Carnival Results
Carnival Corporation reported net income of $260 million, or $0.33 per share, on revenues of $2.9 billion for its first quarter ended Feb. 28, 2009, compared to net income of $236 million, or $0.30 per share, on revenues of $3.1 billion for its first quarter last year. Cost cutting efforts, lower fuel prices, selling and administrative costs, and financial transactions allowed Carnival to post increased earnings while revenues dropped. Bookings are up 10 percent for the rest of the year, but at significantly lower prices, and Carnival has revised its earnings forecast for the year downward to a range from $2.10 to $2.20. The big question mark is the third quarter, which has traditionally been the industry’s strongest quarter. Now pricing and occupancy are running significantly behind last year’s, according to Carnival, but with the European brands performing relatively better than their North American sister brands.
Value Message
“Value” is driving the industry in 2009, according to cruise line executives at the recent Miami Cruise Shipping Conference. In addition to value, product diversification and globalization allow the lines to tap into more markets on a global scale. The value message translates into lower prices, which Gerald Cahill, president and CEO of Carnival Cruise Lines, said is an opportunity to attract people who have not cruised before. “Everybody is looking for value,” he said, “and we have a great value message.” The industry is responding in many different ways to stimulate the markets – with lower prices, onboard credits, lower deposits and job loss insurance. But pricing strategy varies between the different brands.
European Impact
The European cruise industry accounted for nearly 13 billion euros in direct expenditures in 2007, the latest year for which figures are available, according to David Dingle, chairman of the European Cruise Council and CEO Of Carnival UK. The industry was also responsible for more than 280,000 jobs and nearly 19 million visits made to European ports, Dingle said, adding that 2008 saw a 10 percent increase in the number of European passengers – to 4.4 million. Dingle said that was a 66 percent increase compared to five years ago. “Each ship put into European markets fills,” he added, noting that half of the new cruise capacity being introduced this year is going to European markets.
Venice Plans New Port
The Venice Terminal Passeggeri company has commissioned a feasibility study for a new cruise pier and terminal for the latest generation mega ships, according to Managing Director Roberto Perocchio and Antonio Revedin, director of strategic planning for the Venice Port Authority. The site for what will be a new port is an area on the Canale dei Petroli between the Avesa and Dogaletto Canals. Access to this site is easy by ship and by land, according to Revedin, who said it is only 10 minutes by bus to the city center. Venice reported 1.2 million cruise passengers in 2008, up approximately 10 percent from 2007. The 2009 forecast is for 1.3 million.
Mega-berth for Hamburg
Hamburg Cruise Center (HCC) will open its new 30 million euro mega-ship berth in Altona this summer, accommodating ships up to 300 meters, said the Center’s Managing Director Gerd Drossel. And next April (2010), a new, modern terminal with an integrated automated gateway will open at the site, replacing the former ferry facility. In 2009, Hamburg expects 140,000 passengers on 90 calls, compared to 89,791 passengers on 79 calls and in 2008.
And there is more: Cunard reveals more details about the new Queen Elizabeth; Port Everglades has announced plans to triple the size of Cruise Terminal 18 to accommodate the Oasis of the Seas, and the Norwegian Epic will feature studio staterooms.
