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Carnival’s Relaxed Covid Rules Help Push Demand Above 2019 Levels


Carnival Cruise Ship

Skift Take

The focus on returning passengers and relaxation of Covid-19 rules have helped the cruise company's recovery. The next step (and more challenging one) is to win over first-time cruise passengers.

Carnival Corp saw an acceleration in bookings in the third quarter. The boost was due largely to the cruise line’s relaxation of Covid-19 protocols, executives said on the company’s earnings call on Friday.

“It is very encouraging that since announcing our relaxation and protocols in mid-August, we have already seen a very meaningful improvement in booking volumes,” said Carnival CEO Josh Weinstein. “We are now running considerably higher than 2019 levels.”

In August, Carnival announced vaccinated passengers would no longer have to test negative to board and unvaccinated passengers will be allowed to board as long as they provide a negative test.

Onboard and other revenue per diem was up significantly compared to the third quarter of 2019. Carnival Chief Financial Officer and Chief Accounting Officer David Bernstein attributed the growth to price increases, more spending by passengers and increased pre-cruise purchases of onboard activities.

In the last two quarters combined, advertising has exceeded for the full 2019 and was focused on attracting past passengers, said Weinstein. The company plans to now prioritize attracting over passengers new to cruises. “As our brands have been increasing their advertisement investment, we will increase awareness and consideration and now actively target those new to cruises,” Weinstein said.

Adjusted net loss amounted to $688 million for the third quarter of 2022. Total revenue in the third quarter stood at $4.3 billion, up nearly 80 percent from the second quarter.  About 95 percent of Carnival’s capacity was used serving passengers. In the next quarter, Carnival expects eight of its nine brands will have their entire fleet serving passengers.

As part of its decarbonization strategy, Carnival piloted three ships powered by biofuels in the third quarter. One of the ships, Volendam on Carnival’s Holland America Line, ran on 100 percent biofuel, a first among larger-scale ships. The other pilots ran on a mix of biofuel and oil and gas.

Carnival also doesn’t expect hurricanes Fiona and Ian to have a significant impact on business in the fourth quarter. “We have had to cancel a couple of cruises,” Bernstein said. “The impact from these two is probably less than $10 million.”

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