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Skid

Thoughts from Royal CEO Richard Fain

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In addition to the great information provided by @Matt here, Barrons interviewed Richard Fain after the earnings call. Interesting reading. One thing mentioned is that despite being down 1% today, Royal Caribbean stock has led the industry in 2019. Also from the article regarding the Cuba cancellations: “We wanted to be generous to those guests whose vacations were disrupted, and that comes with a cost, but I think most of them say we handled it well, which will auger well for us in the future.” See the full article here

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I was on one of the impacted cruises last week.  I think the Company handled it well - they gave us 50% of our fare back as refundable OBC, and we in turn spent every penny of it onboard. We're happy, and Royal still managed to keep our money (on high profits items like the drink package), so everybody wins.

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1 hour ago, Skid said:

In addition to the great information provided by @Matt here,

From the linked article, I found this quote rather amusing (emphasis added):

Quote

Royal Caribbean Cruises Ltd. Chief Financial Officer, Jason Liberty, spoke to this point, "What has been particularly impressive over the past few months is the pricing we are receiving for sailings visiting Perfect Day at CocoCay. Pricing on these sailings has been consistently outpacing our lofty expectations. It has been a major contributor to our improved, non-Cuba revenue outlook."

My translation of this from corporate-weasel-speak to English -- "We're stunned at all these suckers paying a crazy premium to sail the same ship as last year, just to visit a glorified water park where we can charge them even more money. Guess it's time to raise prices for Coco Cay sailings another 30%!"

😉 

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57 minutes ago, bcarney said:

I was on one of the impacted cruises last week.  I think the Company handled it well - they gave us 50% of our fare back as refundable OBC, and we in turn spent every penny of it onboard. We're happy, and Royal still managed to keep our money (on high profits items like the drink package), so everybody wins.

If you can manage to spend half your fare on board, you either had a ridiculously low fare to begin with or you spend way too much money on the ship.

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I was also on an impacted sailing and interacted with them directly as I hadn't transferred it to my travel agent yet.  Royal was great to work with.  The short notice also created a lot of opportunities to cruise on very short notice.  Normally the sales window to sell a cruise is measured in years from the time bookings open.  In this case they had weeks so fares became very affordable.

The cruise I am on right now has many people disappointed about losing Cuba but still loving the cruise and at a great rate.  #winning

2 minutes ago, JLMoran said:

My translation of this from corporate-weasel-speak to English -- "We're stunned at all these suckers paying a crazy premium to sail the same ship as last year, just to visit a glorified water park where we can charge them even more money. Guess it's time to raise prices for Coco Cay sailings another 30%!"

All kidding aside as I know you meant this in jest, they did hit a grand slam with Perfect Day.  A couple of us saw this coming like Matt and myself.  The combined strategy to AMP Voyager class ships and create Perfect Day at the same time then combine the two for the short cruise market was brilliant.  There were naysayers talking down the CocoCay upgrades but the results have proven them all wrong.  

By the numbers they provided they are tapping into the new-to-cruise market in a big way.  Some 40% booking for Perfect Day have never been on any ship before.  That's impressive and long terms results of creating happy first time cruisers will pay dividends for years to come.  The cruise industry longs to entice new cruisers like any business desires to find new customers.

We are witnessing some pretty savvy business leadership that has to have the competition green with envy.

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1 hour ago, Skid said:

In addition to the great information provided by @Matt here, Barrons interviewed Richard Fain after the earnings call. Interesting reading. One thing mentioned is that despite being down 1% today, Royal Caribbean stock has led the industry in 2019. Also from the article regarding the Cuba cancellations: “We wanted to be generous to those guests whose vacations were disrupted, and that comes with a cost, but I think most of them say we handled it well, which will auger well for us in the future.” See the full article here

I guess they have the right to say they led the industry.  But CCL stock is down 7% since I started tracking it in September of 2017.  I wouldn't buy it.  But I really wouldn't buy CCL (down 31% since then) and NCLH (down 14% since then).  I guess when you compare to the industry -7% is pretty good.  Me, I prefer AMZN (up over 200% since the beginning of 2016).

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1 hour ago, twangster said:

The combined strategy to AMP Voyager class ships and create Perfect Day at the same time then combine the two for the short cruise market was brilliant.  There were naysayers talking down the CocoCay upgrades but the results have proven them all wrong.  

Well said. It was a terrific one-two punch, and they did mention the Voyager ships doing short sailings also being a big deal. 

Bottom line is they crushed it with Perfect Day, and getting the well-deserved returns on that investment.

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I think that the smartest decision they made regarding Coco Cay was the Daredevil slide and to build over the water cabanas.  We had a cabana and my SIL until this cruise was NCL, NCL, NCL.  She grudgingly went on Royal with us.  Got to the cabana and her view changed.  No NCL ship insight for their private island yet at that point. 9 a.m. one pulls up and she starts laughing about how they were stuck at NCLs private island and had to tender in.  30 mins later another pulls up, and now she was like OMG 2 ships, and here we are with just ours.  We laughed and said what do you think those passengers are saying as their kids see this giant water slide as they pull into their private island?  Mommy  are we going there, No, honey, sorry we are going over there, but don't worry next cruise we will go there!

Between Coco Cay and the Chefs table she has now become loyal to Royal

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We were on an impacted Cuba cruise and were very happy with the way it was handled. Between that and the $18 beverage snafu (on a 2020 Perfect Day holiday cruise with my kids that had already been booked), Royal has created a customer who will turn to them first for cruising.

Oh, and I spent a whopping $10 on board my Majesty cruise and was incredibly impressed that my refund was posted to my CC within 36 hours of debarkation. 

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On 7/25/2019 at 3:24 PM, HeWhoWaits said:

If you can manage to spend half your fare on board, you either had a ridiculously low fare to begin with or you spend way too much money on the ship.

I have the final statement in front of me.  $700 was refunded.  It paid for 2 Deluxe Beverage packages, all gratuities, $20 on t-shirts, my wife decided she wanted a drink in a pineapple so there was a $10.62 surcharge for that, and she also bought $61 worth of perfume.  Our final bill was $94.17.

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