Fred's Gone?

[twotravellersLondon]

9 hours ago, FangedRose said:

They acted no different from any other UK based cruise line. No other UK cruise company will give you any redress if the price drops after booking.

 

Not sure about that... one of FOCLs closest rivals will reimburse customers if their cruise is later sold for less than they bought it for originally.

[Eglesbrech]

7 hours ago, ARDXXX said:

Not sure about UK based Cruise lines but we have sailed with much better companies than FO such as Regent and Silversea and have always been able to receive the lower price if it changed. Anyway I am more annoyed about the so called  free upgrade that we were offered as a way to retain our booking,which failed to materialise even though these were available.

A promise which is then not fulfilled would really annoy me too, particularly when you still had the option to cancel.

 

Fred has a limited appeal for some demographics so their potential customer base is less than some of the more flashy child friendly lines. If they annoy that customer base they will move to some of the newer offerings like SAGA etc. 

 

 

[Eglesbrech]

10 hours ago, FangedRose said:

They acted no different from any other UK based cruise line. No other UK cruise company will give you any redress if the price drops after booking.

So why according to what ARDXXX has said make promises and then not  

fulfill them?
 

Surely better to just say no right at the start and then ARDXXX would have  simply cancelled.

 

Other lines won’t give you any money back but some will allow you to upgrade using up the extra you have previously paid, we did it with Princess for example. Some as you say are completely intractable and I’m sure they lose customers because of it.

[tring]

9 hours ago, ARDXXX said:

Not sure about UK based Cruise lines but we have sailed with much better companies than FO such as Regent and Silversea and have always been able to receive the lower price if it changed. Anyway I am more annoyed about the so called  free upgrade that we were offered as a way to retain our booking,which failed to materialise even though these were available.

 

That re pricing is an American thing and does not generally happen on UK based lines or holidays.  They also have a chance to cancel and get a deposit refunded in certain circumstances (not sure of the ins and outs, possibly up to a certain date or depending upon legislation in different states).  Reductions are normally after balance payment dates though and usually on a guarantee (or saver) basis, which cannot be compared as many people, including ourselves would not want to loose the chance to choose cabin location as well as some other advantages.

 

I do totally agree with you about an upgrade though, provided the reduction was for a Freedom Fare and not a saver fare which was brought in.  They used to do a lot to keep cruisers happy, though seem to have stopped those upgrades initially after covid.  However it seems to have started again more recently - I have seen a lot of people mention being offered upgrades more recently.  Sometimes Fred has asked for payment (admittedly a much lower amount than would have been payable up front), but not in every case.  Since this was mentioned to you as possible recompense for a price change before balance payment date, I believe they should have gone through with that.  From what you say you could even have cancelled, lost your deposit and still paid less. If that is true for a lower Freedom fare, yet you stuck with it because of the promise, you have certainly been wronged and I would have forwarded that point. 

 

However, it is a case of buyer beware for anything, (whether buying items in shops or booking holidays) and without a written promise, you are not in a position where you can legally get any sweeteners or price reduction and the same goes for most cruise lines at present, with many really good offers out there.  P&O cruises where always known to be better priced at launch, but this year has seen many reductions which have gone lower than that, even for a full fare in some cases, yet most are saver fares (as is also the case with Fred), so not really comparable - in our opinion very different as we would not want a cheap cruise if we found we could not sleep at night because of noise or became very ill  with an unstable position on the ship.  Many people are leaving booking holidays until later now and taking their chance on what is available.  It will be interesting to see if the situation continues in future years, though with the bigger ships coming in and overall capacity increasing so much, I would not be surprised if it does.

 

  

 

[ARDXXX]

Thank you for your comments, yes we were booked on a Freedom Fare basis which I felt would have given us more benefits, as in this example, and yes I agree that without FO informing us in writing of their upgrade tempter that it does not carry as much weight but after being informed four times that we were on the list for an upgrade then being refused it does not lie well and it would have to be an extremely good deal for us to reconsider FO. I believe that the only reason that they continue in business if the fact that they sail from local ports.Anyone living anywhere south of the midlands should try SAGA and they probably would never return to FO

[twotravellersLondon]

18 hours ago, ARDXXX said:

I would like to comment on our recent experience, we returned from our Baltic Cruise las Saturday we were on the Bolette in the Baltic.

We booked the Cruise when it was first published and a few months later I noticed that the price had been reduced by between 4 and 5 hundred pounds per person ( is this a familiar story!! ) I contacted Fred Olsen and requested that they honoured our booking and reduce our booking price, they refused but said that they would give us an upgrade instead if one became available, I reluctantly accepted this even though I was tempted to cancel our booking and rebook at the reduced price and would still have saved a considerable amount even if we lost our initial deposit.

I phoned FO nearer our sailing date as I had heard nothing regarding the upgrade and was informed that I was on the list if one became available - a week prior to the Cruise my travel agent phoned me to say that a balcony upgrade was available for £1100, I reminded them that I had been informed that I would get a free upgrade if one became available which it obviously had!, they contacted FO who admitted that this was correct.

We boarded the ship and went to guest services but they did not know anything about this so contacted head office, but was informed that I would not be getting one.

On return I emailed FO and received a phone call to say that unfortunately there would be no redress even though this spoilt the Cruise and this makes me very reluctant to go with this company in the future. They are fantastic at taking your money but will give nothing in return.

 

Incredible sorry to read about how badly you've been treated.

 

There are comments elsewhere on this site about Loyalty Club members finding that having paid the introductory "Loyalty" price early on, the cost of the same cabin has been reduced later but they've received no redress.

 

There are also comments that FOCLs are taking bookings at the "cruise from" price and then continually contacting customers to encourage them to pay ever more for an "upgrade" to cabins that are... later on... heavily discounted shortly before the cruise departs.

 

On 5/14/2023 at 3:00 PM, Eglesbrech said:

If it is full then there is so much other choice out there on the market that I will simply find something else with another line. I suspect many people are doing exactly the same thing.

 

We very recently cruised  with SAGA, one of FOCLs competitors for the balcony/suite market for the over 50s demographic, and came across quite a number of people that we'd met before on "Fred."(That's when "Fred" was chaired Fred. Jun. and when it wasn't unusual to come across much loved Fred. Sen on board.) We had dinner on a number of evenings with one couple we'd met innumerable times on Fred over the last 30 years. Their experience was that they had booked a "Fred" on a special "Loyalty" day and found that closer to the cruise date the same grade of cabin had been sold for thousands less that they'd paid. They have sailed with FOCLs and are on one of the highest loyalty tiers. They asked for compensation, Got none. They won't be booking with FOCLs again. They accept that they weren't legally entitled to a refund... so now FOCLs are just going to have to accept that the company will lose three or four cruises, each worth £5,000 to £10,000, a year for the next 10 or twenty 20 years and that they will tell all of their friends, family and acquaintances to avoid FOCLs like the Plague.

 

There's an old business adage... the most difficult customer to attract is a once loyal client who feels let down!

 

It strikes us that if FOCL's are attracting lower numbers of cruisers and the metrics are that they are now carrying more "new" cruisers rather than Loyalty Club Member cruisers... we wonder if  the company has already lost thousands of other once loyal cruisers. Many of those would once have travelled with "Fred" three or four times a year.

 

Looking at the comments on FOCLs own site... it would certainly seem to suggest that many of FOCLs' current customers are new or relatively new to cruising and have little or no point of comparison from other cruise lines about what to expect. (FOCLs is not "five star" and has never claimed to be "five star!") 

 

Our own experience is that we've been interested in taking a short, inexpensive cruise and giving FOCLs "a go" just to see to what extent the fantastic/horrific reviews on the FOCLs website are true. We've carefully followed the price of one or two cruises that we might have been interested from the "Loyalty offers" to the sail date and we've found that we would have lost out in every case. In our view... and even for a short "toe in the water" experiment... we've certainly cottoned on to Fred's pricing system... and aren't interested or willing to spend the time and trouble trying to double-guess FOCLs "fluid pricing" "strategy." In our opinion... a bit like playing poker against and expert that can see your cards in a mirror behind your back!

 

Result... well we've been looking for a balcony cabin on a Baltic cruise this summer. Found one with FOCLs ... 12 nights from Newcastle... lowest grade balcony cabin £6,398 after a £1,200 discount... so a real cost of £533 a day. (Could stay with Rick Stein in a master four-poster room with a huge balcony overlooking Padstow harbour and the Camel Estuary and eat off the full à la carte menu for less per night!) On FOCLs' cruise... we would have to pay extra for travel, car parking, drinks, Wi-Fi, gratuities, speciality restaurants, excursions, insurance and, among other things, a hotel and a meal in Newcastle.

 

So instead we've decided to cruise for 14 days from a South coast port with one of FOCL's upmarket rivals... we've bought the lowest grade of balcony cabin (since been upgraded for free...(next door to one of the most expensive suites on board.) The cost of our cabin is £470 a day...  that's more than £60 a day less expensive than FOCLs. The ship we've chosen is almost brand new, is exciting and exhilarating and... vey importantly...  travel, premium drinks, Wi-Fi, gratuities, a table reservation for two, speciality restaurants, 24/7 room-service excursions, insurance... are all part of the deal. (Worth to us well over £2,000!) For goodness sake... we've even got a concert by one of Britain’s best loved artists who can fill any major venue or arena at the drop of a hat. (Good seats for his next concert in the Albert Hall later this year are each over £100 a ticket!)

 

On 5/9/2023 at 9:16 PM, richard_london said:

I can't square the demand highlighted in the quarterly reports with the need to discount fares so much.  I suspect many have cottoned on to Fred's pricing strategy and are just not booking and looking for last minue deals which are more realistic in terms of their pricing.

 

So if FOCLs is "experiencing good demand for cruises" we find it surprising that's not reflected in the accounts. Perhaps "experiencing good demand for cruises" a bit like one cruise that we followed last year... in May 2022, we were offered a cruise due to leave early in 2023 on the basis of "last few cabins remaining" and that claim was repeatedly made in the following months... yet the ship was almost half-empty when it sailed... perhaps FOCLs understanding of the word "few" doesn’t accord with our own... may it's the same with the term "experiencing good demand for cruises." Annoying? We find it so.

 

We absolutely agree that FOCLs has a limited appeal for some demographics. Importantly also is the fact that FOCLs' pricing means that those in that demographic who choose to have a balcony cabin or above have an extremely wide choice of other cruise lines to choose from... all of which offer better food, better entertainment, better value for money and arguably a better atmosphere and ambiance on board. 

 

The fact that on an average day in the first quarter of this year FOCLs' three ships, between them, were sailing with about 1,367 passengers short of capacity says it all. 

 

That's an average of more unsold berths every singly day over three months than the entire capacity of FOCL's biggest ship, The Borealis. Result (according to a back-of an-envelope-calculation) FOCLs lost, on average over £16 per passenger, per day, for the last reported ninety days. Well... a loss of £16 a day for an average of 2,655 passengers per day for 90 days... is a lot of money. FOCLs could mothball the Borealis and still have capacity to carry the number of passengers that they've been attracting (at loss making prices) recently.

 

Moral of the story? Perhaps best not to annoy a once loyal customer base that used to buy three to four cruises a year.

 

[richard_london]

4 hours ago, twotravellersLondon said:

14 hours ago, FangedRose said:

They acted no different from any other UK based cruise line. No other UK cruise company will give you any redress if the price drops after booking.

 

Not sure about that... one of FOCLs closest rivals will reimburse customers if their cruise is later sold for less than they bought it for originally.

 

Fred do like to portray themselves as a family company, and used to leverage Fred Jr's involvement an awful lot in brochures and publicity.  Curating their image will have convinced many passengers and loyal guests that they had their best interests at heart and I'm sure ARDXXX felt that too when they were assured by Fred about the upgrade.

 

Unfortunately, from my own experiences on Fred ships and from reading this forum I've realised that Fred's customer service can drops any pretence of being a family company and act like so many other companies and sticks rigidly to their T&Cs.  Whilst they are perfectly entitled to do so, and they aren't a charity, I don't think it is unreasonable to expect some goodwill from a company to which they and others have shown such loyalty over the years.  As twotravellersLondon points out, Fred's ships are sailing well below full capacity, so what harm in giving an upgrade to a loyal customer?

 

If loyal Fred cruisers are being disenfranchised (if that is the right word) with the Fred experience, and with the cruise market saturated with so many different companies that we can easily book as alternatives to Fred, Fred are doing themselves a disservice by alientating their already dwindling number of repeat guests.  I've learnt that many cruisers are incredidbly loyal to their preferred cruise lines and it's sad when promises get broken, and I can completely understand their reluctance to every cruise with that company again.

 

[twotravellersLondon]

8 hours ago, ARDXXX said:

Thank you for your comments, yes we were booked on a Freedom Fare basis which I felt would have given us more benefits, as in this example, and yes I agree that without FO informing us in writing of their upgrade tempter that it does not carry as much weight but after being informed four times that we were on the list for an upgrade then being refused it does not lie well and it would have to be an extremely good deal for us to reconsider FO. I believe that the only reason that they continue in business if the fact that they sail from local ports.Anyone living anywhere south of the midlands should try SAGA and they probably would never return to FO

  

"South of the Midlands" is soon to be "South of the Yorkshire Dales." 

 

SAGA has announced that it will extend it's included return car service from 250 miles to 300 miles. Anyone living in York, Leeds, Bradford, Harrogate and even the outskirts of Skipton will now have free travel to and from the port... it will be possible to leave home at a reasonable time in the morning and still be on the Spirit of Discovery or the Spirit of Adventure for afternoon tea... and a similar journey on the way home... cases collected and delivered to the doorstep... no need to trouble with the hassle of driving or parking in Liverpool or Newcastle, no parking charges, no petrol costs... and no worries about being delayed... the ship will wait if a car booked by the company is delayed in traffic.

 

FOCLs has relied on something of a "captive market" in the North. Now millions of people and potentially tens, or even hundreds of thousands of cruisers from what FOCL's may see as its fiefdom will have another choice.  One thing's for certain, the clients that FOCLs are most likely to lose are the high end ticket cruisers who would have taken balconies and suites.

 

[Eglesbrech]

26 minutes ago, twotravellersLondon said:

 

SAGA has announced that it will extend it's included return car service from 250 miles to 300 miles

I would need a few hundred miles more than that before it’s any use to me.

[tring]

3 hours ago, twotravellersLondon said:

  

 

"South of the Midlands" is soon to be "South of the Yorkshire Dales." 

 

SAGA has announced that it will extend it's included return car service from 250 miles to 300 miles. Anyone living in York, Leeds, Bradford, Harrogate and even the outskirts of Skipton will now have free travel to and from the port... it will be possible to leave home at a reasonable time in the morning and still be on the Spirit of Discovery or the Spirit of Adventure for afternoon tea... and a similar journey on the way home... cases collected and delivered to the doorstep... no need to trouble with the hassle of driving or parking in Liverpool or Newcastle, no parking charges, no petrol costs... and no worries about being delayed... the ship will wait if a car booked by the company is delayed in traffic.

 

FOCLs has relied on something of a "captive market" in the North. Now millions of people and potentially tens, or even hundreds of thousands of cruisers from what FOCL's may see as its fiefdom will have another choice.  One thing's for certain, the clients that FOCLs are most likely to lose are the high end ticket cruisers who would have taken balconies and suites.

 

 

Who realistically would want that length of intense journey before getting on a cruise ship?  Far better to travel down the previous day at your own leisure, rather than being stuck in the back of a car or minibus for hours on end for an intensive journey.  The other so called perks from Saga are absolutely no interest to us either.  We have annual insurance, we do not do coach trips, not do we spend much on drinks.  Also Saga itineraries are little better than the bigger cruise lines imo and only sail from the UK, so hardly something worth paying such a high premium for.  Prices are not good compared to many other cruise lines offering those sort of itineraries, unless those so called perks are an advantage to an individual.  All a case of what individuals prefer though.

 

There are other options out there, but Saga is certainly not one which would interest us.  P&O smaller ships are fine for certain itineraries and Azamara are very good indeed for some fly cruises on genuinely small ships.  For really good unusual itineraries, we would happily pay a premium, though that can be very hefty with the expedition lines.  Fred has a some itineraries which compare favourably with some of those and yes not needing to travel so far to embark a ship is a great advantage, or indeed the chance to combine that (far more pleasant) traveling with a few days stay near Edinburgh, or as we did last year, Newcastle - when we were able to go to the Farne Isles during a land stay. 

 

All personal choice and everyone will have their own preferences, but useful at present to have that choice.  Regards Fred though, I do wonder if that first payment to Carnival Corp for the ex HAL ships will actually be paid, or if they will abandon support for the cruise line before that.  I think that payment is due in September, or thereabouts.  We will see, but a shame opportunities for various itineraries are being restricted to those provided by the companies that just want to produce the same old ones, visiting much the same ports such as P&O or Saga IMO.

 

 

[twotravellersLondon]

22 hours ago, richard_london said:

Fred are doing themselves a disservice by alientating their already dwindling number of repeat guests.  I've learnt that many cruisers are incredidbly loyal to their preferred cruise lines and it's sad when promises get broken, and I can completely understand their reluctance to every cruise with that company again.

 

23 hours ago, ARDXXX said:

I believe that the only reason that they continue in business if the fact that they sail from local ports.Anyone living anywhere south of the midlands should try SAGA and they probably would never return to FO

 

The basic question is... what will be then impact on FOCLs of SAGA extending its car service.

 

Perhaps... those people willing to travel 300 miles are of the similar mind as those people  who already travel 250 miles by SAGA included car at the moment... perhaps they're folks who have decided that FOCLs just not for them... have decided that SAGA is a good alternative...  will use the car service or, if they choose, enjoy free car-parking instead. 

 

In our opinion, FOCLs have been on the back foot since SAGA seems to have taken the decision years ago, when it decided to build the Discovery and the Adventure, that it would aim to attract a certain socio-economic demographic. SAGA's not competing for FOCLs passengers as a whole... only those who are willing and able to pay what FOCLs might describe as the "premium" fare for higher grade cabins with balconies. When the Spirit of Discovery was launched in 2019, FOCLs ceased to be one of SAGAs "partners." It could be coincidence but FOCLs' passenger numbers, occupancy rates, revenues, spend per person and profits all fell. That could have been a result of higher ticket price cruisers moving from FOCLs to SAGA.

 

Clearly this model won't suit everybody but we think that SAGAs have no interest in competing for the budget end of FOCLs market. It's very interesting that FOCLs last figures showed only 66% occupancy... compared to 75% on SAGA. One member on these boards has just reported returning from a cruise on SAGA's Spirit of Adventure which was full. 

 

It increasingly seems from comments on FOCLs' own website that company is selling a higher proportion of cruises to the new-to-cruising and to the budget market... and at a daily rate that's comparable with a coach holiday or a trip to one of the adult-only resorts. Many love the experience, think that the food is "first class," "five star," that the entertainment is "West End standard" and the whole experience is "fabulous," "couldn't be better" and that the offer is "value for money." But the amount that they currently pay doesn’t even cover the cost of the cruise... in some cases... far from it. In the first quarter of this year it cost FOCLs, on average, about £226 per day per passenger. In the coming weeks passengers can cruise to the Fjords for as little as £185 pppd (on the basis of the last report... £40 a day less than cost price.)

 

FOCL seem to rely on what they consider as the "premium" client... so on that same cruise the minimum cost for those in a balcony cabin is £428...that's over £200 pppd more than the cost price.

 

But... we've very recently looked at an entry level balcony cabin on a FOCLs cruise and even with a £1,200 discount, it would be more expensive than a comparable cabin for a very similar cruise on SAGA... so we've booked SAGA will have a better cabin that FOCLs can offer, better food, better entertainment, insurance, transport to and from the port, excursions, Wi-Fi, fruit in the room, premium toiletries, premium drinks, speciality dining on a ship... all for less that the basic price per day with FOCLs.

 

And... as far as we're concerned, SAGA is offering a far more "interesting itinerary." It's a personal thing... we all "takes our choice and pays our money."

 

What's important to all of us who cruise is that we can choose from a competitive cruise market where we can each select what will best suit our life-style within our budget. We think that SAGAs extension of their car service by 50 miles will give an additional choice to millions of people in a great arc of the country from Liverpool and Manchester in the West through Leeds. Bradford, York to Hull on the East coast a greater choice.

 

If that increases cruise line competition so that companies, including FOCLs, to provide a better offer at a better value-for-money price it will help cruisers. Just two or three cars per cruise from that extended range would... we recon... increase SAGS's revenue by between £1 million and £2 million a year.

 

But not everybody will want to sail with SAGA. Unlike FOCLs, SAGA doesn’t seem to try to be all things to all people. We think that FOCLs will still have its "cruise from" market, will still have folks who immensely enjoy their cruise, think that FOCLs is "fabulous" that the food is "five star", the entertainment is 'West End" standard" and who will book with FOCLs again and again and again. Like "Fred" years ago FOCLs still has a captive market of appreciative, loyal fans who just wouldn't cruise with anyone else. The main problem is that "fan base" seems to be  much smaller than it was five years ago... and they are far more budget minded and canny than they once were.

 

What FOCLs really need to look out for is... a reinvigorated Ambassador and SAGAs third new ship which is currently under discussion at Board level! 

Edited May 18, 2023 by twotravellersLondon
addition

[Britboys]

On 5/16/2023 at 10:06 PM, FangedRose said:

They acted no different from any other UK based cruise line. No other UK cruise company will give you any redress if the price drops after booking.

I believe the only one that does is Saga, who say they will either reduce your fare or upgrade you if the price of your cruise drops.

[twotravellersLondon]

On 5/17/2023 at 1:06 PM, richard_london said:

f loyal Fred cruisers are being disenfranchised (if that is the right word) with the Fred experience, and with the cruise market saturated with so many different companies that we can easily book as alternatives to Fred, Fred are doing themselves a disservice by alientating their already dwindling number of repeat guests.  I've learnt that many cruisers are incredidbly loyal to their preferred cruise lines and it's sad when promises get broken, and I can completely understand their reluctance to every cruise with that company again.

 

Fred Olsen Jun resigned as Chairman of Fred Olsen Cruise Lines by the 4th of July 2022... just about the time of the AGM of the Norwegian based Bonheur multinational conglomerate which is the Cruise Group's ultimate owners.

 

The cruise business so loving referred to as "Fred" had been severely disrupted in 2021 as a result of the Covid pandemic and the situation in the Ukraine. The operating result for 2021 before depreciation was a loss of NOK 543 million was well down in pre-covid levels and overall, the cruise business's net loss for 2021 was NOK 778 million. (About £58,680,000 at today's exchange rates)

 

So after a year without Fred. Jun... what does Bonheur's accounts show and... did the cruise sector's fortunes change in 2022? 

 

Operating result before depreciation for 2022 was a loss of NOK 424 million. The cruise business's net result for 2022 was a loss of NOK 1,097 million. (About £80.270.000 at today's exchange rates) So no... things don't look anywhere near as good as they did a year ago.

 

With such a large annual lost... it's not surprising that Bonheur has commented that; "2022 ended up with disappointing financial results." 

 

The Olsen family are the majority shareholders of Bonheur which owns numerous companies including the Norwegian based company, First Olsen Holding AS which in turn owns the UK registered company, First Olsen (Holdings) Ltd, which in turn owns a group of UK based companies including; Fred. Olsen Cruise Lines Ltd, Balmoral Cruise Ltd, Borealis Cruise Ltd, Bolette Cruise Ltd, Braemar Cruise II Ltd, Boudicca Cruise Ltd, Black Watch Cruise Ltd and Fred Olsen House (JV) Ltd.

 

But why are results so "disappointing? When some of the press releases  from FOCLs seem to be optimistic? In July 2021 "Fred" resumed cruising with plans to bring back all four ships and with the expectation that cruise profits would bounce back to pre-covid level by later in 2022. Early in 2022 FOCLs reported "a bumper January, with sales returning to pre-pandemic levels across its small-ship ocean fleet." Early in 2023, FOCLs extended their cruise sale into February after what has been the "line’s most successful January on record – with more guests than ever choosing to book with the family-run company than ever before."

 

And why are results so "disappointing when major economies have been made.  Some people cruising on FOCLs have commented on later arrivals and early departures from ports... while others have commented on missed ports and changed itineraries. The Borealis and the Bolette have both been fitted with Artificial Intelligence systems to save fuel and reduce costs. This calculates the most fuel-efficient route based on weather forecast, currents and sensors installed on the ships. These AI systems calculate average speed needed and if speeds are deemed too high the itinerary is changed to allow for slower speeds... in order to reduce fuel consumption. FOLC may plan "hand crafted itineraries" by experienced journey planners... but at sea... it's machine based Artificial Intelligence that determines the route, the speed and the ports! We could never have imagined when we were watching the computer "HAL 9000" in the film "2001"... way back in 1968 or, "Holly" in Red Dwarf in the 1980s... that by 2023 cruise ships like the Bolette the Borealis and soon the Balmoral... would have such powerful Artificial Intelligence guiding the Captains and telling them what they should do! Who would have thought that a couple of hours less for cruise passengers in port or the AI decision to miss out a port all together would be a way to help "save the planet!"

 

But why are the FOCLs results so "disappointing?

 

One of the things that's very seriously booking with FOCLs is the pricing structure and the last minute discounting. The FOCLs website is still advertising "balcony cabins" where cruisers can "Take in the scenery and sea air from a private outdoor space in one of our Balcony cabins" but offering terrace cabins... which have little else than a door opening onto the "public" promenade deck. On a like-for-like basis FOCLs' initial prices tend to be very high. We've just returned from a cruise on one of FOCLs closest competitors for the top end of FOCLs' market... and on a like for like basis FOCLs would have cost us half as much again for a similar cruise. FOCLs may be successfully competing with coach holidays and adult-only holiday camps/hotels by discounting and offers but the real question is... can FOCLs ever break even at those prices and, if it could, how will it repay the millions, upon millions upon millions of debt that the company is now carrying.

 

It looks from the accounts as if it's now costing FOCLs more to run three ships than it ever did to run four, that prospective passengers are still very reluctant to pay "top dollar" and prefer to take heavily discounted offers and that passenger numbers are still far too low for the cruise-line to break even. All that despite glowing reviews on the company website from many of FOCLs' "trusted customers" who are quite honest in their comments that they had a wonderful time at value for money prices and would book again. Is it really the case that FOCLs policy now means that many passengers are being carried at a loss?

 

What should FOCLs do in the next year to ensure that a full financial year after the departure of Fred. Jun. so that when the 2023 Bonheur result are reported to the Norwegian Stock Market next year that the FOCLs doesn’t again end up with another set of  "disappointing" financial results?

[richard_london]

On 6/10/2023 at 4:37 PM, twotravellersLondon said:

The Borealis and the Bolette have both been fitted with Artificial Intelligence systems to save fuel and reduce costs. This calculates the most fuel-efficient route based on weather forecast, currents and sensors installed on the ships. These AI systems calculate average speed needed and if speeds are deemed too high the itinerary is changed to allow for slower speeds... in order to reduce fuel consumption. FOLC may plan "hand crafted itineraries" by experienced journey planners... but at sea... it's machine based Artificial Intelligence that determines the route, the speed and the ports!

I didn't know that.  Thanks for sharing.  I've been on cruises before that have had ports of call curtailed at the last minute (a couple of times and if I recall correctly down to industrial action by dockers), but to have a port of call cancelled this way would be very frustrating.  I know delays can happen, but there should be enough flexibility in the originally advertised schedule to visit all of the planned ports of call.  If things are going to be subject to change at the last minute it does make a mockery of the hand crafted concept Fred like to project, as that suggests a human touch.  Perhaps now it is all done by AI.

 

On 6/10/2023 at 4:37 PM, twotravellersLondon said:

All that despite glowing reviews on the company website from many of FOCLs' "trusted customers" who are quite honest in their comments that they had a wonderful time at value for money prices and would book again.

 

Well, Fred have form in the past for "mysteriously" not sending the Feefo survey emails out on cruises that don't go well.  Can't remember the year it was but I was on a Balmoral cruise with a big outbreak of norovirus and for some strange reason no one got the email asking to review the cruise.  Funny that!

 

Also, you never know from the reviews what price the person paid versus the lowest price that Fred ultimately sold that cabin grade at.  Because as we all know there can be a big difference between the two.  If you get a cheap last minute deal then you would be more forgiving and also more likely to give a good review.

[twotravellersLondon]

On 6/13/2023 at 12:05 PM, richard_london said:

Also, you never know from the reviews what price the person paid versus the lowest price that Fred ultimately sold that cabin grade at. 

 

 

The average spend per person in the last six months (including we think, drinks packages, gratuities and such likewise) was £191 per day per person.

 

The Norwegian based multi-national conglomerate, Bonheur, which is the "ultimate owner" of FOCLs has just filed financial results for the first half of 2023. (Fred. Jun. may have gone as Chairman over a year ago but, ultimately, it's still the Olsen family who have a majority shareholding in the multi-billion business empire.)

 

These results are interesting because the full year results for 2022 didn't look good. The cruise business's net result for 2022 was a loss of NOK 1,097 million. (About £80 million at the then exchange rates.) It's not surprising that Bonheur commented at the time; "2022 ended up with disappointing financial results." 

 

But at the beginning of this year there were hints that FOCLs might just be doing a bit better. At the beginning of February 2023 Peter Deer, the MD, was quoted in the travel press as saying that the company had a "phenomenal start to the year" and January was said to have been a "record breaking" month and a 50% rise in those trying the line for the first time.

 

Looking at these results in context... way back in the pre-pandemic days of 2019 the half yearly revenue results for "Fred" was NOK 1,175 million (about £88 million). With inflation since then that should now be about £110 million on a like for like basis. 

 

These results show that Operating Revenue for the first half of 2023 was NOK 1,538 million (about £117 million). So... well up on 2019. 

 

FOCLs' earnings... the bottom line... for the first half of 2023 was NOK 12 million (about £1 million). Pretty encouraging for a company that made a NOK 19 million (about £1.5 million) loss in the first half of 2019.

 

Costs for the second half of 2019 would seem to be about NOK 1,181 million (about £88 million). By comparison, the costs for the first half of 2023 would seem to be about NOK 1,526 million (about £116 million). That seems to be a huge amount of money for a company discounting at the last minute to fill empty cabins. It really looks as if it's costing more to run the old HAL ships than it did to run the Braemar (laid up for over 3 years), Black Watch (scraped) and Boudicca (scraped). 

 

In 2019 "Fred" had no debt. At this point in 2022 FOCLs owed NOK 976 million (about £73 million). The debt's in 2023 has now increased to NOK 1,325 million (about £101 million). That's a lot of debt for a small subsidiary company that was only making about £6.6 million a year profit on an annual turnover of about £200 million a year between 2015 and 2019.

 

So whatever's wrong; customer relations at the beginning or during the pause, the purchase of HALs two old ships, the loss of the much loved Boudicca, Black Watch and Braemar, the post-pause pricing strategy, the food, entertainment, itinerary changes, cruise cancellations or illness on board... FOCL's not doing as well as many would have liked. And that's despite the rave comments on other sites and the fact that many of FOCLs' new-to-cruising passengers seem to like the product, like the reduced "cruise-from" rates, like the staff on board to remember their names and to know what they always drink.

 

A back-of-an-envelope calculation with trusty slide rule in hand suggests that FOCL has to take in about £240,000,000 a year and achieve about 70% occupancy rate to break even... if the company continues to attract a clientele willing to pay on average around £190 a day for the experience.

 

What does the future hold for FOCLs now that "Fred" has been gone for over a year... the first instalment on the purchase of the old Amsterdam and Rotterdam from Holland America seem to be due in the next couple of months. FOCLs bought the Rotterdam/Borealis from Holland America in mid 2020 and the ship was delivered to FOCLs in September 2020. It cost FOCLs £11,164,274.30 but FOCLs obtained a mortgage for the same amount from HAL. No repayment is due until the 3rd anniversary of the delivery date... so September 2023. The first instalment is £3,721,424.77... and there is also interest at 2.5%. And of course, it's a very similar story with the Amsterdam/Bolette. So that's well over £7 million due in repayments this autumn, again next autumn and yet again the year after that.

 

So despite doing better in the past few months, it seems that FOCLs needs to up the occupancy level, make economies or increase prices if it is to earn enough money in each of the next three years to afford to pay for these two old ships.

 

And then there us the debt of NOK 1,325 million (about £101 million)... how will that ever be paid? Especially now that Fred's gone.

[richard_london]

On 7/14/2023 at 11:40 AM, twotravellersLondon said:

FOCLs' earnings... the bottom line... for the first half of 2023 was NOK 12 million (about £1 million). Pretty encouraging for a company that made a NOK 19 million (about £1.5 million) loss in the first half of 2019.

 

On 7/14/2023 at 11:40 AM, twotravellersLondon said:

It cost FOCLs £11,164,274.30 but FOCLs obtained a mortgage for the same amount from HAL. No repayment is due until the 3rd anniversary of the delivery date... so September 2023. The first instalment is £3,721,424.77... and there is also interest at 2.5%. And of course, it's a very similar story with the Amsterdam/Bolette. So that's well over £7 million due in repayments this autumn, again next autumn and yet again the year after that.

 

So I check I understand correctly, even if the second half of 2023 they achieved, say double what was achieved in the first half (so £2 million) the repayments for the two ships will be wiping out any profit?

[twotravellersLondon]

15 hours ago, richard_london said:

So I check I understand correctly, even if the second half of 2023 they achieved, say double what was achieved in the first half (so £2 million) the repayments for the two ships will be wiping out any profit?

 

You may be very right. That's what our abacus and trusty slide-rule are both hinting at... and that feels right based on recent history... but the whole group finances are complicated and sometimes difficult to fathom.

 

It might be helpful to consider "Fred" in his hay-days as a popular much-loved cruise line... At the beginning of the twenty-teenies when "Fred" really was Fred Olsen Jun, the company's revenues were about £150 million but it cost about £160 million to run the fleet at about 90%+ full and the group made an annual loss of about £20 million. (The chattering at afternoon tea was that Fred Sen. was content to make a loss when his cruise business was carrying so many passengers to Norway and giving such an economic boost to communities there... inside knowledge, supposition, unfounded presumptions... who knows?) It was only from about 2012 when prices were hiked from about £118 pppd to £159 pppd that losses began to fall... but so did occupancy rates.

 

To understand where the company is now... By 2019 Fred Jun's revenues were about £200 million, it cost about £198 million to run the fleet but the occupancy rate had plummeted to about a little over 70%... the company made a profit of about £2 million a year... on a fleet capacity of about 4,000. (But remember the NOK/£ exchange rate wobbles up and down a bit.)

 

In the first half of 2019 FOCL's revenues were about £101 million. In 2023 revenues were about £119 million... about £18 million more than in 2019. In the first half of 2019 it cost about £104 million to run the FOCL fleet but in 2023 it cost £118 million... that's about £14 million more than in 2019. In both cases the occupancy rates were similar (72% and 69%) and in both years the capacity of the ships was virtually the same. (about 4,000) 

 

The net profit for the first half of 2023 was about £930,000 Looking at 2019 the second half of that year matched the first half... it could well be the same in 2023. So waying the dried sea-weed in the air... it looks as if, on a like-for-like basis, 2023 may well replicate 2019. 

 

It looks as if FOCL's have to reduce costs, increase occupancy or increase prices to make any real profit... that's probably why the company's net debt has increased from about £76 million to about £103 million in the last year.

 

So lots of "ifs, ands and buts"... but time will tell. Perhaps FOCLs will flog the Braemar, Bonheur will proffer even more loans, HAL will take pity on FOCLs and reschedule the loan, the "team" at Ipswich will see another "phenomenal" upturn in sales and an 85% occupancy rate (not seen since about 2012) or will be able to sell cabins at an average price of of well over £300. (We don't think that's ever been achieved in the entire history of the company.)

 

We will wait and see. Bonheur ASA has access to some of the most successful financial brains in Scandinavia and the Olsen Family aren't collectively multi-billionaires by accident!

 

[twotravellersLondon]

On 9/5/2022 at 5:42 PM, richard_london said:

But are they willing to "throw good money after bad?"  (i'm not saying Fred's product is bad).  Cruise for Bonheur is not a core product and is a bit anomalous in a wind energy and renewables business, so my fear is that with Fred gone, as the biggest proponent for cruise within Bonheur, what appetite is there for a cruise business that isn't making any money? 

 

Sorry that an informed answer has taken so long... sometimes Company Information moves at a glacial pace.

 

FOCLs Annual Report for 2022 has been filed in Companies House in the last few days. It makes very interesting reading... especially as Fred Olsen Jun. was "gone" from the Company on 4 July 2022.

 

As most people already know, the MV Braemar is up for sale with only essential crew on board to oversee appropriate maintenance and has been "impaired"  permanently reduced in value as a company asset.  However the Balmoral has also been impaired following a review of strategic plans. Seems the Balmoral is destined to leave the fleet in the not too distant future.

 

The Company believe that "management continually strive to ensure the product meets guest expectations." However...

 

FOCLs Annual Report states that the Company made a £105,368,000 loss in the 2022 financial year. FOCLs ended the year with a net debt of £78,277,000 (that's £27 million more than in the previous year.) The Company borrowed £29,000,000 from its ultimate parent company, Bonheur in 2022. (By January 2023 this amount had increased by a further £5,000,000.)

 

FOCLs state that it will have enough cash to see it to the end of 2023 but "the continued uncertainty of availability of additional funding needed represents a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern." The auditors' report added, that in certain circumstances FOCLs "may be unable to realise its assets and discharge its liabilities as they fall due.'

 

 

 

FOCLs Annual Report for 2022  makes very sad reading for those, like ourselves, who've enjoyed so many cruises with "Fred". Fred Jun. has gone and the current directors of FOCLs seem to believe that FOCLs may also go. It seems that they have a limited appetite for a cruise business that isn't making any money.

[LandC]

Thanks for posting twotravellersLondon, this makes interesting reading.  We had a very enjoyable Baltic cruise on the Balmoral a few years ago, with a daytime transit of the Kiel canal.  It is the only ship in Fred’s fleet which can sail through the canal, so it would be a shame if it was “impaired”.  
We have taken several cruises with Fred in the past but have nothing booked at present.  We were stung last year by booking early to get the Oceans discount, only to find that prices reduced nearer the sailing date.  We tend to book no-fly cruises with Saga nowadays.  We love their new ships and all inclusive prices, and by pre-registering we know we will get a good discount when the cruises are launched.  There is so much competition now, and Fred’s ships are getting on a bit.

With debt increasing I guess Bonheur will have to make a decision on the future of the cruise line soon.

 

[Eglesbrech]

Interesting information @twotravellersLondon.

 

If Balmoral goes so do cruises out of Scotland as the two bigger ships need particular tides to leave Rosyth. I doubt they would spend the money to leave from Leith or Greenock. 
 

The cruises from northern England / Scotland seem to be the ones holding their prices as they are the only show in town other than Ambassador. I’ve noticed that the pricing for Southampton is always cheaper, even for very similar itinerary’s but then there is lots of competition down there.

 

It would be a shame to see Fred Olsen go but then so many companies are folding at the moment.

[david05]

This is a shame. Whilst Fred was never our first choice (P&O until 2016) we had a number of enjoyable cruises with them over the years. After 2016 we looked at both Fred and Saga and we preferred the Saga itineraries for what we wanted to do at that time, although we didn't think there was much between the 2 companies when looking at ships and what they offered. So we didn't rule out Fred at that stage but then Saga introduced their new ship, followed after covid with the sister ship. The availability of new ships with a balcony every time, together with Saga's more understandable pricing policy, and Fred's recent choice of replacement ships for its fleet means that we are unlikely to consider Fred in the future. It really is difficult to understand Fred's strategy and who they are trying to attract to their cruises.

[twotravellersLondon]

 

21 hours ago, Eglesbrech said:

Interesting information @twotravellersLondon.

 

If Balmoral goes so do cruises out of Scotland as the two bigger ships need particular tides to leave Rosyth. I doubt they would spend the money to leave from Leith or Greenock. 
 

The cruises from northern England / Scotland seem to be the ones holding their prices as they are the only show in town other than Ambassador. I’ve noticed that the pricing for Southampton is always cheaper, even for very similar itinerary’s but then there is lots of competition down there.

 

It would be a shame to see Fred Olsen go but then so many companies are folding at the moment.

 

Many thanks for that information. We didn't know about the problem with the old HAL ships or that the loss of the Balmoral might have such serious implications for cruises out of Rosyth... it would certainly concern us if we were still living in Aberdeen.

 

The wording in the report is... "An impairment loss has also been recognised during the year in relation to its subsidiary Balmoral Cruise Ltd, following a review of future strategic plans, trading performance, and longevity of the vessel bearing in mind environmental considerations with the age of the vessel." The amount would seem to be £17,966,000. However this suggests that no matter what the Balmoral's days with FOCLs are numbered.

 

How long will the Balmoral be with FOCLs? The report also indicates that FOCLs charters the MV Balmoral from its subsidiary Balmoral Cruise Ltd as a "bare-boat" charter (hiring of a ship with no crew or provisions included as part of the agreement) and that the charter can be ended with three months written notice by either party.  

 

These decisions have been made and these statement have been made public at a pretty high level by the movers and shakers in the Fred Olsen Empire... the directors including some who held the purse strings and who held office at the time of submission of the report to companies House were;

 

Anette Olsen, Chairman of Fred. Olsen Ltd and the owner of Fred Olsen & Co. which is responsible for the management of the Oslo Stock Exchange-listed company Bonheur ASA.  She is the Chairman of the boards of Fred. Olsen Renewables AS, Fred. Olsen Ocean Ltd., Fred. Olsen Ltd., NHST Media Group AS. She is also a board member of Timex Group, Fred. Olsen Cruise Lines Ltd. and Global Wind Service A/S.

 

Jeremy Dowler, currently non-executive Director of Fred. Olsen Cruise Lines Ltd and formerly the Finance Director of Fred Olsen Ltd between Sep 1995 and Aug 2016.

 

Richard Olav Aa, CFO of Fred. Olsen Ltd... a business established in the UK in 1963 Fred with a primarily focus on renewable energy. The Company also have interests in Forest management and travel.

 

Pete Deer, Managing Director for Fred. Olsen Cruise Lines

 

Fred. Olsen Jun left the company on 4 July 2022 but a note in the annual report    indicates that, "A family Member of A. S. Olsen has an indirect interest in Bahai Shipping services in the Philippines" and that Bahai Shipping provided crewing and other services to FOCLs.

 

Its possibly also interesting to note that the directors seem to believe that, "The company recognises that attracting and retaining both new and existing passengers is critical to success." ... "communications with passengers has been vital".... " Passengers have been kept abreast of cancellations as they have taken place, and notified of the re-booking and refund options available to them." it has been a key priority to communicate clearly with passengers and at the right time. At all times, efficiency, courtesy and professionalism has been at the fore when commutating with passengers" (Directors' Report p 5) 

 

 

23 hours ago, LandC said:

We have taken several cruises with Fred in the past but have nothing booked at present.  We were stung last year by booking early to get the Oceans discount, only to find that prices reduced nearer the sailing date.  We tend to book no-fly cruises with Saga nowadays.  We love their new ships and all inclusive prices, and by pre-registering we know we will get a good discount when the cruises are launched.  There is so much competition now, and Fred’s ships are getting on a bit.

With debt increasing I guess Bonheur will have to make a decision on the future of the cruise line soo

19 hours ago, david05 said:

The availability of new ships with a balcony every time, together with Saga's more understandable pricing policy, and Fred's recent choice of replacement ships for its fleet means that we are unlikely to consider Fred in the future. It really is difficult to understand Fred's strategy and who they are trying to attract to their cruises.

 

And that's probably the reason why instead of cruising with "Fred" four times a year as we did up to 2020... we've already cruised with SAGA three times in the last year and we are looking forward to another cruise in the very near future.

[Eglesbrech]

@twotravellersLondon the HAL ships have been in and out of Rosyth, they were berthed there during the pandemic.  My understanding however is that they had to check the tide tables to pick the right time to move out again.
 

Even Balmoral as a smaller ship has to go at the “right” time, that’s why we got disembarked so very early when they needed to deep clean the ship and delay the subsequent embarkation. If they were too late they were stuck there. 
 

That’s why a lot of the bigger ships anchor at South Queensferry rather than going further up the Forth.

 

Last year P&O had to cancel a planned call at Rosyth at the very last minute. The reason given to passengers was the “wrong tides”.

[fruitmachine]

1 hour ago, Eglesbrech said:

That’s why a lot of the bigger ships anchor at South Queensferry rather than going further up the Forth.

I think the air-draft under the bridges is less than 50m.  Many larger cruise ships are bigger than that.

[richard_london]

On 9/25/2023 at 11:51 AM, twotravellersLondon said:

The wording in the report is... "An impairment loss has also been recognised during the year in relation to its subsidiary Balmoral Cruise Ltd, following a review of future strategic plans, trading performance, and longevity of the vessel bearing in mind environmental considerations with the age of the vessel." The amount would seem to be £17,966,000. However this suggests that no matter what the Balmoral's days with FOCLs are numbered.

 

How long will the Balmoral be with FOCLs? The report also indicates that FOCLs charters the MV Balmoral from its subsidiary Balmoral Cruise Ltd as a "bare-boat" charter (hiring of a ship with no crew or provisions included as part of the agreement) and that the charter can be ended with three months written notice by either party.  

 

Thanks as always for your insightful previous posts.  It doesn't paint a positive picture, the loss of the Balmoral would be terribly sad.  Since the Balmoral has spent most of her time recently cruising out of Newcastle and Rosyth it has not been practical for me to cruise from there, but I have fond memories of her from cruises before the pandemic.  Her removal from the FOCL fleet would be a mistake.

 

The "new" HAL ships were already much larger than the Black Watch and Bouddica and in an instant Fred elimated a lot of their nice itineraries those ships did, like the Kiel Canal transits.  I notice in their latest (heavily promoted) advert on television that in the attached screenshot the two images of the Balmoral show her doing two canal transits, something only the Balmoral can do now. 

 

They lost the Corinth Canal transits when they stopped using the Braemar, which I never managed to do, and really regret now having missed out.  If the Balmoral goes, any pretence of "small ship" cruising by FOCL will be pure fiction.