Are cruise ship companies making a mistake getting ride of small ships?

[FredT]

1 minute ago, cruisemom42 said:

 

Of course, you can take the one of the smallest ships sailing and still end up in port with Behemoth of the Seas, disgorging her 7,000 passengers right next to you...

 

I know, I've been there. 

But thats what sites like https://www.cruisetimetables.com/#destports   are for...  (And believe me when researching a cruise THATS one of the sites we go to a LOT! )  Good example was a recent cruise that stopped in Acaba Jordan.   We were about to book "cruise A" but noticed that in 5 of 7 ports there were at LEAST 3 (large) ships in port the same day.   We switched to "cruise B" which visited the SAME ports but on different days.   Our guide to Petra made the comment that the day before (when all three large ships were in port) was a crowded nightmare.  Where we enjoyed the (relative) quiet of the cliffs on our visit.  

[cruisemom42]

1 minute ago, FredT said:

But thats what sites like https://www.cruisetimetables.com/#destports   are for...  (And believe me when researching a cruise THATS one of the sites we go to a LOT! )  Good example was a recent cruise that stopped in Acaba Jordan.   We were about to book "cruise A" but noticed that in 5 of 7 ports there were at LEAST 3 (large) ships in port the same day.   We switched to "cruise B" which visited the SAME ports but on different days.   Our guide to Petra made the comment that the day before (when all three large ships were in port) was a crowded nightmare.  Where we enjoyed the (relative) quiet of the cliffs on our visit.  

 

I hear you. But for those of us not yet retired we may not have the flexibility on dates and itineraries...

[FredT]

Just now, cruisemom42 said:

 

I hear you. But for those of us not yet retired we may not have the flexibility on dates and itineraries...

LOL....  Nope, still "trying" to retire.  (Want to buy a small business?  We've been trying for a couple years to sell!) 

 

Thats why ALL our cruises have been in January/March, (so far)   

 

ANYWAY......   Point I was "trying" to make is that mid sized (and smaller) ships often go where the big boys dont, and THATS why we keep looking (and booking) them...  Not for the "luxury"  aspect. 

[navybankerteacher]

47 minutes ago, FredT said:

LOL....  Nope, still "trying" to retire.  (Want to buy a small business?  We've been trying for a couple years to sell!) 

 

Thats why ALL our cruises have been in January/March, (so far)   

 

ANYWAY......   Point I was "trying" to make is that mid sized (and smaller) ships often go where the big boys dont, and THATS why we keep looking (and booking) them...  Not for the "luxury"  aspect. 

I think more and more of the more interesting ports world-wide will limit the size/number of ships permitted to protect what makes them visiting in the first place.

[cruisemom42]

1 hour ago, FredT said:

LOL....  Nope, still "trying" to retire.  (Want to buy a small business?  We've been trying for a couple years to sell!) 

 

Thats why ALL our cruises have been in January/March, (so far)   

 

ANYWAY......   Point I was "trying" to make is that mid sized (and smaller) ships often go where the big boys dont, and THATS why we keep looking (and booking) them...  Not for the "luxury"  aspect. 

 

I tend to do my land travel in Europe from November through March when the tourists are fewer and crowds are manageable.  Unfortunately some places I want to visit don't always have cruises available in the off-season or when I can go....

 

One example is the cherry blossom viewing circumnavigation of Japan cruise I had booked (cancelled of course) for last April.  It would make little sense to do a cherry blossom viewing cruise in February!

 

[FredT]

15 minutes ago, navybankerteacher said:

I think more and more of the more interesting ports world-wide will limit the size/number of ships permitted to protect what makes them visiting in the first place.

In keeping with my Acaba" thread, I could not agree with you more.  Second day there we visited "Wadi Rum"...   WOW.   But even with the passengers off of one ship, (As well as the few "land tourists"that were there in March) you could see how the majesty of the place could (would) be over run during the "high" season.  

 

As an aside, we spent the week before the cruise in Rome.....   Rome in late February is great (Few tourists)   Add in the "beginnings" of Covid in northern Italy, and the place was a ghost town.  NO ONE at the Colosseum,  The Vatican, or even at Trevi Fountain.   Everyone I know marvels at the "luck" of our first trip Rome.  😁

[navybankerteacher]

23 minutes ago, FredT said:

...

 

As an aside, we spent the week before the cruise in Rome.....   Rome in late February is great (Few tourists)   Add in the "beginnings" of Covid in northern Italy, and the place was a ghost town.  NO ONE at the Colosseum,  The Vatican, or even at Trevi Fountain.   Everyone I know marvels at the "luck" of our first trip Rome.  😁

Rome is great in February - it seems less rainy than in March or April -- and, while February means "Winter" to a lot of us, remember the palm trees, so don't be fooled by the fact that it shares New York's latitude -- many days are in the 60's, and rarely below mid-50's - making it ideal for walking around what is probably the greatest "walking city" there is.  And the crowds just are not there.

Edited September 7, 2020 by navybankerteacher

[cruisemom42]

18 minutes ago, navybankerteacher said:

Rome is great in February - it seems less rainy than in March or April -- and, while February means "Winter" to a lot of us, remember the palm trees, so don't be fooled by the fact that it shares New York's latitude -- many days are in the 60's, and rarely below mid-50's - making it ideal for walking around what is probably the greatest "walking city" there is.  And the crowds just are not there.

 

Okay now, stop talking about how wonderful Italy is in February. Next thing you know there will be no down season at all!

 

[Aquahound]

12 hours ago, Flatbush Flyer said:

You and "getting older slowly" may want to reread my post #84 where I was fairly specific about the profile of cruisers who might find PREMIUM (not "luxury") pricing on CERTAIN Itineraries close to the NDR of better mass market lines for a similar cabin class and itinerary.

 

FWIW, Though I'm talking about "premium" cruise lines, you are citing "luxury" pricing for your comparison, which is often more expensively out out-of-whack with premium pricing that includes all optional purchases necessary to make an apples to apples comparison. It's one of the reasons I choose Oceania over Regent for similar itineraries. 

 

 

I think you need to understand that there is no definitive "Premium" cruise line classification.  According to Cruise Critic, Viking and your beloved Oceania are in the "Luxury" category.  If you Google cruise line categories and open each page, none seem to agree as to what cruise lines fall into what category.  Some put Celebrity, HAL, Princess, and Cunard into the "Premium" category.  So again realize that when you say "Premium," it could have a different meaning to each reader.  

 

Here's a CC article listing Oceania Riviera as one of their best "luxury" cruise ships:

https://www.cruisecritic.com/articles.cfm?ID=5

[ldubs]

13 hours ago, Flatbush Flyer said:

You and "getting older slowly" may want to reread my post #84 where I was fairly specific about the profile of cruisers who might find PREMIUM (not "luxury") pricing on CERTAIN Itineraries close to the NDR of better mass market lines for a similar cabin class and itinerary.

 

FWIW, Though I'm talking about "premium" cruise lines, you are citing "luxury" pricing for your comparison, which is often more expensively out out-of-whack with premium pricing that includes all optional purchases necessary to make an apples to apples comparison. It's one of the reasons I choose Oceania over Regent for similar itineraries. 

 

As for "getting older slowly," his basis for comparison appears to be limited to RT Australia cruises which don't include the international airfare that would be included in some premium fares. If someone from the US was taking his usual cruise, that would mean a mass market "add-on" of $2k+\- USD per person. And, moreover, it appears that he is not looking at the tradional itineraries where the premiums do compete well with the mass market in NDR calculations (e.g., non-RT "fly to" 7-10 day Caribbean/Med cruises).

 

 In any case, it's good to see that some folks do the NDR math (or something like it). But, my concern remains for new or inexperienced cruisers who erroneously base their value decisions solely/primarily on a comparison of cabin costs.

 

The one I have looked at seriously is Oceana.  It has some features that I might find appealing.  I guess that is considered premium (PREMIUM if you want to shout).    

[navybankerteacher]

3 hours ago, cruisemom42 said:

 

Okay now, stop talking about how wonderful Italy is in February. Next thing you know there will be no down season at all!

 

You are right in pointing this out -  sorry about my carelessness.  

 

At least I know enough to stay away from Rome in October - the month when it is ALWAYS cold and dark, when all the museums are closed, the minimum amount allowed to be dropped in the Trevi Fountain is 750 euro, all restaurants triple their prices, and swarms of locusts fill the air and toads hop around the Forum and the Colisseum.

[Heidi13]

17 hours ago, getting older slowly said:

 

Interesting.... for us whom only cruise locally (Round trips from Australia )

I do a costing   which includes everything ( I mean everything )... divide by days and halve

Bingo cost per person per day......   Having done the MATH...

 

I am still way better off enjoying a suite with perks on a main stream line...

that the cheapest cabin on a more up- market line   which costs a lot more...

 

I am happy with the main stream offering... like a lot of people.... but i can not see the worth in going up market

   

eg a 13-14 night trip Australia to New Zealand

Princess in a suite $500 per day per person

Oceania in a base cabin  $750 per day per person and you have a fly home///

 

I have done the MATH not going to do it

 

I have also completed a spreadsheet comparing the 2 World Cruises we have completed - a 2015 Princess R/T Sydney and the 2020 Viking Ocean. We had a m'ships balcony on both cruises and when everything was included - onboard spend, Visas, flights, transfers, etc the total daily cost was virtually identical.

 

However, the standards and the condition of the ships weren't even close - the Sea Princess was comparable to a Greek tramp ship with numerous leaks, while the Viking ship was spotless. Princess meals were about consistent with the condition of the ship, while Viking's were great. 

 

The comparison also included our savings on laundry and internet, as we had Elite perks with Princess. Had we paid for laundry and internet, Viking would most definitely been cheaper.

[Cruzaholic41]

3 hours ago, Aquahound said:

 

I think you need to understand that there is no definitive "Premium" cruise line classification.  According to Cruise Critic, Viking and your beloved Oceania are in the "Luxury" category.  If you Google cruise line categories and open each page, none seem to agree as to what cruise lines fall into what category.  Some put Celebrity, HAL, Princess, and Cunard into the "Premium" category.  So again realize that when you say "Premium," it could have a different meaning to each reader.  

 

Here's a CC article listing Oceania Riviera as one of their best "luxury" cruise ships:

https://www.cruisecritic.com/articles.cfm?ID=5

Paul, I know you know the cruise travel firm for which I was a partner. We listed RCI, NCL, and Carnival as mainstream or contemporary. We listed Celebrity, Princess, and HAL as upscale or premium. 
 

We were careful not to use the term mass market because all cruise lines with multiple 1000+ passenger ships are technically mass market in nature. Just because some are more mass than others doesn’t exclude the lessers. 

Edited September 7, 2020 by Cruzaholic41

[iancal]

Our best time in Rome out of five of six visits,  was a four day stay in November.  Weather was perfect, no crowds, wonderful lighting.  No plans, just went out every day and turned left or right.  For us, Feb. is Thailand time.

[simplelife]

The trend over the past decade or so has been towards building megaships with ever-more-extensive amenities.  For most of the lines the smaller ships are older and past their prime. Still the smaller ships, especially in smaller ports, are lucrative for the lines, as some cruisers still enjoy the simplicity a smaller ship offers. This seems especially true for Carnival; I see them scrapping some, but not all the smaller ships, since cruises out of smaller ports such as Charleston and Jacksonville remain popular.

 

[Flatbush Flyer]

1 hour ago, Heidi13 said:

 

I have also completed a spreadsheet comparing the 2 World Cruises we have completed - a 2015 Princess R/T Sydney and the 2020 Viking Ocean. We had a m'ships balcony on both cruises and when everything was included - onboard spend, Visas, flights, transfers, etc the total daily cost was virtually identical.

 

However, the standards and the condition of the ships weren't even close - the Sea Princess was comparable to a Greek tramp ship with numerous leaks, while the Viking ship was spotless. Princess meals were about consistent with the condition of the ship, while Viking's were great. 

 

The comparison also included our savings on laundry and internet, as we had Elite perks with Princess. Had we paid for laundry and internet, Viking would most definitely been cheaper.

Yes. Exactly.

[iancal]

I believe that there will always be a market for smaller ships.  I also believe that there will be cruise lines that effectively and profitably respond to that market.   I do not believe that it will be mass market cruise lines because their focus is on a much different animal.

 

i believe that HAL’ s sale of five smaller ships is an example of this.  Clearly HAL did not exit this market so quickly because those ships were profit leaders.   This is not their market.  It used to be however the market, and their focus, moved much faster than their management teams did.
 

 

[bigrednole]

Without knowing the exact financials of a smaller ship, my opinion could be wrong. It is my understand smaller/older ships are far less efficient. In some articles, it said Oasis class ships can break even at 33% capacity and smaller ships need 50%+ (I don't recall the exact numbers). Therefore, by eliminating the least efficient ships, they can focus on the ones that will drive better profit ratios due to their incurred debt.

[Heidi13]

1 hour ago, bigrednole said:

Without knowing the exact financials of a smaller ship, my opinion could be wrong. It is my understand smaller/older ships are far less efficient. In some articles, it said Oasis class ships can break even at 33% capacity and smaller ships need 50%+ (I don't recall the exact numbers). Therefore, by eliminating the least efficient ships, they can focus on the ones that will drive better profit ratios due to their incurred debt.

 

Due to numerous variables, especially in these times, I wouldn't place too much credence discussing break-even points for old/new/large/small ships.

 

The operational costs of a ship is primarily driven by the ship's age, with modern technology and designs, reducing operational costs. The newer dual fuel LNG ships experience significant fuel savings, especially when coupled with new hull designs and coatings technology. Conversely, older ships experience ever increasing survey and maintenance costs.

 

Larger ships do experience some efficiency with crew costs, with the cost of mandated Master and Deck/Engineering Officers being spread over more paying pax. However, they are a very small percentage of the total crew. In my experience, the Master of smaller ships also makes less money.

 

With older ships, with higher maintenance costs, a larger ship of approximately the same age, is more efficient as the fixed costs are distributed across more pax. However, a small new ship may have lower operational costs per pax, than an older large ship.

 

The number of passengers required to pay the operational costs is highly dependent on what the customer is prepared to pay for base fare and also onboard spend. Another factor to consider is the expectations of each cruise line's pax demographic. On our preferred cruise line, which is all small ships, the pax/space ratio will not require too many changes for enhanced social distancing, but I suspect mega ships will require significant changes.

 

With our preferred small ship cruise line, I don't foresee much, if any softening in prices, especially since many cruises 2 and 3 years out are already fully booked. Therefore, by maintaining their price point and with 7 ships at an average age of 2.5 yrs (oldest is 5 yrs), I would expect their percentage utilisation to achieve profit to be very competitive within the industry. I certainly wouldn't speculate on guessing a number.

 

The Oasis OTS is already 12 yrs old, with much older technology and increasing maintenance costs. Once she reaches 15 yrs the survey costs further increase. I suspect the onboard experience will definitely change in the new normal. How will this impact their pax demographic and ultimately what price point will be required to fill the ship to the new probably lower capacity? 

 

These are unique times in the industry and anyone putting numbers on how many pax are required to break even is only guessing. One thing for sure is that more ships will be offloaded, but I am reasonably confident that age will be the determining factor. Another consideration, is how will cruise lines manage the plethora of new ships on order.

 

An example could be Fred Olsen, which purchased 2 of the HAL sister ships, which date from the 1990's. Although I don't believe they have confirmed any sales, I expect they may sell their 2 Royal Viking ships dating from the 1970's. While the Royal Viking ships were amazing ships when built and have a very loyal pax base, they are now almost 50 yrs old.

[wowzz]

17 minutes ago, Heidi13 said:

An example could be Fred Olsen, which purchased 2 of the HAL sister ships, which date from the 1990's. Although I don't believe they have confirmed any sales, I expect they may sell their 2 Royal Viking ships dating from the 1970's. While the Royal Viking ships were amazing ships when built and have a very loyal pax base, they are now almost 50 yrs old.

FO have confirmed that Boudicca and Bkack Watch are to be retired immediately, which I assume are the ones to which you are referring.

Given their age, I assume they will be broken up.

   

 

[Heidi13]

2 minutes ago, wowzz said:

FO have confirmed that Boudicca and Bkack Watch are to be retired immediately, which I assume are the ones to which you are referring.

Given their age, I assume they will be broken up.

   

 

 

Thanks for the update. Affirmative, those are the 2 original Royal Viking ships. My dad will be most disappointed, as Black Watch was his favourite ship.

 

Agreed, expect they will be heading to a breaker yard.

[Joebucks]

I'd feeling fairly confident in agreeing that large corporation getting rid of large assets have good reasons in doing so. More so than random internet opinions.

 

On the mass market lines, the reality is the small, older ships do not have the same allure. They often sail less expensive and shorter cruises as fewer people have these cruises on their must-do list. Their cost to operate is also not as efficient. They have less up-sell options. Combine these with bleeding money due to the shutdown, and a future that has reduced capacity at best. What path shows keeping these being a good option? The larger ships are the future of the mass-markets. No matter what your opinion is

 

Lots of people confuse small and old with small in general. Then we got into this unnecessary "premium" vs "common folk" discussion. If smaller ships was a line's bread and butter before, it's going to remain that way. Each segment is going to get hit differently. I don't buy that mass-markets get hit hard, but the premium lines don't get hit because they are retired. If anything, they are the most frightened because of health concerns.

[cruisemom42]

43 minutes ago, Joebucks said:

 

On the mass market lines, the reality is the small, older ships do not have the same allure. They often sail less expensive and shorter cruises as fewer people have these cruises on their must-do list. Their cost to operate is also not as efficient. They have less up-sell options. Combine these with bleeding money due to the shutdown, and a future that has reduced capacity at best. What path shows keeping these being a good option? The larger ships are the future of the mass-markets. No matter what your opinion is

 

 

I'm not sure what you are basing the above info on.

 

Both Princess and HAL have used their smaller ships to sail longer and often more expensive itineraries. Pacific Princess, Princess' one remaining R-class ship sails very few itineraries of less than 14 days and many that are substantially longer. HAL's Prinsendam (before she was sold) usually did the same with many one-off, original itineraries and at a higher per-diem than normal for that line.  In short, these were really cruises for connoisseurs.

 

HAL also offered their World cruise (and some of their Grand cruises, e.g., quite long ones) on one of their smaller ships that was just sold: Amsterdam.

 

I wouldn't say that these ships offer either shorter or cheaper itineraries. What I do think is true is that mass market cruise lines like HAL and Princess can no longer offer a differentiated fleet but need to focus on their larger, mainstream business.

 

For HAL more than Princess this is a bit sad as it is a real departure from their history; however, if they want to be competitive the writing is on the wall.

 

Interestingly, these older ships of HAL and the R-class ships are certainly not going to the breakers just yet, and they do have a substantial minority of fans -- enough to keep them going, I think, for a good while. Especially under new owners who understand and focus on this more niche market.

[iancal]

It takes a cruise line with the management focus, with the experience, and with the financial ability and solid business plan to take one of those old  tubs and convert it to something special that will attract customers AND turn a fair profit.  You can only postpone mtce and upgrades for so long.    Just like Phoenix Reisen has done with Prinsendam.  And no doubt what Olsen will do.   

 

Not a knock on HAL....this market is no longer their strong suit.

Edited September 8, 2020 by iancal

[SuSuTrav]

We have a 350 passenger limit on ships. But, I doubt we will ever cruise again after this virus and all that ensued.