Carnival Cruise Line said Wednesday that it has seen a record level of bookings during the first quarter, up about 90% from fourth-quarter levels.
In addition, current bookings for 2022 are higher than those made in 2019, before the pandemic, suggesting that people are excited to travel again.
“Everybody wants to go away. And I will tell you, the next best thing to actually going away is planning a vacation. And that’s what a lot of people seem to be doing right now,” said David Bernstein, Carnival’s chief financial officer, in a conference call on Wednesday.
Earlier, the cruise operator said its quarterly net loss widened to $1.97 billion from a loss of $781 million a year ago, as cruises remained suspended in the U.S. due to the ongoing Covid-19 pandemic.
But optimism about strong demand from customers yearning be on the sea again pushed Carnival shares to a 52-week high of $30.63 in trading Wednesday. Although the stock has given up some of its earlier gains in afternoon trading, shares are still up about 1.4%.
Cruises have been one of the hardest hit sectors in the travel industry since the pandemic shut down sailing last year after mass Covid-19 outbreaks.
Carnival CEO Arnold Donald said in a press release that booking trends reflect “both the significant pent up demand and long-term potential for cruising.”
To boost demand in the future, the company plans to roll out six new ships by the end of the year, almost one from each of its nine brands.
“They will drive even more enthusiasm, excitement and demand around our restore plans with both our brand loyalists and with new recruits,” Donald said in a conference call.
Still, Carnival faces numerous challenges. It ended the first quarter with $11.5 billion of cash and short-term investments, and must make its funds last until its business resumes. To do that it must receive clearance from the Centers for Disease Control and Prevention, which currently has a ban on sailing.
Carnival said it expects all of its fleets to be sailing by 2022. This summer, it is on track to resume cruise operations with 30% to 50% occupancy on nine ships across six of its brands: AIDA, Costa, P&O Cruises, Cunard, Princess Cruises and Seabour.
One clear priority for 2021 is adapting its operations to meet guidelines that are still in flux.
“2021 will clearly be a transition year, we expect the environment to remain dynamic over the next 12 months as we roll out our fleet, while continuing to adapt to an ever-changing situation,” Donald said.
Carnival said it could shift its home ports to those outside of the U.S. if it is unable to comply with CDC protocols. The company said, for example, that it wouldn’t be able to comply with meeting a requirement that all passengers are vaccinated.
“We’d prefer to have those jobs and all the staff all be here,” Donald said. “But if we’re unable to sail, then obviously we will consider home porting elsewhere.”
Staffing ships is also a challenge for the company.
“Our biggest constraint right now is being able to ramp up with crew,” Donald said. “It will take us minimum 60, up to 90 days, to be able to get a crew on board, trained up with new protocols, etcetera, to be able to execute sailing.”
Source by www.cnbc.com