Layoff of about 400 employees @ Royal Caribbean

[Dannyboy]

Royal Caribbean lays off 400; most are from S. Florida.
Cruise operator cites fuel prices as earnings tumble (Fuel Surcharges not enough).

By Jaclyn Giovis | South Florida Sun-Sentinel
10:38 PM EDT, July 21, 2008
Royal Caribbean Cruises Ltd., the world's second-largest cruise operator, Monday laid off about 400 employees — most from Broward and Miami-Dade counties — and blamed rising fuel prices that are weakening earnings and forcing cuts to operations.

The Miami-based cruise line Monday evening said second-quarter profits slid 34 percent to $84.7 million compared with $128.7 million in the same period last year. Company officials are scheduled to host a conference call today on the financial results.

"It was a very difficult process we've gone through with many wrenching decisions that had to be made," company spokesman Michael Sheehan said. "The objective is to position us to continue to succeed as the company moves forward."

In 2009, Royal Caribbean will debut the largest cruise ship in the world — the $1 billion Oasis of the Seas. The ship will sail from Port Everglades and carry 5,400 passengers.

Despite record high fuel prices, consumer demand for cruises and onboard spending "continues to be resilient," Royal Caribbean said in a news release Monday.

Sheehan said the bulk of the 400 job cuts were shoreline positions ranging from executives to clerical personnel in South Florida, where until Monday the company employed about 3,360 employees at offices in Miramar and Miami.

Employees were notified Monday that it was their last day of work, he said, noting that prompted the company to announce earnings ahead of today's call. Royal Caribbean is offering affected employees severance packages based on position and length of service as well as outplacement services.

In another cost-cutting measure, the company said it has discontinued operations of The Scholar Ship, an educational partnership aimed at college students studying aboard cruise ships.

Combined with the layoffs, Royal Caribbean said it anticipates $125 million in annual savings as a result of the reductions.

"Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively," said Richard D. Fain, chairman and chief executive officer, in a written statement Monday.

Royal Caribbean shares fell 5.8 percent on the New York Stock Exchange to close at $22.70 Monday.

Jaclyn Giovis can be reached at jmgiovis@sun-sentinel.com or 954-356-4668.

[Snoozeman]

RC survived the cut

[ragtiki2005]

Wow, this is very sad news for those people involved in the layoffs. Oil prices are such a big factor in the cruise lines bottom line. Bob

[Donna]

The oil prices are affecting almost every aspect of our regular lives, everything is going up, of course, except for what we make??? I think travel in the future will take a huge hit, so unfortunate. Even look at our food prices, going up weekly, all because of the price of oil..

[ready2board]

I'm not sure this was the best of times to be bringing two, new humongous sized ships into service. Of course, I'm sure they really couldn't have predicted the economic downslide when they began working on the project but I think they may find they have gone a bit too large with this whole Oasis thing. I think it's going to be hard to keep these two ships at near or full capacitly week after week and with a few less people sailing and fuel costs, I think it might spell some trouble for them. In my very non-expert opinion, Carnival did it a bit smarter with the Dream...VERY large but not ungodly so with lots of new innovative ideas and expanding old ideas and features they know work well from the past.

[thecruisequeen]

Oasis should do pretty well I don't think Royal has to worry yet unless the economy takes more beating in the future.

So many cruisers are counting down the days until booking opens up for Oasis.

I will be on the Oasis also no matter what the rates are. Getting tired of the Freedom class ships and I need a bigger ship.

I think with all these ships coming out from all the different cruiselines the rates should be good.
Last month Carnival Valor had inside rates of $399. 1st and 2nd for a Oct. sailing. Now that rate has gone up. Whoever booked it at $399. for a 7 nite cruise lucked out.

As ships (all lines) are not filling up during the low season maybe we all will see more dirt cheap rates out there.

We shall see what the future holds for all these new ships coming out.

[ready2board]

Originally Posted by thecruisequeen

Oasis should do pretty well I don't think Royal has to worry yet unless the economy takes more beating in the future.

So many cruisers are counting down the days until booking opens up for Oasis.

I will be on the Oasis also no matter what the rates are. Getting tired of the Freedom class ships and I need a bigger ship.

I think with all these ships coming out from all the different cruiselines the rates should be good.
Last month Carnival Valor had inside rates of $399. 1st and 2nd for a Oct. sailing. Now that rate has gone up. Whoever booked it at $399. for a 7 nite cruise lucked out.

As ships (all lines) are not filling up during the low season maybe we all will see more dirt cheap rates out there.

We shall see what the future holds for all these new ships coming out.

I truly hope you're right because I think RCI is a great line. But man, that's alot of cabins to fill each week on those big ships especially during off seasons. I suppose they have done their marketing research though and I hope it works out. Then again, I suppose Starbucks did their research too and now they are closing hundreds of stores nationwide...Although, I know we're talking about 2 very different things. Like you said, time will tell and it will be interesting to see.

I think RCI is going to have to get a bit more competitive with their prices. They are quite a bit higher than both Carnival and Celebrity for the 5 dayer I'm looking at around Feb of 2009. It's not a huge difference but it does add up when you figure in it's per person and the fact that air fares are up, new fuel surchages etc.

[thecruisequeen]

I always say RCCL has the highest rates out there!!

There is alot of cabins to fill on all the cruiselines.

My hurricane season cruise on Liberty just went down and Royal did credit my account. They are very good that way even once final payment is paid they still credit your acct.

I still say during off peak season all the cruiselines will have some better or excellent deals going on in the future with this economy.

We shall see.....

[ready2board]

Originally Posted by thecruisequeen

I always say RCCL has the highest rates out there!!

There is alot of cabins to fill on all the cruiselines.

My hurricane season cruise on Liberty just went down and Royal did credit my account. They are very good that way even once final payment is paid they still credit your acct.

I still say during off peak season all the cruiselines will have some better or excellent deals going on in the future with this economy.

We shall see.....

I was also worried some about going during hurricane season last year but we didn't have any problem at all. I think more often than not they just sail away from it and there may be some risk you might have to miss a port of call or substitute one. I think it's going to have to be pretty extreme before they completely cancel a cruise so I think it's worth the small risk for the price savings.

[thecruisequeen]

This is my first Hurriance cruise however it all works out well I will think about cruising again during hurriance season as the rates are good.

[skymaster]

Originally Posted by thecruisequeen

This is my first Hurriance cruise however it all works out well I will think about cruising again during hurriance season as the rates are good.

I'd bet you'll have no problems. I cruise during hurricane season at least twice a year, and (knock wood) have never missed a cruise yet. Yes, we have missed some ports, or been redirected from East to West, but I go for the cruise, so it's no problem. Prices during that time of year make it very much worth the risk. You'll have a GREAT time!

Ken
"Sky"

[thecruisequeen]

Originally Posted by skymaster

I'd bet you'll have no problems. I cruise during hurricane season at least twice a year, and (knock wood) have never missed a cruise yet. Yes, we have missed some ports, or been redirected from East to West, but I go for the cruise, so it's no problem. Prices during that time of year make it very much worth the risk. You'll have a GREAT time!

Ken
"Sky"

Thanks Sky! 8) I would not care about missing ports I have been to all the ports as long as the ship is not real real rocky.

[ragtiki2005]

I have sailed the past 7 years during the hurricane season and have had only one problem back in 2005. We left a day late on the Explorer because of hurricane Jean but received $200 onboard credit plus 50% off the next cruise. Bob