Cruise capacity

[PaulB]

Having a discussion with friends in regards to cruise holidays, and one asked whether cruise lines are sailing at full capacity. I understand the closer to the date of sailing, if there are empty rooms then they can put deals in place, but are there many ships that wouldn't have filled the capacity?

[FJB]

My guess is that most cruises are now sailing at pre-rona capacities here in the US. Not sure about Europe cruises though since some countries still have restrictions in place. Of course January is historically a slow month so ships may not be at 100% but I would guess they are still at 90%+. 
 

This is just my educated guess - YMMV

[PaulB]

@FJB so would they be operating at a loss would you think if they don't fill the ships?

[Woody14]

4 hours ago, PaulB said:

@FJB so would they be operating at a loss would you think if they don't fill the ships?

most cruise companies don't say what the break even point is but when cruising restarted and they were sailing at 50% capacity they were all loosing money (just less than when they were not sailing at all) likely they need about 80-90% capacity to break even.    This is one of the reasons that the older less fuel efficient / less amenity ships are getting  phased out.   I big contributor to profits is all the things that are over and above the cruise fare (alcohol, excursions, shops, specialty dining, casino, et all).    One other note on capacity which can cause confusion, they list capacity as the double occupancy numbers (2 people per cabin) but in reality they can and most often sail at numbers above that since they have a maximum number of passengers they can have on the ship which accounts for having 3 or 4 passengers in some cabins.    Most cruise lines are striving for 105-115% capacity on all sailings.

[Kendall James-Vargas]

@FJBI'm sure this is dependent on the cruise line, but I would say most U.S. based ships are cruising at full capacity. 

I think the threshold for "operating at a loss" is likely not full capacity. Not all sailings get filled to full capacity, but I would say anything about 80% capacity is at least breaking even. I remember sailing when it was under 50% capacity during the pandemic, and the cruise lines were most definitely operating at a loss. The fact that the ships were sailing again was huge! So I would say a sailing boat at that time period was at least is generating some income verses a sitting boat. 

@Woody14 That's exactly what I was thinking! Although, I didn't think about the goals of over 100% capacity. That's a great point. 

 

Edited January 13 by Kendall James-Vargas

[PaulB]

@FJB@Woody14 that's really interesting. You dont tend to think about how much they need to fill before they break even

[LukeJ]

@PaulBsame thing happens with planes and hotels. Everything needs a place where they need to reach before making profits. 

[Kendall James-Vargas]

@LukeJ That's true. Most operations set goals to turn a profit, but every industry has a different threshold. 

[FJB]

14 hours ago, PaulB said:

@FJB so would they be operating at a loss would you think if they don't fill the ships?

I would guess anything less than 80% is not profitable but I really don’t know.  I watched a documentary a year or two ago following a one week cruise behind the scenes - the profit center is the onboard stuff - shops, casinos, bingo, specialty restaurants, etc. 

[PaulB]

Yes that's true. The age old mantra they probably will be getting through to workers is sell, sell and sell again. So overall, they may even sneak past the profit margins

[LukeJ]

@PaulB the companies may not want to make profits "on paper" as they would require to pay tax. 

[Kendall James-Vargas]

@LukeJ That's an intriguing thought. How do you think cruise lines could hide profitable earnings?