Tag Archives: Wall Street

Carnival Corp. Sets 2024 Q2 Earnings Date

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Carnival Corporation has scheduled a conference call with analysts for Tuesday, June 25, 2024, at 10 a.m. (EDT); 3 p.m. (BST) to discuss the company’s second-quarter financial results which are expected to be released that morning.

The call will allow company executives to go over the quarter, talk about an all-important third quarter and then take questions from Wall Street analysts.

A simulcast of the call will be available via the company’s websites at http://www.carnivalcorp.com and http://www.carnivalplc.com.

Cruise lines say loyalty will lead them back

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Who Owns and Operates What in the Cruise Industry? | TravelPulse

During Carnival Corp.’s business update last week, a Wall Street analyst asked whether the brands that were particularly tarnished by media coverage in the early days of the pandemic, such as Princess Cruises, were suffering more in terms of bookings.

The answer was no. CEO Arnold Donald said that not only was Princess not doing worse than other Carnival Corp. brands but was “trending with all the other brands in the industry.”

Wall Street might not understand this, but it doesn’t come as a surprise to travel advisors who understand how strong cruise line loyalty can be.

“What we noticed in our sales numbers is that Princess has remained strong since that incident,” said Vicky Garcia, COO of Cruise Planners, No. 24 on Travel Weekly’s 2020 Power List. “It did not affect them. Princess has a very loyal following, so they almost went into a reactionary mode and said, ‘I’m going to be even more loyal because they got so beat up.’ They were so loyal they wanted to defend and support it.”

New Cruise Itineraries Fall 2020 – 2022 – Best Cruise Destinations ...
Majestic Princess

In fact, Cruise Planners data shows that Princess 2021 departures are up 11% over the same time last year and almost 40% versus the same time two years ago.

It is this level of loyalty to brands and to cruise vacations in general that has cruise line executives confident that past cruisers will be the ones to bring the industry back once ships can start sailing again. It is that confidence that also prompted Donald to declare during the call with analysts that Carnival expects demand to be “more than adequate to fill ships in a staggered restart” with fewer ships sailing, citing the two-thirds of its global guests, 8 million each year, that are repeat cruisers, and the company’s active database of nearly 40 million past guests over its nine brands.

According to CLIA’s 2020 State of the Cruise Industry Outlook, 82% of cruisers say they are likely to book a cruise as their next vacation.

While that survey was done before the pandemic, UBS Investment Bank recently asked 94 cruisers in the U.S. about  their “inclination to cruise again” and found that, while the sample is small, the survey showed that over 85% of respondents are “likely to cruise again,” while less than 5% say they “will not or [were] unlikely to cruise again.” The remainder says they “will not cruise for a long time.”

Of the cruisers surveyed, 56% expect to take a cruise in the next 18 months, and 16% said they expect to wait until there is a vaccine. Expectations for cruising this year remain somewhat low, the survey found, with 13% of those surveyed expecting to cruise in the next six months.

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Carnival Cruise newest ship Mardi Gras

Reliance on past cruisers and customer loyalty, however, will not long sustain an industry with more than 100 new ships on order through 2027, which Donald acknowledged.

“That doesn’t mean we don’t have work to do once we start cruising with much larger volumes of capacity to attract new-to-cruise,” he said. “Of course, we will have work to do, but right now the brands are strong, the bookings are encouraging, and with the staggered start we’re going to have in the resumption of cruising, there should be plenty of pent-up, latent demand with previous cruise-goers to fill the ships.”

Cruise lines are not resorting to rock-bottom pricing

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Cruise Lines 2019 Q4 Breakdown: By the Numbers - Cruise Industry ...

By Johanna Jainchill

Cruise lines and Wall Street analysts report that cruise pricing, for the most part, has not gotten to the low levels seen after the fallout of the 9/11 attacks and the 2008 recession.

To be sure, there are deals out there, and some executives have said that Covid-era prices have fallen across the board — but not to the rock-bottom levels seen in prior crises. Execs, analysts and industry watchers have said this is primarily because demand is expected to exceed capacity, at least at first, because lines are likely to relaunch only a few ships at a time at reduced capacity.

“We note that since cruise lines are taking so much capacity out of service and not pricing to fill what is in service, they could potentially eliminate some of the lowest-margin demand that they might normally turn to when filling a ship,” UBS Analyst Robin Farley said in a recent note.

In discussing the strong pricing for 2021, Brad Tolkin, co-CEO of World Travel Holdings, agreed that reduced capacity was a big factor. “There will be a lot less of ships to top off within the last 90 days,” he said. But he also said that future cruise credits (FCC) the cruise lines have been using for cancelled 2020 sailings play a role.

“The cruise lines know they have these supersized FCCs out there; most are at least 25% more than the value of the cruise,” Tolkin said. “They have to keep pricing up to absorb that somehow.”

On top of that, he said that people who have the FCCs are upgrading.

“The people that took these FCCs said, ‘I love cruising, and I’m getting on a cruise; I’m taking the FCC,'” he said. “If they spent $3,000 on a cruise before, now they have $3,500, $3,600 to spend. They’re spending it and buying up.”

Vicki Freed, Royal Caribbean said that another reason why lines are holding the line on pricing is that they know that they will have lower occupancy and they don’t want to compromise quality.

“We know that initially, we’re not sailing at 100% occupancy and we’ll have to have lower load factors  I think all the cruise lines are planning that,” Freed said. “And we’re going to need to have more staff on board and still offer the quality people expect from Royal Caribbean. If suddenly we downgrade the product onboard people will say, ‘they’re not the same brand I thought they were ‘ So you do keep your price integrity up in order to fund what we need to fund.”

Freed also anticipated that people will pay more for experiences that include Royal Caribbean’s Perfect Day at CocoCay private island.

“It’s a safe, enclosed environment; it’s a private island, it’s got all the fun and thrill and chill that people want now,” she said. “I think itineraries with Perfect Day at CocoCay or our private island of Labadee will demand a better price.”

UBS’s Farley also said that, according to an executive from a privately-owned cruise line, he expects “only single-digit price declines” by keeping only the lowest-priced cabins empty.

“He believes that cruise lines will keep ships in various stages of warm and hot and cold layup so that they will be able to add ships into service without delay if there is demand,” Farley said.  “A month of notice is more than enough time to staff a ship and start operations. Airlift is not that much of an issue since the cruise lines can charter flights from the Philippines and Indonesia, for example, when they are ready to bring the crew back to a ship.”