• 4 min de lectura
• 4 min de lectura
The last three months of bookings have been solid for Carnival Corp., particularly notable since the macroeconomic and geopolitical conditions haven't gotten better, nor have airfares gone down, an analyst noted during Tuesday's third quarter earnings call.
Citi's James Hardiman asked: Is this specific to Carnival's model, where many customers live near homeports so air travel doesn't figure in as much, or because Europeans continue to feel entitled to a holiday, or is it "headline fatigue," and people deciding to take a vacation no matter what?
All of the above, Carnival Corp. CEO Josh Weinstein responded.
June was an inflection point and the booking momentum turned positive year over year then accelerated in July and August.
"There's a normalization of what the world is throwing at people. There is a growing change in the mentality of Americans catching up to Europeans, that vacations are sacrosanct and they will take them in good times and in bad. If you have a job, you need that break and you take a vacation," Weinstein said.
"We are an amazing value for people if the consumer confidence isn't great, if there is pressure from things like the price of gasoline, if there is other inflation, if there is concern about [anything], because that is all we hear about nowadays,' the Carnival chief continued.
Cruising provides great value, a great experience and is convenient. "So we feel like our strategy is working. It can work in great times and in times that aren't so great. And that's what you're seeing now."
Weinstein was also asked: Six months into the Iran war, how do people feel about booking into 2027, versus a year ago six months after the US-instigated tariffs and resulting stock market shock were impacting bookings?
"Every crisis is different, and certainly this crisis is different from last year," Weinstein said. "We thought we'd have a great opportunity to lap the volatility from last year, but what happened in the spring was a much longer burn for the consumer, and the macroenomic backdrop."
Second quarter patterns spilled into Q3, and now things are getting better. The impact on long-haul flights and more exotic itineraries that will affect Q1 2027 are "not insurmountable," though certainly more of a challenge than Carnival was expecting last year at the same time, Weinstein continued.
That said, Carnival saw consumers almost "double-down for Europe next year," particularly in the Q3 peak season, with a "large cohort" of people in the spring and early summer deciding they weren't going this year but would in 2027.
Of the nearly 7% in onboard revenue growth during the recent quarter, how much is related to Celebration Key and how much from actual onboard spending? another analyst asked.
Higher onboard spending is broad-based, across all brands and for Americans and Europeans, CFO David Bernstein said.
"We are not seeing any slowdown in the strength of the consumer," he underscored. Bundled packages help lift onboard revenue, with more than 50% booked pre-cruise so "we're getting the benefit of the 'second wallet' meaningfully onboard."
According to Bernstein, because of these packages, breaking down the ticket and onboard revenue is not as meaningful as it used to be.
In the first quarter, Carnival announced its PROPEL initiative, targeting about 20% in earnings growth a year through 2029. An analyst asked if that's still realistic, given oil prices, the Iran war and Caribbean rates?
Operationally 2026 is "pretty good," all things considered, in Weinstein's view.
Yields are up almost 3% on an normalized basis in a year with the "biggest geopolitical crisis we've seen in decades," he said, adding that shows demand is robust and "our brands are doing a pretty good job."
Fuel prices can't be forecast but Carnival has proven it can control consumption and continue to drive that down.
If fuel costs dropped, that would make things "a hell of a lot easier," Weinstein said before getting the question he's asked every quarter: If the company is rethinking its longstanding practice of not hedging?
That question only comes when fuel prices are up, he said.
Carnival doesn't think paying other parties to make trades as a way of reducing fuel cost volatility is worth it. Instead, the company is "maniacally" focused on cutting fuel consumption per available lower berth day and has done so by 13% in the last three years and 26% since 2019.
So far this year, fuel consumption is down 4%.
