Tag Archives: profits

Royal Caribbean staff to receive ‘thank you bonus’ after profits hit target

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Thousands of workers across Royal Caribbean Cruises brands are to share the equivalent of $80 million after the world’s second-largest cruise group hit long-term profit targets.

Each of the company’s 66,000 employees will receive equity awards equal to 5% of their 2017 salaries following a record year.

The individual salary bonuses in the form of equity grants over three years will go to staff working at sea and on land, full-time and part-time, domestic and overseas – but not corporate officers.

The parent company of Royal Caribbean International Celebrity Cruises and Azamara Club Cruises also pledged to contribute to a crew welfare fund for upgrades to crew living and recreational areas on board ships.

The windfall for staff came as Royal Caribbean announced that it had achieved a three-year goal of doubling earnings per share and recording a double-digit return on invested capital – a so-called ‘double-double’.

Chairman and chief executive Richard Fain said: “Exceptional results require exceptional effort.

“Reaching the double-double required remarkable focus and discipline from our employees, and they delivered.”

The “thank you bonus” had the added benefit of enabling employees to see the company as shareholders do, he added.

“Ours is a people business. We want to thank every one of our people for the hard work that got us to today’s announcement and give them a stake in our success going forward.

“We wanted to show our appreciation in a tangible way and we wanted it to reach every employee regardless of level in the organisation. It was our way of saying thanks a million; in fact, thanks 80 million.”

The group’s net income for 2017 rose to $1.63 billion from $1.28 billion the previous year.

This result was achieved despite what was described as an “unusually ferocious” hurricane season last September which hurt earnings by approximately $55 million.

Passenger carryings nudged up marginally year-on-year to 5.76 million from 5.74 million. Looking forward, bookings for 2018 is better than last year’s record high and at higher rates.

“North American and European consumers continue to drive strong demand for all of our main products,” the company said. “These trends, coupled with strong onboard spend and a positive outlook for our Asia Pacific products, are positioning the company for a ninth consecutive year of yield growth.”

The forecast came as the group prepares for the launch of Symphony of the Seas in April and Azamara Pursuit in August in Europe and the introduction of Celebrity Edge in Fort Lauderdale in November.

“These new ships will be important contributors to 2018 yield growth,” the company said.

Chief financial officer Jason Liberty said: “Our yields are increasing on top of an exceptional 6.4% net yield growth experienced in 2017.

“This is quite extraordinary and a testament to the strength in the demand for cruising and our brands.”

Reviewing last year’s performance, he said: “We started the year very well positioned to achieve our double-double goals, and 2017 ended up being exceptionally good, resulting in the company exceeding these goals.

“Strong demand trends for cruising coupled with disciplined cost management helped deliver another record year for the company.”

A combination of strong demand for North American and European cruises as well as onboard offerings drove growth.

Fain said: “Each of the brands performed excellently during the past year raising their guest satisfaction and employee engagement scores to new heights.”

A reset for Carnival on Europe

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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

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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.