Rock-Bottom Prices Contribute to Carnival’s $15 Million First Quarter Loss

Skift Take

Carnival’s recovery is proving to be a lot more protracted than expected as its cruise pricing remains stubbornly low. This is a real test for the new leadership in the form of newbie CEO Arnold Donald.

— Dennis Schaal

Carnival’s marketing campaigns stimulated increased demand during the first quarter, but cruise pricing was lower than year-ago levels.

For its fiscal first quarter, which ended February 28, the world’s largest cruise line recorded a $15 million net loss compared with $37 million in net income a year earlier. Revenue was flat at $2.72 billion.

Since January, Carnival stated, booking volumes are outpacing year-ago volumes, although cruise prices are lower.

Carnival’s marketing team has been pushing its live onboard concert series, featuring Jennifer Hudson, Lady Antebellum and Jewel, and it has been refurbishing ships with its Fun Ship 2.0 project. Carnival was also the exclusive national cruise line advertiser for the 2014 Sochi Olympics.

“We have experienced a solid wave season, with booking volumes up almost 20 percent globally surpassing last year’s cumulative advance booking levels, albeit at lower prices,” said CEO Arnold Donald. “Many guests are booking further in advance, which increases visibility and builds confidence that yield comparisons will turn positive in the second half of 2014.”

Donald said Carnivals’ brand messaging has been “resonating” with consumers — albeit at lower prices.

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