June 30, 2020
In this Issue
Here are some of the news articles we are following:
- As cruise lines plan comeback, some loyal travelers are eager for the next trip
- This Analyst Warns Cruise Investors: A Full Recovery Is Still “Several Years” Away
- Carnival cruise ship named for demolition amid Covid-19 crisis
- Luxury Cruise Line Sails for the First Time Since Suspensions
- The Former Norwegian Cruise Ships, Where Are They Now?
- After Recent Cruise Line Suspensions, What's Next?
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As cruise lines plan comeback, some loyal travelers are eager for the next trip
“Gail Raines, of Royal Palm Beach, Fla., has been on over 30 cruises and has no plans to stop. She hasn’t been scared by tragic tales of ships stranded at sea while passengers die on board. And she thinks people are overreacting when they compare ships to floating petri dishes. Raines, 55, is among a loyal contingent of South Florida cruisers who book trips like clockwork each year, rack up rewards and enjoy onboard perks like free champagne. For them, a cruise is not a one-off vacation. It’s a way of life. “It’s just what we do,” she said. That’s a breath of fresh air to Carnival Cruise Line, Norwegian Cruise Line and Royal Caribbean Cruises, the three largest lines who face an uphill battle to win back trust from passengers and recover from massive revenue shortfalls. First, they must win over ports, health departments and the Centers for Disease Control and Prevention, convincing them that setting sail in September will be safe. The companies have issued statements highlighting their work with experts to develop enhanced safety protocols onboard to protect against the coronavirus.”
This Analyst Warns Cruise Investors: A Full Recovery Is Still “Several Years” Away
“America's up-again, down-again group of cruise line stocks -- Carnival Corporation (CCL), Royal Caribbean (RCL), and Norwegian Cruise Line Holdings (NCLH) -- went down again, en masse, this week, with all three companies' stocks sinking 10% or more. Don't say you were not warned. Analyst Chris Woronka of Deutsche Bank penned a note in which he tweaked price targets ever so slightly higher. At the same as he did this, however, Woronka also warned investors that none of the three publicly-traded cruise stocks is currently cheap enough to buy. Although Woronka raised his estimates (the price target on Carnival going from $11 to $13 a share, Royal Caribbean going from $36 to $40, and Norwegian Cruise from $11 to $15), the analyst remained firmly on the fence about all three of these companies, and reiterated a "hold" rating on all three stocks. Turns out, while in the long term Woronka sees the three major cruise stocks recovering after getting torpedoed by the COVID-19 panic, it could be several years still before things start to look better for them. So, how precisely does Woronka see this situation playing out? First, the background. COVID-19 has done a number on the cruise stocks, first by frightening potential customers away, and later by making it utterly impossible for passengers to cruise, even were they so inclined, because of a "no-sail" order implemented by the Centers for Disease Control to prevent further spreading of the coronavirus. For the past several months therefore, cruise companies have had no revenue at all coming in. A recent announcement by the Cruise Lines International Association (CLIA), declaring that no cruise line will resume sailing before September 15 at the earliest, means there probably won't be any revenues coming in for another three -- or more -- months. To survive this situation, cruise lines have been cutting costs wherever they can. Woronka believes that, because cruise lines need to continue cutting costs, and are also forecasting a decline in demand for their services, it's likely that the cost cutting will result in cruise lines both postponing deliveries of cruise ships they've already ordered, and also selling off some of the ships they already have.”
Carnival cruise ship named for demolition amid Covid-19 crisis
“A major cruise liner with only 23 years of service has been earmarked for the scrap heap amid a coronavirus-driven downturn for the leisure shipping industry. Following an announcement by cruise giant Carnival Corporation that it expects to remove several vessels from its fleet, it's emerged that one of these could be the Costa Victoria, a 2,394-passenger capacity ship that debuted in 1996. While Carnival has yet to identify any of the ships set for decommissioning, the Costa Victoria's fate was called into question when the mayor of Italian town Piombino, Francesco Ferrari, announced on Facebook that the ship had arrived there to be prepared for demolition. Ferrari said he'd welcomed the ship's captain, Gianfranco La Fauci, to the city on Tuesday morning and celebrated the moment as a step forward in Piombino's economic recovery.”
Luxury Cruise Line Sails for the First Time Since Suspensions
“SeaDream Yacht Club has officially set sail! They are the first luxury cruise to sail since the cruise industry paused sailings because of the COVID-19 pandemic. The line’s first Norwegian voyage left Oslo on Saturday, June 20th. SeaDream's Norwegian voyages have sparked excitement among past and future passengers alike. Initially, SeaDream had planned to sail in Norway with only one ship, SeaDream I, for nine voyages. After the first cruises quickly sold out, the line decided to add SeaDream II to double their capacity in the region and meet the overwhelming demand.”
The Former Norwegian Cruise Ships, Where Are They Now?
“Norwegian Cruise Line (NCL) is one of the most popular cruise lines in the world, well known for its casual, freestyle experience and stunning ship hull art. Today, the line is home to 16 amazing ships, with seven new ships already ordered and planned for launch over the next few years. What many passengers don’t realize, however, is that there are 19 ships that previously belonged to Norwegian Cruise Line that are no longer part of the fleet. Who are these former NCL cruise ships, and where are they now?”
After Recent Cruise Line Suspensions, What's Next?
“With the latest suspension of most cruise lines through September 15, cruise fans are beginning to wonder if their favorite vacation will be taking place this year -- and depression is setting in. On the Cruise Critic forums, the mood has changed from people planning trips to debating when a COVID-19 vaccine might occur, as well as what kind of changes that people might see on ships. While avid cruisers are still booking -- Cruise Critic's survey shows that 73 percent of respondents’ plan on booking a future cruise -- the dates for those sailings keep getting pushed back.”
Disclaimer: The views expressed in the articles above are those of the authors' and do not necessarily represent or reflect the views of this e-Newsletter
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