When Carnival Corp. CEO Josh Weinstein flipped the switch lighting the New Year's Eve ball in Times Square on Dec. 31, he welcomed a year that the world's largest cruise company enters with its highest booked position in history.
Carnival Corp., the official cruise line sponsor of Times Square New Year's Eve, said during its fourth-quarter earnings call late last month that nearly two-thirds of its 2024 business was already on the books, up from a prepandemic average of a little more than half booked.
Carnival Corp. follows its two main cruise industry competitors in reaching record booked positions. In the third quarter, both Royal Caribbean Group and Norwegian Cruise Line Holdings reported breaking their records for booked positions on a 12-month forward basis. Neither has yet reported Q4 earnings.
Weinstein told investors during the Q4 earnings call that Carnival Corp., which also scored all-time-high booking volumes for the two weeks around Black Friday and Cyber Monday, "ended the year in the best-booked position we have ever seen, both on price and occupancy, setting 2024 off to an amazing start."
The booked position puts Carnival Corp. in a better position to control pricing during this year's Wave season, he said.
"Last year in Wave, a lot of what we were trying to accomplish and our brands were trying to accomplish was just filling the ships because we were in such a different position from an occupancy perspective," Weinstein said. "This time we actually get to go through Wave and really be more strategic in how we are trying to advance the needle, not just on the short-term but on the longer-term."
Norwegian Cruise Line Holdings executives said in November the company had between 60% and 65% of 2024 booked for the next 12 months, calling it a record high. Executives at Royal Caribbean Group said it, too, was in a record booked position for the next 12 months but did not specify at what percentage.
UBS cruise analyst Robin Farley said that while these records indicate strength, they also come during the continued irregularity of booking patterns since the pandemic.
"At some point mathematically it may be difficult for the cruise lines to continually break record volumes," Farley said in a note to investors last month, adding that booking volumes in 2023 accelerated after February, "which is the opposite of a typical Wave pattern." It also means that there may be less inventory available in the second quarter of 2024, she said, that would enable them to set a new record "since the year is already so far booked ahead."
Carnival Corp. also reported during its earnings call that it is pushing occupancy back toward 2019 levels, after seeing it fall to 56% in 2021. The company reported sailing at 101% occupancy for the fourth quarter of 2023 and averaging 100% for the year. In contrast, the company sailed at 104% occupancy in Q4 2019 and at 106.8% for the year.
This year, Weinstein said he expects to return to historical load factors while adding 5% capacity.
Carnival also saw a 51% year-over-year increase in first-time cruisers during the quarter, and a 26% increase in cruisers new to its brands, which he credited to the line's advertising and the role of travel advisors. After amping up advertising last year, Weinstein said he plans to keep up a similar level of spending on a unit basis to drive demand.
Carnival Corp. overall performed better than expected in Q4, reporting record revenue for both the quarter ($5.4 billion) and the full fiscal year ($21.6 billion), which ended Nov. 30. The boost in Q4 revenue pushed the company to positive adjusted net income for 2023.
Carnival Corp. CFO David Bernstein calls the results "a great way to close out the year and another indication that we do not see a slowdown in our consumers."
Patrick Scholes, a hospitality sector securities analyst at Truist Securities, said next year's revenue pace for Carnival Corp. is tracking about 10 percentage points ahead of the same time in 2019, but with a greater mix of pricing growth.
"Importantly, commentary around forward bookings and pricing sounds encouraging," he said.