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

[TLCOhio]

22 hours ago, Randyk47 said:

Want to echo Lois and Terry’s comments about the cost of included tours potentially being removed and a corresponding price drop. We just got off the Dawn…..boarding as Lois was getting off….and only took one shore tour out of the dozens offered at the 12 stops of a 14-day cruise.  We actually were booked to take two but the sea conditions at our one tender stop were too dangerous for the mobility challenged husband of the couple we were cruising with so cancelled that tour.   Seems to me it would make sense to offer included tours as a separate package like the piece parts of a door-to-door booking where you can drop flights and limo transfers or go back to paying for only those you want.   

 

Appreciate this great wisdom and follow-up from savvy and experienced Randy.  WOW, you did not get your "money's worth" from all of those "free" and included excursions.  With 12 scheduled ports and to only get one excursion done is rather surprising.  I understand the marketing take-offs as to including excursions or not.  Various pro/con factors involved for both the corporation and consumer.  As the economy moves forward, we will see how Silversea reacts or adjusts as their customers spend . . . or not??   

 

From the Wall Street Journal this morning, they had this headline: “Travel Stocks Soar After Pandemic Struggles" with this sub-headline: "High customer demand and strong industry pricing power are fueling big gains for shares of airlines, hotels and cruise lines.”

 

Here are a few of their reporting highlights: “The travel industry is making a comeback from Covid-19. Stock prices are going along for the ride.  Consumers have flocked to the skies, after the worst of the pandemic essentially shuttered the travel industry. Shares of companies focused on travel are among the early winners of 2023. United Airlines Holdings Inc. and American Airlines Group Inc. have advanced 39% and 34%, respectively. Cruise operators Carnival Corp. and Royal Caribbean Group are up 49% and 40%.  The stock and bond markets have rallied to start the year, and speculative assets have run up even faster as investors bet the Federal Reserve’s campaign to raise interest rates is nearing an end. Travel companies, though, are seeing a strong business outlook to match that stock performance, industry executives and strategists say.   Behind the good times is a surge in travel demand from customers eager to put the pandemic behind them.”

 

Here is another specific cited in the article: "Travel spending is holding up. American Express Co. said last month that fourth-quarter spending on travel and entertainment-related expenses on the company’s credit cards rose 34% from a year earlier.  'That premium customer base, while not immune to economic downturn certainly, right now, is spending on through,' CEO Stephen Squeri said on a conference call with analysts."

 

Full story at:

https://www.wsj.com/articles/travel-stocks-soar-after-pandemic-struggles-11675399454

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 70,873 views:

https://boards.cruisecritic.com/topic/2076101-live-amazon-river-caribbean-many-pix’s-terryohio/

[Randyk47]

Terry - Yes, we certainly didn’t take advantage of the afford tours.  Part of that is Mrs K and I have some 300+ days in the Caribbean on a combination of Carnival, Celebrity, and Holland America starting back in 1993.   While we did get off the Dawn at most stops it was move to get some land time and visit a few favorite places like Gladys’ Cafe in St Thomas.   We’ve been getting a drink and a lunch snack there since 1998 on every visit.   Our friends and cruising partners were dedicated scuba divers in the Caribbean for years and years until his hip replacement and have been to most of the Caribbean islands several times.  The one tour we took was chocolate making in St Lucia and that was fun.  Still thought it would have been nice if Silversea had offered a no-excursion discount.  

[Randyk47]

Should have read: …

we certainly didn’t take advantage of the offered tours.

Edited February 3, 2023 by Randyk47

[cruiseej]

3 hours ago, Randyk47 said:

Still thought it would have been nice if Silversea had offered a no-excursion discount.

 

I'm sure there are a lot of folks on this forum who would agree with you. But here's why I think it's unlikely:

1) They added included tours in the arms war of luxury cruise lines aiming to outdo each other for the most ultra luxury offerings. Regent has offered included excursions for several years, so Silversea basically matched them, then raise the ante by including the home/airport Blacklane car service. (I believe Regent offer that, but only to their passengers in their very top-tier suites.) If they added this to better compete against Regent, why would they now remove it?

 

2) If they offered a no-excursions discount, probably a lot of people would take the discount so they could pay for only the excursions they really want, presumably for less money, and/or book private tours. What's the point of saying you're all-inclusive if most people then ask for discounts to undo the inclusions. Air? You can remove it. Pre-cruise hotel? You can remove it. Transfers to/from the pier & hotel? You can remove it. If you throw in the ability to remove included excursions, then you're basically back to having an a la carte offering, except you start with the high all inclusive price and then select all the things you want to drop. It would just be simpler to offer a cruise-only price and then offer various optional add-ons.

 

3) If they allowed people to get money back from not doing the included excursions, they've have fewer people going on excursions, and therefore would likely offer fewer excursions.

 

4) If they offer an opt-out for those who don't want excursions, inevitably people ask about adding an option to get a discount for those who don't drink alcoholic beverages. Why have t have the cost of drinks & wine bundled in your cruise far if you don't drink the stuff? But then they'd have to swipe your card or otherwise check everyone for every drink, and you're back to being like a mass-market cruise line. 

 

5) Could there be a discount for those who are vegetarian and don't consume any steak? Those who don't eat lobster or caviar? Okay, I'm mostly being facetious here, but undoubtedly the question would arise if there were a menu of included features you could opt out of for a monetary savings. 

 

So it's just a slippery slope to start offering carve-outs for things people don't want/don't use. 

 

[TLCOhio]

35 minutes ago, cruiseej said:

I'm sure there are a lot of folks on this forum who would agree with you. But here's why I think it's unlikely:

Could there be a discount for those who are vegetarian and don't consume any steak? Those who don't eat lobster or caviar? Okay, I'm mostly being facetious here, but undoubtedly the question would arise if there were a menu of included features you could opt out of for a monetary savings. 

So it's just a slippery slope to start offering carve-outs for things people don't want/don't use. 

 

Appreciate these great above comments and follow-ups from Randy and our Philadelphia-area suburban friend.  As I had summarized earlier, there are "marketing trade-offs" and various "pro/con factors" that can be cited on both side of this pricing/value "debate".  As usually happens, we as consumer look at the price tag, evaluate what we will get, consider value yield and our budgets, etc.  Like a three-level, multiple-staged chess game, we pick which options best fits our needs for cruises and travel.  Fortunately, there are a decent variety of different cruise companies, offerings and styles.    

 

From the Wall Street Journal late this Friday afternoon, below are the charts for the three major cruise companies.  Generally, things went up, UP, especially starting Wednesday afternoon.  These movements were somewhat similar to what happened with the larger stock market trends. Overall, it seems that Carnival is dragging behind the most when comparing their value versus the previous highs during the past twelve months for their other two main competitors.

 

Other insights and guesses for where the stock market is headed, including for these three cruise companies??

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 53,583 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

 

From the Wall Street Journal, here are the stock value charts for the three major cruise line companies during the past five trading days.  At the end of this week, three companies tracked in similar patterns and somewhat matched the overall market trend.:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

 

For this past week, here is the WSJ S&P 500 chart reflecting the broader stock market during this past week.:

[RetiredandTravel]

16 hours ago, TLCOhio said:

 

Appreciate these great above comments and follow-ups from Randy and our Philadelphia-area suburban friend.  As I had summarized earlier, there are "marketing trade-offs" and various "pro/con factors" that can be cited on both side of this pricing/value "debate".  As usually happens, we as consumer look at the price tag, evaluate what we will get, consider value yield and our budgets, etc.  Like a three-level, multiple-staged chess game, we pick which options best fits our needs for cruises and travel.  Fortunately, there are a decent variety of different cruise companies, offerings and styles.    

 

From the Wall Street Journal late this Friday afternoon, below are the charts for the three major cruise companies.  Generally, things went up, UP, especially starting Wednesday afternoon.  These movements were somewhat similar to what happened with the larger stock market trends. Overall, it seems that Carnival is dragging behind the most when comparing their value versus the previous highs during the past twelve months for their other two main competitors.

 

Other insights and guesses for where the stock market is headed, including for these three cruise companies??

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 53,583 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

 

From the Wall Street Journal, here are the stock value charts for the three major cruise line companies during the past five trading days.  At the end of this week, three companies tracked in similar patterns and somewhat matched the overall market trend.:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

 

For this past week, here is the WSJ S&P 500 chart reflecting the broader stock market during this past week.:

 

 

Todays Barron's reminded me of a great Yogi Berra quote "Its dangerous to make forecasts, especially about the future". 

 

IMO the charts of the overall averages have certainly improved this year.  The Russell 2000 is bumping up against its Aug 22 high of ~2020, always nice to see leadership from the small caps because they represent more stocks so the rally may have more breadth.  The S&P 500 has nicely cleared the 200 day MA, the downward trendline off the highs and the December high.  This week it also had what chartists consider a positive sign called a "golden cross" where the 50 day MA went above the 200 day MA.  Personally I think many "Golden Cross" events happen after the horse is out of the barn and I've seen to many be false signals but its still a potential positive.  My only investment in cruise stocks is down payments but according to CNBC CCL is actually the winner YTD +46% vs RCL +38 & NCLH +35.  The future possibly depends on how quickly inflation declines without hurting growth and how well earnings hold up, easy right.

 

I read the Zacks earnings prediction model you attached and its not something I would use in my personal investment decisions.  If I read it correctly Zacks says the "model" only works on earnings beats but according to Factset over 5 years 77% of companies have beaten earnings estimates and over 10 years 73% anyway.  (Quote and attachment below)  Hmm.   Prognosticating quarterly "beats/misses" is a risky business which I don't partake.   If I were I don't think I'd use the Zacks data.  I'm not saying they will be wrong on RCL earnings but its just not an approach I personally would consider.

 

 

None of my comments should be considered investment advice.

 

Quote on earnings

 

"Of these companies, 70% have reported actual EPS above estimates, which is equal to the percentage of 70% at the end of last week, but below the 5-year average of 77% and below the 10-year average of 73%."

 

https://advantage.factset.com/hubfs/Website/Resources Section/Research Desk/Earnings Insight/EarningsInsight_020323A.pdf

 

 

Edited February 4, 2023 by RetiredandTravel

[TLCOhio]

1 hour ago, RetiredandTravel said:

Todays Barron's reminded me of a great Yogi Berra quote "Its dangerous to make forecasts, especially about the future". 

IMO the charts of the overall averages have certainly improved this year. My only investment in cruise stocks is down payments but according to CNBC.  Prognosticating quarterly "beats/misses" is a risky business which I don't partake.   I

 

Super appreciate the wise "wit and wisdom" as cited above by R&T.  

 

Love the Yogi Berra quote.  Fun!!  And, true!!  Agree that for most, the major "investment" risk with cruise companies is your advance payments and hoping that it all works out OK in the coming months leading up to your sailing.  Guessing as to how the future economic trends will "flow" and move for the world can be challenging and "Mission Impossible!".  

 

From this web financial reporting site connected below, they had this headline: “Royal Caribbean May Have Swung Back to Loss in Fourth Quarter" with this sub-headline: "Cruise industry demand is picking up, but inflation and other headwinds remain.”

 

Here are some of their reporting/analysis highlights: “Royal Caribbean, the second-largest cruise company by 2021 revenue, is expected to return to a loss in the final quarter of 2022 after posting its first profit in several years in the third quarter, even as revenues almost triple amid rebounding cruise demand.  The cruise line likely will say that net losses reached $355.8 million, for adjusted losses of $1.37 per share, according to estimates compiled by Visible Alpha. Both are narrower than the prior-year quarter. Revenue could increase 165% to $2.6 billion.   Royal Caribbean reports results for the fourth quarter before markets open on Feb. 7.”

 

Have Feb. 7 marked on my calendar and will try to monitor or follow what is announced and revealed by RCL.

 

Full story at:

https://www.investopedia.com/royal-caribbean-q4-2022-earnings-preview-7104754

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Visuals, details from two visits in a city and nearby with great history, culture and architecture.  Now at 50,110 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

[TLCOhio]

From a financial news website yesterday, they had this interesting headline: “Why Norwegian Cruise Won't Miss This Iceberg” with these key summary points: “Norwegian Cruise is facing down a financial iceberg of its own making. Bookings currently lag 2019 levels, and the war in Ukraine has placed heavy pressure on EBITDA. The company is slated to grow its fleet at a rapid pace in the next few years, and the timing could not be worse.”

 

Here are some added highlights to back their viewpoint: "Over the last three months, Norwegian Cruise has lagged severely behind rivals Carnival and Royal Caribbean.  Management soured the narrative of their strong Q3 with a preview of Q4's and Q1 of 2023's earnings, stating in blunt terms that 'we will report a net loss for the quarter and full year ended December 31, 2022 and the first quarter of 2023.'  Norwegian Cruise wants you to know that it targets the upper crust of cruise line passengers.  Some analysts have argued that because airlines have experienced a resurgence, other travel and leisure industries like cruises will follow. We think this is a flawed argument. Sailing on a cruise ship is nothing like getting on a plane. Unlike the few hours it takes to complete a flight, it is still entirely possible that COVID and other illnesses could sweep through a ship, affecting the experience of every passenger either through sickness."

 

To back their pessimistic concerns, they cite: "Baby Boomers, the generation which holds the most aggregate wealth, is more concerned about COVID than they have been in several months.  Inflation is likely to drive consumers who were on the edge about spending more on a Norwegian Cruise into the arms of lower-cost carriers as even high earners are now feeling inflation pain."

 

Specific to Norwegian, they noted: "The road ahead indeed looks difficult, with a payment of $1 billion due in 2023 and $3.7 billion in 2024. In the short time since the Q3 results were published, the company issued $600 million of new debt at 8.375% per year to retire obligations due in 2024."

 

Full story at:

https://seekingalpha.com/article/4575387-why-norwegian-cruise-stock-wont-miss-this-iceberg

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Various visual samples, tips, details, etc., for this scenic, historic location. Over 59,115 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

[Neilio]

Just an fyi... Jason Liberty, CEO of Royal Caribbean will be on  CNBC The Exchange, Tuesday Feb 7 between 1pm - 2pm EST.

[Stumblefoot]

49 minutes ago, Neilio said:

Just an fyi... Jason Liberty, CEO of Royal Caribbean will be on  CNBC The Exchange, Tuesday Feb 7 between 1pm - 2pm EST.

Thx. Should be an easy interview as Kelly Evans lobs nothing but softballs.

[TLCOhio]

21 hours ago, Neilio said:

Just an fyi... Jason Liberty, CEO of Royal Caribbean will be on  CNBC The Exchange, Tuesday Feb 7 between 1pm - 2pm EST.

 

Appreciate this tip and follow-up regarding the Royal Caribbean CEO doing a media interview this afternoon.  Will aim to tune-in and try to report back here.  

 

From a financial news website this morning, they had this headline: “Royal Caribbean stock gains on bottom line beat, bullish forecast” with these highlights: “Royal Caribbean Cruises shares rose sharply on Tuesday after the cruise operator reported a lighter than anticipated quarterly loss and signaled of 'record-breaking' demand to start 2023.  The Miami-based cruise company posted a $1.12 loss for the fourth quarter, exceeding expectations by $0.22. Meanwhile, a 164.7% jump in revenue from the prior year to $2.6B only narrowly missed estimates. The company saw total revenues per passenger cruise day up 3.5% from the prior year.”

 

Good news?  As shown below, Wall Street traders are acting that way this morning. 

 

Full story at:

https://www.msn.com/en-us/travel/news/royal-caribbean-stock-gains-on-bottom-line-beat-bullish-forecast/ar-AA17cF70

 

THANKS!  Enjoy!  Terry in Ohio

 

Dubrovnik!  Visual samples, tips, details, etc., for this super scenic and historic location. Over 49,366 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

 

From the Wall Street Journal late this morning, here was how this financial news "juiced up" the Royal Caribbean stock value today.:

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

Edited February 7, 2023 by TLCOhio

[TLCOhio]

From Forbes magazine a little over a week ago, they had this headline: “How Disney Sailed Off With $1.6 Billion From Its Cruise Line,”

 

Does this prove that running a cruise line can be very profitable?  If and if?

 

Here are some of their reporting highlights: “Disney banked a total of $1.6 billion of dividends from its cruise line over its first 25 years in business according to detailed analysis of its financial statements.  The strength of Disney's brand makes it a bellwether of the cruise industry but it wasn't even a player just 25 years ago. The Mouse first dipped its toe in the water in the mid-1980s when it signed a partnership which allowed Premier Cruise Lines to sell combined cruise, hotel and theme park packages and offer on-board appearances from Disney characters. In 1993 Premier decided to partner with Warner Bros. instead. The led Disney to approach Carnival and Royal Caribbean about becoming its exclusive sea partner but the talks sunk without a trace.  In 1998 Disney decided to take the plunge and launched its own ship, the Disney Magic. The 85,000-ton liner has 875 rooms and an Art Deco style which evokes the golden age of cruising. The experience on-board is much more modern with appearances by cuddly characters and theaters showing Disney musicals.”

 

Did Carnival and RCL goof by not partnering with Disney?  The rest of this interesting story and history details the successful brand that Disney created and the profits that resulted.  

 

Full story at:

https://www.forbes.com/sites/carolinereid/2023/01/31/how-disney-sailed-off-with-16-billion-from-its-cruise-line/?sh=35f2c04f5365

 

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 33,003 views.  Many pictures, details for history, food, culture, etc.:

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

[TLCOhio]

23 hours ago, Stumblefoot said:

Thx. Should be an easy interview as Kelly Evans lobs nothing but softballs.

 

Just completed watching this Royal Caribbean CEO interview on CNBC.  It was fairly short (maybe because of carrying info at the top of their hour segment from the Federal Reserve Chairman Powell).  Nothing dramatic and/or very significant was discussed.  Mostly just the typical, positive, up-beat talking points for a bright future and recent strong bookings. 

 

To me, the most interesting aspect was Jason Liberty mentioning about the re-opening of business involving China, both with customers from there and visits to these locations.  His summary point was that China, in good times, would be about 10% of their business.  That is significant and an area for future, expanded business opportunities.  

 

THANKS!  Enjoy!  Terry in Ohio

[TLCOhio]

On 2/6/2023 at 2:34 PM, Stumblefoot said:

Thx. Should be an easy interview as Kelly Evans lobs nothing but softballs.

 

From CNBC cable news this afternoon, they had this headline: “Royal Caribbean CEO on inflation, pricing power, health of the consumer and company outlook” with these highlights: “CNBC's Seema Mody and Jason Liberty, Royal Caribbean CEO, join 'The Exchange' to discuss the state of the traveling consumer, inflation and pricing power.”

 

From their website, you can review the full, nearly three minute video interview.  The RCL CEO was on one of their large 4600-passenger ships when being questioned.  He cited that recently they have had nine of the best booking weeks in their company history.  Plus, also cited was their prices set and achieved being above 2019 levels.  "Incredible demand" was spotlighted by Liberty.  

 

As a key point, he cited customers seeking to shift from "buying stuff to buying experiences."  Stating that most of their cruise customers have jobs and/or strong savings, any threats of a coming economic downturn were not viewed by him as threatening to their economic model.   For the RCL fourth quarter, they cited a 94.9% occupancy rate.  

 

Full story at:

https://www.msn.com/en-us/money/news/royal-caribbean-ceo-on-inflation-pricing-power-health-of-the-consumer-and-company-outlook/vi-AA17dq53

 

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 31,753 views.

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

[Stumblefoot]

3 hours ago, TLCOhio said:

 

Just completed watching this Royal Caribbean CEO interview on CNBC.

The part of the interview that surprised me was that he didn’t seem to know SS is already sailing in China since he referred to a return to China by their brands in late ‘23, or even ‘24, a couple of times.

[TLCOhio]

17 hours ago, Stumblefoot said:

The part of the interview that surprised me was that he didn’t seem to know SS is already sailing in China since he referred to a return to China by their brands in late ‘23, or even ‘24, a couple of times.

 

To clarify and be fair to the Royal Caribbean CEO, he was more referencing their past and/or expected future customer base to be drawing 10% of their passengers from China.  Some cruises ships are now doing a little with Hong Kong, etc., but they are a long ways from being "back to normal' in that part of the world where they expect and seek much future growth.

 

In such a super short media interview, it is hard to generalize and precisely include detailed discussions for all three of the RCL brands, including Silversea.   

 

THANKS!  Enjoy!  Terry in Ohio

[highplanesdrifters]

Well....the FED did a heck of a job of verbal intervention today.  It's their own little Pac man game.

Thoughts?

[RetiredandTravel]

11 hours ago, highplanesdrifters said:

Well....the FED did a heck of a job of verbal intervention today.  It's their own little Pac man game.

Thoughts?

 

 

More like a game of pong (which I had in college)😎.   Considerable US borrowing is based off the US  Treasury curve, they did a nice job of pushing Treasury yields back up.  10 year started the month at 3.40 now 3.60.  It appears that recently there hasn't been as strong a correlation between Treasury prices and stock prices.  Upcoming Inflation and employment data will be key IMO.  

[highplanesdrifters]

Pong, of course! I wrote Pac Man but was thinking Pong. Thanks @RetiredandTravel

Agree, all eyes are on inflation and employment numbers. But it's looking more and more like a soft landing. As you mentioned, market seems comfortable and/or has slightly decoupled with interest rates at these levels give or take 50bps. We are still at historically  low rates, will post chart.  Trillions of stimi still sloshing around looking for a home.  I'm in the trading range/ bullish camp with finger on the hedge button*, ha ha. There is a Head and Shoulders pattern that puts S&P at 4748.   Wouldn't that be dreamy!

 

The real question is....what does this mean for the cruise lines?  Will pent up demand ease up?  Will service and food on the ships improve? Will some of the eye-watering prices back off?  

 

*FYI, I could write a treatise for the Bear case.

[highplanesdrifters]

[RetiredandTravel]

On 2/9/2023 at 9:52 AM, highplanesdrifters said:

Pong, of course! I wrote Pac Man but was thinking Pong. Thanks @RetiredandTravel

Agree, all eyes are on inflation and employment numbers. But it's looking more and more like a soft landing. As you mentioned, market seems comfortable and/or has slightly decoupled with interest rates at these levels give or take 50bps. We are still at historically  low rates, will post chart.  Trillions of stimi still sloshing around looking for a home.  I'm in the trading range/ bullish camp with finger on the hedge button*, ha ha. There is a Head and Shoulders pattern that puts S&P at 4748.   Wouldn't that be dreamy!

 

The real question is....what does this mean for the cruise lines?  Will pent up demand ease up?  Will service and food on the ships improve? Will some of the eye-watering prices back off?  

 

*FYI, I could write a treatise for the Bear case.

 

The "risk on" trade in stocks, corporate bonds and high yield YTD indicates the market is leaning towards the soft landing camp.  The spike in two year yields this week is a little disconcerting, Feb 2 low 4.04% yesterday 4.52.  With Covid this seems to me to be a very unique economic environment, very hard to predict.  Economic data is always important but even more so at this point, big economic week this week.

 

  I only make long term asset allocation decisions at this point and my big question is are we going back to the low inflation environment we had for ~ 40 years (couple of bumps 🙂).  The rise in productivity because of technological advancements was a key driver of the low inflation.  Will these advancements continue and are there any other potential negative drivers.  Here is an article by the St Louis fed on long term inflation pre - Covid (2018) and a comment (somewhat dated 2005) by Chairman Greenspan.

 

"Alan Greenspan, then chairman of the Federal Reserve, stated in testimony before the U.S. Congress in 2005: “The past decade of low inflation and solid economic growth in the United States and in many other countries around the world … is attributable to the remarkable confluence of innovations that spawned new computer, telecommunication, and networking technologies, which, especially in the United States, have elevated the growth of productivity, suppressed unit labor costs, and helped to contain inflationary pressures.”

 

https://www.stlouisfed.org/publications/regional-economist/first-quarter-2018/why-inflation-so-low

 

I guess a potential negative driver is how the energy transition will be handled.  Will it be done in a manner that maintains our current standard of living and doesn't make us less economically competitive with our competitors that aren't as aggressive in the transition.  This isn't a political statement but the US  still doesn't have what I would consider a viable long term energy transition policy from either party.

 

I would have to think that RCL long term barrowing cost has decreased quite a bit in the last 3-6 months.  The stock is up and there has been a solid rally in high yield.  Oil prices are down and the vacationing consumer remains strong, all good.  How you value RCL stock at this point is way above my pay grade.   I don't think the bookings are "pent up" anymore, people have cash and like to vacation.  Will the service & food improve?  You tell me , I hope so from what I've read. Not luxury IMO in many cases.

 

S&P 500 chart still looks ok to me, I'd like to see the Russell 2000 get above 2000.

 

[highplanesdrifters]

@RetiredandTravel

So many well written great points and comments.

 

There are dozens of viable analysis of the next move in the market that all make perfect sense. I know enough to know that if I'm right, it's because I'm lucky and the market Gods have chosen my point of view.😀

 

Nice article from 2018. Interesting that we're trying to get back to 2% inflation from a completely different direction. 

 

"The rise in productivity because of technological advancements was a key driver of the low inflation.  Will these advancements continue and are there any other potential negative drivers."

There are not many people that are talking about this, much less understand it's  importance and impact on the economy. 

 

"This isn't a political statement but the US  still doesn't have what I would consider a viable long term energy transition policy from either party."

It's hard to talk about energy transition without folks making it political. I don't believe anyone has a viable transition policy. Tongue bitten. 😉

 

"Not luxury IMO in many cases"

As for luxury travel, I suspect it's out there. In the seven "luxury" trips we have taken since Covid, luxury has been almost non existent*. The trips have been with Seabourn, Silversea, and numerous resorts. I am increasingly reluctant to plop down large amounts of cash only to be disappointed and feel as if I have been had.

 

*The exceptions were The Retreat at the Blue Lagoon, Iceland. Pricey, but amazingly perfect. And the Mandarin Oriental in Santiago, not amazing but great product and great price.

 

As a side note, on a recent road trip, Lovie and I listened to "The Big Short" by Michael Lewis. We read it when it came out. Fascinating to revisit the details of sub prime debacle.

 

@TLCOhio we just booked the Ava in Athens on your recommendation.  I'm forgoing the 5* hotels for something that looks more realistic, as opposed to the luxury fantasy.

 

 

 

 

[TLCOhio]

On 2/9/2023 at 9:52 AM, highplanesdrifters said:

The real question is....what does this mean for the cruise lines?  Will pent up demand ease up?  Will service and food on the ships improve? Will some of the eye-watering prices back off?  

 

Appreciate these great above questions by the savvy highplanesdrifters and the follow-ups by R&T, etc.  Agree that it is very, very unclear as to how ALL of these economic developments will affect the cruise lines.  Not an easy period for "navigating" and predicting/anticipating the future.  As noted previously, I am happy to not be a cruise line CEO or CFO.  The are "gambling" with billions of dollars in debt, assets, etc.

 

From the Wall Street Journal, below are their stock charts for the three major cruise lines companies during this past week.  Surprisingly, all three of these corporate cruise stock values did not exactly move in the same patterns during this past week.  Rocky???  

 

Also from the Wall Street Journal late yesterday afternoon, they had this top headline: “S&P 500 Turns In Worst Week So Far This Year" with this sub-headline: "Index gains on Friday, but not enough to make up earlier losses; crude oil rises.”

 

Here are a couple of the WSJ reporting/analysis highlights: “U.S. stocks swung between small gains and losses Friday, capping a week in which this year’s investor optimism about the direction of the economy faced its first test.  The S&P 500 fell in early trading, then inched up before moving in a tight range for the rest of the day. The index turned in a 1.1% weekly decline, its worst weekly performance so far in 2023.  Markets seemed to be digesting the previous week’s news, which included the Federal Reserve’s 0.25-point increase and a surprisingly strong jobs report. With the fourth-quarter earnings season more than halfway through, fewer companies are topping Wall Street profit expectations than normal.”

 

Full story at:

https://www.wsj.com/articles/global-stocks-markets-dow-update-02-10-2023-48a30126

 

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 21,566 views.  Connect at:

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

 

From the Wall Street Journal, here are the charts for the three major cruise lines during the past five trading days.  Does the "ride" of Royal Caribbean look like a roller coaster?  And Norwegian's stock had the wildest movement for this past week.  Strange?  Any explanations?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Also from the Wall Street Journal, below is their chart for the past week as to the three major stock market measuring sources, including the S&P 500, plus the more tech-reflective Nasdaq.  Not exactly a positive week?:

 

 

[TLCOhio]

15 minutes ago, highplanesdrifters said:

@TLCOhio we just booked the Ava in Athens on your recommendation.  I'm forgoing the 5* hotels for something that looks more realistic, as opposed to the luxury fantasy.

 

Excellent to hear from highplanesdrifters that you are headed to Athens and the Ava.  As mentioned, we have stayed there twice and their location is so super excellent.  Love this area that is so close to excellent dining, important sites, interesting shopping, etc.  Please follow-up later as to how your visit there works, etc.  Will my booking commission check being in the mail from that hotel?  Just kidding!!  Just like in many case for sailing with Silversea, the Ava is smaller and more "personal".  Not only a big, chain hotel.  

 

From a financial news website yesterday, they had this headline: “Royal Caribbean Has Bad News for Passengers" and this sub-headline: "The cruise line has built its business back after the covid pandemic and that comes with some bad news for customers.”

 

Here are some of their reporting highlights: “During the early days of the cruise industry's comeback from the covid pandemic, prices were depressed even though capacity was limited.  Those days of low prices and cheap cruises may be over, according to comments made by Royal Caribbean Group CEO Jason Liberty during the cruise line's fourth-quarter earnings call.  'We are seeing particularly strong booking trends for North American-based sailings, which account for nearly 70% of our capacity this year,' Liberty said. 'From a cumulative standpoint, these itineraries are now booked at the same load factor as they were in 2019 and at higher prices. Our 2023 European sailings are booked within historical ranges at better rates with recent bookings outpacing 2019 levels.'  CFO Naftali Holtz made it clear that the increased prices had already started to take hold in the fourth quarter.  Liberty made it clear that the traditional cruise booking pattern where prices go up on a sailing as rooms begin to fill up has returned.”

 

Part of what is helping to fill up the ships is that many customers from the March 2020 to late 2022 period had cruise credits and want to use them now.  What will happen for later 2023 and throughout 2024?

 

Full story at:

https://www.thestreet.com/travel/royal-caribbean-has-bad-news-for-passengers

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Visuals, details from two visits in a city and nearby with great history, culture and architecture.  Now at 50,267 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

 

 

To help building excitement for your upcoming Athens visit, below is one of my night visuals of the Ava Hotel during our November 2018 visit.:

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

[highplanesdrifters]

Thanks for the link to your Athens trip, I was just looking for it. So much great information.  It was that review that lead me to book the Ava a few years ago. Sadly, the trip was scuttled by Covid. This time I'm a tad more positive we will make it. We are actually on Seabourn Encore for this one. Not to worry Silversea, you'll get our money too. We board Explorer in April for 35 days. Yikes long trip on a small ship. Fingers crossed.

 

BTW, referral check in the mail. 😀