Archive for January, 2011

Will Royal Caribbean’s earnings be an Oasis?

Royal Caribbean Cruises Ltd. (NYSE: RCL) is scheduled to release the company's fourth quarter financial results this week on Thursday, January 27, 2011.  This provides us an opportunity to compare "mega" ships current pricing (per person, inside cabin).

In the graph below one can see the average inside cabin asking price (during August to December 2010) for various sailing departure dates.  The Allure and Oasis have mirrored each other fairly closely, topping out at just over $1,400 per person.  Other than Allure's inaugural sailings, you will pay roughly the same for either Royal Caribbean ship.

Interestingly, Norwegian's Epic has maintained higher pricing than Carnival's Dream.  The premium paid to sail Royal Caribbean mega ships diminishes during September to November 2011 (particularly compared the Epic) only to increase again in the later part of the year.  Albeit, one can currently book a cruise aboard the Allure or Oasis during January to March 2012 for about 11% less than January to March 2011.  The bottom line, Royal Caribbean managed to unleash two of cruising's greatest buzz-worthy ships when it went super-sized.  If RCL can to continue to retain higher asking prices, larger margins and economies of scale from those investments will reward investors.

Royal Caribbean's earnings call will be available on-line at the company's investor relations web site,

Our proprietary database tracks daily ticket prices and passenger sailings to port destinations from nearly 8,000 annual cruises.  With an exclusive window into virtually every sailing, every day, world wide (including Carnival Cruise Lines (CCL), Royal Caribbean Cruises Lines (RCL) and Norwegian Cruise Lines (NCL)) our subscribers can view cruise revenue and passenger trends in near real time.


Top 5 least expensive cruises

Our proprietary database tracks daily ticket prices and passenger sailings to port destinations from nearly 8,000 annual cruises.

This gives us a unique vantage point to spot unusual values.* Topping our "least expensive" list is the Norwegian Sky.  For a total of $109 you could sail round trip from Miami, FL to Grand Bahamas Island, Bahamas to Great Stirrup Cay, Bahamas and Nassau, Bahamas.

Rank Price Per Day Cruise Ship Sail On Date Total Number of Days
1 $27 Norwegian Sky 9/5/2011 4
2 $35 MSC Poesia 1/30/2011 7
3 $36 Vision of the Seas 11/18/2011 14
4 $38 Splendour of the Seas 11/25/2011 16
5 $39 Monarch of the Seas 1/31/2011 4

Getty Images via @daylife

If you have more time sail the MSC Poesia.  For as little as $249 she cruises from Fort Lauderdale, FL to Key West, FL and Ocho Rios, Jamaica to Grand Cayman, Cayman Islands to Cozumel, Mexico returning to Fort Lauderdale, FL.

The last three in our top 5 least expensive cruises (per day per person) are all Royal Caribbean.  Of the three, two don’t sail until November 2011, so you have plenty of time to book.

The Vision of the Seas, which hit prices as low as $514 in December, is a transatlantic sailing.  It starts in Lisbon Portugal, moving to several stops in Grand Canary Islands; then Recife, Salvador and Rio de Janeiro Brazil.

Closer to home the Monarch of the Seas, pricing a round trip from Port Canaveral, FL at $159.  It stops in Coco Cay and Nassau, Bahamas.

Feeling even more exotic?  Try this low price Spain to Brazil cruise.  The Splendour of the Seas from $619 also crosses the Atlantic.  You will sail from Barcelona Spain with stops in Valencia Spain; Cadiz Spain; Lisbon Portugal; Tenerife Canary Islands and Salvador Brazil.

For more least expensive cruises visit World Cruise Watch.

With an exclusive window into virtually every sailing, every day, world wide (including Carnival Cruise Lines (CCL), Royal Caribbean Cruises Lines (RCL) and Norwegian Cruise Lines (NCL)) our subscribers can view cruise revenue and passenger trends in near real time.

* Lowest advertised inside cabin price from December 2010.  Price will vary based on actual date of booking.




Norwegian Cruise Line ad account under review

Ad Age is reporting Norwegian Cruise Line (NCL) is putting its current creative advertising account up for review.  The account, valued at $50 million, has been handled by the Austin based Idea City for the last five years.

Headquarters of Norwegian Cruise Line
Image via Wikipedia

The Idea City ad campaigns have focused on driving home the message NCL is different in a “freestyling” way.  The TV spots showed, tongue in cheek, what it might feel like to dine on a competitor’s cruise ship – one featuring traditional fixed dining times and formal attire.

Speculation is NCL is making the change as part of its planned stock IPO (initial public offering).  Increased visibility could help the pricing of an initial offering of its stock. NCL has not shied away from publicity, being featured on CNBC's Cruise, Inc. "Big Money on the High Seas" and more recently in "Undercover Boss," a reality show where CEO, Kevin Sheehan worked alongside NCL onboard staff.

NCL, with it's 50% owner Star Cruises, together control a 7.7% share of the 2011 worldwide cruise market.

According to Ad Age, a pitch has already been delivered by Pile & Co. of Boston.  Idea City is expected to defend the account and NCL is shopping other agencies.  Regardless of what agency takes over, look for a new ad campaign to be hitting print and broadcast media in approximately six months.

Carnival Splendor no lasting impact to cruise demand

There are obvious costs to Carnival related to the recent fire aboard the Splendor; needed repairs as well as lost revenue from 4,500 passengers on each potential sailing (scheduled to resume sailings on February 20).  Carnival has reported the loss to earnings at 7 cents a share in the fourth quarter.  There will likely be several more cents impact in the first quarter.

Pop-Tarts Frosted Strawberry

Image via Wikipedia

But are there any other “hidden” costs to Carnival?  Might there be any damage to the image of cruising or negative buzz generated from the major media exposure that could keep potential cruisers who are “on the fence” from booking a cruise?

Not really – at least according travel agents in the most recent Cruise Pulse survey.  The incident clearly had little if any impact to cruise demand.

Just 10.1% of agents indicated demand and inquires decreased and then only briefly and just for Carnival Cruises specifically.

  • Comments from travel agents included:
  • ~"Cruises stayed the same but no one wanted Carnival at all."
  • ~"Just a lot of jokes about the Spam and Pop Tarts and wonder why there was no better backup generator."
  • ~"Our agency does a large volume of group bookings… have had inquiries about Splendor but no cancellations."
  • ~"My store is in San Diego where the Splendor was towed. We had a Cruise Show that week and had our biggest turnout."
  • ~"Ever so slightly the first week, but generally we could talk people through the issue."

Web search research firm Compete made some interesting observations.  “The newsworthy events off the coast of Mexico back in early November definitely generated buzz for Carnival Cruises, but the buzz resulted in increased demand across a broad suite of sites not named”  In other words, people searching for Carnival or Splendor specifically were less likely to be directed to the brand itself ( or a cruise booking site) and web searchers were more likely to wind up at a news story.

The increased exposure, however, seems to not have turned into be a bad thing.  Consumers understand travel carries certain risks - snow storms result in overnight waits for planes at airports for example.