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Old May 30th, 2003, 09:10 AM
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Admiral
 
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Default How profitable are they?

A fellow cruise enthusiast and I were discussing how profitable cruising is for the company. We surmised that Disney cruises were probably much higher in price than the mainstream lines because they lacked the revenue from gambling and alcohol sales the others enjoy. We discussed the pensions of shoreside employees, gas prices, food costs, maintenance, etc. and this drove me to the financial reports of CCL and RCI.

What would you think the profit would be for an average 7 day trip to the Caribbean? And what kind of profit margin do you think they operate on?

Regards,
Thomas

My answer to follow!
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Old May 30th, 2003, 09:21 AM
susancruzs
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Default Re: How profitable are they?

I can't even put together an educated guess, but will be interested to read the replies on this one!

Of course when they are purchasing thousands of everything, instead of just one or two that pricing is far, far different than what we know. As far as pensions, companies like to say the benefit packages for every employee costs thousands and thousands of dollars but they have accounts that the money goes into that gain interest!

Anxious to see answer!

Susie
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Old May 31st, 2003, 06:08 PM
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Default Re: How profitable are they?

O.K. here's the answer.

Royal Caribbean has 25 ships, including the Celebrity brand. On average, a 7-day cruise nets about $250,000 in profit. The shoreside employees have a pension equal to an expense of $8 million per year and the ship employees, apparently union now, just received in bargaining agreement a pension which accounts for about $3.5 million per year. They have a zero collar purchase agreeement for gas, which from what I can tell is a set price range for fuel purchases which cannot exceed the range which accounts for 4.5% of revenues. Their capital expenditures, after the delivery of the 4 ships under construction for the '03 and '04, will taper off and net income should improve in '05 and beyond. They have options for two ships in '05 and '06 but are not expected to build any new ones those years.

Royal Caribbean operates on a margin of 10.3% and Carnival's margin is 23%. Royal Caribbean just completed it's $20 million renovation of CocoCay. It's occupancy rate for 2002 was 104.5% (100% would be 2 people per cabin).

Regards,
Thomas

I didn't get into Carnival's numbers that deep. And since they don't operate in the U.S. (?) they don't pay any U.S. taxes. Imagine what their financial statement would be if they had to pay taxes?
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Old May 31st, 2003, 11:50 PM
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Default Re: How profitable are they?

That's profit AFTER all overhead, right?
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Old June 1st, 2003, 08:13 AM
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Join Date: Dec 2001
Location: My GPS says 12 ft. above 6 ft. under!
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Default Re: How profitable are they?

That's correct. That's net income from their financial statement, after depreciation, one time fixed costs, interest on income, deferred expenses, severance packages, etc.

I'm sure some of the sailings on the bigger ships are more profitable than that and the smaller ships are losers, but that is an average for all ships in the fleet.

Consider if the Voyager class ships hold 2000 or so people, each one passenger accounts for about $125 in profit for a 7 day cruise.

What do you think about that? About what you'd expect?

Regards,
Thomas
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Old June 1st, 2003, 04:23 PM
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Default Re: How profitable are they?

That would quite a feat of ledgerdemain considering what fares are these days.

Het y ,,, for your new restaurant, want the BEST recipe in the world for lemon curd pie? Makes Key Lime cut and run.
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Old June 1st, 2003, 06:58 PM
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Join Date: Dec 2001
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Default Re: Re: How profitable are they?

Just think about this. If everyone on a 2000 passenger ship bought one more umbrella drink on a week's cruise, just one more for the week, the company would earn an additional $9,750,000 in profit ! ! (Assuming $3.75 per drink)

Now you know why they try to limit or refuse you bringing your own and/or push them all the time.

Regards,
Thomas
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Old June 2nd, 2003, 09:28 AM
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Default Re: How profitable are they?

I would like your recipe, Pam... please post in "Cruise Cuisine."

Cheers,
Michelle B.


Land Cruise, Britain and Belgium

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