Carnival Corporation’s shares rose with the report of a net profit of $264 million during the second quarter of 2009, surpassing the expectations of Wall Street and the company’s own projections.
COO Howard Frank said it was cost cutting measures, both in operations and on shore, that provided the improved picture during “the most significant slowdown in the world economy in our lifetime,” adding, “We will emerge as a far stronger and more profitable business than before.”
Net revenue yields decreased 9.8 percent during the second quarter, an unprecedented drop in Carnival history, with the greatest decline in Alaska cruises. However, following the policy of filling the ships even with substantially lower ticket prices, March booking volumes rose 26 percent for the second half of 2009. In Europe, recent high demand has generally kept the market stronger than anticipated.
Premium brands saw a little improvement in pricing, but mass market sales took a blow from the three-week alert against nonessential travel to Mexico because of the H1N1 (swine flu) pandemic. Although there were few cancellations, bookings came to a virtual halt. Micky Arison, Carnival Corporation chairman, said consumers were unwilling to book when it was unsure where ships would be sailing.
Although several Caribbean nations and Venezuela have turned away cruise ships due to fears of the flu, Arison said that 20 of the 23 Caribbean governments where Carnival lines sail have agreed not to ban calls.
And there are real signs of light for 2009. Arison commented, “As we have progressed throughout the year, booking volumes have continued to accelerate with less discounting, as consumers have come to recognize the extraordinary value proposition our cruise vacations represent.”