A Royal Proclamation...In PINK!
Would it surprise you that the most viewed news article last week in Travel Weekly was YTB’s new franchise model? (As well as the most e-mailed story of the week.) What seemed to be flying under the radar last week due to all the YTB news was the second most viewed story of the week concerning Royal Caribbean budget cuts.
According to sources mentioned in Travel Weekly, RCCL was looking to cut payroll by 10% and asking staff to reduce expenses. A Credit Suisse Bank analyst confirmed that Royal Caribbean would also implement “broad based, shore side expense reductions of up to 25%”. If you’re thinking “layoffs” you’re right on the mark as a Miami News Station made the “Royal Proclamation” late last night that the Miami based company handed out some 300 Royal Letters in pink Monday afternoon with 100 positions already vacant totaling 400 job cuts.
Not surprising since after yesterday’s closing bell, Royal Caribbean released numbers showing a 34% decline over 2007 second quarter numbers and more information on its cost savings measures. Seems investors have seen this coming for some time as RCL stock has plummeted from $43 per share to a 5 year low of $19.16 per share just last week.
The company announced a significant cost savings initiative that is expected to reduce spending by approximately $125 million annually.
"Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively," said Richard D. Fain, Chairman and Chief Executive Officer. "While our brands continue to attract premium prices even in this difficult environment, it is imperative that we find ways to reduce our costs."
Hey! Here’s a novel idea you’re more than welcome to steal from the current #1 Cruise Line in the World! Looks like Royal Caribbean is in need of even MORE Travel Agent Support to offset these Royal Pink Slips.
But I regress. Instead they are spending Lord knows how much on more Direct Response TV ads “Starring You”!
Unfortunately, Agent support may not be so easy since it was also reported here that Royal Caribbean gave their existing Travel Agent base the Royal Shaft back at the beginning of June by increasing commission thresholds. While I was “told” by the knowledgeable Travel Agent community I’ve come to know and love, that this was no big deal, I found story after story of Agencies feeling truly shafted. Jim Mazza, COO of Oyster Bay, NY-based TRAVELSAVERS urged them to reconsider. He continued to say “we don't feel that it was in the best interests of the travel agent community.” Mazza was also quoted in another Trade Publication “Given the implications of the current economy, isn't this the perfect time for cruise suppliers to strengthen, not diminish, their relationships with travel agents?"
Vacation.com’s Steve Tracas, president and CEO expressed disappointment with Royal Caribbean's move and reaffirmed the value of travel agents to Royal Caribbean and the industry. CEO Tracas also was quoted “This is certainly a conflicting message compared to some of their more recent communications to the agency community."
One agent, who asked for anonymity, told Travel Trade, "This change is especially punitive to smaller agencies that will be hurt the most. Large producers don't care about a $1.5 or even a $3 million threshold because they are above that anyway. Many of the literally thousands of agencies that barely make 11% now are dropping to 10% and, no, a few hundred dollars doesn't seem like much but the psychological size of the cut is huge."
"The bitterness goes very deep and several producers in the $1 million range that will be affected are already moving share to Princess," according to this agent.
What ever happened to that promise back in October when Royal Caribbean said they were done with Travel MLM’s and only going to kiss and hug REAL Travel Agents? What happened to the standing ovations all over this country from the Travel Agent community who were behind Royal Caribbean 100% and promised they were going to take this industry back?
Now that Royal Caribbean has been out at sea all by itself the last 9 months they’ve sprung a leak and cries of “Man Overboard!” are being heard down in Miami and the Wichita, Kansas call center.
To be fair, fuel costs ARE a big reason for these cuts, but you’ve just GOT to wonder what a company like YTB, who booked some $414.5 Million in travel in 2007 could have done to help save at least some of these jobs. Remember, our suppliers don’t pay a dime to YTB unless YTB produces a sale. There are no marketing expenses; there’s no Co-op Advertising, there’s just more than 100,000 web sites out there that could be pointing friends, family, neighbors, and co-workers to their ships, which quite honestly are very nice.
With a capacity of some 5400 passengers on the new Genesis Class ships being built and on order, maybe bigger at this point isn’t better. Like it or not kids…YTB is the PERFECT model right now to fill up all those new ships they have coming out. You take a look at Carnivals earnings, and now Royal Caribbean’s and despite both having to struggle through the same fuel costs and economic troubles, one has YTB and one doesn’t.
It’s just one of those things that make you go Hmmmmmm.
Royal Caribbean has scheduled a conference call at 10 a.m. Eastern Daylight Time, Tuesday, July 22, to discuss its earnings. This call can be heard, either live or on a delayed basis, on the company's investor relations web site at http://www.rclinvestor.com/.
PS - If you’d like to keep up to date with all the latest news, acquisitions, and developments with YTB feel free to sign up for my FREE Newsletter. Just like here, it’s loaded with food, water and sunshine to grow your YTB business.
Doug & Ronda Bauknight
AKA: TravelPro
Travel Agent / Networker
Phone: 678.458.5812
Learn How To Become A Travel Agent
Book Your Travel & Vacations With
Travel Reservations: 1.800.243.4450
RTA #24635
According to sources mentioned in Travel Weekly, RCCL was looking to cut payroll by 10% and asking staff to reduce expenses. A Credit Suisse Bank analyst confirmed that Royal Caribbean would also implement “broad based, shore side expense reductions of up to 25%”. If you’re thinking “layoffs” you’re right on the mark as a Miami News Station made the “Royal Proclamation” late last night that the Miami based company handed out some 300 Royal Letters in pink Monday afternoon with 100 positions already vacant totaling 400 job cuts.
Not surprising since after yesterday’s closing bell, Royal Caribbean released numbers showing a 34% decline over 2007 second quarter numbers and more information on its cost savings measures. Seems investors have seen this coming for some time as RCL stock has plummeted from $43 per share to a 5 year low of $19.16 per share just last week.The company announced a significant cost savings initiative that is expected to reduce spending by approximately $125 million annually.
"Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively," said Richard D. Fain, Chairman and Chief Executive Officer. "While our brands continue to attract premium prices even in this difficult environment, it is imperative that we find ways to reduce our costs."
Hey! Here’s a novel idea you’re more than welcome to steal from the current #1 Cruise Line in the World! Looks like Royal Caribbean is in need of even MORE Travel Agent Support to offset these Royal Pink Slips.
But I regress. Instead they are spending Lord knows how much on more Direct Response TV ads “Starring You”!
Unfortunately, Agent support may not be so easy since it was also reported here that Royal Caribbean gave their existing Travel Agent base the Royal Shaft back at the beginning of June by increasing commission thresholds. While I was “told” by the knowledgeable Travel Agent community I’ve come to know and love, that this was no big deal, I found story after story of Agencies feeling truly shafted. Jim Mazza, COO of Oyster Bay, NY-based TRAVELSAVERS urged them to reconsider. He continued to say “we don't feel that it was in the best interests of the travel agent community.” Mazza was also quoted in another Trade Publication “Given the implications of the current economy, isn't this the perfect time for cruise suppliers to strengthen, not diminish, their relationships with travel agents?"
Vacation.com’s Steve Tracas, president and CEO expressed disappointment with Royal Caribbean's move and reaffirmed the value of travel agents to Royal Caribbean and the industry. CEO Tracas also was quoted “This is certainly a conflicting message compared to some of their more recent communications to the agency community."
One agent, who asked for anonymity, told Travel Trade, "This change is especially punitive to smaller agencies that will be hurt the most. Large producers don't care about a $1.5 or even a $3 million threshold because they are above that anyway. Many of the literally thousands of agencies that barely make 11% now are dropping to 10% and, no, a few hundred dollars doesn't seem like much but the psychological size of the cut is huge."
"The bitterness goes very deep and several producers in the $1 million range that will be affected are already moving share to Princess," according to this agent.
What ever happened to that promise back in October when Royal Caribbean said they were done with Travel MLM’s and only going to kiss and hug REAL Travel Agents? What happened to the standing ovations all over this country from the Travel Agent community who were behind Royal Caribbean 100% and promised they were going to take this industry back?
Now that Royal Caribbean has been out at sea all by itself the last 9 months they’ve sprung a leak and cries of “Man Overboard!” are being heard down in Miami and the Wichita, Kansas call center.
To be fair, fuel costs ARE a big reason for these cuts, but you’ve just GOT to wonder what a company like YTB, who booked some $414.5 Million in travel in 2007 could have done to help save at least some of these jobs. Remember, our suppliers don’t pay a dime to YTB unless YTB produces a sale. There are no marketing expenses; there’s no Co-op Advertising, there’s just more than 100,000 web sites out there that could be pointing friends, family, neighbors, and co-workers to their ships, which quite honestly are very nice.
With a capacity of some 5400 passengers on the new Genesis Class ships being built and on order, maybe bigger at this point isn’t better. Like it or not kids…YTB is the PERFECT model right now to fill up all those new ships they have coming out. You take a look at Carnivals earnings, and now Royal Caribbean’s and despite both having to struggle through the same fuel costs and economic troubles, one has YTB and one doesn’t.
It’s just one of those things that make you go Hmmmmmm.
Royal Caribbean has scheduled a conference call at 10 a.m. Eastern Daylight Time, Tuesday, July 22, to discuss its earnings. This call can be heard, either live or on a delayed basis, on the company's investor relations web site at http://www.rclinvestor.com/.
PS - If you’d like to keep up to date with all the latest news, acquisitions, and developments with YTB feel free to sign up for my FREE Newsletter. Just like here, it’s loaded with food, water and sunshine to grow your YTB business.
Doug & Ronda Bauknight
AKA: TravelPro
Travel Agent / Networker
Phone: 678.458.5812
Learn How To Become A Travel Agent
Book Your Travel & Vacations With
Travel Reservations: 1.800.243.4450
RTA #24635
Labels: Card Mill, Layoffs, RCL, Royal Caribbean, Travel Agent Issues, Travel MLM, YTB News, YTB Travel Network
