The emerging markets of Australia, Asia and South America represent the top future growth opportunities for Carnival Corp. brands, company Vice Chairman and COO Howard Frank told shareholders at an annual meeting in Miami on April 11.
In 2006, sourcing from emerging markets totaled 7% of all passengers carried, Frank said, and by 2011 the number had doubled, to 14%. European sourcing also increased during those years, he said, from 19% to 26%. At the same time, North American passenger sourcing fell to 60% from 74%.
"We will continue to put more resources and capacity into those emerging markets," Frank told shareholders who had gathered at the W Hotel in Miami Beach. "That's where we see the future growth of the business."
The company's Costa Crociere unit, he said, entered the China market in 2006 and this year will source about 60,000 Chinese passengers. Frank noted that the 1,928-passenger Costa Victoria this month will replace the smaller Costa Classica, which accommodates 1,308 passengers.
China "is getting to be an easier market for us, logistically," he said. "We have tremendous growth projections for China."
He also referenced the announcement late last month by Princess Cruises, which will deploy its 2,022-passenger Sun Princess to Japan next year for a series of cruises from April to July.
Japan is the world's fourth-largest economy, Frank said, and there are 36 million people in the greater Tokyo area.
The vice chairman also addressed Carnival Corp.'s safety and security policies in a presentation that began with a moment of silence for the 32 people who died when Costa Cruises' Costa Concordia hit a rocky reef and capsized off Italy Jan. 13.
Frank told shareholders that the company exceeds safety regulations that are set by the International Maritime Organization, local authorities such as national coast guards and by its own in-house safety board.
In the six weeks following the Concordia accident, Frank said, bookings across the Carnival Corp. brands (excluding Costa) dropped by 9% but have increased by 3% in the five weeks after that.
Pricing has taken a hit, too, he said. In the six weeks following the accident, pricing fell by 3%. In the five subsequent weeks, prices were down 5%.
Costa's bookings dropped by "75% to 80%" in the immediate aftermath of the accident, and while volumes "are still down," they are not down as severely. He did not detail pricing changes at the Costa brand.
But he said, "We do see a light at the end of the tunnel for Costa."
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