Just Cruises Plus

Steamboat Makes a Comeback 

A new cruiseline, The Great American Steamboat Company, is re-introducing the 436-passenger American Queen steamboat to the rivers of the south and mid-west United States.  Cruises on the Mississippi, Ohio and Tennessee Rivers will begin in April of 2012.  The ship will depart from cities which include Memphis, New Orleans, Vicksburg, St. Louis, Louisville, St. Paul, Cincinnati and Pittsburgh.

The American Queen, built in 1995 and originally operated by the Delta Queen Steamboat Company, is possibly the largest steamboat ever built. It is a 6-deck recreation of a classic Mississippi riverboat.  The American Queen is actually a hybrid ship whose paddlewheel is powered by steam but which gets some of it’s maneuverability from  a secondary propulsion unit powered by diesel-electric propellers.

Voyages range from three to 14 nights.  Rates include bottled water and soft drinks, coffees and cappuccinos, wine and beer with dinner, deluxe pre-cruise hotel stays and complimentary shore excursions.

NCL Names New Ships

The next two ships from Norwegian Cruise Line will be named Norwegian Breakaway and Norwegian Gateway.  Despite the names, there is much to like about these new ships.  Like the Norwegain Epic, the new ships will have studio  staterooms for singles with a private lounge.  They will also have 42 oceanview staterooms that will accomodate 5 passengers so families of 5 won’t have to buy two rooms.

These 4,000 passenger vessels will be delivered in April of 2013 (Breakaway) and April of 2014 (Getaway).

Ship Fire Kills Two in Norway

An intense  fire aboard Hurtigruten Line’s MS Nordyls killed two crewman and forced passengers into lifeboats.  The ship was near Aalesund, Norway when an apparant explosion tore through the engine room.  In addition to the two deaths, nine crewmen and three rescue workers were injured.  There were no injuries among the passsengers.  “We were sent up on deck and given our lifevests,” Danielle Passebois-Paya, a French tourist told Norwegian daily Aftenposten.  It took only a few minutes after the alarm and we were in the lifeboats”  “It was a well-organized evacuation,” she added.  “The crew did a really good job.  Everything was calm and went smoothly.  There was no panic.”

The Nordlys was in danger of capsizing due to the amount of water pumped into her to fight the fires.  This is exactly what happened to the French Line’s Normandy at a New York pier during WWII which ended the short career of, what may have been, the most beautiful ship ever built.

Most ships of the Hurtigruten Line ply the craggy western coast of Norway, stopping to deliver mail and cargo to the towns and villiages along the coast.   It is a great way to get close to the people of Norway while enjoying spectacular scenery.  However, some ships sail to Antarctica and Greenland.

Irene Disrupts Cruise Line Schedules

Hurrican Irene missed Florida and passed over the Bahamas.  Fortunately, Nassau took a glancing blow and  damage was not severe.  Other than the 3 and 4 day cruises to the Bahamas, schedules for Florida departures had minor changes in the order ports were visited.

There was a serious glitch in San Juan where a Carnival ship and a Royal Caribbean ship were ordered by port authorities to depart several hours early stranding hundreds of passengers in San Juan.

Irene is expected to arrive in the NYC  area around 8 AM on Sunday.  Holland America brought the Veendam back from Bermuda a day early.  Celebrity Cruises kept the Summit in Bermuda for an extra day so it won’t arrive back until Monday.

Let’s hope that Irene gets her ill winds out of here real soon.

Crystal to Become All Inclusive

Beginning in the spring of 2012, Crystal Cruises will include the following on all cruises:  Airfare with transfers, wines and spirits, water and soda, gratuities and two specialty dining experiences.  Crystal is following many of the other luxury cruise lines in including these amenities.  Except for the free liquor, we applaud these changes.  Our concern with including liquor is that it requires non drinkers to subsidize those who use alcohol.  It may also encourage folks to overindulge.

Oil Price Drop Good for Cruisers

The price of crude oil has declined by more than 20% over the past few weeks climaxed by a precipitous $7 dollar drop in the last two days.  This is good news for cruisers.  The cruise lines have been holding a potential fuel surcharge over our heads for the past year. The decline in oil prices, combined with a sputtering economy, virtually insures that the cruise lines will not impliment a fuel surcharge over the near and medium term (as long as the oil producing countries remain stable).

Voyager of the Seas Goes Global

The Voyager of the Seas is moving to China and Australia.  Beginning in the summer of 2012, Royal Caribbean’s Voyager of the Seas will be be based in Shanghai, China.  Following that deployment, she will move to Australia for the remainder of the 2012 season into 2013.

The departure of the Voyager from San Juan will leave only the Serenade of the Seas in the deep Caribbean for Royal Caribbean.

Carnival Still Rules the Waves

       By Chris Baines, Motley Fool Contributor

April 19, 2011

This year has not been all fun and games for Carnival Corp. (NYSE: CCL  ) , which is down 17% on $100+ oil. Turns out the company’s 98 cruise ships (most of which are bigger than the Titanic) are thirstier than a castaway.

But fear not fellow Fools, now is not the time to abandon ship. Carnival’s wonderful business model is still intact.I used to think a cruise ship is where rich retirees spent their twilight days. Turns out that’s not entirely true. Cruising is actually cheap, really cheap, in comparison to land-based vacations. (The average age of a cruise passenger is still 50, although that’s declining as well.) 

Exhibit A: Carnival is offering a 16-day cruise from Barcelona, Spain, to Galveston, Texas, with day stops in Spain, the Canary Islands, and the Grand Turks, for $699. That’s $43 a day, with food, lodging, regional transportation, and transportation stateside included in the price. 

Try vacationing from land in Europe for $43 a day, I dare you. Heck, try living in New York or D.C. for $43 a day. 

Even the more expensive cruises from Carnival’s Princess Cruises or Royal Caribbean‘s Celebrity Cruises, charge around $150 per day per person. Considering that a Courtyard Marriott can run about $300 a night in the summer in Europe, $150 per person sounds like a bargain for a luxury cruise ship. 

No wonder the number of passengers has grown annually at 5.3% worldwide, and 12.1% outside of North America, since 2005. 

What’s even more amazing — and far more important from an investor’s perspective – is that Carnival makes money doing this. Lots of money. 

In 2010, Carnival made $2 billion, which was more than Marriott International , Host Hotels and Resorts, Hyatt , Wynn Resorts, and Las Vegas Sands (NYSE: LVS  ) combined. These companies stand at the pinnacles of their respective areas of the travel and hospitality industry. With their name-brand recognition and histories of providing customers and shareholders outstanding value, most people would think they would trounce Carnival. The fact that Carnival blows them all out of the water (yes, pun intended) speaks to the sheer scale of Carnival. 

The margins tell the tale: Carnival’s operatiing margin was 16.2% in 2010, whereas Marriott’s was 5.9%, Host Hotels and Resorts’ was 5%, Hyatt’s was 3.1%, and Wynn Resorts and Las Vegas Sands clocked in at 14.9% and 17.2%, respectively. The comparison isn’t exactly equal because Marriott manages/franchises hotels while Las Vegas Sands and Wynn primarily operate on gambling, but if anything I would expect that to benefit them in comparison to Carnival. 

So how is Carnival able to beat hotels on price while earning higher margins? 

Cruisonomics 101
The most likely explanation, for my money, is the ability to price discriminate. That’s the ability to charge what each individual customer is willing to pay. 

You see, hotels are stuck in a difficult dilemma. If they price too high that will scare away leisure travelers. If they price too low, they won’t be able to exploit the business travelers that need to travel. As a result, hotels strike an unhappy compromise: They price higher than the market price to capitalize off business travel, but that leaves them with empty rooms. They turn to Pricelinee to help them with price discrimination, but that only goes so far. 

For example, Hyatt’s occupancy rate in 2010 was 70.9%. So on average, about a third of rooms were empty and not generating any revenue. 

Carnival doesn’t have the same dilemma. Carnival knows that nobody needs to take a cruise. Hence they price their ships for maximum occupancy without regret. In 2010, occupancy was 105%. In the depths of the Great Recession, occupancy was still 105% (more than two to every room). In order to create such high demand, it offers cheap rates for consumers. However, once on the ships, consumers typically buy additional services and goods that the company can sell at a substantial markup. This evening-out effect helps pad the company’s overall margins. 

At the same time, Carnival can still capitalize off of travelers who’d be willing to pay more. Those customers can choose premium Carnival brands like Holland America, Princess, or Seabourn, cruises that charge around $100-$400 a day. Those travelers aren’t likely to trade down because their choice of cruise brand plays an enormous role in their vacation experience. 

Everything from the food they’ll receive, to the places they’ll go, to the people they’ll meet, are enormously different on a Seabourn cruise as opposed to a Carnival-brand cruise. 

By contrast, Marriott and Ritz Carlton both take you to the same Manhattan.

Celebrity Offers Reduced Europe Airfare

For a limited time, Celebrity is offering reduced airfare* on the following sailings:

12 Night Solstice from Barcelona – June 19th, July 1st, 13th and 25th plus August 12th and 24th.

10/11 Night Equinox from Rome (Civitavecchia) – June 27th; July 8th and 29th; August 8th, 19th and 29th.

* $999 from Newark, JFK, Boston and Washington DC.  $1099 from Philadelphia.

Princess Three Day Europe Sale

Princess will be offering low fares plus cash back on a large variety of Europe sailings.  The sale begins next Wednesday and ends Friday.

Celebrity Going to Asia

For the first time ever, Celebrity Cruises will cruise to the exotic ports of the Far East. The cruises will begin in the winter of 2012.  China, Vietnam, Thailand , Singapore and Hong Kong will be some of the spots visited.

Celebrity Reflection Open for Captain’s Club Bookings

Captain’s Club members will have an exclusive booking period from April 7th to April 19th when they can book space on the Celebrity Reflection, scheduled to be complted in  2012.