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Got Out There

Will there be consolidation within the cruise line industry?

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Interesting to see if there will be consolidation ...... who will buy who?  Not many big players out there beyond the big four (carnival, Royal, NCL, MSC) ....

 

From a RCCL perspective, I recall years ago Carnival tried to buy them, but the Pritzker  family came in and saved the day..... later RCCL tried to buy Princess but Carnival out bid them.  Been sometime since any significant merger or buyout.   Interesting to see what happens going forward .

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No one knows. It's just be more speculation and a million things can happen before they start cruising.

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29 minutes ago, ReneeFLL said:

No one knows. It's just be more speculation and a million things can happen before they start cruising.

One thing you can’t speculate is when the cash runs out then something has to give. Not sure what the cruise lines cash burn rate are, but whatever it is it is not sustainable.  I guarantee beyond what has been in the press with regards to cash infusions (credit or otherwise)....there are a small group of top executives at each line that are searching for all options to survive.   And yes I do believe they are or will be fighting for their survival.  

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Saudis Arabia has bought a piece of Carnival, 8.2 percent I believe.   Not sure what it means but they got some cash.

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1 hour ago, Got Out There said:

Interesting to see if there will be consolidation ...... who will buy who?  Not many big players out there beyond the big four (carnival, Royal, NCL, MSC) ....

 

From a RCCL perspective, I recall years ago Carnival tried to buy them, but the Pritzker  family came in and saved the day..... later RCCL tried to buy Princess but Carnival out bid them.  Been sometime since any significant merger or buyout.   Interesting to see what happens going forward .

 

You should read Devils on the Deep Blue Sea

Fascinating 

Screenshot_20200406-215101_Google.thumb.jpg.0ae30d23a4c3b400bc5cfc4645211bd2.jpg

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40 minutes ago, njkruzer said:

Saudis Arabia has bought a piece of Carnival, 8.2 percent I believe.   Not sure what it means but they got some cash.

 

Hard to say who got the cash. Was it an open market purchase?

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3 minutes ago, John&LaLa said:

 

Hard to say who got the cash. Was it an open market purchase?

Not sure, but think so.  Will try and find my source.

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58 minutes ago, njkruzer said:

Saudis Arabia has bought a piece of Carnival, 8.2 percent I believe.   Not sure what it means but they got some cash.

It means they aren't afraid of a bankruptcy and losing their new sizable investment.

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1 minute ago, mpk said:

It means they aren't afraid of a bankruptcy and losing their new sizable investment.

Agree.  But wonder if they'll want any control. 

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This is just my guess, and I’m just some idiot posting on the internet: If anything, I expect whatever the opposite of consolidation is called. The corporate entities are in trouble, and the worst is yet to come. Desperate to stay alive, I can see them selling off some of their brands. 

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1 hour ago, John&LaLa said:

 

You should read Devils on the Deep Blue Sea

Fascinating 

Screenshot_20200406-215101_Google.thumb.jpg.0ae30d23a4c3b400bc5cfc4645211bd2.jpg

Thanks. I need refresh my reading list and I will add this..... somehow I have more time in my hands lately 😀

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42 minutes ago, zekekelso said:

This is just my guess, and I’m just some idiot posting on the internet: If anything, I expect whatever the opposite of consolidation is called. The corporate entities are in trouble, and the worst is yet to come. Desperate to stay alive, I can see them selling off some of their brands. 

 

Liquidation

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If push comes to shove, I don't think we'll see consolidation, but we will see significant downsizing when it comes to ships and new builds. Fleets will be thinned out. The industry was already approaching the point of being overbuilt, more and more ports are becoming unwelcoming to the over-tourism. I would expect to see smaller ships prevail, shortened itineraries and tighter restrictions on deposits. The fixation on 5-6k passenger ships was bound to see a breaking point eventually. 

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39 minutes ago, zekekelso said:

This is just my guess, and I’m just some idiot posting on the internet: If anything, I expect whatever the opposite of consolidation is called. The corporate entities are in trouble, and the worst is yet to come. Desperate to stay alive, I can see them selling off some of their brands. 

Based on current market value if anyone does this it will likely be out of desperation.  You know the old saying you never want to sell at the bottom.  We have seen this in the airline industry, they start selling off assets towards the end out of desperation.  I happen to

have a front row seat to this about 30 years ago.... cash flow was so bad at the airline I worked for, no one would give us credit.  Watched an operations team member count out $2k in small bills from cash collected on the plane from drinks.  Handed it over to an airplane mechanic who went to a vendor to buy a part for a plane!!! Essentially we were bankrupt but somehow another airline bought us a few weeks later.....

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3 minutes ago, paulh84 said:

If push comes to shove, I don't think we'll see consolidation, but we will see significant downsizing when it comes to ships and new builds. Fleets will be thinned out. The industry was already approaching the point of being overbuilt, more and more ports are becoming unwelcoming to the over-tourism. I would expect to see smaller ships prevail, shortened itineraries and tighter restrictions on deposits. The fixation on 5-6k passenger ships was bound to see a breaking point eventually. 

 

I think the opposite. Liquidate the smaller ships, stay close to home and the private islands. More revenue opportunities on the big girls

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3 minutes ago, Got Out There said:

... cash flow was so bad at the airline I worked for, no one would give us credit.  Watched an operations team member count out $2k in small bills from cash collected on the plane from drinks.  Handed it over to an airplane mechanic who went to a vendor to buy a part for a plane!!! 

 

Sounds like the early days at Carnival. 

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2 minutes ago, John&LaLa said:

 

I think the opposite. Liquidate the smaller ships, stay close to home and the private islands. More revenue opportunities on the big girls

 

Possible...if they have the demand to support the sheer passenger volume to uphold the economies of scale. There are a lot of people that have zero interest in going to a day on a cookie island private island (myself included). It'll be interesting to see how it pans out. 

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Posted (edited)
9 minutes ago, paulh84 said:

 

Possible...if they have the demand to support the sheer passenger volume to uphold the economies of scale. There are a lot of people that have zero interest in going to a day on a cookie island private island (myself included). It'll be interesting to see how it pans out. 

 

Oasis ships draw on the ship as a destination. The stop in Coco Cay, if allowed by Bahamas, is merely a way around the cruise to nowhere bans. And to make more calls available, I can see them doing morning or afternoon visits. 😉

 

You might even see work on Freeport accelerate

 

Bottom line is you work with what's available.

 

But then again, this is purely speculation 

Edited by John&LaLa

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The question is who would buy these ships anytime soon? If the big three are going out of business, there probably aren’t a whole lot of people pounding down doors to invest billions into a struggling industry. 
 

More curious then I am to see what RCI, NCL and Carnival does is how a new line like Virgin enters the market as it goes down the crapper. Maybe they are the ones that start buying up some ships?

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49 minutes ago, maaaaattt said:

 

The question is who would buy these ships anytime soon? If the big three are going out of business, there probably aren’t a whole lot of people pounding down doors to invest billions into a struggling industry. 
 

 

As I mentioned in another thread, I would love to buy a Voyager class ship if the price goes low enough. Just gotta figure out where to park it. 

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Posted (edited)
5 hours ago, Got Out There said:

Interesting to see if there will be consolidation ...... who will buy who?  Not many big players out there beyond the big four (carnival, Royal, NCL, MSC) ....

 

From a RCCL perspective, I recall years ago Carnival tried to buy them, but the Pritzker  family came in and saved the day..... later RCCL tried to buy Princess but Carnival out bid them.  Been sometime since any significant merger or buyout.   Interesting to see what happens going forward .

 

There are just too many unknown nowadays.

You mention the 'Pritzker' family. But these are during normal times. Nobody has seem what the cruise industry is like as it is today.

I remember  Star Cruises Chairman Dato Lim  bought NCL and then sold 50% to Leon Black of Apollo management. With hindsight I am sure Chairman Lim feels he should not have sold as the shares have multiplied by six times in value.

 

I would ask this question first before yours.

 

'If the cruise industry survive which is highly debateable, in future what will it look like'

Among the unknown are the following.

Are the cruise industry really going to adopt the 70 years old rule as almost all would have at least one 70 years old in their party.

After the companies have disgorge their crew and this virus thing is behind us, what are the countries that would accept their ships. Not counting what new regulations the US government would put through.

Would existing guests still want to cruise after seeing what it has gone through.

Edited by datolim
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There was already a lot of consolidation occuring before the COIVID-19 crisis. Looking at Carnival they own most of the cruislines followed by Royal Caribbean. Hence there is not so much out there anymore to be consolidated. Since demand will go down and new builds can't be cancelled very likely the companies need to consider to retire it's oldest ships and amend such pace over the next years paralel with the arrival of new builds as demand will develop. In the Case of Royal, we hopefully will see them Order smaller ships again fitting max approx 3'000 passengers when it comes to replace the remaining Vision Class and eventually Radiance Class.

 

It will be interesting to see how MSC will hold itself, I doubt that RCL or Carnival will take them over or that they will go bankrupt, but also here with their ambicious growth plans over the next years we might see them retire older ships to balance out their demand needs.

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7 minutes ago, LXA350 said:

 

 

It will be interesting to see how MSC will hold itself, I doubt that RCL or Carnival will take them over or that they will go bankrupt, but also here with their ambicious growth plans over the next years we might see them retire older ships to balance out their demand needs.


MSC is really a container ship company, that has a small cruise ship arm. So if any of the big cruise lines need to sell ships, cheap, I wonder if someone like Maersk would end up buying some ships and trying something like MSC. 

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On 4/6/2020 at 10:14 PM, njkruzer said:

Agree.  But wonder if they'll want any control. 

Could you just imagine a cruise ship without alcohol?  Men only in the Diamond lounge?

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