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So in effect Star lost only $19 million in the first quarter.
Bearing in mind Q1 is one of the strongest of the year this does not bode well for the year as a whole, especially as occupancy fell again albeit there was increase in beds available.
So what you do if you were employed by Star to run NCL and turn it into a profit ? Come on we are all armchair experts, so what would you do ?
2) I'd headhunt somebody from RCI or Carnival who could show NCL how to achieve good customer feedback for food and service, while keeping the fares reasonable.
3) I'd take a golden handshake and retire early in the lap of luxury. Running a cruise line like NCL is just too much hassle.
[ 05-16-2007: Message edited by: Malcolm @ cruisepage ]
Better still sell off the cruise ships to companies that can run ships at a profit.
The parent company can then just run its resorts and casinos and not worry about the large losses.
Neil ( Bob )
As to Star, I am always sceptical over such 'single' bottom line figures. Due to the main business of the Genting Group as a whole, or infact whatever business, these may well be just what is required to offset gaming profits for any tax/gains liabilities. Accountancy flair is required. Figures showing profits may not be desirable; something we will not be privvy to.
Very defeatest Neil. A real challenge that I am sure plenty out there would love to take on.
Pam
Having read so many comments about poor service on all of the NCL ships, on various forums, it seems that things will not get any better with the way the ships are run at present.
To sell off the ships to another company can only lead to improvements when their ways of running ships are adopted.
1. Pride of Aloha stays full time in Hawaii doing 7 days.
2. Pride of America does 10 day Hawaai as well as 7 days and also does longer West Coast trips with an annual deployment to East Coast ports doing what others cannot do.
3. All older tonnage is transferred out or sold urgently.
4. The newer freestyle tonnage redeploys as required to cover some of the cruises and routes lost as a result, due to reduction in beds available pricing becomes under less preasure and less discounting is required.
5. All non commissioned hotel staff get an increase and new incentive programme based on results. The flat fee hotel/resort/service is abolished permanently. Pax tip who they want to tip. This will motivate the crews to deliver the service needed to up grade the product from so so to excellent, in conjunction with new training programmes.
6. Food is upgraded generally across the board, obviously this will cost money but will deliver greater guest satisfaction and will ensure returns.
7. Fleet deployment to Europe - already in hand.
8. Look for new routes in emerging markets - ie: Aussie and to some extent parts of SE Asia.
9. All management put on a no pay for no results scheme.
10. The new F3 ships to include whole decks of suites etc to increase earnings from top end.
11. Regular deployment to South Africa for 1 ship - welll have to look after the home team !
The new NCL hardware looks great - not a big fan of Freestyle but you have to play to what you have thus you need to make it so good that everyone wants it.So if you like that is my "CV" - do I get the job ?
Having just returned from my first NCL cruise (a repo on Star) I can affirm that most of what I've read about NCL's weak performance is true. There is really nothing about NCL that would make someone want to come back or give preference to NCL over another cruise line. They've tried to position themselves as different with the Freestyle branding, but in truth they've just lowered their service quality.
Here is my list of top changes for NCL:
1. Abandon NCL America. Use Pride of America on Hawaii cruises, but also deploy the ship on other East/West Coast cruises other lines cannot offer.
2. Abandon the automatic gratuity policy.
3. Speed up the transfer of older ships to Asia.
4. Do not add new tonnage after the F3 ships until the line shows a profit.
5. If nothing else works, sell NCL to a true shipping/cruise company. My choice: MSC. They need a stronger North American presence and they have the money and energy to revamp the NCL brand.
NCL are still a very popular cruise line. It would appear that many passengers do feel that they are getting reasonable standards of food and service for their fare.
Example they are advertising 7 nights in alaska WITH AIR for $799.00 and are not selling out. Princess is getting twice that without air and are waitlisted on more then 50% of their ships.
NCL is done. MSC should by it, get rid of the freestyle nightmare and run a quality mass market line. NCLA should have one ship, bring "POAloha" back to the NCL fleet and run with PO America in Hawaii.
Star doesn't know what the North American / European vacation experience should be and neither does NCL.
I don't not know why everyone has to continually stamp on NCL, some people have had far superior cruises with NCL than other supposed more premium lines. They do not appear to be any cheaper at all either in Alaska.
quote:Originally posted by PamM:A quick glance at Alaska pricing shows me endless 7 nighters around the $550 mark, down as low as $406 on Statendam in June, Island Princess $457 & Summit $499. Pity I can't get these prices I would never be at home!Pam
With those fares I wonder why more seniors and people w/time on their hands just don't set up residence onboard. The fares are less than a months rent for a nice 2-bedroom apartment in L.A. and 1/2 the price of a retirement community!
So if I were NCL I'd ditch the high wage poor results american crew from NCLA (if allowed), operate one of the ships on more ambitious itineraries and carry on with the current deployment and fleet replacement strategy. I would also fire whoever was responsible for the Pride of Hawaii decisions- a ship purpose built for a route/ area (i.e. without casino) that within 18months she moves off.
quote:Originally posted by mike sa:NCLA accounted for most of the loss but NCL also lost money, the most worrying issue for them is that occupancy fell for the 2nd time in a row.
You are absolutely correct. The problem is larger than NCLA. In my experience, there is nothing particularly wonderful about NCL that would keep passengers coming back repeatedly. They might take NCL because they got a low fare, but in my experience I'd rather take Princess, RCI, or Celebrity.
Freestyle simply isn't that big a draw for people, and certainly not a "must" that keeps people coming back to NCL over and over. Without a strong percentage of repeat passengers the occupancy rates will suffer.
I don't see how one can really determine much from the scant information available.
Fairsky there are many NCL repeaters who would not sail anything else, and Freestyle is little different to Anytime on Princess. I have never seen any figures from either NCL or Princess on repeater %s?
quote:Originally posted by Fairsky: Freestyle simply isn't that big a draw for people...
I have certainly met people that once they have cruised NCL Freestyle are reluctant to cruise a ship with traditional dining again. Lets not forget that Freestyle is NCL's unique selling point. It's their 'gimmick' and all big lines need a gimmick to succeed.
As NCL are still the number three biggest cruise line, I assume they have many 'repeaters.' In fact the whole cruise industry has - cruise passengers are some of the most loyal tourists.
As for people taking NCL because of low fares, price is the most powerful sales tool and one that NCL normally exploit very well. They do not aim to be deluxe and do not charge deluxe fares either.
The fact that NCL/Star are spending millions of dollars on their newbuild programme, I would imagine any profit is swallowed up in the short term by building costs. NCL/Star will take 5-10 years to reap the benefits if they play their cards right.
Personally, I think NCL has HUGE potential if they can just get their product right. Imagine what the brand could have done had it not invested so much money and energy in the poorly conceived NCLA fiasco. Everyone knew it was a risky plan, but the loss is not simply the resources thrown into NCL America, but the lost potential of using those resources to bolster the rest of the NCL brand. Hopefully its not too late!
NCL would do well to drop all their cruises to Honolulu and close down their NCLA operation and cut their losses.
By concentrating on their other cruises and making some profit they might then have the money to re- fit the ss United States.
If NCL/NCLA make a profit [though I rather think on paper, losses are better shown in respect of the rest of the group] they should reinvest in more and more new tonnage, not an old rust bucket [flamecoat on] which only a minority of people know much or have heard about.
Freestyle has the potential to be a really good product BUT it would seem to make it work really well they need extra staff and the food quality needs to be improved dramatically across the board. The fixed resort charge has to go.
NCLA again has the potential to work, they need to be more creative with the deployment of their 2 remaining ships and they need to enthuse their crews and probably again add a few more to increase the level of service. It may be an option that they continue to employ the same number of US crew but they are deployed across the fleet rather than just in Hawaii, they could then learn for others etc.
quote:Originally posted by PamM:No-one is going to throw money at SSUS, best to forget the idea.
I still wonder if they ever really intended to return the Big U back to service or was it just some sort of bluff?
I'm glad that NCL exist as an alternative to Carnival and RCI. I think the two big NCL newbuilds at the end of the decade will be very exciting ships.
After cruising on the Norwegian Wind 11 night Hawaiian cruise twice I think that NCL should leave one ship in Hawaii and concentrate on 10 and 11 night cruises around the islands. These cruises are more relaxing and give people time to appreciate the islands and the cruise and it overcomes NCL's staffing problems.
Hawaii is close to Australia and with the momentum in the Australian cruising market a lot of Australians are starting to cruise the Hawaiian Islands as it is much cheaper to fly to Hawaii than other parts of the world. NCL realises this potential and has started marketing their product quite well in Australia.
I think that NCL is filling a market niche with their Hawaiian cruises which has the potential of being very profitable for them and it would be a big mistake to move out of this market.
quote:Originally posted by Malcolm @ cruisepage:I have certainly met people that once they have cruised NCL Freestyle are reluctant to cruise a ship with traditional dining again. Lets not forget that Freestyle is NCL's unique selling point. It's their 'gimmick' and all big lines need a gimmick to succeed.As NCL are still the number three biggest cruise line, I assume they have many 'repeaters.' In fact the whole cruise industry has - cruise passengers are some of the most loyal tourists.
With all that NCL experience under our belts, all three of us concluded that given a free choice, we would not now choose NCL over Princess (the line that we were on last week). Moreover, we unanimously preferred traditional dining to Freestyle. We won't stop going on the cruises organised by NCL, but that's because of the event and not the cruise line. And although Princess has about 50% traditional dining and 50% anytime dining, it seems that it's traditional that is usually oversubscribed. So while Freestyle will of course have an appeal to some of the market, there must be a question about whether it will ever be a majority preference.
I had a two year gap between NCL cruises from late 2004 to late 2006, and I noticed a distinct and significant decline in the overall NCL product during that time. That was also disappointing. I don't think it'll happen any time soon, because we still have a good time on NCL - but I can foresee a distinct possibility that the NCL product could get so bad that it would put me off the annual event completely.
Of course, Malcolm is right that cruisers are some of the most "loyal" to "their" cruise line. But (as a wild generalisation) cruise passengers are also some of the most unadventurous travellers on earth, so that's hardly surprising.
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