Specialist
Former Director at Viking Cruises Ltd
Agenda
- Key trends and developments in the river and ocean cruise industry
- Near-term headwinds from operational disruption due to the coronavirus pandemic focusing on Viking Cruises' operations
- Competitive landscape and potential industry recovery scenarios
- Medium-term industry challenges and long-term demand outlook
Questions
1.
Which key secular trends have you been following in the river and ocean cruise industry?
2.
You mentioned the target demographic and clientele skewing towards mid-20 to 30 year olds, and the age threshold lowering to mid-40s. Can you please elaborate and outline any implications, given the coronavirus crisis and today’s economic environment?
3.
What were the industry’s expectations for growth in 2020 ahead of the coronavirus? What were your expectations for Viking Cruises’ growth relative to that industry number?
4.
Do you think the river cruise industry will grow overall?
5.
What might be the impact on the overall industry if Viking and other operators bring in more vessels? Would there be oversupply relative to demand?
6.
You have frequently referred to customers booking two years ahead. If we assume that Viking customers are booking a year prior to sailing, on average, how should we think about the post-pandemic booking windows, given some of the trends you highlighted?
7.
What needs to happen for operators to restart voyages?
8.
Is there reason to believe operators such as Viking will start voyages back up in Q3 or Q4 2020?
9.
Viking’s press release about its cancellation policy indicates options for refunds and/or credits for cancellations – up to 125% in the form of a voucher for a reservation. What are the implications of Viking making these changes, and what are the average deposits that people pay for bookings?
10.
Who are Viking’s closest competitors, and who do you think is best able to navigate the crisis environment?
11.
What do you think niche operators such as Viking consider to be the shortcomings of the major ocean cruise line operators, when thinking about the river vs ocean cruise model? Is there anything fundamental to understand coming out of the pandemic?
12.
How would you characterise customer loyalty for ocean cruise vs river cruise operators, such as Viking?
13.
You suggested some of the pluses and minuses of a river cruise vs ocean cruise. How might the pros and cons influence consumer sentiment towards Viking or any of the river names?
14.
To what degree does negative press towards traditional ocean cruise operators pose a headline risk for Viking?
15.
Industry regulators will presumably issue guidelines for the river and ocean cruise operators as we come out of the pandemic. What impact on capacities or occupancies would you expect from potential guidelines?
16.
How should we think about average breakeven occupancy? Would 50% occupancy correspond to a breakeven?
17.
Is there a number or a capacity percentage where it is not possible to socially distance at two metres minimum, the way it is currently implemented on land?
18.
How would you rank the players relative to each other, in their ability to weather the current zero revenue environment? Who is positioned most and least favourably, and why?
19.
Is there anything we should fundamentally understand about Viking’s cost structure?
20.
What percentage of Viking’s costs would you estimate are fixed vs variable?
21.
How are you assessing refunds and people’s concerns about when sailing will be allowed? To what degree can this put a strain on operators’ balance sheets, if more cash refunds are requested?
22.
What is your outlook for pricing? You said it might take a bit of effort or investment by operators to try to incentivise people to cruise again. To what extent could pricing be impacted relative to 2019 levels, and when might pricing recover?
23.
Are you concerned about a more permanent shift in pricing, or an impact on forward bookings as a result of the pandemic? You seem to be positive on a recovery in 2023.
24.
Which names might be attractive acquisition targets when thinking about industry consolidation?
25.
You mentioned a 25% decline in pricing on average. How might a recession impact that?
26.
How should we evaluate Viking’s assets? What figures or estimates would its fleet be valued at, assuming nuances in the fleet’s age and vessel capacities, etc?
27.
How would you value Viking’s IP? Is there any technology behind it?
28.
What is your outlook on a potential rebound for the industry vs Viking? When do you think the industry might get the green light to operate, and what does Viking need to procure to successfully prepare for sailing?
29.
Are there any opportunities for market share gains coming out of the pandemic? Is there potential for customers to shift to river cruises and Viking, from more traditional ocean cruises?
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