Carnival Corporation has dissolved the Holland America Group...

[Mary229]

Just now, BermudaBound2014 said:

 

I'm curious why you believe this? 

 

Celebrating/Promoting the 150 years makes complete sense whether holding or selling.  

They have also made announcements regarding the long voyage and have introduced a whole new set of cruises for the 30+ day voyage.  Recently they announced an Alaskan enrichment program that seems to rival the programs offered by the luxury brands.  All interviews have emphasized their traditions of the quiet voyage for the traveler. 

[BermudaBound2014]

1 minute ago, Mary229 said:

They have also made announcements regarding the long voyage and have introduced a whole new set of cruises for the 30+ day voyage.  Recently they announced an Alaskan enrichment program that seems to rival the programs offered by the luxury brands.  All interviews have emphasized their traditions of the quiet voyage for the traveler. 

 

I agree. They are setting the stage for expanding their niche. Lots of positive information coming out that boasts well for Hal's longevity. I like it given I'm with you on a long voyage next year. 

 

But I still believe they would promote/celebrate the 150 year mark regardless of external factors.

 

[PACD_JG]

With all these similar lines under the CCL umbrella...make HAL adult-only.  It provides an alternative to Virgin, and it's a win-win as older folks who want to travel with grandkids will still spend money in the company (probably with Princess).

[Guest ldtr]

54 minutes ago, BermudaBound2014 said:

 

Agreed. Whatever happens, the sky is still here.

 

 

Disagree. Next quarter they will show that they have lost more money and likely not just due to depreciation. Even CCL is admitting this. They state they will lose money for all of 2023.  I suspect it is the heavy burden of paying interest on their 34 Billion dollar loans that is most challenging.

 

 

Did you actually type that with a straight face? Your a smart guy, you know better.

 

 

 

 

 

 

Notice I said cashflow positive which is what really matters. They will still show a loss, but it will be a paper loss due to depreciation on capital investments spent long ago. Last quarter they were only 100 million from being cash flow positive overall. They were already cash flow positive on operations. Once they are cash flow positive they have demonstrated that they can handle the debt load.

 

The main impact of the debt load will be to restrict new capital investment for the next 10 years or so.

 

As far as selling HAL. Who? Clearly not NCLH or RCL. Clearly not MSC who is perfectly happy building their own ships with a different model and building their own premium ship.line. So exactly who?

 

The new money is going into premium or luxury lines.  That money might be willing to buy Seabourn, but not HAL.

 

So who exactly would be willing to buy HAL and be willing to pay a price that would make it beneficial for CCL to sell?

Edited June 10, 2023 by ldtr

[Guest ldtr]

On 6/8/2023 at 12:30 PM, FlaMariner said:

Anything that further separates Princess from Holland America Line is a bonus, IMO. 

 

Perhaps this helps keep the Princess Medallion out of our 'dam ships.  LOL. 

I happen to like the Princess medallion and miss its functionality when sailing on other lines. It has worked fine for me for the last year or so. Once it got past its teething issues.

[Guest ldtr]

9 hours ago, OlsSalt said:

^^^^ All very well-reasoned points ldtr, Thank you for sharing them.

 

The pre-covid HAL was becoming schizophrenic. The new HAL can succeed just as you pointed out. 

Smaller, leaner, and more experienced than any other competition out there for the mid-price longer, destination cruiser. There will always be a new crop of "older" passengers coming of age every year looking for this quieter brand of destination-emphasis cruising.

 

There is no reason at all HAL must grab younger passengers now with newer larger ships, by being glitzy, noisy, frenetic, and trendy.  While alienating their former solid older customer base at the same time.

 

Where else have I recently seen that exact same ploy play out? Badly.

HAL will still continue it push towards younger demographics. It now has an average age demographic  that is younger than Princess.

 

It will use the Alaska and Carribean  itineraries to introduce the brand to younger adults and families. To those interested in more traditional cruising, compared to the ship is the destination of the family oriented mass market lines (Royal, NCL, Carnival, MSC).

[Guest ldtr]

29 minutes ago, PACD_JG said:

With all these similar lines under the CCL umbrella...make HAL adult-only.  It provides an alternative to Virgin, and it's a win-win as older folks who want to travel with grandkids will still spend money in the company (probably with Princess).

Not likely. Viking is filling that niche and is continuing to expand aggressively. HAL will.still have few children on longer cruises, but will have children during the school.holiday periods. Especially in Alaska, as well as in the Carribean  during winter holiday periods.

[PACD_JG]

3 minutes ago, ldtr said:

Viking is filling that niche and is continuing to expand aggressively.

But Viking isn't under the CCL umbrella, and frankly...most of the forum regulars here won't open up their purse strings to pay for Viking.

[Guest ldtr]

7 minutes ago, PACD_JG said:

But Viking isn't under the CCL umbrella, and frankly...most of the forum regulars here won't open up their purse strings to pay for Viking.

And that exactly is the problem. They want an experience, but not willing to pay for it.

 

No reason for CCL to convert HAL to.adults only or for that matter to start one. There are other adult only lines such as Viking and Virgin. One a premium line and one going after younger adults.  One very traditional and one anything but. Makes no sense at HALs current price point.

 

 

Edited June 10, 2023 by ldtr

[BermudaBound2014]

11 minutes ago, ldtr said:

Notice I said cashflow positive which is what really matters. They will still show a loss, but it will be a paper loss due to depreciation on capital investments spent long ago.

 

I noticed. Let's see how much debt they service next quarter. 

 

15 minutes ago, ldtr said:

As far as selling HAL. Who? Clearly not NCLH or RCL. Clearly not MSC who is perfectly happy building their own ships with a different model and building their own premium ship.line. So exactly who?

 

Agreed. Certainly not NCLH or RCL. Yet CCL found a buyer for Seabourn Odyssey in Mitsui OSK lines just a few months ago. How many others are out there willing to chip away? And again, the Saudi Sovereignty has the capital to buy it all and light it on fire just for giggles. A

 

I think it's interesting to note that Americans are no longer the largest cruising demographics. The industry is changing on many levels.

 

https://www.cruisemummy.co.uk/cruise-industry-statistics-facts/#19-cruise-passenger-statistics-

 

 

 

 

 

 

[Guest ldtr]

7 minutes ago, BermudaBound2014 said:

 

I noticed. Let's see how much debt they service next quarter. 

 

 

Agreed. Certainly not NCLH or RCL. Yet CCL found a buyer for Seabourn Odyssey in Mitsui OSK lines just a few months ago. How many others are out there willing to chip away? And again, the Saudi Sovereignty has the capital to buy it all and light it on fire just for giggles. A

 

I think it's interesting to note that Americans are no longer the largest cruising demographics. The industry is changing on many levels.

 

https://www.cruisemummy.co.uk/cruise-industry-statistics-facts/#19-cruise-passenger-statistics-

 

 

 

 

 

 

Next quarter, not much, if any.  Especially since they still have new capital investment that is finishing up with the new builds. That alone will add a couple of billion. Getting back cash flow positive was the sprint.  Handling the debt is the marathon.

 

Saudi has their investments in mass market cruiselines already. They could buy why would they. They could put their money in a big pile and make a bonfire but why would they.  Any Saudi investment, would be like the hedge funds targeted, and in the premium and luxury space.

 

As a rule they invest in, they do not buy and run businesses.

 

 

Edited June 10, 2023 by ldtr

[BermudaBound2014]

Just now, ldtr said:

Next quarter, not much, if any.  Especially since they still have new capital investment that is finishing up with the new builds. That alone will add a couple of billion. Getting back cash flow positive was the sprint.  Handling the debt is the marathon.

 

 

 

On that we agree. In addition, CCL is holding variable interest debt. I think the stuff will really hit the fan when it comes to time to refinance the existing debt. 

 

My position is that the company is still in a very precarious position. None of us can say that HAL is safe. Nor can we say that HAL will be sold. We just don't know.

[Shalandara]

16 minutes ago, BermudaBound2014 said:

 

I noticed. Let's see how much debt they service next quarter. 

 

 

Agreed. Certainly not NCLH or RCL. Yet CCL found a buyer for Seabourn Odyssey in Mitsui OSK lines just a few months ago. How many others are out there willing to chip away? And again, the Saudi Sovereignty has the capital to buy it all and light it on fire just for giggles. A

 

I think it's interesting to note that Americans are no longer the largest cruising demographics. The industry is changing on many levels.

 

https://www.cruisemummy.co.uk/cruise-industry-statistics-facts/#19-cruise-passenger-statistics-

 

 

 

 

 

 

I'm not certain how much we can use pre-2020 statistics for anything currently. 

[Hlitner]

Just now, BermudaBound2014 said:

 

On that we agree. In addition, CCL is holding variable interest debt. I think the stuff will really hit the fan when it comes to time to refinance the existing debt. 

 

My position is that the company is still in a very precarious position. None of us can say that HAL is safe. Nor can we say that HAL will be sold. We just don't know.

It is almost a perfect storm working against the cruise lines.  Consider that inflation has increased the cost of food/drink supplies in a major way.  Fuel prices are again on the rise (not helped by recent Saudi cut-backs and the US anti-fossil fuel policy).  A slow-down in the world economy will also have an impact on the cruise/travel market as disposable income decreases.  And add to this the anti-cruise ship stance taken by an increasing number of ports around the world.  And the proverbial "nail in the coffin" is the world-wide trend towards higher interest rates which is like the sword of domiciles hanging over the head of CCL (and some other cruise companies).  With debt service eating up an increasing proportion of revenue, cost cutting must continue.

 

There is also the issue of new builds, the cost of which is increasingly exponentially.  And, with the possible exception of MSC, all the cruise lines depend on long term financing for new builds and the higher interest rates mean more cost and higher fares.

 

Hank  

[Guest ldtr]

1 minute ago, Hlitner said:

It is almost a perfect storm working against the cruise lines.  Consider that inflation has increased the cost of food/drink supplies in a major way.  Fuel prices are again on the rise (not helped by recent Saudi cut-backs and the US anti-fossil fuel policy).  A slow-down in the world economy will also have an impact on the cruise/travel market as disposable income decreases.  And add to this the anti-cruise ship stance taken by an increasing number of ports around the world.  And the proverbial "nail in the coffin" is the world-wide trend towards higher interest rates which is like the sword of domiciles hanging over the head of CCL (and some other cruise companies).  With debt service eating up an increasing proportion of revenue, cost cutting must continue.

 

There is also the issue of new builds, the cost of which is increasingly exponentially.  And, with the possible exception of MSC, all the cruise lines depend on long term financing for new builds and the higher interest rates mean more cost and higher fares.

 

Hank  

Certainly there is risk if economic conditions change.

 

Keep in mind that much of the financing for new builds is provided by the countries in which those builds are occurring, at very favorable terms. After all they do not want the shipyard idle and jobs lost.

 

 

[tscoffey]

4 minutes ago, Hlitner said:

There is also the issue of new builds, the cost of which is increasingly exponentially.  And, with the possible exception of MSC, all the cruise lines depend on long term financing for new builds and the higher interest rates mean more cost and higher fares.

 

One may not like MSC as a cruise experience (it is unique). But you can't deny the fact that they know far more about efficiently running ships at sea than just about anyone else. They are only expected to get bigger in the cruise market over time, as other lines cut back or sell off parts of their fleet.

[Guest ldtr]

14 minutes ago, BermudaBound2014 said:

 

On that we agree. In addition, CCL is holding variable interest debt. I think the stuff will really hit the fan when it comes to time to refinance the existing debt. 

 

My position is that the company is still in a very precarious position. None of us can say that HAL is safe. Nor can we say that HAL will be sold. We just don't know.

Juggling debt is why CFOs make big bucks. When a company is cash flow positive all thinge possible. Including  as a last resort, a restructuring that would convert the debt into equity, while leaving operations and the customers whole. The US airlines have done that for years.

 

Such a restructuring not likely, but with cash flow positive operations would be a viable last resort, if needed.

[Guest ldtr]

8 minutes ago, tscoffey said:

 

One may not like MSC as a cruise experience (it is unique). But you can't deny the fact that they know far more about efficiently running ships at sea than just about anyone else. They are only expected to get bigger in the cruise market over time, as other lines cut back or sell off parts of their fleet.

Other lines more likely to slow the rate of new construction. Less likely to sell.off parts of fleet, except for the normal selling of ships that age out.

 

Viking is also expanding aggressively. Largely funded by their practice of full payment a year in advance which give them a lot of cash to fund new builds.

Edited June 10, 2023 by ldtr

[Heidi13]

1 hour ago, PACD_JG said:

But Viking isn't under the CCL umbrella, and frankly...most of the forum regulars here won't open up their purse strings to pay for Viking.

 

Having just booked our first HAL cruise, in our experience, the price differential can minimal, depending on the cruise.

 

2023 Viking 121-night World Cruise in a midships balcony - CAN $533/day

 

2025 HAL 133-night P2P in a midships OV - CAN $439/day

 

Viking includes nearly all drinks, includes a shore-ex in each port, laundry, Visas and included CAN $5,500/pp OBC, whereas HAL has a paultry CAN $500/pp. Viking also includes Business Class flights, whereas HAL provides a paultry CAN $500 credit.

 

By the time we end the cruise, the cost per day on HAL will be significantly more, for what I expect will be a much lower standard

[cruisemom42]

21 minutes ago, Heidi13 said:

Having just booked our first HAL cruise, in our experience, the price differential can minimal, depending on the cruise.

 

I'm curious -- I assume you are booking this for the novelty of the cruise?  I admit the idea is intriguing....

[OlsSalt]

1 hour ago, Heidi13 said:

 

Having just booked our first HAL cruise, in our experience, the price differential can minimal, depending on the cruise.

 

2023 Viking 121-night World Cruise in a midships balcony - CAN $533/day

 

2025 HAL 133-night P2P in a midships OV - CAN $439/day

 

Viking includes nearly all drinks, includes a shore-ex in each port, laundry, Visas and included CAN $5,500/pp OBC, whereas HAL has a paultry CAN $500/pp. Viking also includes Business Class flights, whereas HAL provides a paultry CAN $500 credit.

 

By the time we end the cruise, the cost per day on HAL will be significantly more, for what I expect will be a much lower standard

 

Beware of loss leader pricing - non-availability of cabins when it comes time to book. Oceania was classic using this ploy. So sorry but that special price offer is already booked up, but we can offer you $$$$ instead.  

 

HAL has a fairly generous number of cabins in each cabin price point - insides, ocean view, balconies and suites -- while far more limited in the very upper amenety Neptune and Pinnacle suites. 

[Heidi13]

47 minutes ago, cruisemom42 said:

 

I'm curious -- I assume you are booking this for the novelty of the cruise?  I admit the idea is intriguing....

 

The primary reason is the itinerary, but the P2P novelty is also a factor.

 

With the exception of S/America, Norway and E/W Coasts of Africa, I have been in most of the world's ports, many of them multiple times. On each of our World Cruises, I believe only about 3 or 4 of the 35 and 50 ports were new to me.

 

On the P2P, at least 50 of the 60+ ports are new to me. It also stops at the Falkland Islands, which is of interest, as had I not left P&O, I could have been there during the war and knew most of the officers that did serve. It also adds another 10 new countries to my list of those visited.

 

So lots of positives with the itinerary, whereas Viking's World Cruise is almost a repeat of the 2020 and 2023 cruises.

[Colorado Klutch]

3 hours ago, ldtr said:

And that exactly is the problem. They want an experience, but not willing to pay for it.

 

No reason for CCL to convert HAL to.adults only or for that matter to start one. There are other adult only lines such as Viking and Virgin. One a premium line and one going after younger adults.  One very traditional and one anything but. Makes no sense at HALs current price point.

 

 

 

It's not always that people aren't willing to open their purse strings, but rather they are simply not able to do so. That's the primary reason Carnival Cruise Line has been so successful. Those cruises are at a price point which many people can afford. The higher the cost, the fewer the number of people who can afford it. 

I think it would be great if HAL offered specific, adult-only cruises. That would be a win-win. Families with children could still enjoy HAL cruises and adults who would rather not cruise with children could also enjoy HAL cruises. HAL could adjust the numbers to fit demand. Cruises with children would have more staff in the kids club to handle demand. Cruises without children could send those HAL staff to plus up the cruises with children. Club HAL could simply go dark on adults-only cruises. If a specific ship was identified for adults-only cruises, Club HAL could be repurposed. 

[mwj]

25 minutes ago, Colorado Klutch said:

 

It's not always that people aren't willing to open their purse strings, but rather they are simply not able to do so. That's the primary reason Carnival Cruise Line has been so successful. Those cruises are at a price point which many people can afford. The higher the cost, the fewer the number of people who can afford it. 

I think it would be great if HAL offered specific, adult-only cruises. That would be a win-win. Families with children could still enjoy HAL cruises and adults who would rather not cruise with children could also enjoy HAL cruises. HAL could adjust the numbers to fit demand. Cruises with children would have more staff in the kids club to handle demand. Cruises without children could send those HAL staff to plus up the cruises with children. Club HAL could simply go dark on adults-only cruises. If a specific ship was identified for adults-only cruises, Club HAL could be repurposed. 

In essence HAL already does this indirectly ...

 

Note: Kids Club is not offered on cruises of 25-days or longer, including all Legendary and Grand Voyages. We will offer a selection of children’s activities throughout these longer voyages for any children who may be onboard.

 

https://www.hollandamerica.com/en_US/onboard-activities/cruise-activities/kids-club.html

[Guest ldtr]

42 minutes ago, Colorado Klutch said:

 

It's not always that people aren't willing to open their purse strings, but rather they are simply not able to do so. That's the primary reason Carnival Cruise Line has been so successful. Those cruises are at a price point which many people can afford. The higher the cost, the fewer the number of people who can afford it. 

I think it would be great if HAL offered specific, adult-only cruises. That would be a win-win. Families with children could still enjoy HAL cruises and adults who would rather not cruise with children could also enjoy HAL cruises. HAL could adjust the numbers to fit demand. Cruises with children would have more staff in the kids club to handle demand. Cruises without children could send those HAL staff to plus up the cruises with children. Club HAL could simply go dark on adults-only cruises. If a specific ship was identified for adults-only cruises, Club HAL could be repurposed. 

Companies usually do not win fragmenting their brand. Going some ships adult only others not is a sure fire way to fragment their brand. As it is now there are too few children on the real long itineraries to operate club HAL, though children are still allowed and we have seen some on long trips. Though usually not many.