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...Norwegian Cruise Line celebrated the debut of the all-new Norwegian Aqua to Port Canaveral, Fla. on Saturday, April 26, 2025, where she commenced her inaugural season of round-trip Caribbean cruises as the newest ship in port. This past weekend, approximately 3,700 guests embarked on Norwegian Aqua's first week-long voyage to the Caribbean from Port Canaveral, Fla., her initial homeport ...
Latest News...Royal Caribbean Group (NYSE: RCL) today reported first quarter Earnings per Share ("EPS") of $2.70 and Adjusted EPS of $2.71. These results were better than the company's guidance due to stronger than expected pricing on close-in demand and lower costs mainly due to timing. Royal Caribbean said that it is increasing its full year 2025 Adjusted EPS guidance to $14.55 to $15.55...
Latest News...Holland America Line announced itineraries for its two Grand Voyages sailing in 2027, offering guests the choice to embark on an ambitious 129-day circumnavigation of the globe on the 2027 Grand World Voyage or a 70-day, region-specific in-depth exploration on the Grand South America & Antarctica Voyage. As revealed today by the cruise line's president Beth Bodensteiner to guests on board...
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...