Carnival Corporations released a major update on Wednesday morning that included news on nine vessels resuming cruises this summer, high bookings and a continued push on resuming operations.
Carnival is working hard across all its brands on making sure cruises can resume safely along with looking forward to when vessels do finally sail. In the latest update, we hear from Carnival Corp’s president and CEO Arnold Donald and look into the six Carnival-owned cruise brands set to sail this summer. Bookings are looking good for 2022 when we hope operations will be in full swing along with Carnival’s survival despite a hold for more than a year.
Cruise Ships Sailing this Summer
So when you look at Carnival as a whole, there are cruise ships resuming operations safely. With different brands catering to different markets, Carnival can keep some business going, and some countries have or are ready to open up again.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted:
“Our portfolio of brands have clearly been an asset as we resume operations this summer with nine ships across six of our brands.”
Costa Cruises is set to restart sailings in May to Italian ports and German-based AIDA Cruises has already resume cruises in late March in the Canary islands.
The UK is opening up to domestic cruising from May 17 and several Carnival brands are taking full advantage. P&O Cruises will start UK coastal cruises in June; Cunard and Princess Cruises will also start British cruises from July.
Seabourn, a small line for the luxury cruise market, plans to resume sailings out of Greece this summer. Alaska has been hit hard due to the Canadian government banning cruises for one year, which has heavily impacted Princess Cruises and Holland America Line. Those cruise lines will offer some land-based packages to try and make up for the loss.
Bookings Are Accelerating
You need to believe it as bookings remain strong for Carnival, and as of March 21, 2021, bookings for 2022 are ahead of a very strong 2019. it shows the industry will make a comeback once the global crisis is over.
“Booking volumes are accelerating. During the first quarter of 2021 they were approximately 90% higher than volumes during the fourth quarter of 2020 reflecting both the significant pent up demand and long-term potential for cruising.”
Total customer deposits as of February 28, 2021, and November 30, 2020, were $2.2 billion, most of which are future cruise credits. During the quarter, customer deposits on new bookings essentially offset the impact of refunds provided.
As of February 28, 2021, the current portion of customer deposits was $1.8 billion, of which $0.7 billion relates to bookings for the remainder of 2021.
Carnival Continues to Survive
Despite the majority of the cruise industry being on hold for over a year, Carnival Corp is still surviving. The company has found ways to save money and optimize the monthly cash burn rate.
Carnival Corporation & plc Chief Financial Officer David Bernstein noted:
“We ended the first quarter with $11.5 billion in cash and short-term investments. At this time, we believe we have enough liquidity to get us back to full operations and we will be pursuing refinancing opportunities to reduce interest expense and extend maturities. We have successfully identified and implemented actions to optimize our monthly cash burn rate and we will continue to do so.”
The company expects the monthly average cash burn rate for the first half of 2021 to be approximately $550 million, which is better than previously expected. This results from the company’s efforts to optimize its monthly spending despite higher restart related spending.
More expenses are expected when cruise lines start to bring vessels back to service. this includes bringing crew members back to the ships from their home countries and implementing new health measures.
We’ve already seen complicated technical instructions released from the CDC which includes the need to work with U.S. ports and local health authorities. How this could impact operations and the finances remains to be seen.
For each Carnival-owned cruise line, the situation is different but there is hope in other cruise markets such as the UK, Asia and Europe.
However in the United States, the CDC has a grip on the cruise industry and major lines including Carnival Cruise Line remain on hold through June 2021. We could see a shift with Carnival moving shift to homeports in the Caribbean.