The contented Carnival cruiser

The contented Carnival cruiser

By Tom Stieghorst
*InsightIn most businesses, customer satisfaction looks like a bell curve.

On one end, there are a few loyal patrons who can’t stop raving about their experience. There’s a big group in the middle who are moderately content, and then a few very unhappy campers.

At this point, the public may think most Carnival Cruise Lines passengers are all in the last group, and that taking a cruise with Carnival is a risk that few sane vacationers would accept.

But there are plenty of Carnival passengers in the other two groups. This fall, the company plans to feature some of them in an ad campaign to reboot public perception about Carnival.

To that end, it is collecting testimonials on its Facebook page from customers who have enjoyed their cruise.

There were plenty of them on a recent Carnival Sunshine cruise I took in the Mediterranean. The ship had an admittedly rough start after emerging from a drydock in May. Areas of the ship weren’t ready for passengers, due in part to last-minute sabotage of some cabins, company President Gerry Cahill said at a media briefing.

But the cruise that I was on was uneventful.*TomStieghorst

There were no fires, no illness outbreaks, or rogue waves, or missed ports of call, or mechanical breakdowns or any of the other misfortunes that tend to draw media attention to a cruise.

It was smooth sailing, literally, on a flat Mediterranean Sea. Passengers were largely unaware of a hearing that took place during the cruise, in which Sen. Jay Rockefeller (D-W.Va.) outlined his bill to give them more rights.

Typical, perhaps, was a group I lunched with on a port call in Marseille, France. Some said that after booking Carnival, they monitored news about the company to be sure they hadn’t made a mistake. None felt they had.

A honeymoon couple said they chose the Sunshine cruise for the port-intensive itinerary, which included Marseille, Rome, Florence, Naples, Venice, Dubrovnik, and Messina, in Sicily, in nine days.

An older couple picked Carnival for the low price and good value.

The group wasn’t giddy, but they did seem satisfied. Ads with real folks like these, talking from first-hand experience, could be just what Carnival needs to bring the discussion about cruising closer to reality.

A reset for Carnival on Europe

A reset for Carnival on Europe

By Tom Stieghorst

*InsightThe Carnival Sunshine is hosting a media group on its current Mediterranean voyage, and the top concern of the European reporters onboard is Carnival Cruise Lines’ decision to go without a ship in Europe in 2014.

The Carnival Legend, which had been scheduled to sail in Europe next year, is being deployed to Australia, after a winter season in Tampa.  It seems to reverse a promising expansion of Carnival’s sales deployment into the U.K.

At a news conference, Carnival President Gerry Cahill said it ain’t necessarily so.

“We’re not stopping marketing to the U.K. and Europe,” Cahill noted, saying it would continue to sell cruises to the Caribbean, New York and Barbados to Europeans.*TomStieghorst

But Americans made up most of the passengers on a majority of the line’s European itineraries.

“Carnival caters best to middle America,” Cahill continued. “The cost of an air ticket to Europe became very, very high, and it was causing a lot of our guests not to be able to afford to come.

“At the end of the day, when the air fare costs more than the price of the cruise, that’s a problem,” he said.

The reset on Europe comes as Carnival is withdrawing from several regional ports on the U.S. East Coast, such as Baltimore and Norfolk, Va. Tighter pollution rules mean higher costs for clean fuels at those ports, and Carnival has an aversion to higher costs. When low prices are such an important part of your strategy, anything that raises them means trouble.
So Carnival is increasingly returning to tried and true markets where it has had traditional success: sailing to the Bahamas and the Caribbean, primarily from ports in Florida.

It recently bolstered its Caribbean capacity from Port Canaveral, where the Sunshine will sail for much of 2014, and from New Orleans, where it will have two ships year-round. Miami, Tampa and Jacksonville will also be home to Carnival ships next year.

For many passengers, flying to Florida isn’t as cheap as driving to the port, but it is a lot less expensive than flying to Europe. Travel agents can sell a fly-cruise to Florida because the airfare isn’t that scary. But it does mean getting people excited about an area that many cruise passengers have seen before.

The traditional itineraries may not be the most exciting. But with costs rising, they’re the ones that Carnival can sell at a price point that middle America can afford.  Europe on Carnival will have to wait for another year.

Carnival Corp cuts profit forecast

By Phil Davies

Carnival Corp cuts profit forecastThe world’s largest cruise conglomerate Carnival Corporation last night cut its profit forecast for the second half of the year.

The US-based cruise giant blamed lower net yields and the cancellation of cruises by its main Carnival Cruise Lines brand, which has suffered from a series of problems with its ships.

The line slashed prices in the UK by up to 40% last month following the announcement of a £500 million fleet-wide operational review in the wake of an engine fire which left Carnival Triumph (pictured) stranded in the Gulf of Mexico in February and technical faults on some of its other ships.

Carnival Cruise Lines then announced the withdrawal of its two ships from Europe in 2014, although denied this was due to the recent incidents.

Miami-based parent company Carnival Corporation said last night: “Current cruise ticket pricing for the company has driven higher booking volumes; however, at the same time, it has led to lower-than-anticipated net revenue yields which has resulted in reduced earnings guidance.”

It cut its full year earnings per share expectation to a range of $1.45 to $1.65 compared with previous guidance of $1.80 to $2.10.

The group said: “The company now expects full year 2013 net revenue yields to be down 2% to 3% compared to the previous flat yield guidance for the year.

“In addition, voyage cancellations beyond those incorporated in the company’s previous earnings guidance, as well as increased selling and administrative costs, are expected to reduce earnings by approximately $0.10 per share.”

These factors, as well as current fuel prices of $674 per metric ton and currency exchange rates of $1.30 to the euro and $1.53 to the pound, prompted the new earnings outlook.

The company, which has UK brands P&O Cruises and Cunard Line, is to announce second quarter results and more details of its 2013 full year guidance in late June.