Carnival Corporation has released its second business update of the year, covering operational developments across its nine cruise brands, a positive outlook on bookings and capacity, and increased revenue compared to the first quarter of 2022.
Carnival Cruise Update
The largest cruise company in the world has released a much-anticipated business update which comes on the heels of its plunging stock price in recent days. However, with its latest update, the situation looks much more positive across its brands.
Despite the company having a net loss of $1.9 billion for the second quarter, some aspects are looking much stronger than before. For the first time since the pandemic and the industry-wide shutdown, cash from operations turned positive in the second quieter of 2022.
There was a revenue increase of almost 50% compared to the previous quarter and no doubt the increased occupancy level of 69% compared to 54% in the first quarter also had an impact. Bookings for future sailings have nearly doubled, which is the best since the start of the pandemic.
90 Percent of the Fleet in Service
With the industry-wide suspension for most of 2020 and half of 2021 having all cruise ships on pause, the cruise company has since been gradually bringing vessels back into service.
Over 90 percent of the fleet is now back in service, including Carnival Cruise Line, which had all ships sailing with guests since early May 2022.
Carnival Corporation & plc President and CEO Arnold Donald noted, “We are aggressively, yet thoughtfully, ramping up to full operations with over 90 percent of the fleet now in service.”
“We are driving occupancy higher, while at the same time significantly increasing available capacity, resulting in a nearly 50 percent sequential improvement in revenue in the second quarter, despite facing constantly changing and far more restrictive protocols than broader society and travel at large.”
In total, five Carnival cruise brands have all vessels back in service, and in the coming months, other major lines will also be fully back, including Holland America Line and Princess Cruises.
The company is expecting higher occupancy levels of up to 110 percent for one of its leading brands Carnival Cruise Line. This also comes as Carnival continues to sell older, less efficient ships such as the Fantasy-class Carnival Sensation and the AIDAvita from Germany-based AIDA Cruises.
There are also some ship shuffles between Carnival Cruise Line and Italian-based Costa Cruises. Three Costa ships will join the Miami-based cruise line in the coming years, with Costa Luminosa joining as early as November 2022, Costa Venezia in Spring 2023, and Costa Firenze in Spring 2024.
Donald noted, “We continue to build on our fleet optimization efforts by reallocating capacity in a highly differentiated way to strengthen return on invested capital across our portfolio.“
“In addition, we continue to further refine our fleet and have announced the removal of an additional smaller-less efficient ship. Upon returning to full operations, nearly a quarter of our capacity will consist of newly delivered ships, expediting our return to profitability.”
Carnival Cruise Bookings Increase
With protocols in many countries gradually being eased, there has been more confidence in cruise bookings. Just days ago, Carnival’s P&O Cruises announced that it will drop pre-cruise testing for select cruises, which sister lines will closely watch.
Donald added, “As friction from protocols is removed and society becomes increasingly more comfortable managing the virus, we expect to see demand continue to build, as we have already seen with the strength in Carnival Cruise Line’s closer-to-home cruises.”
Even though cruise ships operating in the U.S. follow the requirements of the U.S. Centers for Disease Control and Prevention’s (CDC) voluntary program, the agency has confirmed with Cruise Hive that it is currently reassessing pre-cruise testing.
Carnival’s booking levels are still below the 2019 level but higher than the first quarter of 2022. It’s also the best bookings since the start of the pandemic.
Donald noted, “It is reinforcing to see continued strength in demand with our guests overcoming far more restrictive protocols than broader society and travel at large, leading to a near doubling of booking volumes since last quarter with near-term bookings even outpacing 2019.“
“We were encouraged by close-in demand and remain focused on optimizing occupancy while preserving long term pricing.”
Carnival Corporation is on the right track to recovering from the global pandemic. With the cruise company coming out of the unprecedented last couple of years, Arnold Donald, President and CEO, will be stepping down from the position and appointed Vice-Chair of the Boards of Directors. Taking over as the new President and CEO of Carnival Corporation & plc from August 1, 2022, will be 20-year veteran Josh Weinstein.