is this a strategic game plan

[1Virgo]

Reading the posts and thinking about how many of us are either ticked off and/or upset at all the fast changes, some as a test, then reverted, some permanent, almost every other day…. I started wondering if this is a new strategy.  Create turmoil and confusion ,angst,  take away then give back, so when Laura gets what she and RCG want,, stop the game, they get what they want in eliminating and we go, whew and accept.   

 

I ve seen businesses do this but not on this large scale and not businesses that were considered high end aka premium. 

[Charles4515]

11 minutes ago, 1Virgo said:

Reading the posts and thinking about how many of us are either ticked off and/or upset at all the fast changes, some as a test, then reverted, some permanent, almost every other day…. I started wondering if this is a new strategy.  Create turmoil and confusion ,angst,  take away then give back, so when Laura gets what she and RCG want,, stop the game, they get what they want in eliminating and we go, whew and accept.   

 

I ve seen businesses do this but not on this large scale and not businesses that were considered high end aka premium. 

It is not a strategy. It is a meltdown. It is a sign of a business in trouble. 

[markeb]

It isn’t a strategy. It’s the absence of a strategy. Not a pilot, but the fighter pilot thing is all thrust and no vector. Lots of random activity with no clear direction. 
 

The individual pieces have everyone fixated. And some of those individually are no big deal to many if not most people. But the totality does not suggest a healthy company. Which is truly unfortunate and I hope incorrect. 

[hankandteri]

I probably have reached the point of being over cynical, but I totally believe Cookiegate was a designed feint to draw attention away from the pre-planned AI move. If so, it backfired gloriously.

 

My evidence is that Cookiegate is the mirror image of what happened just a week or two ago when big brother Royal got their customers worked up over potentially eliminating free pizza, then said they were just kidding. Free pizza for everyone! A couple of days later they very quietly jacked up prices of their pay-for casual menu items by anywhere from 20 percent to 50 percent.

 

In Royal's case it seems to have worked like a charm. Not so when X tried the same ploy with the cookies. Free Cookies For Everyone! was immediately followed by the AI changes. Not sure why this time it created so much more of an uproar, causing many here to declare they were heading for the exits.

 

I think it may be that Royal and Celebrity have different client bases that react differently to change or maybe Celebrity's guests, many of whom have many cruises over many years under their belts, are more alert to the machinations of the cruise line.

[NMTraveller]

Royal Caribbean Cruises Debt to Equity Ratio 2010-2023 | RCL | MacroTrends

 

If you look at the charts they do seem to be improving their debt/equity in rapid fashion.  Though I am not sure how long that will last if they keep on ticking off their customers.

Edited August 30, 2023 by NMTraveller

[Robert de Beaumont]

20 minutes ago, NMTraveller said:

f you look at the charts they do seem to be improving their debt/equity in rapid fashion.  Though I am not sure how long that will last if they keep on ticking off their customers

Yes, and they are expected to be cash flow positive in 2023 (after being $2 billion negative in 2022).  They’ve done well increasing margins.  But demand for their product is elastic; and, as you note, they might kill it with a combination of continued cutbacks, perceived erosion in value, and just plain bad PR.  Time will tell.  We’ll see how demand looks for 2024. 

[chemmo]

The nature of changes resembles a group of individuals with no real knowledge of cruising being locked in a room and told they can’t come out until they have a list of ways to save on spending and ways to up income…

 

Everyone has their own little idea, the chairperson hasn’t a clue which ideas are good and which are bad so agrees to all random ideas! The proviso being if they don’t work they can always cancel, reconvene and try a few more…

 

 

[bikerunner]

I was thinking back, I remember all the uproar when Celebrity decided to do the AI, so many were upset.  They liked the I think it was good, better best, etc.  Even when that came out there was many upset.  I think the main problem now with this, is there has been a cheapening of the product, when in the past when these type of changes came out it was more just change in way you bought the cruise.  My feeling is that Celebrity has no identity anymore.  There is nothing that makes it a unique product in the marketplace.  Use to be food, have some more longer itineraries, and service that set it apart from Royal and the other mass market lines.  Now to me they are lumped in with them and one of the more expensive offerings in that space.  

[deliver42]

We were looking at Celebrity for 2024, but with all the changes, seemingly on a whim, our searches are now more with Princess and HAL who both are offering more for a lot less.

[TeeRick]

1 hour ago, chemmo said:

The nature of changes resembles a group of individuals with no real knowledge of cruising being locked in a room and told they can’t come out until they have a list of ways to save on spending and ways to up income…

 

Everyone has their own little idea, the chairperson hasn’t a clue which ideas are good and which are bad so agrees to all random ideas! The proviso being if they don’t work they can always cancel, reconvene and try a few more…

 

 

Chemmo I mostly agree.  But I think they do have knowledge of cruising.  And they are doing just about anything to generate more income and reduce debt.  We and they are now all paying the piper together.  Damn virus!

[cruisefam38]

1 hour ago, TeeRick said:

they are doing just about anything to generate more income and reduce debt. 

So.

Damn the Torpedoes, Full Speed Ahead!

 

[Dolebludger]

And the majority of this debt was incurred during the pandemic shutdown at very high interest rates. Cruise line bonds were rated as “junk bonds” as nobody knew who long the shutdown would last. Interest payments must be crushing. This is a reason for the panic we see. What I don’t understand is that it seems only Celebrity is behaving this way. Other lines seem to be holding rather steady with their product content. 

[JRG]

11 hours ago, NMTraveller said:

If you look at the charts they do seem to be improving their debt/equity in rapid fashion.  Though I am not sure how long that will last if they keep on ticking off their customers.

Edited 11 hours ago by NMTraveller

 

The ratio analysis here is great.  I'd like to see the other lines bar-graphed the same way.  There is no better way to judge post Covid-19 performance,  with respect to managing the debt service imposed by surviving the deluge.

 

How much progress is being made on reducing the deferred cruise credits,  that is a big indicator of recovery here too.  Remember all the lift and shift bookings and the deposits that went with that.

 

It would be interesting to see the comparative income statement year over year for the line item for the $100 deposit fees surrendered by customers, to see if it spiked in the past three years.

 

Always have to keep an eye on the Balance Sheet and the Income Statement and the Quality of Service being reported on CC to make a reasonable assessment.

 

Ratio Analysis is a good measurement, but it is after the fact, but that makes it useful for identifying the recovery trends, IMO.

 

[cruisefam38]

Continued thoughtful and meaningful conversation going on here.

I look forward to reading more.

[JRG]

15 hours ago, markeb said:

t isn’t a strategy. It’s the absence of a strategy. Not a pilot, but the fighter pilot thing is all thrust and no vector. Lots of random activity with no clear direction. 
 

The individual pieces have everyone fixated. And some of those individually are no big deal to many if not most people. But the totality does not suggest a healthy company. Which is truly unfortunate and I hope incorrect. 

 

I disagree.  It is most certainly a strategy.

 

Strategies are comprised of both Long and Short Segments,  and each of those segments has both a tactical and a strategic element.

 

For cruise lines when the pandemic hit,  it became like an industry defcom2 and cruise lines started disposing of revenue generating and cost extensive ships prematurely, to reflect the early stages of a business strategy known as retrenchment and maintain solvency. i.e. new deposits. 

 

Without new cash inflows operations suffered and the "quality debt" became evident in the level of service and quality of food, etc...

 

Operating on a shoestring budget is the status quo until the balance sheet debt can be supported by revenue from on going operations.  And when the on-going concern is at stake,  as evidenced by opinions expressed in annual reports and filings,  that has been the case for the mass lines.

 

Its a strategy of Transitioning from Retrenchment to Survival and then Crawling from the Wreckage with Dignity and it makes sense as an overall short term goal.

 

On a long term basis, one can only hope for the best short term outcome to be favorable and the level of quality improves to pre-Covid expectation levels.