Interesting statistics

[AKman2495]

I was perusing the 2012 Carnival Corp annual report prior to voting my shares when I saw the breakdown of income. Now, we all have heard the maxim that cruise lines don;t make money off of tickets, but on drinks and tours. SO, much to my surprise, I found to the contrary that they do make most of their money off ticket sales.

 

In 2012 Carnival corp has gross income of $15.382 billion (American).

 

Of that, $11.658 billion was from ticket sales, $3.513 billion was onboard and other, and $211 million came from tours.

 

Just FYI...

[Kenswing]

I was perusing the 2012 Carnival Corp annual report prior to voting my shares when I saw the breakdown of income. Now, we all have heard the maxim that cruise lines don;t make money off of tickets, but on drinks and tours. SO, much to my surprise, I found to the contrary that they do make most of their money off ticket sales.

 

In 2012 Carnival corp has gross income of $15.382 billion (American).

 

Of that, $11.658 billion was from ticket sales, $3.513 billion was onboard and other, and $211 million came from tours.

 

Just FYI...

 

 

That's gross income.. Just what they brought in.. Where's the profit breakdown??

[beg3yrs]

 

Of that, $11.658 billion was from ticket sales, $3.513 billion was onboard and other, and $211 million came from tours.

 

Just FYI...

 

Thanks for that interesting information. It certainly does make one wonder about the statements that they make all their money on the onboard sales. I suppose one could say that onboard sales are required for Carnival to make a profit if for instance, the overall cost of doing business was greater than the $11.658 billion in ticket sales. Does the report have that number?

 

I'm also surprised the gross income from tours is relatively small in comparison to the other sources of revenue.

 

Finally, I wonder how much of the onboard is from the casino?

 

Regardless, as I said before, very interesting information. Thanks!

[beg3yrs]

Just looked up the numbers in the same report.

 

Cost of "Onboard and other" was $0.558 billion versus gross income in the same category being $3.513 billion. That's almost a $2B net difference.

 

Net income for 2012 was $1.298 billion. That is less than the $2B net of the onboard sales, so I'd say without the profit from those sales, the ship sails at a loss!

 

Of course this pro-forma analysis is very general and uses the amalgamation of all the cruise lines operating under the Carnival corporate umbrella, but it probably does make the statement true that the onboard sales make the ship profitable.

[beg3yrs]

For those of you interested, the link to the 2012 report is:

 

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDk2ODUzfENoaWxkSUQ9NTM1ODQ1fFR5cGU9MQ==&t=1

[thinfool]

I was perusing the 2012 Carnival Corp annual report prior to voting my shares when I saw the breakdown of income. Now, we all have heard the maxim that cruise lines don;t make money off of tickets, but on drinks and tours. SO, much to my surprise, I found to the contrary that they do make most of their money off ticket sales.

 

In 2012 Carnival corp has gross income of $15.382 billion (American).

 

Of that, $11.658 billion was from ticket sales, $3.513 billion was onboard and other, and $211 million came from tours.

 

Just FYI...

 

No offense, but income is not profit.

 

There are tons of expenses that have to be accounted for (deducted) before you arrive at a net income....which as you likely already noted, was approx 1.3 billion USD. (Slightly less than 10% of gross.)

 

Doing some quick math, CCL made a net profit of $132.00 on each passenger.

( I hope I had that right)

[AKman2495]

Ok, I did check the income statement. Operating expenses were about $1.4 less than ticket sales. WHen you add in advertising, admin and other, the net expenses end up at about $13 billion.

 

So, it is kind of tricky. I agree that the net profit comes from onboard and tours-but the onboard and tours would not exist without ticket sales. It is clear that the ships generate a small profit on their operation alone-in other words, they are not losing money operating their ships. But, once you add in the overhead and finance costs, they need more than ticket sales to earn their profit.

 

All in all, they seem to be doing OK-even with the drop in sales and higher fuel costs....

[beg3yrs]

Ok, I did check the income statement. Operating expenses were about $1.4 less than ticket sales. WHen you add in advertising, admin and other, the net expenses end up at about $13 billion.

 

So, it is kind of tricky. I agree that the net profit comes from onboard and tours-but the onboard and tours would not exist without ticket sales. It is clear that the ships generate a small profit on their operation alone-in other words, they are not losing money operating their ships. But, once you add in the overhead and finance costs, they need more than ticket sales to earn their profit.

 

All in all, they seem to be doing OK-even with the drop in sales and higher fuel costs....

 

Reading the report was quite interesting even if I started skimming about half-way through. I learned a lot, even hazily remembered some of my old accounting courses ... :eek:

 

You are quite right that on board sales and tours would not exist without ticket sales and that you have to look at the whole operation.

 

The point about on board sales keeps being made in discussions where some will boast they do not spend an extra dime on board and then still complain about ticket prices. If nobody spent extra money on board, ticket prices would have to go up. Ah, the circle of life ...

[trabeler]

Doing some quick math, CCL made a net profit of $132.00 on each passenger.

( I hope I had that right)

 

Page 50 of the report has the per-passenger statistics. Net revenue per person was $171 with $130 of that from ticket sales. Profit from ticket sales was actually down last year while other revenue (onboard purchases) was up.

 

The report makes several mentions of significant discounting (due to the Concordia incident) which impacted ticket revenue.

[AKman2495]

Reading the report was quite interesting even if I started skimming about half-way through. I learned a lot, even hazily remembered some of my old accounting courses ... :eek:

 

You are quite right that on board sales and tours would not exist without ticket sales and that you have to look at the whole operation.

 

The point about on board sales keeps being made in discussions where some will boast they do not spend an extra dime on board and then still complain about ticket prices. If nobody spent extra money on board, ticket prices would have to go up. Ah, the circle of life ...

 

That's right. But, keeping the price of a cruise fixed, here's something else to look at. If you own Carnival stock and you're interested in the share price, telling people to avoid all on board expenses doesn't do you any good...If you only own the stock for the OBC, and could care less what the price is then by all means don't encourage on board spending....

[AKman2495]

Hereis something else I discovered. Everyone squawks about cutbacks-espicially the food.

 

Well, in 2010 they had a food to total ship expense of 9.55%. In 2011 it was 9.34% and in 2012 it was 9.30%...

 

I also went back to see for 2008 and 2009. In 2008 it was 9.16% and in 2009 it was 9.97%.

 

Next, I went back to 2004-2006 and found they were spending close to 10% on food in 2004 but by 2006, that percentage was down to 9.48%.

 

Keep in mind that the fuel costs have increased over the years so that the total expenses have also gone up. For example, fuel was about 17% of total expenses in 2010 but by 2012 it was over 23% of total expenses.

[0bnxshs]

Page 50 of the report has the per-passenger statistics. Net revenue per person was $171 with $130 of that from ticket sales. Profit from ticket sales was actually down last year while other revenue (onboard purchases) was up.

 

The report makes several mentions of significant discounting (due to the Concordia incident) which impacted ticket revenue.

 

Just curious here, but are you sure that the net revenue of $171 is "per person" and not "per ALBD" (Available Lower Berth Day)?

 

I'm no accountant here, I'm really just wondering if 1 ALBD is equal to 1 person. If ALBD is equal to 2 people though, the "per person" quote would be just less than half what you've indicated.

[Loonbeam]

From what I overheard when I was there, the general target is for ticket revenue to cover all operating costs and other revenue to represent profits. This of course is a moving target, they'd be very happy if ticket revenue represented a profit of course in addition to onboard spend.

[AKman2495]

From what I overheard when I was there, the general target is for ticket revenue to cover all operating costs and other revenue to represent profits. This of course is a moving target, they'd be very happy if ticket revenue represented a profit of course in addition to onboard spend.

 

I think that's right. As far as I can see, overall, They did make a profit on operations last year, which always helps the bottom line.

[bhawkcruiser]

What is really amazing is how they can generate such large amounts of income, create thousands and thousands of jobs (inside and outside their company) show very good profits and still provide the best vacation value on the planet!

 

Sounds like a model to me.

[paradise4ever]

if each person on each ship leaves a pure profit after all is paid, thats everything, of aprox 10 dollars at 2500 persons per sailing x 52 sailings x 10 ships thats $13,000,000 if my calculations are correct. would the shareholders be satisfied. after all there is more ships than 10. sounds good to me.

[Loonbeam]

It IS important to note that it does so by relying very much on low compensation staff.. I didn't use the term undercompensated because in comparison to their local wages, they are quite good, but lets face it conditions are not always the best.

 

What is really amazing is how they can generate such large amounts of income, create thousands and thousands of jobs (inside and outside their company) show very good profits and still provide the best vacation value on the planet!

 

Sounds like a model to me.

[trabeler]

Just curious here, but are you sure that the net revenue of $171 is "per person" and not "per ALBD" (Available Lower Berth Day)?

 

I'm no accountant here, I'm really just wondering if 1 ALBD is equal to 1 person. If ALBD is equal to 2 people though, the "per person" quote would be just less than half what you've indicated.

 

You're correct that the actual statistic is per ALBD, which is the available beds basis double occupancy. Most times ships sail at >100% occupancy since there are some 3 and 4 passenger cabins.

 

So the $171 is technically "per bed" and not "per person", although at double occupancy it is the same thing. Any cabins with more than 2 people would tend to inflate the revenue per ALBD.

[Shogun]

Hi All

 

Accounts published, give you one view, the one they want you to see,

 

having just spend the day adjusting raw accounts, all within what

 

accounting practice and the law allows, the final set look quite a bit

 

different,

 

yours Shogun

[madjohn]

Its all ok. I want them to make money for two reasons 1) I own shares and want them to make me money 2) if they dont make money they will go out of business and I can't cruise.

[bhawkcruiser]

It IS important to note that it does so by relying very much on low compensation staff.. I didn't use the term undercompensated because in comparison to their local wages, they are quite good, but lets face it conditions are not always the best.

 

You also must note the people that make a good living off the industry. I remember sitting on my balcony in Ft Lauderdale watching the endless amount of trucks delivering to the ships which comes from warehouses and dock workers, fuel trucks, taxi cabs, security. etc. etc. etc.

 

Nobody will argue the crew is underpaid and overworked, but they are in almost every case in a better position then they were before their employment on the ship. I have never seen a crew member in shackles. I have always been generous to their cause when a passenger.

[PescadoAmarillo]

It IS important to note that it does so by relying very much on low compensation staff.. I didn't use the term undercompensated because in comparison to their local wages, they are quite good, but lets face it conditions are not always the best.

You took the words right out of my brain. The whole business model for mass market cruise lines exists only because their customers come from certain countries and their labor comes from others. (Doesn't THAT sound familiar?). As I see it, this is a very narrow window of opportunity in which they are profiting. As we move towards a truly global economy, with country boundaries presenting fewer barriers to employment, the wages of the crew will increase and the discretionary spending of the passengers will decrease until the business model is no longer feasible.

 

Not exactly a model for long term success, but then the cruise lines are not alone in exploiting it while it lasts.

[Hondu]

Sounds similar to movie exhibition companies. The theaters would not make a profit without the concession stand. The first 4 to 6 weeks on a big movie, the distributor (i.e. MGM, FOX, Warner Bros.) gets 90 cents from every dollar of ticket sales.

[AKman2495]

You took the words right out of my brain. The whole business model for mass market cruise lines exists only because their customers come from certain countries and their labor comes from others. (Doesn't THAT sound familiar?). As I see it, this is a very narrow window of opportunity in which they are profiting. As we move towards a truly global economy, with country boundaries presenting fewer barriers to employment, the wages of the crew will increase and the discretionary spending of the passengers will decrease until the business model is no longer feasible.

 

Not exactly a model for long term success, but then the cruise lines are not alone in exploiting it while it lasts.

 

I tend to disagree with the assessment. I do think that over time, wages will rise, but as far as the discretionary spending of the passengers goes, I disagree. People who cruise who cannot afford discretionary spending will simply stop cruising. However, as we all know, the "rich" are getting richer, which can only mean that there is a bigger pot of money among the "cruising class".

 

This is evidenced by the fact that cruise lines are adding new ships and new home ports. If they saw their market collapsing in even a decade, you would not see them expanding.

 

On the other hand, we are seeing an increase in short cruises to give borderline cruisers the ability to take a cruise and spend some money.