Carnival’s Q2 Booking Volumes Up 45 Percent Due To Pent-Up Demand
On a call with analysts today, Carnival Corp. revealed that the company has seen a sharp spike in booking volumes for future cruises across its nine brands since the start of the year.
Carnival Corp. executives reported that Q2 cruise bookings had risen 45 percent over the first quarter of 2021. They also said that, as of May 31, cumulative advanced bookings for 2022 cruises are surpassing the numbers seen during a very strong 2019.
CFO David Bernstein said that, in addition to robust booking volumes for 2022, the second-quarter spike could be attributed to close-in bookings prompted by Carnival brands’ recent restart announcements. “This is a clear demonstration of the pent-up demand for cruises as well as the long-term potential for the market,” he said on the call.
Carnival Corp. CEO Arnold Donald said that the recent spate of bookings came with minimal marketing and advertising on the company’s part. “Despite our minimal advertising spend, we continue to experience an acceleration in booking trends globally, including capturing significant latent demand for our new sailings this summer. This strong demand affirms confidence in our future,” he wrote as part of an SEC Filing.
Still, the company reported an adjusted net loss of $2 billion for 2021’s second quarter and disclosed that it anticipates an adjusted net loss for the third quarter and full year. Carnival Corp.’s monthly cash burn was $500 million, according to a CNBC report.
The cruise industry has been one of the last sectors permitted to resume operations, so sales have only just begun to rebound. Eight of Carnival Corp.’s nine brands have either restarted or announced plans to resume operations by the close of the fiscal year, November 30. By that date, 42 ships, representing 55 percent of the company’s overall capacity, will have returned to service, with more expected to be announced in the coming weeks.
Donald noted, “We are working aggressively on our path to return our full fleet to operations by next spring. So far, we have announced that 42 ships, representing over half of our capacity, have been scheduled to return to serving guests by this fiscal year-end.”
Amid the pandemic, the company has been trimming down fleets by retiring some of its older and less-efficient vessels. During the call, Donald reaffirmed comments made previously about bookings’ potential and pricing strength for 2022, as well as the company’s reduced capacity at present.
“We will exit 19 ships, that’s a significant reduction in capacity,” he said. “We are adding new ships and therefore will get to a capacity comparable to what we had in 2019 eventually. But, the reality is that we’re at a much lower growth rate as an industry and as a company than we were before, with a lot of pent-up demand,” he said.
He anticipates that much of that pent-up demand will come from loyal cruisegoers who’ve sailed with Carnival brands before. By next spring, a lot of repeat cruisers may not have had the opportunity to cruise again, and we have a huge base of repeat cruisers across our various brands. There will still be considerable pent-up demand that has been largely unsatisfied. And that’s the environment we’re anticipating we’ll be operating in.”
Thus far, Carnival Corp. brands in Europe have been sailing at reduced capacity, since passengers have been largely unvaccinated and physical distancing protocols apply. On upcoming sailings where all guests have been fully vaccinated, no distancing measures will be necessary and those cruises can therefore sail at full capacity. Donald said, “We are slowly ramping up our occupancy on sailings of that type,” in order to provide crews sufficient time to “get oriented” with ships’ enhanced health and safety protocols.