YVR Cockroach

Just caught this on Bloomberg.

The Norwegian cruise line CEO puts a figure that an additional spend of $4 per pax per day will double EPS and ROI in 3 years.

Seems a mighty slim figure and a cruise line could also easily go into the red.

GRALISTAIR

It seems crazy to me that businesses such as cruise lines and airlines have huge capital input costs and razor thin margins - historically. I know quite a few airlines are improving at the moment.

MCOGUY

There are so many mega-ships today and it takes mega thousands to fill them. The pricing strategies have changed drastically since I started cruising in 1987. Now the cruise fare is cheap, but the cruise lines make it up on all the extras such as specialty dining, drinks - most are now pushing the drink package, expensive photos, shore excursions, and of course the spa and casino which have always been around. Like unsold airline seats, cruises have to fill the ships to make money, and many are offering incredible promotions to get you onboard. It used to be the cruise fare was high, but the drink prices and photos were quite low, and specialty dining was nonexistent. Now it's the opposite -low fares and high onboard prices. We booked New Years Eve a while ago, and the deposit was only $25 on Celebrity for this weekend. Great way to lure people in and fill the ship, and make the profit $$$.

KatW

Except for the ostensible "luxury" lines such as a Silversea, Seabourn, Regent and others. These feature all-inclusive (or mostly so) cruises at hefty prices. So far as I can see, these lines are doing ok. Another recession would sink one or two.

Calliopeflyer

What's interesting to me is that a couple of the luxury lines are actually owned by the larger cruise corporations. Seabourn is owned by Carnival, Regent is owned by NCL, whereas Silversea and Crystal are still independently owned. That will certainly affect their survival, but it also affects how they operate (size and number of vessels, etc).

DanJ

Sure, 4 bucks doesn't sound like much, but that equates to probably close to $200,000 per day across the NCL fleet.

YVR Cockroach

But again, very thin margins. It'd imply -$4 pppd would wipe out profits.

YVR Cockroach

Never looked too much into Crystal but just got something today that it was being sold by its parent, the Japanese shipping line NYK (which would make Crystal something akin to MSC - the relatively newly-created cruise arm of a shipping company) to Genting Hong Kong which I believe is a casino/gamling outfit.

Calliopeflyer

Yes, GHK has several Resorts World casino resorts (including plans for one in Vegas), and the largest cruise line in Asia (Star Cruises) as well as being a major shareholder (28%) of NCL. They certainly don't have a reputation for small-scale, upper-end products like the current Crystal operation - they're resorts and cruises are considered mass market, glitzy, low cost/high volume types of operations.