Carnival Corp. executives discuss pent-up cruise demand

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T0621MARDIGRAS_C_HR [Credit: Carnival Cruise Line]
Carnival Cruise Line's newest ship, the Mardi Gras, will launch seven-day cruises from Port Canaveral on July 31. Photo Credit: Carnival Cruise Line

During a second-quarter business update on Thursday, Carnival Corp. said booking volumes for future cruises have risen sharply since the beginning of the year. 

Speaking to analysts, Carnival Corp. executives said that Q2 cruise bookings were up 45% over the first quarter. The company also said that cumulative advance bookings for 2022 are ahead of what was a very strong 2019, as of May 31, 2021. 

CFO David Bernstein said the second-quarter increase was driven by close-in bookings associated with recent restart announcements as well as strong booking volume for 2022. 

"This is a clear demonstration of the pent-up demand for cruises as well as the long-term potential for the market," he said during the call. 

The strong bookings contrast with another $2 billion quarterly loss.

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Carnival Corp. CEO Arnold Donald said the bookings surge was achieved with minimal advertising and marketing. 

During the call, Donald reiterated comments he has previously made about the potential for booking and pricing strength for 2022 given the huge pent-up demand among past cruisers and the line's reduced capacity from shedding older tonnage from its fleet during the pandemic.

"We will exit 19 ships, that's a significant reduction in capacity," he said. "We are adding new ships and therefore will get to a capacity comparable to what we had in 2019 eventually. But the reality is that we're at a much lower growth rate as an industry and as a company than we were before, with a lot of pent-up demand. By next spring, a lot of repeat cruisers may not have had the opportunity to cruise again, and we have a huge base of repeat cruisers across our various brands. There will still be considerable pent-up demand that has been largely unsatisfied. And that's the environment we're anticipating we'll be operating in."

Carnival Corp. said that 42 ships from eight of the company's nine brands (more than 50% of the company's capacity) have resumed or have announced plans to resume cruise operations by Nov. 30, with more announcements expected in the coming weeks. P&O Cruises Australia is the only line with no set restart plans. 

Donald said the company plans to have "the full fleet sailing before next summer. But we have to see what evolves around the world."

In terms of occupancy levels, Carnival said that on fully vaccinated sailings, its ships can operate with full capacity since there are no physical distancing restrictions in place. 

"We are slowly ramping up our occupancy on sailings of that type," Donald said, in order to give the crew a chance to "get oriented" with enhanced protocols onboard. 

After that, he said, "we can get pretty close to full occupancy."

Carnival Corp. brands have been operating ships in Europe at reduced capacity because they have been sailing with unvaccinated people and have physical-distancing restrictions in place. 

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