Carnival 3rd qtr earnings on the rise

[jimbo5544]

William Blair and company stated that Carnival earnings are on the rise with the 1st positive yield inflection since 2012, modestly better than anticipated.

 

At least a partial driver for this is the company's decision to sacrifice occupancy (read that as severely discounted cabin pricing) to stabilize pricing. This seems to paying off. Kudo's to them for sticking to the plan.

[ncovert]

William Blair and company stated that Carnival earnings are on the rise with the 1st positive yield inflection since 2012, modestly better than anticipated.

 

At least a partial driver for this is the company's decision to sacrifice occupancy (read that as severely discounted cabin pricing) to stabilize pricing. This seems to paying off. Kudo's to them for sticking to the plan.

 

Interesting news, thanks for sharing

[S.S.Oceanlover]

If I'm reading it right it is helping that they aren't severely discounting cruises and sacrificing occupancy.

 

What is the definition for "severe" in this case? There are 6 and 7 day cruises to had for $199 - $239.:confused:

 

Bill

[jimbo5544]

If I'm reading it right it is helping that they aren't severely discounting cruises and sacrificing occupancy.

 

What is the definition for "severe" in this case? There are 6 and 7 day cruises to had for $199 - $239.:confused:

 

Bill

 

Valid question.... there is some movement towards a more conservative pricing stance. It is subtle but meaningful, although there certainly are some gouging still occurring. I will state an example of the current Splendor cruise to New England that we had some family on. As of the morning of the sail there were still cabins available but balconies were listed at $678 a person for an 8B. Certainly not rock solid but in the past you would have seen much lower with the anticipation of "filling the cabin" at all cost.

 

Very healthy posture and I hope to see it continue. We will all be better off for it in the long run.

[cjknox]

Great news thanks for sharing. I don't however expect a full recovery until Q2 2015.

[richstowe]

Well Jimbo , this is not bad news but I'm not sure if it is particularly good news.

The important thing is that it has no bearing on me and my loved ones.:D

 

Seriously as S.S.Oceanlover pointed out, the severe discounting hasn't stopped.

So far Blair's words are just that. I agree that severe discounting is not healthy for the industry.

In addition it tends to piss off everyone who didn't get these "drop your pants" bargains.

I love deals and have gotten a couple so I hope they continue for me but nobody else.;)

 

One final note before the haters come out and state"See this is what happens when you let your brand become crap".

These deals are not unique to Carnival. I have noticed big discounts for NCL and most of the other brands as well.

Edited September 10, 2014 by richstowe

[jimbo5544]

True enough, the proof is in the pudding (or in the WCMC) as they say. That being said, investment analysts usually are pretty good in depicting trends (both positive and negative).

 

I would also agree on the discounting across brands....

[DirtyDawg]

William Blair and company stated that Carnival earnings are on the rise with the 1st positive yield inflection since 2012, modestly better than anticipated.

 

At least a partial driver for this is the company's decision to sacrifice occupancy (read that as severely discounted cabin pricing) to stabilize pricing. This seems to paying off. Kudo's to them for sticking to the plan.

 

Geez Jimbo, I read your title and thought Carnival had actually reported their 3rd quarter early! Heck they just closed the books on the Quarter on August 31st. Wow did they hire Alcoa's accounting team! But alas, CCL has not yet reported so I guess William Blair got a hold of some nonpublic information or they are "expecting" 3rd Quarter earnings to rise.;)

[cruisinfanatic]

If I'm reading it right it is helping that they aren't severely discounting cruises and sacrificing occupancy.

 

What is the definition for "severe" in this case? There are 6 and 7 day cruises to had for $199 - $239.:confused:

 

Bill

they were free???

[bruadhin]

It will be interesting to see how long and well they can pull it off. Also, what kind of impact will this have on onboard spending?

 

The fact severe discounting has been needed to fill berths suggests cruisers are a rather price sensitive bunch. Perhaps a better move would be to shed a few ships that aren't performing as well?

[Pine Bluff]

William Blair and company stated that Carnival earnings are on the rise with the 1st positive yield inflection since 2012, modestly better than anticipated.

 

At least a partial driver for this is the company's decision to sacrifice occupancy (read that as severely discounted cabin pricing) to stabilize pricing. This seems to paying off. Kudo's to them for sticking to the plan.

 

Huh? This headline is as misleading as DEWEY DEFEATS TRUMAN.

 

Only one problem. Instead of deep cut cruises, which still exist by the way against your statement to the contrary, they are giving cruises away. And people not getting their free cruise are a bit TO'd.

[jimbo5544]

Huh? This headline is as misleading as DEWEY DEFEATS TRUMAN.

 

Only one problem. Instead of deep cut cruises, which still exist by the way against your statement to the contrary, they are giving cruises away. And people not getting their free cruise are a bit TO'd.

 

Go read the article.

[jimbo5544]

It will be interesting to see how long and well they can pull it off. Also, what kind of impact will this have on onboard spending?

 

The fact severe discounting has been needed to fill berths suggests cruisers are a rather price sensitive bunch. Perhaps a better move would be to shed a few ships that aren't performing as well?

Is it your take that if they don't have discounted cabin rates people will sail and not spend?

[bruadhin]

Go read the article.

 

Do you have a link? Everything I see online in a quick search is about the 2nd quarter and projects a weak 3rd quarter.

[Pine Bluff]

Go read the article.

 

I see no article supporting any rise.

[bruadhin]

Is it your take that if they don't have discounted cabin rates people will sail and not spend?

 

If they don't sail, they definitely won't spend. It is hard to spend money onboard the ship if you aren't onboard yourself.

 

And that is the very premise of what you posted. They are sticking to their rates and sacrificing occupancy as a result. Done correctly, it is a net rise in revenue, done incorrectly and you realize even less revenue. The fact that severe discounting has been needed in the past does suggest that there is a group of cruisers who will not cruise without a sharply discounted rate. Perhaps it is people taking a 2nd, 3rd, 4th or even 10th cruise of the year or it may be new cruisers who decide that is too much or even people who decide to pass on cruising for the year due to the rates.

 

I have not and will not put enough research into it to say exactly what the cause or the solution is. I'm simply suggesting it may be better to remove ships from the fleet or at least send them to other ports (Europe, Australia).

[jimbo5544]

Do you have a link? Everything I see online in a quick search is about the 2nd quarter and projects a weak 3rd quarter.

 

sea trade insider dot com

[jimbo5544]

If they don't sail, they definitely won't spend. It is hard to spend money onboard the ship if you aren't onboard yourself.

 

While not an analyst (nor do I want to be one) the logic seems fairly obvious (including the "if they don't sail, they can't spend");) The industry would be better off if none of them had to do sever discounting to fill rooms. Your point on over saturation of the market suggests the same. Carnival taking the stance to resist doing just that (on the short term in resisting severe discounting and on a longer term by doing what you suggest, removing ships from the Caribbean (where most of the discounting is taking place). This was addressed by Wells Fargo on their last earnings call.

[TPFKAH]

If they don't sail, they definitely won't spend. It is hard to spend money onboard the ship if you aren't onboard yourself.

 

).

 

I didn't think this was rocket science. This thread seems to be more of wishful thinking than anything, and normally by a business, not a customer.

[jimbo5544]

I didn't think this was rocket science. This thread seems to be more of wishful thinking than anything, and normally by a business, not a customer.

 

Are you implying something in that?

[jimbo5544]

What a shock my two closest friends on cruisecritic come to debunk any positive Carnival statement.:cool:

[Pine Bluff]

This is such a stark contrast to what RCCL did years ago, by actually raising the rates, to ensure a more perfect cruise experience. People thought they were crazy, but they knew EXACTLY what they were doing. People stayed, and found they enjoyed sailing with others that wanted that better cruise experience.

 

And they continue to do so, while Carnival is grasping at an ever out of control spiral.

[bruadhin]

What a shock my two closest friends on cruisecritic come to debunk any positive Carnival statement.:cool:

 

Is that a reference to me?

 

I know we are of different opinion on a few threads, but I'd hardly say we are bitter enemies.

 

I'm all for a profitable cruise line, I'm just not sure this will accomplish it. That said, they are doing a fair sight better than JC Penny's did. Their attempt to hold the line on pricing blew up in their face.

 

By all accounts there is way too much capacity in the Caribbean right now which is a boon for bargain hunters. In the long run, it may not be the best for the industry. Or maybe it will all work out and demand will grow to meet the supply.

 

I will openly say, I want to get my cruise as cheap as I can. But I also want the cruise line to be profitable so they can deliver a safe and fun cruise!

[Disconnections]

Carnival isn't the only one giving away free cruises. Princess currently has five sailings where they are reimbursing your cruise fare by 100.5% in the form of onboard credit, essentially paying you to cruise with them and can be combined with shareholder, military, future cruise certificate, travel agent and loyalty onboard credits. Plus, last year, they were refunding 100% of your cruise fare in the form of a cruise credit to be used sometime this year. Carnival's Diamond offer that was extended to Platinum and some Gold guests is still active until September 15 for those who received the offer in the second round.

 

Edit:

What a shock my two closest friends on cruisecritic come to debunk any positive Carnival statement.:cool:

 

Not here to debunk the article you shared, but simply to add to the conversation about Carnival offering free cruises.

Edited September 10, 2014 by Disconnections

[jimbo5544]

Is that a reference to me?

 

I know we are of different opinion on a few threads, but I'd hardly say we are bitter enemies.

 

I'm all for a profitable cruise line, I'm just not sure this will accomplish it. That said, they are doing a fair sight better than JC Penny's did. Their attempt to hold the line on pricing blew up in their face.

 

By all accounts there is way too much capacity in the Caribbean right now which is a boon for bargain hunters. In the long run, it may not be the best for the industry. Or maybe it will all work out and demand will grow to meet the supply.

 

I will openly say, I want to get my cruise as cheap as I can. But I also want the cruise line to be profitable so they can deliver a safe and fun cruise!

 

 

No not you. I value our discussions.

 

 

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