Carnival dining changes slow to gel

Posted on 24 June, 2014 by Spacejunkie2

By Tom Stieghorst

ABOARD CARNIVAL FREEDOM — Carnival Cruise Lines’ implementation of a new main dining room program is taking longer than anticipated, said the line’s chief marketing officer, Jim Berra.

After a news conference, Berra said Carnival has been tweaking the features of American Table and American Feast, the dining room concepts it developed with the input of Union Square Hospitality Group.

Four of Carnival’s 24 ships have been piloting the concept. Berra said Carnival wants to make sure it has the bugs worked out before the changes expand to the rest of the fleet. There is currently no ship being targeted for expansion of the program, he said.

Carnival has been doing what Berra termed “A/B testing” of variations on ships with similar itineraries. One discovery is that the idea of sharing common appetizers at a table isn’t playing as well at sea as it does in land restaurants. It works best during “Anytime Dining,” when guests are generally eating with people they know, but less well when dining with strangers, Berra said.

He said the upgraded bread and water service has been well received, as has the “Port of Call” items on the menu, which are matched to the port the ship is visiting on the day of the meal.

American Table is the everyday complimentary dining in Carnival’s main dining room on the Carnival Glory, Liberty, Inspiration and Imagination.

American Feast is a more elegant, celebratory version that is offered twice during each voyage.

Both feature redesigned menus, a new style of service and cuisine with an emphasis on American origins.

Norwegian Cruise Line pricing weak, equity analyst says

Posted on 19 June, 2014 by Spacejunkie2

By Tom Stieghorst

Norwegian Cruise Line’s prices are sagging, according to SunTrust Robinson Humphrey analyst Patrick Scholes, who reduced his 2014 earnings estimate as a result.

“Based on our survey data, we remain concerned about the persistent direction of pricing trends,” said Scholes, who downgraded his recommendation on the stock from “buy” to “neutral.”

Scholes said a periodic survey of pricing done in May showed prices down in the mid-single digits over the next 12 months. Advertised sailings 1-3 months out were down 5% from last year, an improvement from April, but the fifth consecutive month of decline, he said.

Prices for cruises 4-6 months out were down 6.5%, compared with 8% in April, the second month of decline, while prices 7-12 months out were down 6% for the second straight month.

Contributing to the declines was a narrowing of the premium Norwegian gets on its newer ships, Scholes said, with Norwegian Getaway selling for 3-5% less in May than other ships in the fleet that sail to similar destinations.

In addition, Scholes said onboard spending per passenger has been flat to down for three quarters “suggesting either the newer ships are not as productive as planned or the older ships are fading faster than expected.”

He reduced his 2014 earnings estimate to $449 million from $457 million previously.

Norwegian did not have any comment on the report, a spokeswoman said.

Separately, Scholes said Royal Caribbean International is on track to exceed its own forecast of profits for 2014, with pricing up double digits in May, according to survey data. Carnival Corp. prices were up 8% in May from a year earlier, “as the company laps the easy compares that resulted from the Carnival Triumph incident last year,” Scholes said.

Carnival Corp. CEO: Competitors’ newbuilds may hurt pricing

Posted on 9 June, 2014 by Spacejunkie2

By Tom Stieghorst

MSC Cruises’ order book of four big new ships is an example of a trend that could spell trouble for an industry struggling to raise prices, Carnival Corp. CEO Arnold Donald said.

“We’ll have to see how it all plays out,” Donald said in a recent teleconference with reporters. “In an ideal world, you wish it wasn’t happening.”

Arnold Donald Donald was not singling out MSC’s expansion for criticism, but he happened to be making his comments on the day the line ordered two 4,170-passenger ships. That came on the heels of an order for two 4,500-passenger ships, part of a plan to double MSC’s capacity by 2022.

Asked how prices can rise if Carnival Corp. restrains its own brands’ capacity growth while other lines don’t, Donald said he was confident that Carnival’s strategy was sound. It includes incremental growth in onboard revenue and ticket prices spread over 78 million passenger days, coupled with shrinking expenses by employing best practices culled from its 10 brands.

But, he said, if any competitor resorts to “super-aggressive pricing” to fill its ships, “then it can become a problem for the industry.”

Donald said travelers come to view the industry’s lowest prices as a gauge of how much they should pay for any cruise.

“People say, ‘I’m not going to go on that ship, but cruises only cost this much, and I don’t want to pay more than that because I don’t want to get ripped off.'”

On the other hand, he said, the upside of new capacity is more attention being paid to cruise products.

“It just allows them the opportunity to put cruise front and center, to help all of us close on [those] new to cruise,” he said.

MSC Cruises USA President Rick Sasso said that the real pricing stress this year has been in the Caribbean and that MSC wasn’t the initiator of the fare discounting there.

“It should not be a surprise to anybody that we’ve been successful and we’re going to continue to invest in our brand,” he said.