Posted on 05/25/2022 12:13:14 PM PDT by Capt. Tom
What happened Shares of cruise line stocks plunged in trading on Tuesday as the market continues to grapple with economic uncertainty. . So what The news continues to be murky at best with companies warning of slowing sales in a variety of sectors, consumers experiencing inflation, and the Federal Reserve continuing to indicate that it will keep raising interest rates.
Today's news was that Snap is experiencing far slower advertising spending in just the last few weeks than expected and that indicates companies from direct response retailers to gaming companies to big brands are pulling back on their spending. This could be an early indication that the economy overall is slowing, which will eventually make its way to people's pocketbooks.
If the economy is slowing as interest rates are rising, it puts businesses and policymakers in a tricky position.
All three of these cruise line companies added a tremendous amount of debt to make it through the financial crisis and that has made their businesses riskier. At the same time, operating cash flow is not back to a sustainable level.
This risk isn't new to the cruise line industry, but if spending is going to decline and consumers are going to pull back on spending, then cruises may be one of the first expenses to go. At a time when investors were hopeful that consumer spending will pick up and the pandemic subsides, the opposite may be true.
Despite the drop in cruise line stocks today, I still see more risk than opportunity. These companies have a tremendous amount of debt and operations aren't anywhere near where they were in 2019. I'm staying out of cruise stocks right now and until they start generating positive cash flow, this is a market that I'll watch from the sidelines.
(Excerpt) Read more at msn.com ...
I have piked up this opinion piece because I feel it touches on the problem the cruise lines are going to have face in he future no mater how many new ships they order ,or how the future demand for cruising is touted.
I feel that alienating a great amount of their base ( unvaccinated passengers) the worldide inflation, gas prices, food prices, rents efc.,and the Billions of dollars of debt they have gotten themselves into, traveling with 60% filled ships, and the ongoing covid threats will only slow their businesses recoveries for years to come.
How long can their creditors hold out? -Tom
There was a news story today that airline travel is increasing.
The rising fuel costs probably have a lot to do with it.
I wouldn’t get on one of those giant petri dishes.
Also, don’t forget the prolonged stays passengers had when no port wanted them to disembark.
Electric plug in cruise ships, sounds fun.
Is third world monkey pocks and hemorrhagic fever part of this - close quarters and all...
“Why Cruise Line Stocks Are Plunging Today”
Carnival up 5% today.
That's another expense for the cruise ships, as many of them are diesel powered, and the projected cost of fuel this winter is staggering asea and ashore. -Tom
“Electric plug in cruise ships, sounds fun.”
Biden resides in your head!
The lines you mentioned are what I would call finality lines. You go to the port, you take the cruise, and you go home. The only incentive to cruising with them is the cruise.
One company that has held its own is Disney. They can filter out the cruise customers to the parks or home when they came from the parks to the cruise. There is a further incentive than just the cruise. Disney stock at of May 22 this year was at 103.74 and today is 101.59. But the cruise line stock in 2017 was 101.49. So it hasn’t changed in stock price near what the others have. And the reason is the diversity of businesses feeding it. And between the investment into entertainment like Marvel, Pixar, the parks, and merchandising of all of it, there will be a hodgepodge of money going from one income to another to stay solvent with all of it.
So the finality lines are the ones going to take the debt on with just themselves. And with things like travel expenses, (priced airlines lately?), outside source hotel capacity, and no alternate entertainment as a draw, they are going to take the hit and with it the failure of the business based upon a lack of backing and HR problems catching up to them. So the service goes down the tube and they have nothing to offer but a floating barge. They’ll have to shanghai customers. But if they can get them from other entertainment sources, they can create upselling and cross selling options. May be the only way to stay afloat.
wy69
Well, soon everybody will have to wear full body armor and gas masks to be allowed on the ships because of the forthcoming simian butt pox
There was a news story today that airline travel is increasing.
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Was that Cramer on CNBC trying to sell losing shares?
Charts show energy inflation and inflation-impacted spending revisions by consumers are killing air travel. Look at the charts for OOTO, JETS, and any others.
Charts and weekly, monthly, Year-over-year performance numbers are much more correct than media reporting.
The great “Democrat Reset” going as planned.
This is going to cause another massive hit to the haitian hooker industry
The giants will probably go away and a select number of much smaller, more exclusive will survive.
Good point.
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I am not interested in whether cruise stock goes up or down, because stock prices are not an indicator of the economy.
It is the reasons for his concerns about the cruise industry that are the same as mine, that I posted this article.
Carnival cruise line quietly borrowed another Billion dollars last week to keep on going. -Tom
I’ve been on just one cruise ever, enjoyed it immensely, my wife and I went with the F.R. Gang and it was like a second honeymoon for us.
I have no interest in going on another one without her, she passed away in 2018.
The picture on my “about” page is the two of us on that cruise.
I have no interest in going on another one without her, she passed away in 2018.
The picture on my “about” page is the two of us on that cruise.
I can relate to your feelings ,since I put my wife into a Nursing Home a year ago, when her dementia worsened.- Tom
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