Cruise pricing improved in April after a
dismal March, but bookings are down, according to a survey of
travel agents by Bank of America equity analysts.
The banks monthly
Travel Agent Survey found that there had been a subtle improvement
in trends after a dismal March, wrote Michael Savner, Bank of
Americas leisure analyst.
Savner said that
key pricing and demand indexes ticked higher in April and that Bank
of America expected yield increases in the second half of this
year. Most of the years growth is weighted toward the December
quarter, he said.
Bank of Americas
booking index dropped from 58.0 in March to 51.1 in April, its
lowest point since the company began tracking cruise bookings in
August 2006. Savner said he believed the dip reflected seasonal
trends as well as continued weakness in the Caribbean.
The decline in
the index may be related to the seasonally slow period after the
end of the Wave season, Savner wrote.
An index score
above 50 means that bookings were higher than the same month last
year, while below 50 means bookings were lower than the year
before. He noted that the score indicated that agents said
year-over-year bookings were slightly higher than the year before
despite the indexs sequential decline.
pricing continued its recovery streak for the third month in a row,
Savner wrote, which he attributed to the lengthening of the booking
window, reduced level of price promotions and general seasonal
We believe that
some aggressive promotions offered during the height of Wave season
have begun to roll off, which is helping aggregate pricing trends,
he said. The key factor we will watch is whether the aggressive
promotions in February and March will be enough to drive demand
growth into the spring. ... Given the importance of ticket prices
on net yields, we believe that increasing pricing trends may
indicate an improving net yield environment.
improved slightly, Savner said, because of the lines aggressive
Alaska demand in
April was stable and better than in March, the survey indicated,
but still soft compared with last year.
The tepid results
jibe with [Royal Caribbean] managements commentary that Alaska is
good, but not as strong as Europe, Savner wrote.
When asked what
cruise region had the strongest bookings relative to last year,
agents listed Europe as the strongest, followed by the Caribbean.
Alaska came in last.
Compared with the
response from March, Savner wrote, the largest decline was in
Alaska, with the percentage of agents listing it as the strongest
region decreasing from 16% in March to 12% in April.
To contact reporter Johanna Jainchill, send e-mail to [email protected].