Quote:
Originally Posted by Shelby
Bruce,
All, or nearly all, of HAL's ships are under 2,500 passengers. Are you saying HAL has never made a profit?
Shelby
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HAL made a great profit for most of it's 150 or so years in business - because until recent decades, the cruise industry operated on a very different business model from the one we see today.
Today, mass market Cruising is all about volume and economy of scale.
When Carnival purchased HAL about 20 years ago, HAL was just days away from bankruptcy. Their smaller ships couldn't make a profit even then.
It was the new Vista Class ships operating at a healthy profit for the past decade that has allowed HAL to continue operatiing their smaller ships at a loss or a break even point.
In the past few years, fuel and other operating costs have gradually eroded the profitability of the Vista Ships. That explains why you are recently seeing an increasing number of complaints about cutbacks at HAL, accompanied by an increase in comments about fare increases at HAL. They must cut perks and amenities fleetwide to cover their decreasing profitability.
HAL does have one great advantage in that their smaller ships are all quite old (that means they are already paid for). Despite their small size, their operating costs are somewhat manageable with no bank loan payments to cover. But that situation will not last too much longer. It will soon be time to retire some of those smaller, older ships. They will not be replaced with newer small ships.
You will also notice that HAL is no longer building any smaller ships, and their CEO is slowly and very carefully getting HAL cruisers accustomed to the idea of larger HAL ships in future. With the current business model, it is the only direction they can go if they want to stay in business.