Carnival Corp – cruise recovery trajectory & CDC advisory impact

No plain-sailing for cruise industry

Vaccines are unlikely to help with cruise industry challenges “for at least another year-and-a-half,” according to the specialist. In the meantime, adhering to the CDC’s guidelines — which are due an update — is the industry’s only way to get up and running again. “You could potentially be looking at an April time frame for cruises to start here in North America.”

The Interview considered how vaccine developments are influencing booking behaviour. Cruise lines have “been very clear on one thing and that is for the back half of ’21 they’re seeing demand for cruising, even though they really haven’t spent a penny on sales and marketing.” However, the expert explained the context within which these observations should be interpreted. 

In terms of pricing, there are “too many unknowns” adding to the list of cruise industry challenges, such as the impact of a potential recession, to predict near- and long-term trends. “At a minimum, you’re looking at probably close to five years before they could really get to a strong point, but that will also be predicated on how long this current situation lasts.” However, the expert noted that typically only 30% of revenue comes from the ticket itself, with on-board spending accounting for the rest.

Cruise industry challenges still to be solved

Overall, the specialist’s expectations were that much is currently hinging on the final details of the CDC’s guidelines as to whether the cruise line industry will be able to accommodate the framework. In a broader sense, the fact that there seem not to have been any new ship cancellations “proves that the industry is very keen on continuing to grow”.

To access all the human insights in Third Bridge Forum’s Carnival Corp – cruise recovery trajectory & CDC advisory impact Interview, click here to view the full transcript.