For years, cruise ships have been slowly but surely making a comeback. Over the past few years, they have been seeing a 30 percent increase in bookings, according to travel data company ForwardKeys. Carnival, however, has been experiencing a staggering increase of up to 70 percent over the past few years. This is mainly due to the revival of the cruise industry, which has seen a significant increase in bookings.
Carnival Corporation, the largest U.S. cruise line, reports a 96 percent increase in bookings for its fall 2017 cruise season over the summer cruise season. The company also revealed that bookings for its fall cruise plans have been outpacing those of the summer plans by a factor of 8 percent. Carnival said that the return of the cruise line’s “new” fleet of larger, more luxurious cruise ships has led to an increase in the number of passengers booking for those trips.
The cruise ship industry has been on something of a downward trend. Part of the reason for that has been the rising costs of running the ships, and the general trend of people preferring to stay in less expensive hotels or pop in the refrigerator in their rooms, rather than spend a night out on an overpriced ship. However, it seems the trend is finally reversing, and that the days of cruising are on the way back.
Although the Carnival Corporation share price did not reflect this development and fell nearly 80 cents, the second quarter results were positive. The Miami-based cruise line, which has nine different cruise lines, has booked record bookings for both the second half of 2021 and all of 2022.
In addition, the Company intended to bring the majority of its vessels, more than 50%, into service before the end of the year. Although the investors are not enthusiastic about this, they would like to see considerably more ships brought into service. Given the difficulties cruise lines have in recruiting crews and getting these ships back into service, this is nevertheless a valiant effort.
As expected at the end of fiscal year 2020, orders in the first half of 2021 were not as strong as in previous years. Uncertainty over the launch date of the ships, the delaying tactic chosen by the CDC earlier this year and the fact that vaccinations outside the US and UK are slower than expected have made customers hesitant to book a cruise in the first half of 2021. Nevertheless, orders for the rest of the year have increased significantly.
Carnival Corporation received 45% more orders for the second half of the year than for the first half. This shows that demand for cruises is excellent and many customers plan to spend at least some time on a cruise ship this year.
The figures for 2022 are even better. Some may remember the record year of 2019, when cruise lines had their best year ever. As of 31. May, the figures for 2022 are even better.
Arnold Donald, CEO of Carnival Corporation:
Despite minimal promotional spending, we continue to see accelerating booking trends around the world, including significant latent demand for our new flights this summer. This strong demand confirms the confidence in our future. In addition, customer deposits increased in the last quarter, which is an important step towards the recovery of business activity.
photo: Carnival Cruise Line
Carnival Corporation is getting off to a much slower start than other companies. Given the size of Carnival as a company and the way it operates, this is understandable.
Carnival Cruise Line operates according to a much more demographically oriented modus operandi. This means that the shipowner’s nine brands tend to be focused on nationalities (Carnival Cruise Line, AIDA, P&O Cruises Australia, P&O UK and Costa are examples), age groups (Holland America, Cunard) or luxury levels (Princess Cruises vs. Seabourn).
The company has been reluctant to operate these brands outside these populations, as evidenced by Carnival Cruise Line’s Christine Duffy’s outright refusal to operate her ships outside the United States earlier this year. The company therefore waited until each site was operational.
To date, Carnival Corporation has launched or plans to launch 27 ships by the end of the third quarter, representing approximately 35 percent of its total capacity. Another 15 vessels will be delivered by the end of the third quarter. The plant is scheduled to return to service in the second quarter of 2021. Together these 42 vessels represent more than 50% of the capacity. For more information on Carnival Corporations’ recovery plans, click here.
Photo credit: JJava Designs / Shutterstock.com
As is to be expected from a company operating the largest number of ships in the world, its financial position is not the strongest it has ever been. The financial losses represent a U.S. GAAP net loss of $(2.1) billion and an adjusted net loss of $(2.0) billion.
Read also: 10 benefits and tips on Carnival Cruise Line promotions
The company’s cash consumption, which takes into account vessel maintenance, fuel, food, wages and other costs, was $500 million per month. This cash flow is expected to remain at the same level or increase slightly as the company brings more ships into service in the coming months.
Overall, the future looks bright for Carnival Corporation, despite the volatility in its share price. While not a full launch like Royal Caribbean, Carnival is methodically planning to resume flights. Something that will likely benefit them in the long run.
It’s been decades since cruise ships were a staple of the seafaring world; with the exception of a few token ships, the industry has ceased its operation for over 20 years. However, Carnival is betting that the market is ready to re-enter the scene, and are doing their part in making the cruise ship industry relevant again. One of the ways Carnival is doing this is by signing up popular artists to perform on board, including Bruno Mars, who played two shows in 2017 on Carnival’s Carnival Vista.. Read more about carnival cruise line and let us know what you think.
Frequently Asked Questions
Are Carnival Cruises refunded?
Carnival Corporation and plc (NYSE:CCL) (NASDAQ:CCL) announced its second quarter financial results with CCL Florida and CCL Alaska leading the way. Carnival Corporation and plc (NYSE:CCL) (NASDAQ:CCL) announced today its second quarter financial results with CCL Florida, CCL Alaska and CCL Carnival Cruise Line all leading the way. CCL Florida and CCL Alaska are both significantly higher than last year’s second quarter figures. After a long period of decline, cruise lines are showing a remarkable increase in bookings. While there is no data on how many bookings Carnival has received, its conference call with analysts showed that bookings were up significantly in the first quarter, with the difference in the first quarter of 2009 and the first quarter of 2010 being more than 60% for Carnival. The company has attributed its success to increased bookings in Europe, the Pacific, the Caribbean and the United States, with average fares up between 10% and 20% in those markets.
Are cruises coming back in 2022?
On August 2, 2017, Carnival Corporation and P&O Cruises Holdings Ltd. announced that the United States and China have signed two new Memoranda of Understanding (MoUs) that will allow Carnival Corporation and P&O Cruises to begin cruising in China in early 2018 and possibly in 2022. Carnival Corporation and P&O Cruises will each sign a five-year MoU with the Chinese Ministry of Culture to allow Carnival Corporation and P&O Cruises to begin operating in the China market. Last year, cruise line giant Carnival revealed that it saw record bookings for its cruise ships in 2017, and a new study shows that companies big and small are looking to make the same kind of comeback in 2022. Cruise fans are eager for the industry to get back on track, as lines like Carnival and Norwegian have experienced significant financial hardships due to competition from emerging cruise brands like Norwegian Cruise Line and Royal Caribbean, according to the trade publication Cruise Capacity . Cruise executives have been looking to rekindle the industry’s growth by luring passengers with new itineraries and amenities. Norwegian, for example, has been working on a new ship for several years that will combine onboard activities like fitness centers and retreats with a more traditional cruise experience.
Is it better to book a cruise directly through the cruise line?
The travel industry is generally a very competitive market, but there are a few winners. From apartment rentals to chic boutique hotels, there’s plenty of options to choose from. When it comes to cruises, however, there’s only one real player, and that’s Carnival Corporation & plc. Last year the company’s Carnival division generated a record $10.7 billion in revenue, a 7% increase from the year prior. That’s impressive, but Carnival’s portfolio is much larger than just cruises. In addition to the cruise business, the company’s lines include Broadway-caliber musicals, high-end shopping experiences, and even a gambling chain. Just like at a casino, when you book a cruise vacation, the last thing you want to do is jump through a bunch of hoops to book directly through the cruise line. But the truth is, there are a number of ways in which you can save time and money, and also get better pricing by booking through a third party. This is especially true when you are looking for a cruise holiday with a discount or long-term discount.
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