Slumping bookings taking a toll on cruise industry giant Carnival

[mercedes]

The economic meltdown of the past few months is taking a toll on the world's biggest cruise company.

Industry leader Carnival Corporation today reported net income of $371 million for its most recent quarter, up from $358 million in the same quarter a year ago. But the better-than-expected results were tempered by a warning that the coming year is shaping up as a tough one.

"For 2009, occupancy levels for advance bookings are running behind the prior year, with ticket prices for these bookings also at lower levels," the company said in a statement accompanying its earnings release.

The parent company of nearly a dozen lines including Carnival, Princess, Holland America, Cunard and Seabourn is one of many travel firms that were hit hard in October and November by a sharp downturn in bookings as consumers cut back drastically on spending.

On a constant dollar basis, the company now expects net revenue yields for 2009 to decrease 6% to 10% -- considerably lower than the 1% to 5% drop the company forecast as recently as October. The company says the decline is due in part to the recently announced fuel surcharge refund for 2009 bookings combined with a forecasted reduction in revenues due to deteriorating economic conditions.

When the effect of currency changes on Carnival's foreign revenue is taken into account, the company forecasts an even heftier 11% to 15% decline in net revenue yields for 2009 as compared to 2008.

One bright spot for the cruise giant: Plunging fuel prices. While Carnival says net cruise costs excluding fuel for 2009 will be higher by approximately 2% on a constant dollar basis, the continued decline in fuel prices should reduce fuel expense for the year by $278 million compared to its previous guidance.

Even with the drop in bookings, Carnival still expects to be profitable in 2009 -- just less profitable than it was forecasting just a few weeks ago. The company now forecasts full year 2009 earnings per share to be in the range of $2.25 to $2.75, compared to its previous guidance range of $2.50 to $3.00.

[Dan40]

The slumping economy will have a negative effect on every facet of the travel industry. So far it looks like Las Vegas is hit worst of all with the economy AND "bailed out" companies afraid to book a LV convention.

I think CCl's debt load puts them in much better shape than their MAIN competitors. CCL will likely experience depressed PROFITS, while others may suffer serious LOSSES.

Dan

[rogue]

You're probably right. Those giant new ships are not so enticing to their owners theses days.

[Hillbilly]

The economic meltdown of the past few months is taking a toll on the world's biggest cruise company.

Industry leader Carnival Corporation today reported net income of $371 million for its most recent quarter, up from $358 million in the same quarter a year ago. But the better-than-expected results were tempered by a warning that the coming year is shaping up as a tough one.

"For 2009, occupancy levels for advance bookings are running behind the prior year, with ticket prices for these bookings also at lower levels," the company said in a statement accompanying its earnings release.

The parent company of nearly a dozen lines including Carnival, Princess, Holland America, Cunard and Seabourn is one of many travel firms that were hit hard in October and November by a sharp downturn in bookings as consumers cut back drastically on spending.

On a constant dollar basis, the company now expects net revenue yields for 2009 to decrease 6% to 10% -- considerably lower than the 1% to 5% drop the company forecast as recently as October. The company says the decline is due in part to the recently announced fuel surcharge refund for 2009 bookings combined with a forecasted reduction in revenues due to deteriorating economic conditions.

When the effect of currency changes on Carnival's foreign revenue is taken into account, the company forecasts an even heftier 11% to 15% decline in net revenue yields for 2009 as compared to 2008.

One bright spot for the cruise giant: Plunging fuel prices. While Carnival says net cruise costs excluding fuel for 2009 will be higher by approximately 2% on a constant dollar basis, the continued decline in fuel prices should reduce fuel expense for the year by $278 million compared to its previous guidance.

Even with the drop in bookings, Carnival still expects to be profitable in 2009 -- just less profitable than it was forecasting just a few weeks ago. The company now forecasts full year 2009 earnings per share to be in the range of $2.25 to $2.75, compared to its previous guidance range of $2.50 to $3.00.

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

[JoeyandDavid]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

[coloradocruisers]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

I hope you're right Joey. If they don't start turning a profit, it won't just be the pillow chocolates that go missing.

[Hillbilly]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

[/size] Joey, how will RCCL turn a profit. People are not cruising with RCCL these days. They treated my wife and I terribly on a cruise with them some years ago. They treated a niece and nephew of mine pretty bad as well. Other cruise sites are loaded with people who say they are now going with other cruise lines.

RCCL now charges for steaks in the dining room, room service after certain hours. Why would anyone want to cruise with them?

[zebra]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

[/size] Joey, how will RCCL turn a profit. People are not cruising with RCCL these days. They treated my wife and I terribly on a cruise with them some years ago. They treated a niece and nephew of mine pretty bad as well. Other cruise sites are loaded with people who say they are now going with other cruise lines.

RCCL now charges for steaks in the dining room, room service after certain hours. Why would anyone want to cruise with them?

This quote is not entirely correct. There is still a New york Strip steak available included on the menu each and every night.... the $14.95 up charge steak is a steak which can be ordered from "Chops" IF you would prefer that instead. We have just got off Royal Caribbean and there was NO room charge during normal hours... only after 1 am - now how many people order room service after 1 am????

[JoeyandDavid]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

[/size] Joey, how will RCCL turn a profit. People are not cruising with RCCL these days. They treated my wife and I terribly on a cruise with them some years ago. They treated a niece and nephew of mine pretty bad as well. Other cruise sites are loaded with people who say they are now going with other cruise lines.

RCCL now charges for steaks in the dining room, room service after certain hours. Why would anyone want to cruise with them?

This quote is not entirely correct. There is still a New York Strip steak available included on the menu each and every night.... the $14.95 up charge steak is a steak which can be ordered from "Chops" IF you would prefer that instead. We have just got off Royal Caribbean and there was NO room charge during normal hours... only after 1 am - now how many people order room service after 1 am????

Jackie i couldn't venture a guess as to the number.. I was told the charge is in attempt to off set the increase in man hours needed to implement over night service.. and you are also correct about the steak the $14.95 is for a fillet mignon

FYI~~Analysts are expecting RCL to earn between $0.91 and $1.63 per share for the Quarter ending 09/09

[Hillbilly]

Carnival will be making a profit for this year. However, other cruise lines will have hefty losses and will have to take radical steps. We already are seeing RCCL charging for steaks in the dining room and for room service.

True RCL lost money this past quarter but they like Cranival are expected to turn a profit for the year.

[/size] Joey, how will RCCL turn a profit. People are not cruising with RCCL these days. They treated my wife and I terribly on a cruise with them some years ago. They treated a niece and nephew of mine pretty bad as well. Other cruise sites are loaded with people who say they are now going with other cruise lines.

RCCL now charges for steaks in the dining room, room service after certain hours. Why would anyone want to cruise with them?

This quote is not entirely correct. There is still a New york Strip steak available included on the menu each and every night.... the $14.95 up charge steak is a steak which can be ordered from "Chops" IF you would prefer that instead. We have just got off Royal Caribbean and there was NO room charge during normal hours... only after 1 am - now how many people order room service after 1 am????

How Many People order room service after 0100 hours? Anyone that plays in the Casino or goes to some of the lounges. Getting into your stateroom is after 0100 is normal on a cruise ship. Most times I don't get in until after 0200 or later,