now you are virtually forced to pay for premium services. You get these "free" perks, but at the same time, the base fare is higher to pay for them. This way, people who would use these perks anyway are happy with it overall, and those who want to cruise at bargain rates and spend nothing onboard hate them. Mission accomplished! Also, the refusal to provide Free At Sea to last-minute discounted rooms is another way to ensure that value cruisers don't get that good of a deal.

 

Taking the latest water/soda fiasco... NCL is very aware that their water prices on board are horrendous, and people will hate it. But which people will hate it? Del Rio thinks the loudest angry voices will be from those who bring water/soda onboard as part of a general pattern of thriftiness -- something he doesn't want on his ship.

 

Regarding Carnival vs NCL, the biggest difference between the two is actually clientele. Carnival tends to cater to both a younger/party crowd and a working class crowd, while NCL's clientele tends to skew older and more middle class. NCL is by no means a premium line (and never will be), but many people (myself included) don't like cruising with the typical rowdy Carnival passenger. Princess, also owned by Carnival, is much more comparable to NCL.

 

The room service was just an example. You can do a similar analysis on the water aspect. NCL's main competition RCCL also states that alcoholic and non-alcoholic beverages are not allowed. The benefits to the cruise line of not allowing liquids, outside of the sales revenue aspect include: labor involved in transporting luggage on board the ship, labor involved in checking the liquids, both checked and carried on, delays involved in check in lines and in getting luggage to rooms, environmental issues, from the point of having to discard bottles (incurring a trash cost for bottles from which the cruise line received no revenue.

 

Now with that said, I would have done the implementation differently. I would have announced the change 120 days out and given people 30 days to cancel at no penalty from the date of the announcement. Of course that would have only applied to cruise line payments, not anything such as hotels and air done outside of the cruise line. I also would have either set water price to similar levels with the competition (RCCL) or would have provided each cruiser with a number of discount water coupons for a period of 6 months until the change had been absorbed. Carnival did a much better job of both setting the rule and implementing. But again it is clear that NCL considers their competition to be RCCL more then CCL.

 

 

NCL is nothing like Princess. NCL has a much younger demographics, aimed more towards families. Some families may take Princess ships, but it does not have anything like the features and activities that CCL, NCL, and RCCL has for families. Princess (traditional) is also positioned at the upper end of mass market with Celebrity (younger demographics, split ship) and HAL (older demographics, traditional)

Edited August 31, 2016 by RDC1

[RDC1]

ProkerPro5, I don't disagree Del Rio's responsibility is to his shareholders. At this point I don't think his shareholders or customers are very happy. The NCL model "Freestyle" set it apart from most other lines. NCL is not Freestyle anymore. They've abandoned their signature concept. You need reservation for just about everything. Informal dress and anytime dining has been adopted by other cruise lines too. They are moving away from what people liked about NCL and continue to add things most don't like. Just doesn't seem to be heading in the right direction.

 

NCL is moving toward a Las Vegas resort hotel model, only one that moves at sea. It is aimed at non-traditional cruisers, younger demographics, with families.

[sweetride]

NCL is moving toward a Las Vegas resort hotel model, only one that moves at sea. It is aimed at non-traditional cruisers, younger demographics, with families.

 

The problem with that is for the ridiculous prices they're pushing now, you can get a nice suite in Vegas and have one hell of a great week there, much better than if you went on a cruise to say Roatan.

[richstowe]

It's similar to the story of American car companies. They became masters at maximizing revenue while minimizing costs. They provided the bare minimum in quality, but stayed competitive as far as outward appearances are concerned. Remove a relay from the ignition system? That saves a few pennies per car that turns into millions when multiplied over an entire fleet. Will our customers care? Do they see that relay? Do they even know it exists? Probably not. However, adding that bigger cup holder provides a ROI that's tangible. Of course, when the ignition switch fails and the current overload causes a fire, you might then appreciate the relay more...which is precisely what happened. Ah, well, but that's just one little example that only affected a tiny fraction of customers. Sure. Now add up all the other tiny little cuts that affected a tiny fraction of customers. After a while, customers begin to feel dissatisfied. Even worse, they notice their friends driving Hondas and Toyotas don't seem to have all these problems. The loyalists dismiss all these minor issues thanks to cognitive dissonance. But over time, the customer base gets whittled away. Now, the company is in a tough spot because it's MUCH harder to get people to try your product again after they've moved on to the alternative.

And the problem is the Del Rio's / former American Car execs of the world get paid for short-term results . Comp is also tied to the stock price , which is based on the opinion of those with the attention span of tze-tze flies .

I always felt that the Arison's Carnival Corp had an advantage over their competitors because of a long term focus . CCL has lost much of this lead but NCL's focus on the immediate is a mistake .

[NLH Arizona]

ProkerPro5, I don't disagree Del Rio's responsibility is to his shareholders. At this point I don't think his shareholders or customers are very happy. The NCL model "Freestyle" set it apart from most other lines. NCL is not Freestyle anymore. They've abandoned their signature concept. You need reservation for just about everything. Informal dress and anytime dining has been adopted by other cruise lines too. They are moving away from what people liked about NCL and continue to add things most don't like. Just doesn't seem to be heading in the right direction.

How is having to make reservations not Freestyle. Freestyle started with dining, you can eat where you want, when you want and with whom you want, instead of sitting at a designated table at a certain time and with the same people. Many don't have an issue making reservations and if one doesn't want to make reservations they can just show up and wait in line if the venue is busy. But to say they aren't Freestyle anymore is not correct. You keep saying things like them adding things most don't like, I'd have to disagree, it might be some don't like but not most.

[tartan cruiser]

I know what you're saying about the Las Vegas resort style model that they want families and a younger demographic. Las Vegas tried to appeal to families years ago and it didn't work for them. All these extra charges do not appeal to families who might have limited vacation dollars. We're paying for 12 people to cruise so a few extra charges add up. You just can't pander to one group to have a successful business plan. Many middle aged and older people have both the time and money to cruise. Why drive any customer away. Look what's happening at Target.

 

We just sailed on RCCL in January and brought a small amount of water and soda on board along with juice boxes for the kids. It might be a policy but I'm not sure they are enforcing it. Maybe we were just lucky.

[RDC1]

I know what you're saying about the Las Vegas resort style model that they want families and a younger demographic. Las Vegas tried to appeal to families years ago and it didn't work for them. All these extra charges do not appeal to families who might have limited vacation dollars. We're paying for 12 people to cruise so a few extra charges add up. You just can't pander to one group to have a successful business plan. Many middle aged and older people have both the time and money to cruise. Why drive any customer away. Look what's happening at Target.

 

We just sailed on RCCL in January and brought a small amount of water and soda on board along with juice boxes for the kids. It might be a policy but I'm not sure they are enforcing it. Maybe we were just lucky.

 

Up through last quarter it apparently has worked, when you look at the filed 10Q. Will see what things look like over the next two quarters.

 

As I understand it with RCCL it varies by port. It also gives them a way to go after someone abusing it, even if they don't always enforce. However it is in the FAQ concerning bringing drinks on board.

Edited August 31, 2016 by RDC1

[Warm Breezes]

How is having to make reservations not Freestyle. Freestyle started with dining, you can eat where you want, when you want and with whom you want, instead of sitting at a designated table at a certain time and with the same people. Many don't have an issue making reservations and if one doesn't want to make reservations they can just show up and wait in line if the venue is busy. But to say they aren't Freestyle anymore is not correct. You keep saying things like them adding things most don't like, I'd have to disagree, it might be some don't like but not most.

 

You just wrote my thoughts for me. Thank you.

[tartan cruiser]

NLH Arizona, when we were on the Escape in February we had made reservations online before we left. Once on the ship for whatever reason we wanted to changed our time or dining venue. It was not possible in the specialty venues we had booked. They were booked solid and that was that. Take it or leave it. MDR we could go standby but that was the only place. If we had to wait then we missed our desired show time. So for us it was not "Freestyle". Glad it works for you on your cruises. I'm not here to argue, just giving my experiences having cruised for many years with NCL.

 

As for most liking the changes time will tell. Their stock price doesn't necessarily seem to indicate that. Never said I won't cruise NCL again, but right now we feel we get a better experience and value on other cruise line. Most of the other lines do a better job at "freestyle" now than NCL. JMHO. I don't own NCL stock and I've been able to find cruises that satisfy my needs for 2017 so it won't affect me beyond my Getaway cruise. Finished on the subject.

Edited August 31, 2016 by tartan cruiser

[mking8288]

Trading volume is on the low end today and will remain that way till next Tuesday with the holiday mood on Wall Street.

 

The perceived affluence in the Chinese cruise market could well turn out to be a myth and costly if they miscalculated - like the prices of fuel for ships, the continued tightening and devaluation of the RMB a/k/a Chinese Yuan is beginning to hit the luxury retailers like Tiffany & Company ... sales down 19% last quarter from one report I read, blamed on the shrinking affluent Chinese shoppers with their tight purses. Flagship stores are closing up some of the shops on Hong Kong's Fifth Avenue ... shooper's corridor in TST & Causeway Bay. Casino gaming revenue continued to drop in Macau for consecutive quarters and Gentling based in Singarpore (NCL's (ex) alliance getting out of Macau since they failed to secure a new gaming license, while MGM-Asia and Wynn's Asia division are slowing down their projects and expansion's opening dates. Even Uber is getting out of markets like Macau ... and, they have been burning lots of money backed by investors.

 

Keep in mind that China is still, largely, state-run and it is not a free market, with the political wind-of-change that NCL is rushing to join ... years behind RCI and CCL with several ships already sailing there now. And, they are discounting their staterooms to boost occupancies - nice deal this Fall if you can "wing" it. P.S. NCL's Star is doing a repo and/or trial run to Asia this Fall, and go have a look ... not exactly sold out.

 

But, I am sure NCL did their market analysis - between live lobsters and Margaritaville, passengers will be chowing plenty of fried chicken, hotdogs and pizza & happily also paying that 18% extra. Except, these are things that brands like Yum Food are selling everything in China over the last decades ... and this group of passengers are often afraid of motion sickness and fearful of being seasick.

 

Lots of opportunities and challenges ahead ... risks and danger as well, will need plenty of luck or FengShui.

[mscdivina2016]

The above is generally correct, but I think you might be missing the fact that the thrifty cruiser has not been actively thwarted by any line up until recently. The cruise industry has long hated the value cruiser, but accepted them as an unavoidable expense, similar to how a land-based buffet accepts the fact that small percentage of their clientele will be huge eaters and actually cost them money.

 

Del Rio is leading the charge toward squeezing out the value cruiser, both via new policies and higher base fares.

 

The old way of thinking was, "Yeah, value cruisers cost the cruise line money, but there's really no way to force EVERYONE to spend money onboard, so we just have to deal with the small percentage of passengers of whom we don't make a profit."

 

The new way of thinking is, "Let's find ways to both raise the minimum amount we will make from each passenger AND gently nudge the value cruiser away from our line by making their lives unpleasant."

 

NCL has long been an innovator in the cruise industry. Some of these innovations (freestyle cruising) were a pleasant change for most passengers, but a lot of the more recent ones are not so pleasant, and are aimed solely at increasing the company's bottom line.

 

The question is whether there will be a backlash. At some point, the nickel-and-diming atmosphere will be off-putting to most passengers, not just the frugal ones, and they might either switch cruise lines or give up cruising altogether.

 

Keep in mind that two of the most cited positive things about cruising in the past were, "I loved the food, and I could have as much as I wanted" and "I loved how everything except drinks and excursions was included!"

 

Now neither are true. The MDR food is unappetizing slop (this is true across most major cruise lines), and the add-on charges are now numerous, especially on NCL.

 

If cruising becomes too much like visiting a land-based resort, some people will simply give it up and start going to land-based resorts instead.

 

There's a fine line, and Del Rio is seeing how far he can push it.

 

I don't necessarily blame him. His responsibility is to the shareholders, but he has to be careful not to ruin the brand while squeezing out these extra profits.

 

I guess I am still that customer they will lose on.:D

Even after I booked my next NCL cruise they changed the free promo so instead of $200 worth of excursions, I got $1080 worth of free gratuities plus UBP still.

We will drink over $6000 worth based on their current pricing.

So $6000 in booze, $1080 in DSC so for $2230 we get a 40 night cruise in a balcony:eek::D

Thats less than $30 a day each.

[SuiteCruiser]

How is having to make reservations not Freestyle. Freestyle started with dining, you can eat where you want, when you want and with whom you want, instead of sitting at a designated table at a certain time and with the same people. Many don't have an issue making reservations and if one doesn't want to make reservations they can just show up and wait in line if the venue is busy. But to say they aren't Freestyle anymore is not correct. You keep saying things like them adding things most don't like, I'd have to disagree, it might be some don't like but not most.

 

Until 2015, I had never made a reservation in a specialty restaurant other than Teppanyaki. We ate all of our meals in the specialties, perhaps one every other cruise we'd have one in the MDR. Occasionally we had to wait 15 minutes, but usually they just sat us. For me, truly Freestyle. Eat Where and When you want without planning on what you would feel like months ahead.

 

I agree with the other poster, that it's not just about the MDR. With the onslaught of promos to sell the ship, the specialties have to be booked far ahead of the cruise. What if I don't feel like a steak that night for some reason Too bad. They lose my money as I'll order a soup and wish I was somewhere else.

[NLH Arizona]

Until 2015, I had never made a reservation in a specialty restaurant other than Teppanyaki. We ate all of our meals in the specialties, perhaps one every other cruise we'd have one in the MDR. Occasionally we had to wait 15 minutes, but usually they just sat us. For me, truly Freestyle. Eat Where and When you want without planning on what you would feel like months ahead.

 

I agree with the other poster, that it's not just about the MDR. With the onslaught of promos to sell the ship, the specialties have to be booked far ahead of the cruise. What if I don't feel like a steak that night for some reason Too bad. They lose my money as I'll order a soup and wish I was somewhere else.

See, I'm just the opposite. I know when I want to eat, where I want to eat and with whom, so I can make my reservations ahead of time, which I've done since I started cruising with NCL and I love being able to do it.

 

You don't have to make reservations months ahead if you don't want to, they save some of the times to only be reserved on the ship. Last December, one of the couples I met was going to join me at the Teppanyaki restaurant and all they did was ask the Concierge the day of the reservation and we all had a wonderful dinner.

[swedish weave]

See, I'm just the opposite. I know when I want to eat, where I want to eat and with whom, so I can make my reservations ahead of time, which I've done since I started cruising with NCL and I love being able to do it.

 

You don't have to make reservations months ahead if you don't want to, they save some of the times to only be reserved on the ship. Last December, one of the couples I met was going to join me at the Teppanyaki restaurant and all they did was ask the Concierge the day of the reservation and we all had a wonderful dinner.

 

I had a different experience on the Getaway. I tried to book the LeBistro the first day on the ship and was told they were booked solid for the entire cruise. We went to Moderno instead.

 

They don't always hold some of the space for those who want to do their booking after boarding.

 

On another ship a different time, one of my friends was given a certificate for dinner at Cagney's in lieu of the $100 shareholder benefit (which was denied) and he was told they had no openings. One of the officers who stopped by to chat overheard some of our conversation and made reservations for my friend.

 

It is not good that these things have to happen, but they do.

Edited August 31, 2016 by swedish weave

[RDC1]

NLH Arizona, when we were on the Escape in February we had made reservations online before we left. Once on the ship for whatever reason we wanted to changed our time or dining venue. It was not possible in the specialty venues we had booked. They were booked solid and that was that. Take it or leave it. MDR we could go standby but that was the only place. If we had to wait then we missed our desired show time. So for us it was not "Freestyle". Glad it works for you on your cruises. I'm not here to argue, just giving my experiences having cruised for many years with NCL.

 

As for most liking the changes time will tell. Their stock price doesn't necessarily seem to indicate that. Never said I won't cruise NCL again, but right now we feel we get a better experience and value on other cruise line. Most of the other lines do a better job at "freestyle" now than NCL. JMHO. I don't own NCL stock and I've been able to find cruises that satisfy my needs for 2017 so it won't affect me beyond my Getaway cruise. Finished on the subject.

 

So the ships have so few passengers that NCL's business is suffering but all of the restaurant capacity is being taken up so there is no reservation availability? Uh.

[fstuff1]

ProkerPro5, I don't disagree Del Rio's responsibility is to his shareholders. At this point I don't think his shareholders or customers are very happy. The NCL model "Freestyle" set it apart from most other lines. NCL is not Freestyle anymore. They've abandoned their signature concept. You need reservation for just about everything. Informal dress and anytime dining has been adopted by other cruise lines too. They are moving away from what people liked about NCL and continue to add things most don't like. Just doesn't seem to be heading in the right direction.

replaced with FeeStyle

[swedish weave]

So the ships have so few passengers that NCL's business is suffering but all of the restaurant capacity is being taken up so there is no reservation availability? Uh.

 

The actions of NCL management created some of the problems. In the case of my friend, the renovation of the ship moved the Moderno into a space formerly occupied by part of Cagney's. That effectively reduced the capacity of Cagney's to about half it's original size in the same time period that NCL was offering the UDP as a booking bonus.

 

I don't know if it was intentional or just plain bad management, but it did create problems for guests and the crew on the ship.

Edited September 1, 2016 by swedish weave

[Sizzlechest]

So the ships have so few passengers that NCL's business is suffering but all of the restaurant capacity is being taken up so there is no reservation availability? Uh.

 

There's no availability because service has SLOWED dramatically over the last year. You used to be able to get in and out of a dining room in an hour if you wanted. Not anymore. I can't say for sure why, but I suspect NCL cut back on staff. The reason I'm guessing that is because the staff that's working there seems to be working really hard to please. Therefore, there must not be enough of them.

[Fido Chuckwagon]

So the ships have so few passengers that NCL's business is suffering but all of the restaurant capacity is being taken up so there is no reservation availability? Uh.

 

There is no restaurant capacity because it no longer costs anything to reserve the specialty restaurants, since they are a la Carte. So people can no show reservations.

[richstowe]

So the ships have so few passengers that NCL's business is suffering but all of the restaurant capacity is being taken up so there is no reservation availability? Uh.

So who exactly are you responding to ? Who said " the ships have so few passengers that NCL's business is suffering "?

 

As far as specialty restaurants being full , I witnessed idiocy on the Epic . Completely sold out between 6:30 and 8:30 we heard them tell others . It was their way of trying to get two turns in these restaurants . We saw lots of empty tables as a result . :mad:

[NLH Arizona]

As far as specialty restaurants being full , I witnessed idiocy on the Epic . Completely sold out between 6:30 and 8:30 we heard them tell others . It was their way of trying to get two turns in these restaurants . We saw lots of empty tables as a result . :mad:[/size]

This happens a lot with some upscale restaurants I've been to. It is so frustrating to be waiting for a table and there are a number of empty tables. When I ask why, they say so the kitchen can keep up. My feeling is if a restaurant is 100% filled, the service should be great and if they are less than 100% full, it should be totally out of the world awesome, but that isn't what happens at most restaurants.

 

On all of my cruises, they have those boards that have the restaurant availability and the only one that is always red (no availability) is the Teppanyaki restaurant. Some of the prime times are scooped up prior to boarding and people rush to book when they get on board the ship, but all other times have always been green (available).

 

As far as getting in and out of a specialty restaurant in an hour, I have always been able to get out in an hour, maybe because I usually just have a salad, entree and a side.