Carnival Corporation to raise prices as deposits reach all-time high

Cruise group narrows quarterly loss to US$407m as demand accelerates

Carnival Corporation will increase ticket prices as customer deposits reach an “all-time high” at US$7.2 billion for the second quarter of 2023.

The previous record quarter for customer deposits was hit earlier this year with a total of US$5.7 billion, which the cruise giant attributed to a successful wave season.

Carnival Corporation said its latest record-breaking result was thanks to continued acceleration of demand, as booking volumes exceeded those seen during the first quarter, which was the previous record high.

The parent company of P&O Cruises and Cunard also reported a record second-quarter revenue of US$4.9 billion.

Carnival Corporation chief executive Josh Weinstein said the company plans to increase revenue by raising ticket prices, despite its brands continuing to report “record onboard spending” by passengers.

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Weinstein said: “Our momentous wave period, typically a first-quarter event, started in record-breaking fashion at the end of the fourth quarter, set a record in the first quarter, actually accelerated in the second quarter and has continued into the third quarter.

“Booking volumes have been tremendous and we are gaining momentum with favourable pricing trends, which reflects improved commercial execution and returns on our advertising investments.

“We reached a meaningful inflection point for revenue this quarter, with net yields surpassing 2019’s strong levels, and we achieved positive operating income, cash from operations and adjusted free cash flow.

“We're already executing on our strategy to grow revenue by taking up ticket prices, even while maintaining record onboard spending levels, building occupancy and growing capacity.”

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Despite Carnival Corporation recording a net loss of US$407 million and an adjusted net loss of US$395 million for the second quarter of 2023, Weinstein said the North American booking curve is “as far out as we’ve ever seen it”. Its net loss in Q2 2022 was US$1.8 billion.

Meanwhile, bookings by the corporation’s European brands for sailings in the second half of 2023 have “achieved double-digit percentage increases in both volume and price compared to 2019”.

Weinstein added: “Lead times for our Europe segment continue to lengthen and are now within 10% of 2019 levels, which is an improvement of 10 points from the last quarter.”

The company expects net yields compared to pre-pandemic 2019 to be positive for the second half of the year, despite the headwinds from the loss of St Petersburg as a “marquee destination” due to the suspension of cruises to Russia.