SS/RCCL Finances: Improving, Options, Questions??!!

[cruiseej]

2 hours ago, AmazedByCruising said:

 I think FCCs shouldn't be valued as "debt"

 

I guess you can think what you want, but legally, if someone prepaid for a trip and hasn't used it yet, in accounting, that's a liability. But because this isn't debt like a loan which needs to be paid, with interest, by a set date, it's not the ticking time bomb like the money the cruise lines borrowed to stay afloat. 

 

2 hours ago, AmazedByCruising said:

I wonder how much FCC that wasn't bought on a ship but was given away is actually used.

 

Huh? Except for the bonuses, these FCCs are not "given away"; they are money that customers actually paid for cruises which were canceled. If I paid $2,500 or $5,000 or $20,000 for a cruise which was canceled by a cruise line during Covid, do you really think I'm going to just ignore it and not use it? No way! Yes, there's probably some small change out there on mass market lines where someone's deposit might amount to a nominal few hundred dollars. But if they were concerned about those small amounts, they would have let the FCCs expire this year; instead, by making them valid forever, they've made them more likely to be used. Someone might decide to cruise 5 years from now and cash in the money they put down back in 2019. Clearly by making the FCCs not expire, more of them will be used over time. But without the cruise line having to give up 10% to 25% more than the customer paid, combined with higher rates, when people do end up cruising the cruise line will pull in more money while slowly reducing the liability on their balance sheet. 

[AmazedByCruising]

 

6 hours ago, cruiseej said:

I guess you can think what you want, but legally, if someone prepaid for a trip and hasn't used it yet, in accounting, that's a liability.

 

I guess a liability that can be insured? Sometimes companies come up with a new variety of crisps with a coupon attached to get your money back. So it feels like "free", but in reality people lose the coupons or once back home, simply don't feel like going through the trouble for a few bucks. Companies insure themselves to make sure they don't need to actually pay 100%, so instead of a somewhat vague liability their balance shows that they spent 30% on the insurance. 

 

It's different, of course, for a $5000 FCC but even then. If someone actual bought it (on the previous cruise), they will probably use it for an already planned cruise to get a rebate. But if they got it because their cruise was cancelled, or the ship was on fire, it's different. The cruise had been planned for 5 years to get all family members across the US to align their agendas and it's not easy to do so again. Nephew X married to someone who is totally opposed to cruising as it hurts the environment, Y got seasick the first day and vowed to never cruise again. And of course, people get illnesses and die. I wonder how the company values FCC that is given as compensation. 

[rkacruiser]

FCC are a gimmick to encourage those who have them to use them--sooner or later--with the hope that the guest will spend more money that will help the company's bottom line.  (I have some.  Gee, do I really want to loose that "free money" if I don't use them?)  Extending there expiration dates is a smart PR move.  As prices increase, that "free money" isn't going to go as far in 2023 and beyond and it did when the FCC was issued.  

 

FCC needed to be issued when the cruise lines had to start cancelling cruises.  If all of the cancelled guests had wanted cash refunds, where would the cash have come to pay all of those refunds?  

 

 

[rkacruiser]

On 6/1/2022 at 10:31 AM, TLCOhio said:

A halting recovery in the cruise line industry is keeping CCL stock trading at 25-year lows. That’s not a misprint. Carnival hasn’t consistently traded at its current levels since 1996.

 

That is correct.  Carnival's stock price has long been higher than RCI's when the cruise companies prices went into the tank in 2008-2009.

 

 

On 6/1/2022 at 2:28 PM, Stumblefoot said:

 In fact, Delta Airlines upped their earnings guidance today stating this quarter’s revenues will be equal to the same quarter in 2019 and yet, available seat capacity is 18% less.

 

Less capacity + more demand = higher prices   

 

What's the surprise with this news?

 

ALL of the cruise lines have a similar problem.  TOO much capacity to meet the demand.  Yet, more capacity is on the order books.  Maybe with a couple of new CEO's in the corner offices some re-thinking will occur.  

 

On 6/1/2022 at 10:31 AM, TLCOhio said:

The reality is that, like inflation, transitory is taking a lot longer than many people expect.

 

There are many reasons why we are finding our economy in the situation that exists.  Many mistakes have been made on many issues by well meaning people as well as by a few who made decisions based on what was best for them and not "We, the People".  

 

During my lifetime of some seven decades, I have seen the economy go from "boom to bust to boom to...."  What we are experiencing is just one more chapter of the story.  

 

No one has yet to write a successful formula to write the final chapter of this book.  

 

Will we endure?  Will the Sun rise tomorrow morning?  

[TLCOhio]

On 6/2/2022 at 11:43 PM, cruiseej said:

I guess you can think what you want, but legally, if someone prepaid for a trip and hasn't used it yet, in accounting, that's a liability. But because this isn't debt like a loan which needs to be paid, with interest, by a set date, it's not the ticking time bomb like the money the cruise lines borrowed to stay afloat. 

 

While having a college degree in business administration, I only took one accounting course.  My knowledge base is very, very limited for the appropriate accounting rules.  Interesting questions as to whether these FCC's should be listed as liabilities . . . OR NOT??  And, a great point/questions about how many of these outstanding FCC's will ever be used . . . OR NOT??  Excellent range of comments and follow-ups.  Keep it coming!!

 

From the Wall Street Journal, below are their charts on the three major cruise lines for this past week.  Clearly, June 1 was a bad, BAD day for these three cruise stocks.  Then a Thursday rise up and a Friday fallback!!  Is that a "Rocky Ride" in three days??

 

Clearly, the stock values now are better than the 52-week lows on May 25, 2022.  BUT, the questions continue as to if and when the Wall Street financial experts will signal a positive run-up in these stock values given the rising oil prices, inflation pressure and economic uncertainty about a coming recession.  Predictions?

 

THANKS!  Enjoy!  Terry in Ohio

 

Lisbon, NWSpain, Bordeaux/Brittany: Live/blog, June 2017 from Portugal to France along scenic Atlantic Coast on the Silver Spirit.  Now at 32,318 views.  Many interesting pictures, details for history, food, culture, etc.:

www.boards.cruisecritic.com/showthread.php?t=2511358

 

 

From the Wall Street Journal, below are their charts for Royal Caribbean and the other two major cruise lines during this past week.  At the bottom, this fourth chart reflects RCL for the first five months of 2022.  These stock tried to recover, but kept having ups and downs.   Has it been like a roller coast ride?:

(Open your screen/viewer wider to see this visual larger/better!)

 

 

 

[cruiseej]

On 6/3/2022 at 7:09 AM, AmazedByCruising said:

If someone actual bought it (on the previous cruise), they will probably use it for an already planned cruise to get a rebate. But if they got it because their cruise was cancelled, or the ship was on fire, it's different.

 

Sorry, I guess I'm not understanding your thinking. No one got a FCC just for a cruise being canceled. The FCC is what the customer already paid, whether deposit or full payment. Some people chose to get FCCs in lieu of cash refunds, largely because the cruise lines were tacking on 10%-20% in bonus credit for people who took the FCC instead of cash refund. But the base FCC amount is still the money a customer paid to the cruise line. Why do you think it matters whether it was a deposit made onboard on a previous cruise or a cruise booked from the living room couch? It's still money a customer paid to the cruise line. 

 

8 hours ago, TLCOhio said:

My knowledge base is very, very limited for the appropriate accounting rules.  Interesting questions as to whether these FCC's should be listed as liabilities . . . OR NOT??

 

Terry, I'm not an expert on travel industry accounting either. To be accurate, the FCCs which represent money customers paid to the cruise line should be listed on the balance sheet as "prepaid income" — money received for services not yet delivered — which falls under liabilities. The "bonus" FCCs the cruise lines gave out in exchange for customers not taking cash refunds may be a different matter; since no money changed hands, I don't know how they accounted for those credits when they were created. 

[Stumblefoot]

1 hour ago, cruiseej said:

…the cruise lines were tacking on 10%-20% in bonus credit for people who took the FCC instead of cash refund.

25% at SS in 2020.

[AmazedByCruising]

2 hours ago, cruiseej said:

Sorry, I guess I'm not understanding your thinking. No one got a FCC just for a cruise being canceled.

 

 

It was my understanding that guests get FCC all the time, for instance if there's a fire on the ship. "We're very sorry, but here's a coupon to buy another cruise that hopefully doesn't kill you". That's what happened when Covid struck "Sorry, no real money for you, read the contract, but here's a coupon for another cruise."

 

2 hours ago, cruiseej said:

Why do you think it matters whether it was a deposit made onboard on a previous cruise or a cruise booked from the living room couch? It's still money a customer paid to the cruise line. 

 

I mean the FCC that the customer got because the line couldn't deliver the product paid for, and instead of simply giving the money back got offered a coupon.

[rkacruiser]

23 hours ago, cruiseej said:

To be accurate, the FCCs which represent money customers paid to the cruise line should be listed on the balance sheet as "prepaid income" — money received for services not yet delivered — which falls under liabilities. The "bonus" FCCs the cruise lines gave out in exchange for customers not taking cash refunds may be a different matter; since no money changed hands, I don't know how they accounted for those credits when they were created. 

 

No accountant by any stretch of the imagination, but, your reasoning makes sense to me.  Maybe a new accounting line item for the bonus FCC?  

[RD64]

On 6/4/2022 at 6:25 PM, cruiseej said:

 

Sorry, I guess I'm not understanding your thinking. No one got a FCC just for a cruise being canceled. The FCC is what the customer already paid, whether deposit or full payment. Some people chose to get FCCs in lieu of cash refunds, largely because the cruise lines were tacking on 10%-20% in bonus credit for people who took the FCC instead of cash refund. But the base FCC amount is still the money a customer paid to the cruise line. Why do you think it matters whether it was a deposit made onboard on a previous cruise or a cruise booked from the living room couch? It's still money a customer paid to the cruise line. 

 

 

Terry, I'm not an expert on travel industry accounting either. To be accurate, the FCCs which represent money customers paid to the cruise line should be listed on the balance sheet as "prepaid income" — money received for services not yet delivered — which falls under liabilities. The "bonus" FCCs the cruise lines gave out in exchange for customers not taking cash refunds may be a different matter; since no money changed hands, I don't know how they accounted for those credits when they were created. 

In Canada - instead of prepaid income, we would call it unearned revenue. Unearned revenue is still a liability.

[cruiseej]

On 6/4/2022 at 9:20 PM, AmazedByCruising said:

It was my understanding that guests get FCC all the time, for instance if there's a fire on the ship.

 

Well, I'd say that a fire on a ship doesn't happen very often, and that getting a credit for a disruption on a cruise — like a major itinerary change — happens, but is pretty rare. Certainly not "all the time." 😉

 

People who were on cruises when Covid shut things down generally got FCCs for another cruise, but those represent a tiny, tiny fraction of all the cruises which were outright canceled over the ensuing two years. So when thinking about FCCs at this time, I'm describing people who paid a deposit or full payment for a cruise which was canceled, who declined a cash refund, and instead accepted a FCC for the amount they had paid plus, in many cases, a bonus percentage of what they had paid.  These FCCs represent the money people paid, not a freebie handed out by the cruise line (except for the bonuses they offered so everyone wouldn't ask for cash refunds). 

[RetiredandTravel]

There are news reports that MS had a negative note on CCL and its ability to service the debt.  I haven't read the MS note but here are a couple of news reports.

 

https://markets.businessinsider.com/news/stocks/why-carnival-royal-caribbean-and-norwegian-cruise-line-shares-are-falling-today-1031517420

 

https://www.fool.com/investing/2022/06/08/why-carnival-stock-slumped-today/

 

IMO the conundrum for the cruise industry is there are some people who strongly want Covid measures like pre cruise testing, masks, quarantines  etc and some who strongly oppose them.  The cruise lines at this point really needs them both back on the ships.

 

 

Edited June 9, 2022 by RetiredandTravel

[TLCOhio]

13 minutes ago, RetiredandTravel said:

MO the conundrum for the cruise industry is there are some people who strongly want Covid measures like pre cruise testing, masks, quarantines  etc and some who strongly oppose them.  The cruise lines at this point really need them both back on the ships.

 

YES!!  There are still major questions and uncertainties out there for the cruise lines and their potential customer customer base.  Appreciate these all of these various comments and follow-ups.  

 

From the Wall Street Journal chart as you can see below, Royal Caribbean was down, down 4.99% yesterday.  Also in Wednesday trading, Carnival was down 6.17% and Norweigian dropped 4.7%.  Clearly, the stock market yesterday sensed something was not right or confident for these three major cruise lines.  

 

From this below-linked financial news website yesterday morning, they had this headline: “Why Norwegian Cruise Lines Fell 20.1% in May” with these highlights: “Shares of Norwegian Cruise Lines fell 20.1% in May.  One might have thought Norwegian would be taking off around this time, as people get back to traveling and the cruise industry gets back to something approaching 'normal' after a two-year pandemic.  However, Norwegian's recent earnings report missed expectations, and higher fuel and food costs threaten the industry's recovery.  It likely wasn't the company's earnings that caused the stock to drop so much. May was a tumultuous time for the markets, leading to a 'risk-off' mentality, as investors fretted about inflation and what effect that might have on various companies. Unfortunately for cruise lines, their main input costs are food, fuel, and labor -- three of the areas seeing the worst inflation right now. Inflation also threatens consumer discretionary spending. Not only that, but all the cruise lines are more heavily indebted than pre-pandemic, and interest rates are going up, too.  Norwegian has 41% of this year's fuel consumption hedged and 24% of next year's, but it's still susceptible to rising oil prices as it looks to the future. While Norwegian has thus far stuck to its guns on pricing, given its higher-end brands, its ships are not yet back to full capacity. Therefore, there may be some doubt as to when it may get there and at what prices.  Meanwhile, Norwegian is still burning cash, with a near-$1 billion loss in the quarter.”

 

Full story at:

https://www.nasdaq.com/articles/why-norwegian-cruise-lines-fell-20.1-in-may

 

THANKS!  Enjoy!  Terry in Ohio

 

Panama Canal? Early 2017, Fort Lauderdale to San Francisco adventure through Panama Canal.  Our first stops in Colombia, Central America and Mexico, plus added time in the great Golden Gate City. Now at 31,299 views.

http://boards.cruisecritic.com/showthread.php?t=2465580

 

[TLCOhio]

34 minutes ago, RetiredandTravel said:

https://markets.businessinsider.com/news/stocks/why-carnival-royal-caribbean-and-norwegian-cruise-line-shares-are-falling-today-1031517420

 

https://www.fool.com/investing/2022/06/08/why-carnival-stock-slumped-today/

 

Good sharing with these two articles.  In the second one, they had this headline: "Morgan Stanley foresees a cash crunch for the cruise line operator -- but is it right?"

 

Those kind of negative headline do raise serious questions and would make the markets drive down stock values.  What happens next?  Here was a key highlight in that story: "a Morgan Stanley analyst cited weak sales, growing economic risks, and the rising cost of interest on debt as the three biggest risks to Carnival."

 

THANKS!  Enjoy!  Terry in Ohio

[TLCOhio]

Not trying to be a "Debbie Downer", but this additional story and its financial background might help explain why the cruise stocks dropped so much yesterday.  

 

From MSN News yesterday, they had this headline: “Cruise stocks may face trouble as demand 'seems to be eroding': BofA” with these highlights: “The demand for cruise vacations may be weakening as high levels of inflation, the ongoing COVID-19 pandemic, and a slowing economy weigh on consumer purchase decisions.  Royal Caribbean, Norwegian Cruise Line, and Carnival all saw capacity-weighted sequential ticket pricing declines from May to June, according to new data from BofA Global Research. Price declines ranged from 1% to 3% compared to May, with Carnival seeing the largest drop (2.6%).  The pricing softness looks to be extending into 2023 and 2024, BofA noted, as ticket pricing for all three cruise lines fell 2.6% on average for 2024 in the latest survey.”

 

Here was a key concluding summary from their analysis: "The three main publicly traded cruise stocks have fallen an average of 30% year to date as traders view the industry's recovery from the pandemic skeptically."

 

Full story at:

https://www.msn.com/en-us/travel/news/cruise-stocks-may-face-trouble-as-demand-seems-to-be-eroding-bofa/ar-AAYexMm?ocid=BingNewsSearch

 

THANKS!  Enjoy!  Terry in Ohio

 

From late 2018, see “Holy Lands, Egypt, Jordan, Oman, Dubai, Greece, etc.”, with many visuals, details and ideas for the historic and scenic Middle East. Now at 20,845 views.  Connect at:

www.boards.cruisecritic.com/topic/2607054-livenautica-greece-holy-lands-egypt-dubai-terrypix’s/

[RetiredandTravel]

On 6/1/2022 at 2:28 PM, Stumblefoot said:

What I find remarkable is the fact that airlines have had such a great success during this same timeframe.  In fact, Delta Airlines upped their earnings guidance today stating this quarter’s revenues will be equal to the same quarter in 2019 and yet, available seat capacity is 18% less.  THAT is impressive!

 

 

This is a key question, from what I've read travel is booming at this point.  Why are two sectors (Airlines & Cruise Companies) that have similar challenges and end markets stocks performing differently. 

 

Why is MS talking about weak cruise demand?  Is it the overall economy or cruise line specific?

 

Just from my own perspective I'm not flying to Sydney or Lima and spending $40-50k on a cruise & airfare to be told I can't board because I have asymptomatic Covid (which I am highly vaccinated for) or I have to wear a mask on excursion buses.  This is my personal choice and I don't think I'm alone.  There are also people who feel the complete opposite.

 

Reaching 90% capacity will probably require both groups.

 

 

 

 

 

[cruiseej]

7 hours ago, RetiredandTravel said:

Why are two sectors (Airlines & Cruise Companies) that have similar challenges and end markets stocks performing differently.

 

I think you're comparing apples and oranges; both fat under the broad category of fruits, but they ain't the same. 😉

 

Airlines are jammed now, and the focus is on current and short-term demand. For cruises, the analysts focus on bookings for not only the next few quarters, but the next year or more. (After all, you can only book airline tickets for the next 11 months, whereas cruises are often booked 2-3 years in advance.) Airlines have reduced their capacity somewhat significantly. While cruise lines did ditch some older ships, they also have plenty of new ships under construction and coming online this year and the next two years. Finally, for consumers, purchasing an air flight for a vacation is a smaller expense than booking a cruise vacation; to the extent people are feeling the pressure of inflation, there is likely a shift from more expensive to less expensive vacations taking place. 

[TLCOhio]

7 hours ago, RetiredandTravel said:

This is a key question, from what I've read travel is booming at this point.  Why are two sectors (Airlines & Cruise Companies) that have similar challenges and end markets stocks performing differently. 

 

Agree with my SW Ohio neighbor that comparing airlines and cruise lines is somewhat of an apples versus oranges comparison.  BUT, it is an interesting question and somewhat legitimate contrast. Maybe?  Maybe not?  Appreciate these insights and follow-up.  

 

When it was shared about: "Just from my own perspective I'm not flying to Sydney or Lima and spending $40-50k on a cruise & airfare to be told I can't board because I have asymptomatic Covid (which I am highly vaccinated for) or I have to wear a mask on excursion buses.  This is my personal choice and I don't think I'm alone.", that somewhat fits much of my wife's concerns and reluctance to book anything international right now.  

 

From the Wall Street Journal below is their chart as to how Royal Caribbean finished after tody's trading.  I did not want to just quote the number (down 8.9%).  Seeing the actual week's chart makes clear the point that for the past two days, things have not just been bad.  But, sadly, really BAD!!  Today's RCL value is very close to their low, low point for the past 52 weeks.  

 

Good news?  Both Carnival and Norwegian were down more, between nine and ten percent!! Sinking fast?  Or, bottoming out?  Where do values go for Friday and next week?

 

THANKS!  Enjoy??  Terry in Ohio

 

Summer 2019 Calgary, Jasper/Banff National Parks, Western Canada Rocky Mountaineer rail adventure, Vancouver, sailing up to Alaska on Silver Muse, post-cruise excursion to Denali, etc.  Many visuals and details from our first in these scenic areas!  Live/blog: 

https://boards.cruisecritic.com/topic/2682584-live-terryohio-silver-muse-alaska-canadarockies-pix’s/

 

[TLCOhio]

From the Wall Street Journal yesterday, they had this headline: “Airline Seat Fees That Buy …What, Exactly?" with this sub-headline: "Travelers are finding fees that sometimes top $100 for seats that offer no extra legroom or early boarding, even on nonbudget carriers.”

 

This shares details on an  interesting "revenue enhancement" that airlines are doing to pad their bottom line.  Nice financial trick?  

 

Here are some of the story highlights: “Try to reserve seat 15D on a Delta Air Lines nonstop flight from Atlanta to Los Angeles in mid-July and a price tag pops up on the seat map: $105. Each way.  That is on top of the ticket price, a tidy $998 round trip.  The $105 is Delta’s fee for a 'preferred' seat on the flight. It comes with no extra legroom, no early boarding and no dedicated overhead bin space.  Long a budget-airline staple, seat-selection fees have become widespread and are driving up the cost of flying at major U.S. airlines. Free seats are often rare or truly awful—think last row near the lavatories—especially for travelers booking last-minute. Airlines don’t divulge their seat-fee revenue, and the U.S. Transportation Department doesn’t require disclosure as it does with baggage or ticket-change fees. But here’s a hint: Southwest Airlines, which doesn’t assign seats but offers two paid options to board early and get a better pick of seats, collected $711 million from such fees and incidental in-flight purchases in 2019, according to securities filings.  The fees, which vary by carrier, route, flight date and time, and even time of booking, are now airlines’ second-biggest source of a la carte revenue after baggage fees.”

 

Good news?  Cruise lines cannot exactly pull off this "trick" to pick our pockets in the same manner as being done now by the airlines.  .  

 

Full story at:

https://www.wsj.com/articles/the-airline-seat-fees-that-buywhat-exactly-11654652660

 

THANKS!  Enjoy!  Terry in Ohio

 

Early 2020 (right before Covid shut-down), many visuals and details from New Zealand/South Pacific in going from Auckland to French Polynesia.  This includes Bora Bora, Fiji, NZ experiences, etc:  Live/blog;

https://boards.cruisecritic.com/topic/2735732-live-terryohio-“new”-regatta-south-pacificnz-pix’s/

[AmazedByCruising]

3 hours ago, cruiseej said:

Finally, for consumers, purchasing an air flight for a vacation is a smaller expense than booking a cruise vacation; to the extent people are feeling the pressure of inflation, there is likely a shift from more expensive to less expensive vacations taking place. 

 

I still think there's a huge amount of money that is waiting to be spent. 2 years of restaurant visits, resorts, etc add up. Many households that couldn't spend their money on cruises decided to improve their house, while working from home is quite nice actually, and then found that there's a waiting list because everybody thought the same thing and now the materials aren't available.  

 

Another way to look at inflation is that you need to turn your money into memorable events, because in a year the same money buys 10% less memorable events. This is the time to cruise people! With CCL, not RCCL.

 

Never forget that Carnival has the very best ships!  🎵the very best ships! 🎵 Carnival.  🎵the very best ships! 🎵 

 

[TLCOhio]

14 hours ago, AmazedByCruising said:

I still think there's a huge amount of money that is waiting to be spent. 2 years of restaurant visits, resorts, etc add up. Many households that couldn't spend their money on cruises decided to improve their house, while working from home is quite nice actually, and then found that there's a waiting list because everybody thought the same thing and now the materials aren't available. 

 

Agree above that there is lots and lots of cash out there in the hands of potential travelers who are hanging back.  And, waiting for some good news.  

 

Maybe this is this story with the positive news that cruise lines have been seeking.  From the Wall Street Journal this morning, they had this headline: “U.S. to End Covid-19 Testing Requirement for Air Travelers Coming to Country" with this sub-headline: "Health officials have determined testing is no longer necessary based on available science and data and will reassess the decision in 90 days.”

 

Here are the story highlights: “The Biden administration will on Sunday end a requirement that air travelers to the U.S. undergo Covid-19 tests before departure, according to a senior administration official.  The requirement, which was introduced last year for international travel, will cease because the Centers for Disease Control and Prevention has determined it is no longer necessary based on available science and data, the person said. The agency will reassess the decision in 90 days and on a continuing basis after that.  The testing requirement is set to end June 12 at 12:01 a.m. CDC Director Rochelle Walensky is expected on Friday afternoon to sign an order lifting the testing requirement, an official said.”

 

Finally!!!  This should help the cruise lines as this "huge uncertainity/risk" was a serious negative worry for many like us who desire international travel  adventures and experiences.

 

BUT, the morning the stock market is sharply down and cruise lines are part of that continued negative slide.  More later today.   

 

Full story at:

https://www.wsj.com/articles/biden-to-halt-outbound-covid-19-tests-for-air-travelers-to-u-s-11654869122?mod=hp_lead_pos1

 

THANKS!  Enjoy!  Terry in Ohio   

 

Barcelona/Med: June 2011, with stops in Villefranche, ports near Pisa and Rome, Naples, Kotor, Venice and Dubrovnik. Great visuals with key highlights, tips, etc. Live/blog now at 254,914 views.

www.boards.cruisecritic.com/showthread.php?t=1426474

[TLCOhio]

From the Wall Street Journal late this afternoon, below are the charts for the value trends on the three major cruise lines.  It was a bad week for these three cruise companies, plus the overall market.  

 

Could it be worse?  Yes!  In mid March 2020, Royal Caribbean dropped down to $23.81.  Now is not that bad by comparison??  However, today was a new low for the RCL stock price during this most-recent 52-week period.  

 

Here is the headline for the overall market from the Wall Street Journal this afternoon: "Persistent Inflation Drags on U.S. Stocks" with this sub-headline: "Dow industrials drop over 800 points after data showed May’s consumer-price index rose more than economists expected."  

 

Here were their story highlights: "A fresh inflation shock hammered stock and bond prices anew, heightening investors’ fears that the Federal Reserve could be forced into more drastic action to tame surging consumer-price increases. Declines hit across the board, with rising interest-rate expectations increasing worries about the possibility of the economy slipping into a recession. The Dow Jones Industrial Average fell around 2.7%, or about 880 points, in 4 p.m. trading. Technology shares slid along with banks and consumer shares, sending the S&P 500 down 2.9% and the Nasdaq Composite down 3.5%."

 

If I was the CEO of a cruise line, today's news is not encouraging.  BUT, many consumers have cash and a strong desire to get back out to experience fun, exciting adventures.  The Feds dropping the return testing requirement does help!!! 

 

Full story at: 

https://www.wsj.com/articles/global-stocks-markets-dow-update-06-10-2022-11654846772?mod=breakingnews

 

THANKS!  Enjoy!  Terry in Ohio 

 

Norway Coast/Fjords/Arctic Circle cruise from Copenhagen, July 2010, to the top of Europe. Scenic visuals with key tips. Live/blog at 244,444 views.

www.boards.cruisecritic.com/showthread.php?t=1227923

 

From the Wall Street Journal, below are their charts for Royal Caribbean and the other two major cruise lines during this past week.  A bad week?  That is an understatement!!  In just three days, RCL went down from $57 a share to $45.73.  That a drop of nearly 20%.  Talk about a "a great disappearing act"?  At the bottom, this fourth chart reflects RCL since the start of January 2022.:

(Open your screen/viewer wider to see this visual larger/better!)

 

 

 

[rkacruiser]

35 minutes ago, TLCOhio said:

 In mid March 2020, Royal Caribbean dropped down to $23.81.  Now is not that bad by comparison??  However, today was a new low for the RCL stock price during this most-recent 52-week period.

 

True, but, check out the company's low in 2008-2009 when there was also much gloom about the Market.  

 

Several posts back, it was reading about MS's note about CCL.  I am familiar with the analyst after listening to his questioning of cruise line executives on quarterly conference calls.  I have respect for the gentleman.  However, in my managed MS portfolio, my position in CCL remains and it was the MS advisor who put it there.  

 

Is there a "message" there?  

[crusinbanjo]

https://financenews.upexampaper.com/cruise-stocks-may-face-trouble-as-demand-seems-to-be-eroding-bofa-more-finance-news/    I found this posted on another board.  Pretty interesting 

[TLCOhio]

On 6/10/2022 at 5:25 PM, crusinbanjo said:

https://financenews.upexampaper.com/cruise-stocks-may-face-trouble-as-demand-seems-to-be-eroding-bofa-more-finance-news/    I found this posted on another board.  Pretty interesting 

 

Appreciate these good, interesting follow-ups from Mr. Banjo and our SW Ohio neighbor.  Lots of questions, concerns and interests as to what happens next, how and why???  The below article raises good questions as cruise companies try to balance rising costs for staffing and fuel . . . VERSUS . . . keeping prices low enough in order to fill up their ships.  

 

How do they make it "ALL" work?.  Successfully?  Restoring profits to pay off billions of dollars in loans as interest rates rise?  Are these the right and best questions?

 

From the Wall Street Journal yesterday morning, they had this headline: “Cruise-Line Pricing Is Lost at Sea" with this sub-headline: "Cruise companies are lowering prices even as expenses swell.”

 

Here are the story highlights: “Even if you vowed never to cruise again after Covid-19, there might just be a price to tempt you. Mass-market cruise lines need you to bite.  Amid sky-high hotel prices, the best deals in lodging this summer are at sea level—literally. Cruise-review site Cruise Critic noted pricing for summer cruises is currently as low as it has been since the sector’s 2021 restart. The current average cost of a five-night Caribbean cruise begins at $100 a day, according to Cruise Critic, including lodging, meals and entertainment. That is about 10% less than where the average daily rate for a U.S. midscale hotel was tracking last month, according to hotel data provider STR.  As Covid restrictions relax, cruise lines have been removing occupancy limits on ships and appear to be discounting to fill summer voyages. After an abysmal two years of losses and mounting debt, Royal Caribbean, Carnival  and Norwegian are forecasting a return to profitability on the basis of adjusted earnings before interest, taxes, depreciation and amortization at some point this year. Those targets could certainly use the boost of more passengers in the face of rising costs.”

 

Here is more from this story: "Labor and fuel costs, which most cruise lines don’t hedge against, are soaring and comprise significant portions of cruise operators’ overall expenses. UBS analyst Robin Farley estimates Carnival’s labor and fuel typically account for around 29% and 20%, respectively, of ship operating costs, excluding sales and general and administrative expenses.  Wall Street is forecasting a significant rise in occupancy rates across all major cruise companies this year.  Royal Caribbean is expected to boost occupancy from less than 60% as of March 31 to nearly 100% by the end of December."

 

Full story at:

https://www.wsj.com/articles/cruise-line-pricing-is-lost-at-sea-11655038802?page=1

 

THANKS!  Enjoy!  Terry in Ohio

 

Sydney to NZ/Auckland Adventure, live/blog 2014 sampling/details with many exciting visuals and key highlights.  On page 23, post #571, see a complete index for all of the pictures, postings.  Now at 237,655 views.

www.boards.cruisecritic.com/showthread.php?t=1974139