Welcome to Cruise Talk the Internet's most popular discussion forum dedicated to cruising. Stop by Cruise Talk anytime to post a message or find out what your fellow passengers and industry insiders are saying about a particular ship, cruise line or destination.
>>> Reader Reviews >>> CruisePage.com Photo Gallery >>> Join Our Cruise Club.
Latest News...Silversea has outlined its 2029 world cruise, a 125-day itinerary centered entirely on the Pacific — a region the line says remains one of the least understood and most culturally layered parts of the globe. Sailing January 5 to May 11, 2029, aboard the 392-guest Silver Whisper, A Pacific Awakening will visit more than 60 destinations across 19 countries, with 17 overnights...
Latest News...Carnival Pride is back in service in Baltimore following a 22-day dry dock in Freeport, Grand Bahama, returning with a round of updates aimed at enhancing the guest experience as the ship resumes its year-round schedule. The work marks the latest in Carnival’s ongoing fleet-refresh program, which has gradually modernized public spaces, retail venues, and entertainment areas...
Latest News...Holland America Line is preparing for the most extensive modernization effort the brand has ever undertaken, announcing a multiyear initiative that will reimagine six ships across its Vista and Signature classes. The program, called Holland America Evolution, represents more than $500 million in investment and marks the largest guest-experience update in the company’s 153-year history....
Obviously the ability to self finance a new build, such as Carnival and others has done is an enviable position to be in, however; the question which I was wondering if anyone could shed some light on is for those ships built with a large amount of debt service, how long does the cruise line budget for payoff in the business modeling? From what I can glean, it looks like most new builds from the 80’s and early 90’s have already made their 2nd or 3rd appearance at a new company (and typically under a new name) which makes me wonder how or if the business modeling can even begin to account for residual values on new builds of today 10, 15, or even 20 plus years out.
There are a lot of great discussions on this board about how the various ships work, operate, are laid out, entertainment, food, etc. I thought perhaps a thread on the business model aspect for building a cruise ship might generate some interesting discussions.
quote:Originally posted by JohnHJ: the question which I was wondering if anyone could shed some light on is for those ships built with a large amount of debt service, how long does the cruise line budget for payoff in the business modeling? From what I can glean, it looks like most new builds from the 80’s and early 90’s have already made their 2nd or 3rd appearance at a new company
I have not looked at the debt service, length of debt questions in depth but I would think you might find something in the analyst reports on RCL or maybe even could email such a question to their IR department.
One thing to keep in mind is that a fair number of the ships have not actually been sold but instead transfer from the "premier" brand to a second tier brand where the competition factors are different. The USA brands are facing the most difficult competition so the companies like RCL and even Carnival are transferring the oldest ships of the fleet to non-USA brands where they can slap on some fresh paint and get more economic life. RCL has done this with Pullmantur for example which is quickly turning into Royal Caribbean's hand me downs. So the debt service etc. remains with the parent corporation and they are getting extended/better economic lives in theory ... well except for the global recession which hurt the Spanish market very badly.
Carnival Corp has done something similar with P&O Australia and some of its European investments taking the oldest USA tonnage.
Historically in the USA they law set a 20 or 25 year economic life for the ships.
Globally some of the most successful ships paid for themselves in as little as 5 or 7 years.
Cruise lines generally look at the ships on a per berth cost these days but one fears they will get like the airlines which are notorious for burning capital and never recouping.....
Get your hands one some of the analyst reports or email me privately and I might be able to get you some analyst reports on the major cruise lines.
Ultimate Bulletin BoardTM 6.1.0.3
More Vacation & Cruise Specials...