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3 minutes ago, BWIVince said:

 

I don't think the word "core" means as much in this context as it might sound, but technically a casino resort isn't Genting Hong Kong's core focus.  GHK is the cruise ship and shipbuilding arm of Genting, and has had some other businesses under its umbrella like resort partnerships for logistical reasons, but technically you wouldn't call them their "core" business like cruise ship operations and construction.

 

That said, there are other factors in the sale of their share in the Macau project, not just that it's a resort.

 

Vince

I guess you didn't understand my question.  What I am wondering is this.  What is the most important element of the entire Genting Group?  What are they willing to part with to preserve itself?   What is their "core business" that they are trying to preserve?  I think that is a very important question that would determine what Genting might end up doing with Genting Hong Kong, and what Genting Hong Kong/Genting Berhad might end up doing with Crystal.

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10 minutes ago, Psoque said:

I guess you didn't understand my question.  What I am wondering is this.  What is the most important element of the entire Genting Group?  What are they willing to part with to preserve itself?   What is their "core business" that they are trying to preserve?  I think that is a very important question that would determine what Genting might end up doing with Genting Hong Kong, and what Genting Hong Kong/Genting Berhad might end up doing with Crystal.

 

There is no answer to your question.  I was trying to explain what "core business" meant in the context of the press release, but which of Genting's core businesses is more important to them personally is not something that anyone outside the family can probably answer, and I'm sure the answer would change day-to-day based on the ever-changing crisis.  My company has changed focus several times in the past 6 months -- including selling off divisions (sometimes contradicting previous direction).

 

Vince

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11 hours ago, BWIVince said:

 

There is no answer to your question.  I was trying to explain what "core business" meant in the context of the press release, but which of Genting's core businesses is more important to them personally is not something that anyone outside the family can probably answer, and I'm sure the answer would change day-to-day based on the ever-changing crisis.  My company has changed focus several times in the past 6 months -- including selling off divisions (sometimes contradicting previous direction).

 

Vince

 

I agree.  Genting is a remarkably opportunistic, adaptable Southeast Asian family business empire.  Covid has created financial problems, and they seem to be selling superfluous investments.

 

On the first page of this topic, posting #21 provides a simplified organization chart.  It shows Genting’s major business, although the chart is becoming out-of-date. 

 

The Genting Group’s roots were in the hospitality and plantation sectors.  Based in Malaysia, they gradually developed diversified investments in many countries and business sectors, separately operated by numerous subsidiaries.   Like many conglomerates, the Group probably became unfocused and overly diversified.  Evidently, they have identified core competencies which should be retained as they narrow their business portfolio.

 

Their Genting Hong Kong subsidiary owns Crystal Cruises.  Apparently, GHK is eliminating extraneous businesses to focus on cruises and ship building.  It also appears that GHK is operating somewhat independently from the Genting Group, possibly due to public ownership of a portion of its listed stock.

Edited by Jim9310
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22 hours ago, Psoque said:

I'm not a business person and I have no experience or first-hand knowledge about the complexity of the entire Genting corporate structure, but I have no idea what Genting Hong Kong or Genting Berhad means by their core business.  My rudimentary understanding is that the core business of Genting Berhhad has been casinos and resorts, mainly in southeast Asia, though they have been diversifying their portofolio.  My limited understanding of the activities of Genting Hong Kong is that it is a subsidiary that manages casinos/resorts outside of Asia as well as cruises and a shipyard.

 

I have been reading that Genting has been saying that they would like to concentrate on their core business now.  What do they mean by that?  And for that matter, does Genting Hong Kong do any of the "core businesses" for Genting Berhad, or is the Genting Hong Kong essentially a side-business (non-core) subsidiary as a whole, especially now that the entire tourism sector is not doing well at all?

 

Your questions are appropriate.  The Genting Group tends to operate in an opaque manner.  Interested outsiders are inclined to share limited insights as new information becomes available, and that’s happening on this board.   

 

Like many other companies Genting is encountering financial hardship and is struggling to survive the pandemic.  Hence, they’ve adopted defensive profit-seeking strategies.  I believe they have identified exceptional “core competencies” which can sustain ongoing competitive advantages.  Examples of core capabilities are physical assets, patents, specialized knowledge, talented people, integrated networks, brand equity, capital, and an honorable reputation.

 

Here's a helpful definition of “core competencies”:

 

https://www.investopedia.com/terms/c/core_competencies.asp

 

Edited by Jim9310
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1 hour ago, Jim9310 said:

 

Your questions are appropriate.  The Genting Group tends to operate in an opaque manner.  Interested outsiders are inclined to share limited insights as new information becomes available, and that’s happening on this board.   

 

Like many other companies Genting is encountering financial hardship and is struggling to survive the pandemic.  Hence, they’ve adopted defensive profit-seeking strategies.  I believe they have identified exceptional “core competencies” which can sustain ongoing competitive advantages.  Examples of core capabilities are physical assets, patents, specialized knowledge, talented people, integrated networks, brand equity, capital, and an honorable reputation.

 

Here's a helpful definition of “core competencies”:

 

https://www.investopedia.com/terms/c/core_competencies.asp

 

 

Your last two messages really hit the nail on the head. 

 

I was trying to think this morning if there was a clearer way to saw my point, and at the beginning of the pandemic companies were able to shed assets and divisions that were more ancillary.  Now, the story is completely different -- most companies have jettisoned the businesses that were nice-to-haves, and are having to make painful decisions.  Royal Caribbean dumping Azamara for only $201 million is a perfect example of that.

 

As we slog through the pandemic with little/no revenue, when the next big bill is due travel companies are looking around and making decisions along the lines of what you outlined:

 

1) What business lines are going to start bringing in revenue sooner than later, and which business lines will have the longest lag before recovering?

2) Which assets are less dependent on other parts of the company and can be sold off with minimal damage to the organization?

3)  Which markets/projects would cause long-term damage or competitive disadvantage to depart?  Where would it not only be hardest to pick back up where we left off, but where would we shoot ourselves in the foot by divesting an asset or division?

 

Similarly if you ask, "which cruise line does Genting need the least," there is no good answer.  Star is the workhorse that underlies Genting's maritime operations and supports all three brands logistically -- removing them would drastically increase Dream and/or Crystal's costs significantly. Dream is a huge strategic focus for GHK at this point and also has the potential to be the fastest to start covering more of its bills than the other brands.  Crystal is key to Genting's integrated luxury strategy, and would cost time and money to port to another Genting brand (probably Crockfords?), besides removing some of the synergies for Dream where Genting has tapped Crystal for product service input.

 

That said, all that goes out the window when the next big bill is due, and you have to make the next least painful cut.  So long story short, GHK needs everything they've got, until they need to sell something more than they need it.

 

Vince

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1 hour ago, BWIVince said:

 

Your last two messages really hit the nail on the head. 

 

I was trying to think this morning if there was a clearer way to saw my point, and at the beginning of the pandemic companies were able to shed assets and divisions that were more ancillary.  Now, the story is completely different -- most companies have jettisoned the businesses that were nice-to-haves, and are having to make painful decisions.  Royal Caribbean dumping Azamara for only $201 million is a perfect example of that.

 

As we slog through the pandemic with little/no revenue, when the next big bill is due travel companies are looking around and making decisions along the lines of what you outlined:

 

1) What business lines are going to start bringing in revenue sooner than later, and which business lines will have the longest lag before recovering?

2) Which assets are less dependent on other parts of the company and can be sold off with minimal damage to the organization?

3)  Which markets/projects would cause long-term damage or competitive disadvantage to depart?  Where would it not only be hardest to pick back up where we left off, but where would we shoot ourselves in the foot by divesting an asset or division?

 

Similarly if you ask, "which cruise line does Genting need the least," there is no good answer.  Star is the workhorse that underlies Genting's maritime operations and supports all three brands logistically -- removing them would drastically increase Dream and/or Crystal's costs significantly. Dream is a huge strategic focus for GHK at this point and also has the potential to be the fastest to start covering more of its bills than the other brands.  Crystal is key to Genting's integrated luxury strategy, and would cost time and money to port to another Genting brand (probably Crockfords?), besides removing some of the synergies for Dream where Genting has tapped Crystal for product service input.

 

That said, all that goes out the window when the next big bill is due, and you have to make the next least painful cut.  So long story short, GHK needs everything they've got, until they need to sell something more than they need it.

 

Vince

I guess one question I have had even before all of this discussion is this.  Does the Genting Group really interested in holding on to their cruise and shipbuilding businesses, and even if they want to, can they afford to do it until everything "goes back to normal?"  I am not making any speculative statement other than the fact that for the entire Genting Empire to somehow survive, they would need to shed some parts of their businesses, whether it be a single cruise brand, or all of their cruise brands, or all of their cruise brands plus a shipyard, or the entire Genting Hong Kong part of the empire.  I have no idea what is the current source of reliable income for the Genting Group, and but I'm assuming that the cruises, shipbuilding, and resorts are not it.

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53 minutes ago, Psoque said:

I guess one question I have had even before all of this discussion is this.  Does the Genting Group really interested in holding on to their cruise and shipbuilding businesses, and even if they want to, can they afford to do it until everything "goes back to normal?"  I am not making any speculative statement other than the fact that for the entire Genting Empire to somehow survive, they would need to shed some parts of their businesses, whether it be a single cruise brand, or all of their cruise brands, or all of their cruise brands plus a shipyard, or the entire Genting Hong Kong part of the empire.  I have no idea what is the current source of reliable income for the Genting Group, and but I'm assuming that the cruises, shipbuilding, and resorts are not it.

 

These are appropriate questions.  One has to “read the tea leaves” for potential clues.  The following August 21, 2020 Star article does provide earlier insights:

 

lim-kok-thay-puts-fortune-on-line-to-save-genting-hkg

 

“KUALA LUMPUR: Malaysian tycoon Tan Sri Lim Kok Thay has pledged nearly his entire stake in embattled cruise operator Genting Hong Kong Ltd. as collateral for loans, raising the risk of a margin call after the stock plunged 38% on Thursday.”

 

The opening paragraph above reveals that the Chairman of the Genting Group was prepared to surrender ownership and control of GHK to their creditors. 

 

Whether and how much the situation has changed since then has never been disclosed.   GHK’s annual financial results for 2020 ought to be released during February.   Its commentaries, footnotes and numbers may help update the situation.

 

 

Edited by Jim9310
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3 hours ago, BWIVince said:

 

Your last two messages really hit the nail on the head. 

 

I was trying to think this morning if there was a clearer way to saw my point, and at the beginning of the pandemic companies were able to shed assets and divisions that were more ancillary.  Now, the story is completely different -- most companies have jettisoned the businesses that were nice-to-haves, and are having to make painful decisions.  Royal Caribbean dumping Azamara for only $201 million is a perfect example of that.

 

As we slog through the pandemic with little/no revenue, when the next big bill is due travel companies are looking around and making decisions along the lines of what you outlined:

 

1) What business lines are going to start bringing in revenue sooner than later, and which business lines will have the longest lag before recovering?

2) Which assets are less dependent on other parts of the company and can be sold off with minimal damage to the organization?

3)  Which markets/projects would cause long-term damage or competitive disadvantage to depart?  Where would it not only be hardest to pick back up where we left off, but where would we shoot ourselves in the foot by divesting an asset or division?

 

Similarly if you ask, "which cruise line does Genting need the least," there is no good answer.  Star is the workhorse that underlies Genting's maritime operations and supports all three brands logistically -- removing them would drastically increase Dream and/or Crystal's costs significantly. Dream is a huge strategic focus for GHK at this point and also has the potential to be the fastest to start covering more of its bills than the other brands.  Crystal is key to Genting's integrated luxury strategy, and would cost time and money to port to another Genting brand (probably Crockfords?), besides removing some of the synergies for Dream where Genting has tapped Crystal for product service input.

 

That said, all that goes out the window when the next big bill is due, and you have to make the next least painful cut.  So long story short, GHK needs everything they've got, until they need to sell something more than they need it.

 

Vince

 

I appreciate your sharing of recent experiences with survivorship issues.   You’ve shown why risk-reduction strategies are often more pertinent than ordinary competitive strategies for businesses devastated by the pandemic.

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21 hours ago, Jim9310 said:

 

I appreciate your sharing of recent experiences with survivorship issues.   You’ve shown why risk-reduction strategies are often more pertinent than ordinary competitive strategies for businesses devastated by the pandemic.

 

 

21 hours ago, Jim9310 said:

 

I appreciate your sharing of recent experiences with survivorship issues.   You’ve shown why risk-reduction strategies are often more pertinent than ordinary competitive strategies for businesses devastated by the pandemic.

 

 

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  • 3 weeks later...

Given the environment in the cruise industry right now -- and for the next several years -- why SHOULDN'T the Stralsund yard close when Endeavor is complete?  I just think that's a normal management decision in the industry these days until things pick back up, unless the German government wants to subsidize some projects to keep them busy.

 

Vince

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7 minutes ago, DrivesLikeMario said:

Would any of you risk a deposit on a 2023 cruise with Crystal right now?


Are they actually expecting deposits at this time?

i believe you can book but deposits are currently deferred 

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7 minutes ago, Stickman1990 said:


Are they actually expecting deposits at this time?

i believe you can book but deposits are currently deferred 

 

Nope, no deposits until April 5(and we'll see if that holds.)

 

Booked a 2023 cruise today, so have first hand knowledge.

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32 minutes ago, DrivesLikeMario said:

Would any of you risk a deposit on a 2023 cruise with Crystal right now?

 

Last I heard they weren’t even trying to take payments.

 

Vince

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Can someone explain to me why Crystal is voluntarily not taking payments?  Are they doing this because they are morally obligated not to take any more money from their customers?  Or is there a reason they have to refuse payments?  I personally think Crystal is doing the right thing from a customer's perspective, but I'm really puzzled how this came about.

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26 minutes ago, Psoque said:

Can someone explain to me why Crystal is voluntarily not taking payments?  Are they doing this because they are morally obligated not to take any more money from their customers?  Or is there a reason they have to refuse payments?  I personally think Crystal is doing the right thing from a customer's perspective, but I'm really puzzled how this came about.

 

I'll defer to Vince's prior posts on this, but I think it has to do with incurring credit card processing fees on cruises that may not occur.

 

I think the best way to look at the, ahem, elastic deposit date is to translate it to the date Crystal hopes(and I stress the word hopes) to have the current refund backlog cleared. 

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9 minutes ago, KenzSailing said:

 

I'll defer to Vince's prior posts on this, but I think it has to do with incurring credit card processing fees on cruises that may not occur.

 

I think the best way to look at the, ahem, elastic deposit date is to translate it to the date Crystal hopes(and I stress the word hopes) to have the current refund backlog cleared. 

 

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Received news from our TA (in response to inquiring about our refund) that Crystal has stated earlier this week that " all refunds should be processed back to your credit cards no later than 4/30/21."

 

--Let's hope that they  live up to this(SORRY for broken post)

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4 hours ago, DrivesLikeMario said:

 

Oh - so that's why the deposit date isn't until April 5, 2021.  I wonder what they expect to happen between now and that date?

 

 

4 hours ago, docmark said:

Received news from our TA (in response to inquiring about our refund) that Crystal has stated earlier this week that " all refunds should be processed back to your credit cards no later than 4/30/21."

 

--Let's hope that they  live up to this(SORRY for broken post)


These two dates are likely tied together, but I wouldn’t be surprised if they merged, flipped in order or leapfrogged each other so I’ll reply to both together.

 

IMHO there are several reasons they’re not taking payments right now, but Ken hit the nail one the head for one of the biggest.  When you’re doing rolling cancellations, the last thing in the world you want to do is keep cycling refunds because the merchant pays 2-3% percent every single time the card is charged again, and an additional fee every time it’s refunded.  On tens of thousands of bookings of thousands of dollars each, that adds up VERY fast.

 

Speculatively, there are likely additional reasons, potentially including sources of funding for chargebacks that a merchant can use (usually their funds/surety) at their various processors’ agreement that would require the merchant to suspend charges until replenished.  No way to know if that’s the case, but I’ve certainly seen this in the industry before.

 

Vince

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9 hours ago, Jim9310 said:


That sort of cements my earlier reaction that shuttering the Stralsund yard until the industry climate changes is a no-brainer.  Rostock and Wismar continue to have work and will for a while, so there is a strong case to be made for their support (as most countries are doing in cases like this).

 

The most eye-opening part of this for me is about the part having little to do with Genting — the fact that Lloyd Werft, a legendary refit yard known as a mainstay for industry-wide cruise ship refits, now has little or no work due to the state of the industry and could close by the end of the year.  If that isn’t a sign of where the cruise industry is at, or what it’s going to look like for a few years, than nothing is — this is a long-term indicator foreshadowing our onboard experience on all lines for years to come. 
 

That’s a LOT more significant than closing one work location of a going yard, and could mark the end of a yard responsible for such complex transformations as the France into the Norway and QE2 from steam turbines to diesel-electric.  😞 

 

Vince

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