Cruise Insider Updates

Paul Motter — Wed, 12 Nov 2008 15:18:26 +0000

Cruise ships are still sailing full, and cruise lines are still optimistic about the future, but naturally the economy is having its effects on the industry, so here is an update on some of the inside stuff happening.

Norwegian Cruise Lines (NCL) announced its first profitable quarter in two years, actually reporting a $171.2 million profit for the quarter just ended. This is good news, as the company’s parent company, Apollo Management , is the same investment group currently holding going out of business sales at another of their investments, retail stores Linens and Things.

NCL has a new CEO, Kevin Sheehan, upon the departure of the popular Colin Veitch who took over the position some eight years ago. Veitch and Andy Stuart, EVP of almost everything during the same period, ushered in the Free-style era at NCL, practically turning the long-standing concept of how cruises should be conducted on its ear.

Veitch moved over to an advisory role to the board of directors. Stuart has been appointed executive vice president of global sales and passenger services. Kevin Sheehan was NCL’s president and chief financial officer.

Royal Caribbean has a new TV ad campaign called “Why Not?” It shows people on cruise ships having fun and asks them if they are thinking about joiniong them. Indeed, you have to give the cruise industry credit for continuing to advertise actually even more when times get tough. Cruise lines know that when the economy gets tough the value equation of cruises actually becomes more appealing to vacationers. After all, there are incredible bargains out there, and once you get onboard you are in control of how much you spend. If you choose to easy on drinks and tours, you can actually have an incredibly inexpensive vacation.

What kinds of unbelievable bargans are we seeing this week? Some of the ones the press has picked up include an 8-day Caribbean cruise on the POSH Cunard Queen Mary 2 for eight days for $499. Our own newsletter shows a 7-night NCL cruise starting at $249 perp person. That is a jaw-dropping price.7-night Princess cruises to Mexico are currently selling for $375.

On the other end of the scale, Crystal Cruises tells me they couldn’t be feeling any better about how they are weathering what appears to be the worst since 9/11 for many other cruise lines. Mimi Weisband tells me…

“As for Crystal, we feel the luxury market is not immune, but it is more resistant. Luxury travelers are going to rely on brands they can trust, reputation and consistency – which is why the message of 15 years of Conde Nast Traveler awards (and this year with one of our highest margins over large and small ships) and 13 consecutive years of Travel & Leisure awards (also higher than any large or small ship) is a powerful tool.

We are less than 2% down for 2008 and already farther ahead for our 2010 World Cruise than where we were at this time last year for our 2009 World Cruise. 2009 is softer but we’re still confident that we’ll get through it.

With a more discerning customer, Crystal is in a good position.”

Well, I can certainly see her point. First of all, Crystal is West Coast based, and although real estate prices have been hurt there, they do not have nearly the same problems as Wall Street or the factory regions. Crystal is a great cruise line, as are the other luxury lines; Silversea, Regent and Seabourn.

Speaking of 9/11 – is this current crisis in cruise sales anything like that event? The short answer is “no.” That was a travel “scare.” People were actually afraid to fly and felt like targets in airports and even ships. This is purely about money. people are reticent to spend. personally, I am hoping for a good Christmas because in reality very little has changed for most people and there is little reason we could return to normal in a reasonable amount of time.

Cruise Sales for Carnival, NCL and Royal Caribbean

Paul Motter — Fri, 26 Sep 2008 07:01:18 +0000

The truth is, the cruise industry always experiences a doldrums every summer that precedes a Presidential election. This year it’s even more of a distraction because it is such an interesting race. So. what happens now? We get Cruise Sales – and they are out there now!

The current hot one from NCL is the “Pity the Procrastinator Sale” which plainly says “The faster you book, the better your stateroom.” I heard a radio spot last night that descibes it like this… “There are all kinds of balcony cabins, right? But right now we only have one balcony cabin price. Book a balcony cabin right now, and you get the best balcony cabin we have available.”

The NCL sale ad goes on to say, “Get up to an 8-category stateroom upgrade FREE if you book right now (That’s right, FREE.) But remember, every second you wait means another stateroom is gone. There goes one. There goes another. Hurry before the best staterooms go bye-bye. Book between September 22 and October 12.

Another cruise sale we saw announced as coming soon is “Carnival’s October Recharge Event.” It is scheduled to be a month-long sale that will feature a variety of booking incentives, including free stateroom upgrades and special discounts on select “Fun Ship” cruises through 2009.

Carnival already has plenty of last-minute specials including 4-day Caribbean cruises as low as $169, 5-day Caribbean from $279 and 7-day Caribbean cruises on the new Carnival Liberty from $379 and Valor from $399. That is if you want to sail next week.

Royal Caribbean’s HOT DEALS are fewer, but a notable one is a sale on three to five-night Bahamas, Caribbean or Baja, starting from $149. Not only can you get a three-night cruise for $149, you can get Deluxe Suite for $269 per person. Four-night Caribbean cruises to Key West and Cozumel start at $199! That is a fantastic deal.

Part Two: Don’t Drink the Koolaid?

Even a cruise blog will get political at times. Royal Princess docking in St Johns, New Brunswick warned passengers, “don’t drink the water in Saint John, and be careful of the food” in a guest newsletter from the ship.

Many local purveyors were left scratching their heads in empty restaurants that night – because the consumables in Canada are the same high quality as those in the cold Northeast United States where mountain streams of glacial ice fill the town’s coffers regularly.

So, why did the newsletter print this mistake? I think the paper meant to say “Don’t drink the Koolaid!” – as in the political idealogical Koolaid that eminates from one well-known voice from this part of Canada. the very anti-cruise industry antagonist Ross Klein, a professor at Memorial University of Newfoundland in St John’s. He is the author of two self-indulgent books that falsly claim to expose the underside of the cruise industry, yet in the long run they are neither little more retellings of simplified fairy tales passed down in crewbars year after year with no real evidence or veracity left to any of them by the time they reached Ross Klein.

The sad thing is that Ross, to this day, still tries to portray his book as being entirely factual and verified. Even though it is baldly simple to see all of his books are mere conjecture and third-person retellings of fables he heard someone else tell to him. Ross tries to use these fables as proof of the dangers of “cruise ship life.” Now, telling tales is a sea-faring tradition older than Ulysseys, but these tales were never meant to be re-told in a serious way at a U.S. congressional hearing by an expert witness.

Separate the magic from the malarkey and you may become a real sailor someday, Ross!

Ross is famous for skewering cruise industry “statistics” in ways that cruise lines object to vehemently. And to do so with testimony against the cruise industry in a United States Congressional hearing is an odd thing for a Canadian to do, in my opinion.

In any case, my guess is that what Princess really meant to say was “Don’t drink the (political) Koolaid,” not “don’t drink the water” while visiting St John.

Part Three: Deals Gone Bad?

We got word this week that NCL holding company Apollo Management has scrubbed plans for the new F3-class ship set to debut in 2010. No reasons were given as to why, but we at CruiseMates think Apollo is just being careful in the credit-tight market. NCL has been running in the red lately, and they need to pay their bills. A lot of major companies that rely on credit to stay afloat – stalwart U.S. companies like General Motors, are all trying “preserve capital” right now because no one is certain how tight free-cash-flow is going to get.

And so, because everyone is trying to raise and preserve cash right now – no one has any to spare. How does this make sense?

Here is a simple but funny way to look at the economy. I earn a dollar and so I hire you to whistle “Dixie” for a dollar. You whistle and I pay. You then hire Joe to do the same, he whistles and you pay. Joe hires Judy to do the same, she whistles and Joe pays. Four people have now earned a dollar each, and we have a $4 economy, but there was only one dollar! That is part of cash-flow. It isn’t how much money there is in the world that counts, it is how much economic activity it is.

The problem we have right now is “no liquidity” – no one is willing to pay for a whistle Dixie anymore. Why? because no one is sure if it is still worth a dollar. And at the same time everyone wants to save their dollars because they are afraid they might not be able to get any more. We have lost our free-cash-flow. It’s a vicious circle.

Another casualty of the economy – with the help of a little politics. Joe Ueberroth (son of Peter) has quit his position as president of Ambassador’s International. This well-loved and great American was head of the cruise division for Majestic America Lines, who runs the great American steamboats like Delta Queen. This American treasure is still sidelined because of a Congressman who says the boat is a fire-hazard. Well, nothing on the DQ has changed in 40 years and the same Congressman had kept the boat afloat for seven previous votes, but now all the sudden he has a “problem” with it. In truth, his problem is that one of his major contributors doesn’t want the boat on the river anymore.

Politics – it is affecting everything. Not just Wall Street, but also your street abd ny street and the Mississippi River and Biscayne Boulevard. We live in interesting times!

Cruisemates Blog » cruise sales

Cruise Insider Updates

Cruise Sales for Carnival, NCL and Royal Caribbean