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How long can Celebrity/RCL hold on with little or no revenue?


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Our cruise scheduled for this past September was cancelled and we were refunded our deposit in a timely manner.  We had a cruise planned for earlier this year with Pullmantur, which is part owned by RCL and were promised that our deposits would be retuned by RCL.  It has not happened and has made us nervous about the viabililty of RCL.

We had a Celebrity cruise planned for September 2021, and just recently cancelled as we do not feel that by that time things will be anywhere near "normal". We hope that deposit will be refunded as was offered.  With its huge liabilities and little revenue, how long can RCL go before shutting down?

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37 minutes ago, Plato123 said:

Our cruise scheduled for this past September was cancelled and we were refunded our deposit in a timely manner.  We had a cruise planned for earlier this year with Pullmantur, which is part owned by RCL and were promised that our deposits would be retuned by RCL.  It has not happened and has made us nervous about the viabililty of RCL.

We had a Celebrity cruise planned for September 2021, and just recently cancelled as we do not feel that by that time things will be anywhere near "normal". We hope that deposit will be refunded as was offered.  With its huge liabilities and little revenue, how long can RCL go before shutting down?

Well for what it's worth, they still have my money. That should help 🤣

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10 minutes ago, gkbiiii said:

But if they reduce benefits, no one will cruise with them.

They will not be alone in reducing benefits and raising cost. Now, some people may abandon cruising because "it won't be a value" to them. I believe that a reduction of loyalty programs will encourage future cruisers to largely abandon loyalty to a line as a reason for cruising with a particular line.

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8 minutes ago, Orator said:

They will not be alone in reducing benefits and raising cost. Now, some people may abandon cruising because "it won't be a value" to them. I believe that a reduction of loyalty programs will encourage future cruisers to largely abandon loyalty to a line as a reason for cruising with a particular line.

I am getting closer to the fine line of 'value'  I have loved cruising, but there are a lot of destinations within the US that we also want to visit.  I tend to never say never, hoping cruise lines survive and then thrive at a fair price.

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Value is all perceived differently by different people.  I find value in service/ship and the different ports I get to visit but if the costs start exceeding that will make a new determination.  Still would prefer cruises overall and have not looked at any pricing since i lift and shifted mine from last year to Nov this year.  The question tho is how long can they survive is a tough one to answer.  Will they get a bail out of some type if they start hitting that area?  All questions that all we can do is give our opinions on.  The travel industry has a large supply train and many different off shoots that help keep them running and in turn the economy.  Look at how many restaurants will probably be closing in the next few months, the ones still running have raised prices a little here and there but expect to see higher prices overall when/if things start returning to normal.  In general this is unknown waters and still a ways to go before this is cleared up.  I look at it this way, I work at a lvl 1 trauma hospital and only/currently 900 or so have been given the first dose of the vaccine.  This will take time to get to a mass population but it will take time and patience for everyone.    

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I think the market will allow them more working capital if needed on the hopes of successful vaccine distribution. More debt is definitely going to be damaging and a hindrance for years to come, but as of right now, I don't see any of the big players (RCG, Carnival Corp or NCLH) completely folding, although some of their smaller subsidiaries may have a bleak future. Cutbacks, changes, etc. should be a shock to absolutely no one. 

 

The other concern I would have is if this supposedly strong demand actually materializes. Cruises are an oddity in the travel industry in that they are very easy to cancel without penalty. Even HAL said in a CC article that they think people are splurging and their suite demand is unprecedented. But when you're typically a $5k cruiser and then that final $15k credit card bill hits, are all of these people really going to follow through? I'm not so confident. 

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If they can hold on, I predict a boom down the line, so that the ledger will be a net positive 10 years from now. The trick will be in weathering the current and immediate near future time frame.

 

- Joel

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People will absolutely want to travel when the world comes back to some normalcy... the urge of wanderlust is strong- and it has not waned. People want to dream and plan trips.

 

There are also customers, like us, who had major cruise vacations cancelled for 2020... and yes, I admit we did not feel confident to book for 2021 (figure we will hopefully get to do some small road trips) 

But

When the news and hope of the vaccines came out we felt better about booking a cruise for 2022. So we did.

It has given us something to look forward to... and that has been a good thing.


I know many cruisers who did not have our hesitancy and have cruises booked for 2021... they are ready to go when it opens back. When it starts again, they will be there.

 

So... customers do want the product of what cruising offers. They want to travel again and have the beautiful cruise experience.

 

I do believe people will want to travel... and I feel past customers of the cruise lines will absolutely want to cruise. 
Now... selling to people who have not experienced the magic of cruising before, that is another subject. The cruise lines are certainly going to have to convince future customers to believe in the product of cruising. That may pose some challenges, for sure.
 

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This topic is covered in depth by the financial press. You'd be best reading articles by financial analysts rather than asking on here to be brutally honest. 

But for what it's worth, we have shares in all three of the big companies and don't plan on selling just yet. I monitor the situation regularly though! 

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At the moment the value in the shares (of the main players) is good value based on the expected recovery and the fact the current price reflects the current situation... What will have to happen is a lot of trimming and a lot price rising on those fewer ships.. If they get this balance right then they will survive (albeit with a lot of debt and no dividend payout for years (possibly many) to come - But your % gain should cover that especially if you can keep it free of as much tax as possible and are happy to sell when the % gain suits you)

 

Some of the smaller companies may struggle - especially those who dont have other major incomes such as cargo/ferry/insurance etc (Such as Olsen and Saga, MSC) --- I cant really think of an example of the former off hand other than CMV who have already folded but TBF they were is serious trouble before..

 

The worst that could happen re the giants such as Carnival is we see a merger of a brand.. NCL and Celebrity I must admit are more tricky - but they still have multiple sources of money yet and they still can trim fleets and (for those that haven't look at cooperate actions) and split shares with new bank support.

 

 

Edited by ighten
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Well I am not so sure about the public's appetite for cruising.

 

At the nursing station at my father's retirement home, a discussion was underway with three PSW's. They were talking about travel and one stated no way would she ever cruise as cruise ships are petri dishes. The other two ladies jumped in and agreed and the passion in their statements was significant.

 

I asked them if they had ever cruised, each said no, but two said they had been thinking about it.

Those three ladies represented possible future customers for cruising, I doubt that they will consider cruising ever.

 

All three were totally against cruising as a vacation option.  These ladies are just 3 so I would extrapolate there are many other consumers who no longer will consider cruising.

 

Cruising has an uphill battle for customers.

 

 

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22 minutes ago, Doubt It said:

Well I am not so sure about the public's appetite for cruising.

 

At the nursing station at my father's retirement home, a discussion was underway with three PSW's. They were talking about travel and one stated no way would she ever cruise as cruise ships are petri dishes. The other two ladies jumped in and agreed and the passion in their statements was significant.

 

I asked them if they had ever cruised, each said no, but two said they had been thinking about it.

Those three ladies represented possible future customers for cruising, I doubt that they will consider cruising ever.

 

All three were totally against cruising as a vacation option.  These ladies are just 3 so I would extrapolate there are many other consumers who no longer will consider cruising.

 

Cruising has an uphill battle for customers.

 

 

That's a perfect statistical sample for the future of cruising.  This scientific survey says it must be doomed.

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9 minutes ago, Lonedaddy said:

That's a perfect statistical sample for the future of cruising.  This scientific survey says it must be doomed.

 

Is it really that far off though? Within our social circle are people mostly mid 30's to mid 40's, a decently well traveled group with healthy travel budgets. If they have been on a cruise at all, it was 20+ years ago on a Carnival ship and they aren't getting on one again. Quite literally none of them have any desire to join us. In fact the only 'cruising' friends we have are people we have met on cruises and stayed in touch with over the years. The floating Petri dish comment comes up far more than those who say they can't wait to go on a cruise.

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This is the million dollar question.  Personally I feel it can go either way; however, given the implementation of the vaccine programmes this makes the outlook a bit more positive.  It is highly possible that some restructuring within the industry will occur.  Many things have put a big doubt in the general population as to the safety of cruising, particularly the images that appeared in the media when the pandemic first occurred which has left the impression of the floating petri dish.  It is going to take significant changes to overcome that stigma.  When cruising does resume, they will only have one chance to get it right.  If a breakout does occur on a ship, that will cause concern.  How well it is managed will be under close scrutiny.  Pricing will increase due to the new procedures put in place and it is entirely likely ships will be sailing at less than full capacity for an extended period until a sense of confidence is restored.  Senior management are under pressure to get it right.  I am sure there are some loan covenants in place wrt executive compensation (salary & bonuses), and the good times of the past 5 years or so, are not going to be repeated for a while.  I expect resumption of operations in some meaningful way will not occur until Q2 early Q3 2021, and hopefully by 2022 things are back to (the new) normal; whatever that looks like.

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4 hours ago, Jeremiah1212 said:

 

Is it really that far off though? Within our social circle are people mostly mid 30's to mid 40's, a decently well traveled group with healthy travel budgets. If they have been on a cruise at all, it was 20+ years ago on a Carnival ship and they aren't getting on one again. Quite literally none of them have any desire to join us. In fact the only 'cruising' friends we have are people we have met on cruises and stayed in touch with over the years. The floating Petri dish comment comes up far more than those who say they can't wait to go on a cruise.

Jeremiah1212, that is the same situation with the people we know. All professionals, so have the $ to travel but they have not taken cruises in  the past  - they do land trips so they can see the places in detail. I am the only one who regularly cruises, they simply call cruising "fake".  This also speaks to other threads on Celebrity, about chasing the younger crowd, not sure about that either.

 

To the one, no one will consider a cruise and like you said, the Petri dish comes up repeatedly.

So, if they were not inclined to cruise before, then add in the Petri dish context, then add in the lingering effects of the virus, I would think there will be significant hesitancy for the public to cruise.

 

Not sure even the vaccines will dislodge people into being more amenable to cruising. People will long into the future make decisions that give them more flexibility and ways to manage distance, cruising is not that.

 

Time will tell of course. 

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  • 1 month later...
On 12/30/2020 at 6:10 PM, Covepointcruiser said:

Once the vaccine is widespread those vaccinated will not hesitate to cruise.    However once vaccinated I want to travel only with other vaccinated passengers.    I know we will still be wearing masks in the early days but I can live with that.   

Don't be too sure that the "vaccine" will mean the end of Covid now that the "mutants" or variants in the virus are starting to kill people internationally and look to be more easily transmitted from person to person.  Passengers will have to be repeatedly tested to rule out the "symtomless" carriers.

Sounds dire to me for the cruise industry with the higher prices/per passenger/day I am seeing.  Land trips will be our choice for quite a while.

On 12/30/2020 at 6:10 PM, Covepointcruiser said:

 

 

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On 12/22/2020 at 2:10 PM, Orator said:

They will not be alone in reducing benefits and raising cost. Now, some people may abandon cruising because "it won't be a value" to them. I believe that a reduction of loyalty programs will encourage future cruisers to largely abandon loyalty to a line as a reason for cruising with a particular line.

I have never understood why a loyalty program is the main reason to choose one cruise line over another. When we book a cruise the first thing we look at is what destination do we want and what ports do we want to visit. Then we look at which of the cruise lines, we prefer, has the best itinerary to this destination. As of now there are three cruise lines we consider for any cruise and loyalty has nothing to do with our choice. The three lines we prefer are, Celebrity, HAL and Oceania, in no particular order, because they all fit our expectations for excellence and service and our life style.  As you can see in my signature we have 3 cruises, one each with our three cruise lines of choice in the next 18 months all chosen for destinations and nothing to do with loyalty programs.

Edited by terrydtx
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4 minutes ago, Sam.Seattle said:

My apologies!  I should have noticed the date.  I guess the media and analysist where wrong.  

 

Predicting the pandemic over the last year has a lower accuracy rate than predicting weather. Being a weather forecaster is one of the few jobs you can keep while being wrong 60% or more of the time, predicting the pandemic is a job that can now be added to the list.

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When this post was first created, I was very optimistic about the cruise lines being able to avoid bankruptcy.  As time goes on I am more and more concerned (even more so considering I have 9 cruises on the books currently over the next year and a half),  And in the US, the CDC is really making things difficult IMHO.  Safety is one thing - certainly of the most importance.  But they seem to be really zeroing in on the cruise lines in particular with more stringent rules than anyone else.  One can claim that cruise ships are mini-petri dishes, but frankly I think it is more about the optics than anything.

 

Now they are thinking about making travel even more difficult - evaluating potentially requiring a negative Covid test even for domestic flights.   That would be a nightmare due to the lack of a central process for testing.  In my state, the free tests can take anywhere from 2-5 days to return results, and then at least for the state/county places you only get a phone call; no documentation.  So then what?  Try to get tested elsewhere where you may need to pay, and then try later to get your insurance company to cover it, which they may not do unless you lie and claim symptoms or exposure.  Do I really want to front $150 pp for a test when I was able to get a flight for $75 pp???  And if that happens, testing will once again be almost as difficult to obtain as vaccines are now due to significantly increased demand.   What a nightmare.

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