Carnival Corporation is seeing a rebound in forward bookings on the back of better than expected summer.
The world’s largest cruise conglomerate – and parent company of Costa Cruises which suffered the loss of Costa Concordia in January’s disaster – tackled declining prices by keeping costs tight and improving on board spend.
Profits for the three months to the end of August came in at $1.2 billion, just shy of the $1.3 billion achieved in the equivalent quarter last year. Revenues were down to $4.7 billion compared to $5.1 billion.
Fleetwide booking volumes and pricing trends for the remainder of the current financial year and the first half of 2013 have continued to strengthen since June.
Booking volumes in the last six weeks, excluding Costa, increased by 9% over the same period last year at prices in line 2011 levels.
Advance bookings for Costa have shown “considerable improvement” but are still five occupancy points behind the prior year at lower prices over the same period, the company said.
The parent company of brands such as P&O Cruises, Cunard and Princess Cruises, indicated plans to increase its presence in emerging cruise markets such as Asia. The company has almost tripled its passenger sourcing from emerging cruise markets in the past five years.
The company will capitalise on the increasing popularity of cruising in Asia by deploying a second Costa ship in China and the launch of a new Princess Cruises programme for the Japanese market.
Chairman and chief executive Micky Arison said: “The pace of booking volumes remains healthy enabling us to continue to catch up on occupancy levels, while pricing has gradually improved. Both of these trends leave us well positioned for a recovery in cruise ticket prices beginning in the second quarter of 2013.”
“Looking forward, we remain committed to a measured pace of new builds and achieving a strategic balance of supply and demand in established markets.
“Our lower capital commitments should result in significant excess free cash flow in the coming years which we intend to return to shareholders.”
The company has seven new ships due for delivery between 2013 and 2016, some of which will replace existing capacity reductions from possible sales of older ships.
Reviewing the past quarter, Arison said: “The significant efforts of our brand management teams were successful in partially mitigating the decline in cruise ticket prices.
“Onboard revenue yields (excluding Costa) improved 3% during the quarter.
“Our brand managements’ continued focus on cost containment contributed to a 3% reduction in cruise costs as well as a 6% reduction in fuel consumption on a unit basis.”