Cruise industry won't recover until 2030

[tvguy]

https://www.aol.com/cruise-industry-won-t-return-113723185.html

 

[randumb0]

sounds about right

 

[DisneYE]

https://www.aol.com/cruise-industry-won-t-return-113723185.html

Dayum, the guy on the article is way more pessimistic than me. That's quite a feat.
I put it at 2024 for a return to normalcy. 2030? wow.
Wish I could ask him if he thinks ships will sail in 2021. I really want to cruise.
On the flip side of things, this is a good time to buy cruise line stock.

 

[goofystitch]

If one person says it I suppose it's true then.

 

[jlwhitney]

Dayum, the guy on the article is way more pessimistic than me. That's quite a feat.
I put it at 2024 for a return to normalcy. 2030? wow.
Wish I could ask him if he thinks ships will sail in 2021. I really want to cruise.
On the flip side of things, this is a good time to buy cruise line stock.

Return to normalcy and recovering financially is different. They will return to normal well before they recover financially for the year plus closures .

 

[tvguy]

Dayum, the guy on the article is way more pessimistic than me. That's quite a feat.
I put it at 2024 for a return to normalcy. 2030? wow.
Wish I could ask him if he thinks ships will sail in 2021. I really want to cruise.
On the flip side of things, this is a good time to buy cruise line stock.

I wonder if the author is factoring in how many ships have been scraped this year and whether they will be replaced in the next decade as things settle down.

 

[DCLDVC1]

https://www.aol.com/cruise-industry-won-t-return-113723185.html

“The vaccine may not be a panacea for the cruise line industry versus airlines or leisure hotels, where the outlook is a little bit better,” Jason Ader, CEO of SpringOwl Asset Management, tells Yahoo Finance Live. “The perception of the cruise industry is that it's a floating petri dish. And that's a bad perception.”

Cruise lines are going to have a hard time attracting first time cruisers. If I hadn't cruised many times prior to COVID, I don't think I'd be interested in cruising now.

 

[tvguy]

“The vaccine may not be a panacea for the cruise line industry versus airlines or leisure hotels, where the outlook is a little bit better,” Jason Ader, CEO of SpringOwl Asset Management, tells Yahoo Finance Live. “The perception of the cruise industry is that it's a floating petri dish. And that's a bad perception.”

Cruise lines are going to have a hard time attracting first time cruisers. If I hadn't cruised many times prior to COVID, I don't think I'd be interested in cruising now.

I think repeat passengers are a whole lot bigger piece of the pie than you think. I can't find the specific percentage, but according CLIA 50% of the passengers on a ship have been on another cruise in the past year. http://www.windrosenetwork.com/The-...e is also a high,the experience in the future.

 

[KVH]

AOL is still in business?

Anyway, I'd prefer to see this come from the NYT, Forbes, McKinsey, or some other financials-oriented pub. Or from a financial analyst instead of an english/journalism major (yeah, I know what I just said). It's one thing to report facts; it's another thing to take limited info to derive some distinct judgment w/o enough data to back up conclusions.

 

[tvguy]

AOL is still in business?

Anyway, I'd prefer to see this come from the NYT, Forbes, McKinsey, or some other financials-oriented pub. Or from a financial analyst instead of an english/journalism major (yeah, I know what I just said). It's one thing to report facts; it's another thing to take limited info to derive some distinct judgment w/o enough data to back up conclusions.

Alexis Christoforous is a rather well known Business Reporter, with nearly 30 years experience, including stints with Bloomberg, PBS and Marketwatch. And yes, AOL is still around, and a successful subsidy of Verizon these days.

https://en.wikipedia.org/wiki/Alexis_Christoforous

 

[Husker Mike]

The author is a Wall Street veteran reporter, as noted above.

This quote gives you better context:

“I don't think you'll see a return to peak profitability in the cruise industry until 2030,” says Ader. “And that's just not a function of demand coming back, because I do think the cruise industry will see people want to go on cruises. But the prices will be a challenge. People aren't going to pay a premium for it right away.”

 

[eMoneyBug]

Cruise lines sinking underwater would not surprise me.

 

[BartmanLA]

I watched a UK show from Channel 4 called Luxury Cruising - Boom or Bust?. It painted the cruise industry in a pretty dark way, basically accusing them of everything from holding crew members prisoner on ships once the global lock down started, to ripping off the consumer for every dime they can get in over charges for on board things, to being significant major polluters when in reality there's a HECK of a lot more cargo/freight/container ships sailing the oceans than cruise ships. They interviewed some people who've made it their life's mission to bad mouth and campaign against cruise lines at every opportunity. Granted this was a UK based program focusing on primarily UK and European operators, but they did touch on the big 3 Corporate owners, Carnival, RCCL and NCL. They kept hammering on the question to all the people they interviewed if they though the cruise lines would basically disappear and industry would die from this pandemic. Fortunately a number of people they talked to are more than willing to go cruising again as soon as they start up again. But it sure looks like there are some dedicated individuals that have it in for leisure cruising.

 

[SL6827]

Not sure if I will ever cruise again. Doubtful.

 

[71 Truck]

I think it will be sooner. It's going to be a while but i do not think it will take till 2030. A good number of cruise passengers are returning cruise passengers. And they will return. I know I will.
The cruise lines have shed a lot of expenses over the last several months and have relied on money coming in for future cruises people book. I think this will continue. They have my money for three cruises right now.

This of course is till the next virus hits. This may not be that far away.
They are already saying the current virus may have mutated.

 

[KVH]

I still think I'd prefer someone from Oppenheimer, Wells Fargo, Needham, or RBC Capital to tell me what's what with the cruise business first. Considering those are the ones the rest of Wall Street is listening to.

 

[Intr3pid]

I wonder if the author is factoring in how many ships have been scraped this year and whether they will be replaced in the next decade as things settle down.

Yup, they are adjusting for the 15% to 20% capacity taken offline this year. The new ships will cover some ground but not all.

That said, it's clear that the author hasn't cruised much before - or done much research into the industry beyond a spreadsheet. The reason for the industry's pricing power (and profitability) is in its concentration. Nearly 80% of the market is controlled by just three companies, and the number has only gone up this year after the fringe players were shuttered or bought out by the big three.

 

[tvguy]

Yup, they are adjusting for the 15% to 20% capacity taken offline this year. The new ships will cover some ground but not all.

That said, it's clear that the author hasn't cruised much before - or done much research into the industry beyond a spreadsheet. The reason for the industry's pricing power (and profitability) is in its concentration. Nearly 80% of the market is controlled by just three companies, and the number has only gone up this year after the fringe players were shuttered or bought out by the big three.

I think you may also need to consider that cruise lines either will be forced to, or volunteer to, sail at vastly reduced capacity. That is really going to be a bigger factor. I took my first cruise in 1980 at the height of the Love Boat craze. I did not pay for it, I was being paid to Produce 5 half hour shows on cruising. My fare in 1980 dollars would have been $5,000 on a ship with a capacity of 400 passengers. My last cruise cost $800, on a ship with a capacity of 2,800 passengers. The business model has changed, no longer if the fare where they made the money, they make the money on volume of passengers and all the add ons they offer now. Between the loss of ships, and loss of capacity per cruise, I think it will be a long road to recovery. As for the author, she is a well established business journalist with a stellar reputation.

 

[Intr3pid]

I think you may also need to consider that cruise lines either will be forced to, or volunteer to, sail at vastly reduced capacity. That is really going to be a bigger factor. I took my first cruise in 1980 at the height of the Love Boat craze. I did not pay for it, I was being paid to Produce 5 half hour shows on cruising. My fare in 1980 dollars would have been $5,000 on a ship with a capacity of 400 passengers. My last cruise cost $800, on a ship with a capacity of 2,800 passengers. The business model has changed, no longer if the fare where they made the money, they make the money on volume of passengers and all the add ons they offer now. Between the loss of ships, and loss of capacity per cruise, I think it will be a long road to recovery. As for the author, she is a well established business journalist with a stellar reputation.

True, but I don't expect the reduced occupancy to linger beyond 2022.

I don't doubt the author's skills in journalism. The reference is to Jason Ader who 2030 opinion is being quoted, and it's clear Ader hasn't looked at the industry beyond a spreadsheet.

 

[tvguy]

True, but I don't expect the reduced occupancy to linger beyond 2022.

I don't doubt the author's skills in journalism. The reference is to Jason Ader who 2030 opinion is being quoted, and it's clear Ader hasn't looked at the industry beyond a spreadsheet.

Well Jason Ader is considered a recreational travel industry expert. And let's be honest, spreadsheets are where profits and losses are measured.