Travel agents worldwide have been praised by the boss of Carnival Corporation for helping the cruise giant withstand “multiple headwinds” in the first quarter of its financial year.
President and CEO Arnold Donald addressed analysts after revealing that bookings in the peak wave period rivalled last year’s record highs. Europe and Asia brands were well ahead year-on-year but at lower prices.
The combined efforts of the organisation’s 120,000-plus staff as well as hundreds of thousands of travel professionals who support the group’s brands “are helping us to once again withstand multiple headwinds”.
These he cited as including cyclones in Australia, Brexit uncertainty in the UK, heightened political uncertainty in Germany and France as well as ongoing economic concerns in much of Europe, including Italy.
“Despite those headwinds, wave season was consistent with the strength of demand we experienced going into the year, building further confidence in our full year revenue expectations,” Donald added.
And he told analysts on an earnings call that “even though there’s been uncertainty around Brexit, the UK brands are doing well and have withstood the headwind”.
The company, which includes P&O Cruises and Cunard, will monitoring the situation to see what kind of long term effect the UK’s exit from the European Union will have.
Adjusted net income for the three months to February 28 of $338 million, down from $375 million a year earlier, came as the corporation faced a drag from fuel prices and currency. However, comparative revenues rose to $4.7 billion from $4.2 billion as capacity rose by 4.1% year-on-year. The numbers of passengers carried in the quarter went up to 2.93 million from 2.86 million.
Forward bookings for 2019 are ahead of this time last year with prices in line. Full year revenues are expected to be up by about 5.5% with capacity growth of 4.6% based on current booking trends.
The company’s full-year earnings forecast reflects $155 million, or 22 cents per share, hit from higher fuel prices and adverse currency movements, Donald said.
Donald added: “Booking trends achieved during wave season rivalled last years’ historical highs and were consistent with the demand trends we experienced going into the year, building further confidence in our full year guidance.
“For our North America and Australia brands, our booked position is ahead of the prior year at higher prices while our Europe and Asia brands are well ahead of the prior year at lower prices.
“Our brands are strong and growing, including continental Europe, where we continue to expect revenue growth driven by double-digit capacity increases.”
He described fleet renewal efforts as being purposely designed to achieve greater economies.
“We will welcome 17 larger, more efficient ships and continue to divest our less efficient ships, representing net capacity growth of approximately 5% compounded annually through 2022,” Donald said.
“We’ve been consistent with our execution around measured capacity growth. Overall, we operate an industry that is both under penetrated and capacity constrained, which bodes well for creating new demand in excess of capacity increases.
“That should allow us to continue to fill our ships at increasingly attractive rates while still providing a better value relative to the equivalent land-based alternatives.”
