Submit Press release  ∑ eTN Team ·  Advertising  ·  eTN Awards  - Worldtourism Events    


Slumping bookings taking a toll on cruise industry giant Carnival  Dec 18, 2008

The economic meltdown of the past few months is taking a toll on the world's biggest cruise company.

Industry leader Carnival Corporation today reported net income of $371 million for its most recent quarter, up from $358 million in the same quarter a year ago. But the better-than-expected results were tempered by a warning that the coming year is shaping up as a tough one.

"For 2009, occupancy levels for advance bookings are running behind the prior year, with ticket prices for these bookings also at lower levels," the company said in a statement accompanying its earnings release.

The parent company of nearly a dozen lines including Carnival, Princess, Holland America, Cunard and Seabourn is one of many travel firms that were hit hard in October and November by a sharp downturn in bookings as consumers cut back drastically on spending.

On a constant dollar basis, the company now expects full year net revenue yields to decrease 6 to 10% compared to 1 to 5% in the company's October guidance. The company says the reduction in the company's yield guidance is due in part to the recently announced fuel supplement refund for 2009 bookings combined with a further forecasted reduction in revenues due to deteriorating economic conditions.

As a result of changes in currency exchange rates, the company forecasts an even heftier 11 to 15% decline in net revenue yields for the full year 2009 compared to 2008.

One bright spot for the cruise giant: Plunging fuel prices. While Carnival says net cruise costs excluding fuel for the full year 2009 will be higher by approximately 2% on a constant dollar basis, the continued decline in fuel prices should reduce fuel expense in 2009 by $278 million compared to our previous guidance.

Even with the drop in bookings, meanwhile, Carnival still expects to be profitable in 2009 ‚ÄĒ just less profitable than it was forecasting just a few weeks ago. The company now forecasts full year 2009 earnings per share to be in the range of $2.25 to $2.75, compared to its previous guidance range of $2.50 to $3.00.

Slumping bookings taking a toll on cruise industry giant Carnival
Image via

Premium Partners