In the Headlines – November 6th, 2015

In The Headlines

Holland America: Trying Not to Be Your Father’s Cruise Line

CruiseFor decades, the Holland America Line (HAL) has battled the perception that its ships carry an old demographic—plenty of its cruisers are north of 70. Travel agents often steer younger people to other cruise brands, while the line’s rivals lob wisecracks about the geriatric set at sea. Now Holland America is tinkering with the brand to get some of the gray out. With its largest ship ever, the MS Koningsdam, arriving in February and a second in late 2018, the 142-year-old line is trying to expand its audience. That means complementing its older, affluent repeat customers with more active baby boomers and Gen Xers who are now into their 40s.

“Today’s guests are active, sophisticated, and curious,” HAL President Orlando Ashford said Thursday at a press conference in New York. There the brand announced new partnerships with the travel publication Afar, BBC Earth, and Utrip, a Seattle software company that helps align travelers’ personal preferences with the options available in a destination. Holland America is spending $300 million to upgrade its fleet in coming years, with $40 million specifically to update suites with better amenities, including USB ports on each bed. The brand, owned by Carnival Corp., also wants more attention than it has had. “I think we’ve been very quiet … we want to be a little louder,” Ashford said.

Holland America is trying to expand its business beyond its traditional customer, an upper-middle-class or wealthy American or European with the time and funds to cruise for two-week stints and longer. (Some itineraries are 115 days and more.) The 15-ship line is Carnival’s mass-market premium brand, positioned above Carnival and Princess but not as luxurious as a Seabourn or Cunard voyage. Holland America says its average cruiser is 57 to 58, but that is skewed younger by seven-day winter Caribbean cruises, which are less expensive than most of the line’s inventory and attract some younger people.

The cruise line spent much of this year conducting market research, with 30 focus groups nationwide, to understand better the perception of its brand and how to attract new customers—and The Big Finding? Serving too many seniors can turn away younger cruisers. The company also found that travelers want to be “immersed” in the destinations they visit, said Ashford, a veteran human resource executive who joined Holland America last November.

“They like to touch, feel, and taste the destinations,” he said. Such “experiential travel” is also the raison d’être of Carnival’s newest brand, Fathom, which plans voyages to Cuba in 2016 if it receives government permission.

In January, Holland America will adopt a new logo and a new tagline, Savor the Journey. That replaces A Signature of Excellence, which the line adopted about a decade ago. The new tag emphasizes travel as an experience, while the old spoke to the company’s premium service. If it does not sound like a big change, it isn’t. Holland America has to be careful not to dent its upscale reputation and risk a backlash from longtime customers, one reason Ashford twice called the branding tweaks “an evolution, not a revolution.”

Among the new amenities, BBC Earth will create a live quiz show as a new entertainment across the fleet and live music performances coordinated with nature videos. The Washington state’s Chateau Ste. Michelle winery is heading a new wine-blending course for cruisers, much like the one MSC Cruises has on its newest ships with a California-based vintner. For live music, the line is teaming up with Lincoln Center Stage, a new venue overseen by New York’s Lincoln Center for the Performing Arts.

Citations – Bloomberg

The Good News Is . . .

Good News• Case-Shiller home prices edged higher in data for August, up 0.1% for the 20-city adjusted index to end three prior months of contraction. Year-on-year, the 20-city index is up 5.1%. A look at individual cities shows many fewer minus signs with five posting monthly contraction vs an average of 12 over the prior three months. Year-over-year, the weakest markets were New York, Chicago, and Washington DC, all at plus 1.9%. The strongest markets were San Francisco, at 10.8%, and Denver at 10.7%.

• Amgen, Inc., leading independent biotechnology company, reported earnings of $2.72 per share, an increase of 18.3% over year earlier earnings of $2.30 per share. The firm’s earnings topped the consensus estimate of analysts by $0.34. The company reported revenues of $5.7 billion, an increase of 13.8%. Management attributed the company’s results to unit volume growth in several of its product lines and improved operating margins.

• Walgreens Boots Alliance said on Tuesday that it would buy Rite Aid for more than $9.4 billion in cash, significantly bolstering its influence with drug makers and pharmacy benefit managers. Under the terms of the deal announced on Tuesday, Rite Aid shareholders will receive $9 a share. The deal is the latest taking place in the sweeping changes under the Affordable Care Act, which has inspired drug makers, insurers, and others to merge. For pharmacies, a rise in insured Americans has increased prescription demand, helping increase the total revenue of the nation’s retail, mail, and specialty pharmacies 7% last year from 2013. At the same time, companies have also been pressured to keep costs down.


1. – Bloomberg Economic Calendar
2. – CNBC
3. – Amgen, Inc.
4. – NY Time Dealbook

Planning Tips

Apps to Help You Build an Emergency Fund

Emergency FundFinancial professionals generally recommend that you have at least three to six months’ worth of your must-pay living expenses saved in an emergency fund. However, building an emergency fund can be a challenge, especially if you live paycheck-to-paycheck or have a tendency to spend more on unnecessary items than you can afford. Fortunately, technology can make the process easier. Here are five mobile and web-based apps that can help you build a financial safety net. Be sure to consult with your financial advisor about how to set up an emergency fund in a manner that is appropriate to your financial circumstances.

Acorns – Acorns connects to a credit card or debit card and checking account and “rounds up” the virtual change on purchases to the next dollar to help you save and invest. Once round-ups reach $5, Acorns withdraws the money and invests it in a personalized portfolio. You can also set recurring investment amounts if you want to invest more or add a lump sum into your account. Acorns constructs five portfolios, each made up of six exchange-traded funds (ETFs); your portfolio is optimized based on your age, time horizon, goals, income and risk tolerance. Fees apply: $1/month for accounts under $5,000; 0.25% per year for accounts over $5,000. Students and anyone under age 24 invest for free, regardless of account size.

Digit – Digit analyzes your spending habits and moves a few dollars (usually $5 to $50) from your checking account to your FDIC-insured Digit savings account, if you can afford it. To use Digit, you have to link your checking account so it can analyze your income and spending and find small sums of money you can safely set aside. The company claims it will not ever transfer more than you can afford and offers a no-overdraft guarantee: If it overdrafts your account, Digit will cover the fee. You can withdraw money from your Digit account any time, as often as you wish and without paying a fee by texting “withdraw” to Digit. The app is free.

Level Money – Level Money is an award-winning app that lets you track your cash flow by acting as a mobile money meter. At the beginning of each month, Level Money “fills up” with your estimated income and automatically subtracts your recurring bills, plus a savings rate, such as 5%. The remaining money is what you have to spend that month. The app connects to your credit card and banking accounts, and every transaction adjusts the money meter so you can see, in real-time, if you are on track or overspending. There is no charge for the app.

PlentyFi – PlentyFi is an automatic savings program. You tell PlentyFi what you are saving for, whether it is a new car, a vacation or something else, and decide how much to transfer to your destination account and how often. PlentyFi uses ACH processing to automatically transfer the funds. PlentyFi claims that its users put aside an average of $300 a month using the app. While the current version of the app is free, the company indicates it plans to release a new version with enhanced functionality and fee-based features in the future.

SmartDeposit – Betterment’s SmartDeposit makes automatic transfers from your checking account to an investment account when you have extra cash sitting around (note: the app only works with Betterment brokerage accounts). SmartDeposit uses algorithms to determine how much to transfer each month based on your account balance, income and spending habits. Before making a transfer, Betterment sends an email giving you the option to skip it. You set specific limits, including the maximum amount you want to keep in your checking account at any given time, and the maximum amount you will allow Betterment to transfer to the investment account at any time. It takes four to five business days to transfer money back to your checking account, so this app requires you to plan ahead. There is an annual fee associated with the SmartDeposit app based on a percentage of the amount of your transfer: 0.35% for $0-$10,000; 0.25% for $10,000-$100,000; 0.15% for $100,000.


1. – Bankrate
2. – Fox Business
3. – Investopedia
4. – Forbes
5. – Huffington Post

Please don’t hesitate to give us a call if you need help with any component of your financial planning.

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