Daily Archives: July 7, 2017

Princess Beatrix visiting the Sint Maarten Nature Preserve in Simpson Bay, where marine life has been damaged by overdevelopment (2014) AP Photo/M. Cirtiu/PPE/SIPA

Philipsburg, Sint MaartenFranklin, middle-aged inhabitant of the Caribbean island of Saint Martin, cocked his head when I asked him about climate change. There is already a lot of flooding because of storm surges in hurricane season, he said, his ebony brow creased. If the sea level rises four feet, then Philipsburg is gone. Philipsburg is the capital of the Dutch side of the island, Sint Maarten, a major receiver of cruise ships, with its Front Street a collage of high-end shopping and outlets for island specialties like guavaberry liqueur. The UN estimates that the oceans will rise at least four feet in the next eight decades.

The picturesque Caribbean, with its turquoise waters and sun-kissed white sand beaches, conjures images of happy family vacations, heady rum cocktails, and nighttime calypso rhythms for most outsiders. Its economy has become heavily dependent on tourism, with nearly 30 million arrivals annuallyrivaling the number of permanent inhabitants (around 40 million) of these islands. The tourists bring in $35 billion a year. Sint Maarten receives about 1.5 million cruise-ship visitors a year, and half a million tourists who fly in to Princess Juliana International Airport. Tourism now accounts for 80 percent of Sint Maartens economy.

Precisely because of this dependency on a tourism centered on beaches and wildlife, the Caribbean is among the areas of the world most vulnerable to the deadly effects of climate change. This menace is caused by the burning of fossil fuels and release of greenhouse gases, such as carbon dioxide and methane. Saint Martin, divided into a French north and a Dutch south, is a poster child for this looming disaster.

Tadzio Bervoets, the energetic young head of the Sint Maarten Nature Foundation in Philipsburg with Bruno Martins good looks, told me, Climate change is already affecting Sint Maartens environment. He points to unusual dry spells and unseasonable torrents. I have even seen times recently, he remarked with amazement, when part of the Great Salt Pond has dried up. I could walk on its bed.

Data collected on Barbados over 40 years show that both daytime and nighttime temperatures have steadily increased.

Bervoetss personal experience with the Great Salt Pond, a landmark in Philipsburg, is supported by scientific research. Data collected on the island of Barbados over 40 years show that both daytime and nighttime temperatures have steadily increased. Scientists say that as the islands heat up more moisture will evaporate from the soil and from ponds, and fresh-water aquifers may not be so easily replenished. Clay soils will dry out and crack, which will cause them to lose even more moisture.

Environmentalist Victor Peterson concurred about the issues. A former politician and now building engineer for the Westin Dawn Beach Resort and Spa, he complains, Simpson Bay has been filled in to some extent by developers. The lagoon has shrunk and marine life has been damaged.

The concerned citizen, Franklin, took me along the main artery connecting downtown Philipsburg with the resort area of Simpson Bay, stopping to show me the artificial stone culverts installed by the local government to drain off flood waters, which sometimes make the road impassable. He was clearly skeptical that Sint Maartens government would be able to deal with the substantially increased storm surges that will be caused by sea-level rise and stronger hurricanes. (Hurricanes are produced by warm water, and the warmer the water, the greater their intensity). In 1995, the island was wrecked by Hurricane Luis, and it took years to rebuild.

There have been massive marine life die-offs in recent years. Tadzio Bervoets, Sint Maarten Nature Foundation

Storm surges also threaten public health, inasmuch as they can release polluted water. The Great Salt Pond, Sint Maartens largest inland lagoon, now suffers from an inflow of sewage and leakage from a trash landfill on Pond Island in its center. This pollution, including heavy metals, menaces the birds that stop over and breed there, such as the laughing gull, and threatened local species, including the white-cheeked pintail, Caribbean coot, and ruddy duck. There have been massive marine-life die-offs in recent years, Bervoets said, possibly from a lack of oxygen in the pond. Because of landfill leakage, when the pond is occasionally drained into the ocean, toxins go into the sea and beaches have to be closed, he explained.

Bervoets argues that in Sint Maarten we must mitigate climate impacts. We have to protect coral reefs and mangroves, which offer protection from storm surges. His organization is monitoring a government-designated Marine Park a mile and a half offshore, especially its coral reefs. He says, It is important to put a dollar amount to the value of such resources. The Nature Foundation estimates that the resources in the Marine Park are worth at least $50 million. Peterson over at the Westin agrees about the issues, blaming development in part and warmer seas in part. Conch beds and other marine habitats have already been damaged compared to when I was a boy, he said. Mangroves have been removed.

Coral reefs attract and protect fish, helping fishermen, and are a favorite tourist feature for snorkelers and divers. A Nature Foundation report noted of Sint Maartens reefs, They are also a very important ecosystem for the local and global biodiversity. Bervoets said, We have seen coral bleaching because of heat stress.

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Corals are symbiotic, cohabiting with a kind of algae that live in the corals tissue, and are capable of photosynthesis, turning light into energy. These single-celled algae also promote calcium formation, extending the coral reef. Unfortunately, they do not deal well with extra-warm water. And the industrialized worlds addiction to burning gasoline in automobiles and coal and natural gas for electricity is heating up the earth, including its oceans. The high temperatures interfere in the algaes ability to carry out photosynthesis, thus damaging the coral.

Another threat to Sint Maartens rich marine life is an increasingly acidic ocean. Bervoets says, We have seen lobster and conch shells thinning because of acidification. Conch fritters and lobster feature prominently in Sint Maartens cuisine, and tourists on travel sites can often be observed asking which restaurants prepare them most tastily. Extra carbon dioxide in the atmosphere is absorbed over time by the oceans, though much will remain up there for tens of thousands of years. When it goes into the sea, CO2 produces acidity, threatening marine life (sort of like pouring hydrochloric acid in a goldfish bowl, but on a global scale). The middle-aged Peterson agrees about the deterioration.

At the Sint Maarten Westin resort, Peterson is responsible for overseeing one of the islands (and the Caribbeans) major green-energy projects so far, the 2,600 Lightway solar panels on its roof. He said that the owner, Columbia Sussex Corporation, had them installed in 2013-14 for some $5 million, having become convinced they would pay for themselves in as little as four years. The panels, from China, have a capacity of nearly 800 kilowatts and produce 1.2 million kilowatt hours a year (enough to power 100 homes). Most Caribbean islands, Saint Martin included, depend on expensive imported petroleum for electricity generation. Of course, burning fossil fuels contributes to climate change, so the Caribbean is unwise to feed this beast.

Unlike Aruba, St. Eustatius, and some other islands, Sint Maarten has made few strides toward implementing green energy outside the one resort. Peterson blamed the lack of general progress on solar energy on the government-owned Sint Maarten electrical utility, GEBE, saying it was his impression they feared a loss of revenue. Bervoets observed that Sint Maarten has plans to get two megawatts from solar panels. Land is at a premium, so we will concentrate on rooftop installations, he said. He was referring to GEBEs letter of intent on the installation of 2 megawatts of solar, which it could triple over time to 6 megawatts. The Sint Maarten side of the island has an installed capacity of about 100 megawatts, so at this pace it will be a while before the islands energy is green.

The new administrative offices of the government of Sint Maarten, since 2010 a distinct country within the Kingdom of the Netherlands, sit on Pond Island in Philipsburg in the middle of the Great Salt Pond. Across the street, at the Festival Village concert venue, youth staged a pulse-pounding Buss da Chains concert on the eve of July 1, Sint Maartens Emancipation Day. But Bervoets complained that since it became constituent country of the Kingdom, there have been frequent changes of government on the island, which have interfered with consistent environmental policy. We therefore need voter education, he said, on the challenges this generation faces.

More:

Can the Caribbean's Tourism Economy Survive Climate Change? - The Nation.

What happened

Carnival Corp.(NYSE:CCL),Royal Caribbean Cruises Ltd. (NYSE:RCL), and Norwegian Cruise Line Holdings(NASDAQ:NCLH)rose 26.6%, 32.9%, and 28.1%, respectively, between January 1st and June 30th of 2017, according to data fromS&P Global Intelligence.

The "big three" cruise lines are benefiting from a number of concurrent trends. Lower fuel prices, higher consumer spending in developed countries, and burgeoning travel demand among Asian tourists are three of the most significant current drivers of recent cruise industry success.

In addition, as I discussed recently in an article on the best cruise-line dividends, the cruise industry has expanded its passenger counts at a solid 4.5% compounded annual growth rate, or CAGR, since 2009. This is a function of the factors above, but also reflects the travel preferences of baby boomers and an increasing penchant among millennials to spend their earnings on experiences instead of material products.

The cruise passenger CAGR is noticeable for its smooth ascent and general lack of volatility:

Image source: Cruise Lines International Association, Inc.

Steady and nearly predictable passenger growth has allowed this dominant trio of cruise lines to plan capacity in a rational manner, adding new ships to their fleets at a pace that can be absorbed by market expansion.

For investors, there's another implication of a steady 4.5% CAGR. In a good year, in which pricing holds steady, each of these cruise companies has the theoretical capacity to bump total revenue by at least the passenger growth rate, if not by a few percentage points more.

Indeed, in Q1 2017, Carnival and Norwegian showed top-line improvements of roughly 6.5%, while Royal Caribbean boosted its revenue versus the prior year by 4.7%.

Image source: Getty Images.

The first quarter of 2017 appears to bode well for the coming quarters. Each of the cruise lines reported a robust "wave season," characterized by both solid bookings and pricing power. Wave season, which typically occurs from January through March, marks the three months in which a majority of vacation cruise travel is booked, and it's a period of heavy promotion and competition among cruise lines.

Norwegian Cruise Lines CEO Frank Del Rio notably remarked during the company's first-quarter earnings conference call that the 2017 wave season was the strongest that Norwegian -- and likely the industry -- had seen "in quite some time."

And so far this year, Carnival, Royal Caribbean, and Norwegian are each efficiently managing their capacity and revenue per passenger. Alongside financial reporting for the most recent quarter, all three organizations raised expectations for full-year 2017 net revenue yields (net revenue divided by total available passenger cruise days). Carnival projects an increase in net yields of 2.5% this year, close to Norwegian's expectation that net yields will rise 2.25% in 2017. Royal Caribbean expects its net yields to grow between 4% and 5.5% by year-end.

The torrid year-to-date performance of these industry leaders may unnerve some investors, yet it's quite possible that all three could hold onto their gains, and perhaps even appreciate more in the coming months. Here's some context to consider:

CCL data by YCharts.

This time last year, the uncertainty surrounding Brexit weighed heavily on cruise-industry stocks, which rely on European passengers as a core revenue stream. That uncertainty has dissipated. As the chart above demonstrates, the recent price movement of cruise stocks, in addition to industry trends and strong operational fundamentals, also represents a resurgence from steep declines that hit a trough in the summer of 2016.

In fact, the big three are still reasonably valued. Carnival, Norwegian, and Royal Caribbean currently sell for 17.8, 14.3, and 15.5 times forward earnings, respectively. These forward price-to-earnings (PE) ratios compare favorably to the overall market valuation of large capitalization stocks, as represented by the S&P 500 Index average forward PE ratio of 19.9.

Thus, looking forward, as long as the global economy can continue to exhibit modest growth, these leading cruise lines may ply within a sweet spot on the high seas. Travel trends, efficient operations, and moderate valuations point to a decent back half of 2017, and perhaps beyond.

Asit Sharma has no position in any stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

Original post:

Why Carnival, Royal Caribbean, and Norwegian Cruise Lines All Surged More than 25% in the First Half of 2017 - Motley Fool

Oasis of the Seas will set sail on Aug. 20

ABOVE VIDEO:For the first time in 99 years, a total solar eclipse will occur across the entire continental United States, and NASA is preparing to share this experience of a lifetime on Aug. 21. (Eclipse 2017video)

BREVARD COUNTY PORT CANAVERAL, FLORIDA Royal Caribbean is offeringa special seven-night Total Eclipse Cruise to the Caribbean that will sail through this Summers eclipses path on August 21.

The voyage even includesNASA-approved sunglasses for safe and optimal viewing.

The 7-night Total Eclipse Cruise on board Oasis of the Seas will set sail on Aug. 20, 2017 from Port Canaveral, Florida and visit Eastern Caribbean destinations Phillipsburg, St. Maarten; Charlotte Amalie, St. Thomas; and Nassau, Bahamas.

More information can be found at RoyalCaribbean.com/TotalEclipse.

Royal Caribbean is offering a special seven-night Total Eclipse Cruise to the Caribbean that will sail through this Summers eclipses path on August 21.

The 7-night Total Eclipse Cruise on board Oasis of the Seas will set sail on Aug. 20, 2017 from Port Canaveral, Florida and visit Eastern Caribbean destinations Phillipsburg, St. Maarten; Charlotte Amalie, St. Thomas; and Nassau, Bahamas.

The August 21 total eclipse of the sun, the first to sweep the entire continental U.S. since 1918, is a celestial phenomenon thats been anticipated for years as the path of moons shadow travels between the sun and Earthfrom the Oregon coast to the Atlantic Ocean by way of South Carolina.

Day will turn to night and nothing but the outermost part of the suns atmosphere, called the corona, will be left shimmering in the sky.

On Aug. 21, millions of people will travel to witness thistotal solar eclipse.

Being in the right place at the right time is important for viewing a total solar eclipse as it only lasts for a few brief minutes along a narrow path. This is called the path of totality.

The rest of the U.S., including Alaska and Hawaii, will experience a partial solar eclipse.

CLICK HERE to see10 unique spots in the path of totality.

The August 21 total eclipse of the sun, the first to sweep the entire continental U.S. since 1918, is a celestial phenomenon thats been anticipated for years as the path of moons shadow travels between the sun and Earthfrom the Oregon coast to the Atlantic Ocean by way of South Carolina.

CLICK HERE FOR BREVARD COUNTY NEWS

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Here is the original post:

Royal Caribbean Cruise Lines Offering Special 'Total Eclipse Cruise' Out of Port Canaveral - SpaceCoastDaily.com