Carnival Corporation, the world’s largest cruise company, has released its business update for the first quarter of 2023, reporting a record-breaking quarter with exceptional booking volumes and strong financial performance.

The company’s first-quarter revenue was almost equivalent to the levels achieved in 2019, and it exceeded its guidance for the quarter, surpassing expectations. Carnival’s Q1 earnings before interest, taxes, depreciation, and amortization, also outperformed its guidance by more than $30 million. However, the outlook for 2023 could be something that investors are not overjoyed with.

Strong Q1 2023 for Carnival Corporation

Carnival Corporation has started 2023 on a high note, exceeding the guidance it had put out during Q4 of 2022 by a considerable margin. The world’s largest cruise company also set a record for the highest number of bookings in a single quarter in history. At the same time, earnings before interest, taxes, depreciation, and amortization exceeded expectations by more than $30 million. 

Carnival Corporation reported a US GAAP net loss of $693 million and an adjusted net loss of $690 million, significantly better than the December guidance range of $750 to $850 million net loss for Q1 2023.

Adjusted EBITDA for the first quarter reached $382 million, outperforming the guidance range of $250 to $350 million. First-quarter revenue reached $4.4 billion, 95% of the company’s revenue in 2019.

CEO Josh Weinstein commented on the company’s performance: “In the first quarter, we outperformed our guidance on all measures. We achieved record first-quarter net per diems, exceeding the high end of our guidance, driven by improving ticket prices and sustained growth in onboard revenue while delivering an additional seven points of occupancy on higher capacity compared to the prior quarter.”

The significantly better numbers for the first quarter have ensured Carnival can also start using cash to pay back the enormous mountain of debt it has accumulated over the last three years. Much of that cash is coming from a record-breaking Wave Season.

Chief Financial Officer David Bernstein noted: “We believe our debt balance has peaked this quarter and will reduce over time based on our ample liquidity position of $8.1 billion and the expected cash flow strength of our business.”

Record Booking Volumes

Carnival Corporation experienced its highest booking volumes for any quarter in its history, breaking records for North American, Australian, and European cruises. 

Weinstein continued: “We are enjoying a phenomenal wave season, achieving our highest-ever quarterly booking volumes and breaking records in North America and Europe. Our strong performance has extended into March, and we expect this favorable trend to continue based on the success of our efforts to drive demand.”

Total customer deposits reached a first-quarter record of $5.7 billion as of February 28, 2023, surpassing the previous first-quarter record of $4.9 billion as of February 28, 2019, by 16%.

Is Carnival Corporation on the Way Back?

Carnival expects to return to 100% occupancy levels by the summer, where it already achieved 98% over the last quarter. It is also continuing to slim down, even removing Seabourn Odyssey from the fleet, a move that Carnival expects to make a gain on. 

Moving three Costa Cruises cruise ships from Costa to the hugely successful Carnival Cruise Line looks like it will be a tremendously successful strategic decision, with interest in cruises onboard Carnival Luminosa, Carnival Venezia, and Carnival Firenze peaking. 

The financial results announced today could signal the turnaround investors have been waiting for. In the past two years, the hope had been that Carnival Corporation could show the same performance as the competition, Royal Caribbean Group, in particular. However, while Royal has gained nearly $40 in its stock price since March 2020, Carnival Corporation has been lagging. 

With occupancy levels returning to the 100% barrier and possibly going beyond, and bookings exceeding all expectations for 2023, Carnival Corporation could be returning to being the golden goose it once was. However, investors don’t seem to agree.

Carnival Corporation’s outlook for Q2 and the remainder of 2023 seems to be too negative, despite the company reporting better-than-expected fiscal first-quarter results and record bookings.

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The company’s downbeat outlook for Q2 and the full-year losses caused the stock to turn lower, losing 6% after a strong opening, overshadowing the phenomenal revenue increase. The company expects a per-share loss of 42 cents to 34 cents for Q2 and adjusted per-share losses of 44 cents to 28 cents for the fiscal year 2023.

Carnival Valor rescued three stranded boaters on Sunday, March 26, 2023, after being alerted to the emergency situation by the United States Coast Guard. The incident happened in the morning on the second day of the ship’s sailing, as the vessel had departed New Orleans on Saturday, March 25 for a 5-night Western Caribbean cruise.

Carnival Valor Rescue

Carnival Valor was contacted by the United States Coast Guard (USCG) shortly after 7 a.m. on Sunday, March 26, 2023, alerting the cruise ship to a vessel taking on water 386 miles (621 kilometers) offshore of Alabama.

The vessel in distress was the 44-foot recreational boat Snail Mail, with three boaters onboard, and had activated emergency gear on board to signal its condition.

The USCG received the emergency alert, and reached out to Carnival Valor as the nearest vessel able to assist the craft in distress. At the time, Carnival Valor was approximately 35 nautical miles (40 miles / 65 km) from the Snail Mail. An Aviation Training Center Mobile HC-144 Ocean Sentry aircrew was also mobilized.

The Conquest-class cruise ship diverted slightly from its route to intercept the distressed craft. Carnival Valor was en route to its first port of call on the 5-night Western Caribbean itinerary, Costa Maya, where the ship will be docked on Monday, March 27.

A rescue boat – one of the cruise ship’s lifeboats – was launched, and the three boaters – all males from Honduras – were safely taken aboard and transferred to the cruise ship. They have received appropriate medical care, food, and water, and are reported in good condition.

“Special thanks to the crew of the Carnival Valor for rescuing all three people aboard the sinking vessel,” said Lt. j.g. Gretchen Gochnour, a command duty officer at the District Eight Command Center. “The Coast Guard urges the boating public to emulate the Snail Mail by having an EPIRB and geolocating devices onboard before taking to the sea.”

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“Moreover, the Coast Guard encourages commercial mariners to participate in AMVER [automated mutual-assistance vessel rescue system] and self-report their location as this played a pivotal role in this rescue.”

Next Steps

Because the rescued boaters were taken aboard during a day at sea, they will remain aboard Carnival Valor until the ship calls on Costa Maya on Monday. The ship is scheduled to be in port from 1-8 p.m., during which time the boaters will be transferred to the appropriate authorities.

A statement from Carnival Cruise Line confirms “Carnival Valor’s itinerary is unaffected.” Current tracking data also shows the ship on course as planned for Costa Maya.

After Costa Maya, the ship will visit Cozumel, Mexico on Tuesday, before enjoying Wednesday as another day at sea and arriving back to New Orleans on Thursday, March 30.

This is not the first rescue or emergency situation that Carnival Valor has been involved with. In November 2022, the ship made worldwide headlines for an overboard passenger who was rescued by another craft after nearly a full day in the water.

The ship is homeported year-round from Louisiana, offering 4-5 night Western Caribbean cruises. The shorter sailings only visit Cozumel, while the longer cruises also include Costa Maya or Progreso, depending on the departure date.

The 110,000-gross-ton Carnival Valor joined the Carnival fleet in 2004. The ship has a guest capacity of 2,980 passengers at double occupancy, and up to 3,756 guests when fully booked with all berths filled. Approximately 1,200 international crew members are also onboard to offer excellent service.

Carnival Celebration has aided an overcrowded rowboat during a day at sea at the end of the new ship’s current sailing, but without taking the occupants aboard. The encounter was successful and all individuals were in good health, and provided with appropriate supplies as requested.

Carnival Celebration Provides Supplies to Refugees

On Friday, March 24, 2023, Carnival Celebration encountered a crowded rowboat while sailing northeast of Cozumel. The incident occurred at approximately 6 p.m. ship time (Eastern/Ship Time), when the small craft was sighted with at least 12 occupants, both male and female.

The cruise ship immediately diverted to offer assistance, prepared to take the people from the small craft aboard if necessary. The small boat was using multiple oars for propulsion and steering, but was not otherwise signaling for emergency aid. While constructed in part of varying materials, including duct tape, the craft seemed reasonably stable.

Carnival Celebration pulled up alongside and communicated with the craft, and while the occupants stated they did not want rescue, they did accept food and water. Everyone was observed to be alert and in good health, and the boat – while small and crowded – was not in immediate danger.

After the incident, Carnival Celebration‘s cruise director, Chris Williams, made an announcement to explain procedures to guests onboard.

“The most important thing to us of course here at Carnival Cruise Line and our captain and his amazing team is to make sure that we always make sure that people are safe and preserving life at sea,” he explained.

“We have spoken to the people in the boat and they do not need any rescuing at this time. All they need is of course any water or food. We’ve done everything to make sure that they have that and everyone seems in good health.”

Williams went on to note that Carnival’s shoreside team and the United States Coast Guard were both contacted about the encounter, which is standard procedure for such events. The cruise ship remained alongside the small craft until clarification of next steps was received, at which time the ship was released to continue on its sailing.

Why No Rescue?

Photos and video from guests onboard show that the individuals in the boat all had appropriate clothing to protect themselves from the sun and unpredictable weather, and the small boat was carrying storage containers for supplies.

While cruise ships are obligated to offer aid to anyone who may seem in distress – whether refugee boats, stranded mariners, fishermen, or other cruise ships – there is no requirement that anyone be forced to board a larger or more stable vessel, provided their own craft is reasonably sound.

The encounter took place approximately 90 miles (145 kilometers) east of Cancun, Mexico, and roughly 105 miles (169 km) northeast of Cozumel, where Carnival Celebration had visited earlier on the cruise, on Tuesday, March 21. Prior to the incident on Friday, the ship had visited Costa Maya on Wednesday and Roatan on Thursday.

The ship is currently sailing a 7-night roundtrip Western Caribbean itinerary from Miami, which will end on Sunday, March 26. There is no delay or change in the remaining part of the cruise due to this encounter.

This is not the first time the newest Carnival ship – Carnival Celebration just debuted in November 2022 – has encountered a small, haphazard craft. In early January, the ship rescued five refugees from a small raft off the coast of Cuba. In that incident, the refugees were taken aboard the cruise ship.

Carnival Cruise Line has emailed guests booked aboard the March 25, 2023 sailings of Carnival Vista and Carnival Dream that a significant road closure leading to Galveston may impact travel times to the cruise terminal.

Guests setting sail this weekend should adjust their travel driving or rideshare plans to ensure they reach the cruise terminal at an appropriate time.

Traffic Alert for Two Carnival Cruise Ships

Guests sailing aboard Carnival Vista or Carnival Dream this weekend should plan extra travel time to reach the Galveston cruise terminal, due to a local highway closure. Carnival Cruise Line has reached out to guests to notify them about the potential difficulty.

“Officials in Galveston have informed us that a planned road closure is taking place along I-45, southbound to Galveston,” the email read. “Please allow ample time to commute to the cruise terminal for prompt arrival within your pre-selected arrival appointment.”

Guests who have arranged transfers through Carnival Cruise Line may also have their travel plans impacted, though the cruise line will make adjustments to account for delays as necessary.

“For guests who have purchased Carnival’s transfer services, we are working closely with our transportation provider to offset any potential delays,” the email explained.

Guests who have made independent rideshare or shuttle arrangements should contact their transportation providers to adjust pick up times if needed, while guests who are driving to the port themselves should plan to leave earlier than anticipated to allow ample time for traffic delays.

Carnival Vista‘s Saturday, March 25 departure isa 7-night Western Caribbean cruise visiting Roatan, Honduras; Belize City, Belize; and Cozumel, Mexico. Carnival Dream‘s sailing is an 8-night Eastern Caribbean cruise to Key West and three ports of call in The Bahamas – Freeport, Half Moon Cay, and Nassau.

No changes to the ships’ departure times have been announced, nor should their itineraries be impacted by the highway closure.

About the Road Closure

Interstate 45 is a major traffic artery in Texas, connecting not only Houston to the Galveston area, but also continuing north to Dallas. The southbound closure will dramatically impact travel times from those metropolitan areas as well as major airports, potentially causing congestion and delays for many cruise travelers.

According to local Texas news reports, the road closure will begin at 9 p.m. Friday, March 24, and will continue through 5 a.m. Monday, March 27, and will also impact several ramps in the immediate vicinity.

The closure is due to striping work and overall highway renovation that will eventually increase the number of southbound lanes on 1-45. The most heavily impacted area will be between the NASA Bypass and FM 518, a stretch only 2 miles (3.2 kilometers) long, but traffic may be backed up significantly ahead of the closure.

The closed area is approximately 28 miles (45 km) from the Galveston cruise terminal.

Impacts on Other Galveston Cruises

In addition to the two Carnival ships, Royal Caribbean International’s Adventure of the Seas is also setting sail on Saturday and guests may be impacted by the traffic congestion. That cruise is a 5-night Western Caribbean itinerary to Costa Maya and Cozumel.

Sunday sailings may also have traffic difficulties. Princess Cruises’ Ruby Princess and Royal Caribbean’s Oasis-class Allure of the Seas are both departing from Galveston that day.

The closure should be finished by Monday morning when Radiance of the Seas and Carnival Breeze return from their latest sailings, but as guests do not debark until approximately 7-7:30 a.m. and the road should be reopened by 5 a.m., traffic problems that day should be minimal.

All cruise guests, from any homeport, should always stay in close contact with their cruise line with updated email, phone, and text contact information to be notified of last-minute delays, traffic alerts, and other information as they prepare to set sail.