Susie Downs Posted July 29, 2023 Report Share Posted July 29, 2023 I am a shareholder, Diamond Plus Member and former Embarkation Agent for Royal. I solo sail in a Junior Suite or above 8 times a year. Full revenue. Paying double. The new high rates are ridiculous. But that's what you get when kids sail free and you lure in first time cruisers. And the Carnival crowd. Questioning why I am remaining Loyal to Royal. Getting tired of dodging crowds, long lines, overbooked venues and untamed passengers. Neesa 1 Quote Link to comment Share on other sites More sharing options...
Plumlee2028 Posted July 29, 2023 Report Share Posted July 29, 2023 3 hours ago, steverk said: Good point. I guess I overstated it, but here goes. My concern is Royal will enjoy the good times a little too much and allow their costs to get out of control. If that happened and demand decreased, then Royal may not be able to repay the massive debt. That would be bad for everyone. So far they have been very proactive at preventing that. Their costs are up relative to 2019, but a significant portion of that cost is associated with costs that will always add to the top line as well, such as Coco Cay and the terminal in Galveston. This quarter, a large part of their costs was also stock compensation. In bad times, you won't see as much of that either. Quote Link to comment Share on other sites More sharing options...
JasonOasis Posted July 29, 2023 Report Share Posted July 29, 2023 4 hours ago, steverk said: Good point. I guess I overstated it, but here goes. My concern is Royal will enjoy the good times a little too much and allow their costs to get out of control. If that happened and demand decreased, then Royal may not be able to repay the massive debt. That would be bad for everyone. According to their Q2 earnings Royal in the second quarter alone repaid $1.6 Billion dollars worth of debt. Even though they still have a lot of outstanding debt they aren't sitting back enjoying the good times and throwing money down the drain they are actually taking care of business and repaying their debts. I get people are concerned about how expensive cruising is getting and some are saying these record breaking profits are not the result of the current higher fares. If Royal does start to see demand drop they can simply readjust their fares to their 2022 prices which was still higher than where fares were at in 2019. For those hoping to see 2019 prices make a comeback and for the record I would love to see that happen as well, my question is does anything now days cost whaat it did in 2019? None of us myself included like these higher prices but if you look at Royals fuel bill alone for the 3 months of Q2 that bill alone is higher than it was the same time las year and is substantially higher than what it was over the same 3 month period in 2019. Also for the 3 months that just ended Royal's occupancy rate was 105% that is just 3% below where they were over the same 3 months in 2019 this despite the fact they didn't have Odyssey or Wonder in the fleet in 2019. If Royal were to lower their prices it wouldn't necessarily result in higher capacity because they are already at 105% capacity. If they lowered their prices back down to 2019 levels would they even be covering their basic expenses given the fact that those expenses like fuel even food not to mention labor are more expensive than what they were in 2019? Xaa and Rackham 2 Quote Link to comment Share on other sites More sharing options...
Matt Posted July 30, 2023 Report Share Posted July 30, 2023 21 hours ago, JasonOasis said: For those hoping to see 2019 prices make a comeback and for the record I would love to see that happen as well, my question is does anything now days cost whaat it did in 2019? Is that really an expectation for 2019 prices to come back for some? That boat has sailed. I thought you laid out your points quite well, @JasonOasis. At this point, I'd say holding the line on prices for a bit would be a more realistic "dream" for what to expect in terms of pricing. Quote Link to comment Share on other sites More sharing options...
Reigert2008 Posted July 31, 2023 Report Share Posted July 31, 2023 On 7/28/2023 at 12:10 PM, smokeybandit said: Now more than ever booking as early as possible can save $$$ I think this is the key. We have a 7N on Wonder later this year that we booked back in April, which was late for us. We g an inside GTY for two people including gratuity for $2100 total. Last I priced checked it, it was starting at 1800 a person without gratuity. Would I book it today? Of course not, but prices were good at the time I booked it. we also have a 9N on Explorer in 2024 but it’s a group rate via MEI so it’s not a fair comparison with the site. However we got an inside cabin for 2 people with gratuity for about $1900. We booked it this year sometime as well. the prices we are paying are about what we’ve always paid and we try to book as soon as we know we can go. We typically get inside GTY cabins and never had an issue. Quote Link to comment Share on other sites More sharing options...
smokeybandit Posted July 31, 2023 Author Report Share Posted July 31, 2023 Meanwhile carnival is still 32 billion in debt https://www.seatrade-cruise.com/finance/carnival-corp-refinancing-would-pre-pay-12b-highest-cost-debt WAAAYTOOO 1 Quote Link to comment Share on other sites More sharing options...
tjcruisers Posted July 31, 2023 Report Share Posted July 31, 2023 Carnival does concern me with that debt. Not that I'm Carnival, but if they go under, their passengers going to other cruise line would really create a supply issue Quote Link to comment Share on other sites More sharing options...
smokeybandit Posted July 31, 2023 Author Report Share Posted July 31, 2023 I don't see carnival going under. It just may slow any capital growth Quote Link to comment Share on other sites More sharing options...
billdauterive Posted July 31, 2023 Report Share Posted July 31, 2023 10 minutes ago, tjcruisers said: Carnival does concern me with that debt. Not that I'm Carnival, but if they go under, their passengers going to other cruise line would really create a supply issue If you're concerned about Carnival's $32B in debt then you should be just as concerned with Royal's debt which is $21B (but down from $24B 2 quarters ago). Carnival's debt to asset ratio is currently in line with Royal's. Both companies are throwing off enough free cash at the moment to easily service and pay down existing debt. Personally I'm not even close to worried about the viability of either long term. Quote Link to comment Share on other sites More sharing options...
Atlantix2000 Posted July 31, 2023 Report Share Posted July 31, 2023 Based on the size of my mortgage compared to my bank account, you could say I'm in a scary amount of debt. But I don't think the mortgage company has any reason to be worried about me because they are getting their monthly payment on time. The numbers are obviously far bigger when looking at Royal's financials but as long as their creditors believe Royal is making acceptable progress in paying their debt, than the same logic holds. Matt 1 Quote Link to comment Share on other sites More sharing options...
ultimate_ed Posted July 31, 2023 Report Share Posted July 31, 2023 2 hours ago, tjcruisers said: Carnival does concern me with that debt. Not that I'm Carnival, but if they go under, their passengers going to other cruise line would really create a supply issue Yes, but even if Carnival as a cruise company goes into bankruptcy, all their ships will still exist and will be available for passengers. The shareholders would get wiped out, but the debt holders would own the ships and the Carnival name to keep on sailing. Much like what GM went through back in the 2008-2009 financial crisis. Quote Link to comment Share on other sites More sharing options...
smokeybandit Posted July 31, 2023 Author Report Share Posted July 31, 2023 Interestingly,both companies had about the same amount of long term debt in 2019 WAAAYTOOO 1 Quote Link to comment Share on other sites More sharing options...
steverk Posted July 31, 2023 Report Share Posted July 31, 2023 7 hours ago, tjcruisers said: Carnival does concern me with that debt. Not that I'm Carnival, but if they go under, their passengers going to other cruise line would really create a supply issue My biggest concern with Carnival is that they aren't replacing ships fast enough. Between all 9 of their brands, they have just under 90 ships. To keep a fleet of that size under 30 years old, they need to replace 3 per year. Last I heard, they had cancelled several new ship builds and now only have 6 planned within the next 10 years. Unless that changes, or they get rid of some of their brands, they will have such old ships that they simply won't be able to compete going forward. Quote Link to comment Share on other sites More sharing options...
twangster Posted August 1, 2023 Report Share Posted August 1, 2023 11 hours ago, steverk said: My biggest concern with Carnival is that they aren't replacing ships fast enough. Between all 9 of their brands, they have just under 90 ships. To keep a fleet of that size under 30 years old, they need to replace 3 per year. Last I heard, they had cancelled several new ship builds and now only have 6 planned within the next 10 years. Unless that changes, or they get rid of some of their brands, they will have such old ships that they simply won't be able to compete going forward. Royal has said during past industry slowdowns they regretted not continuing their new fleet growth efforts so it was no surprise during the pandemic when Royal did their best to maintain new ship build plans and growth strategy. Carnival tried to "new ship shame" Royal by publicly stating they were taking a more cautious approach that was "financially prudent" and slowing new builds but I suspect that was because Carnival didn't have the new build pipeline and momentum that Royal had. They couldn't finance new builds so they tried to make it sound like that was by choice. Now with the industry going gangbusters Royal's approach appears to be solid, as long as the industry doesn't hit more roadblocks or setbacks in the near term. Royal has long had dynamic pricing engines for everything from cruise fares to drink packages that is the ire of some but they have long been more revenue efficient with their berths compared to Carnival Corp. Royal has fewer berths compared to Carnival Corp. yet generates more revenue more passenger. In days of old the revenue inefficiency of Carnival Corp. could be swept under the carpet since they still generating fists full of dollars. Who cared they could be generating more, the cash was rolling in. Top heavy management structures and old ships didn't matter, enough cash was flowing to mask all the problems. steverk, Rackham, baltodave and 2 others 5 Quote Link to comment Share on other sites More sharing options...
steverk Posted August 1, 2023 Report Share Posted August 1, 2023 5 hours ago, twangster said: Royal has fewer berths compared to Carnival Corp. yet generates more revenue more passenger. In days of old the revenue inefficiency of Carnival Corp. could be swept under the carpet since they still generating fists full of dollars. Who cared they could be generating more, the cash was rolling in. Top heavy management structures and old ships didn't matter, enough cash was flowing to mask all the problems. Thank you for the very thoughtful response. One thing that I would have thought to have been a wake up call for Carnival was Royal Caribbean International out pacing Carnival Cruise Lines in every department. Just looking at those 2 brands and not any sister companies, Royal has 26 ships compared to 25 for Carnival. Royal has larger ships. Royal has more births at sea. And recently, Royal overtook Carnival on total passenger boardings. Including all of the sister brands, Carnival is still larger in every measure than Royal Caribbean group though. Quote Link to comment Share on other sites More sharing options...
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