“We will be leaner. There is no question about it. And we’ll be stronger,” said Arnold Donald, CEO, Carnival Corporation, in an interview with Cruise Industry News.
“What happens in these times is that you are forced to do things that may have been a good idea to do before but weren’t necessarily material enough in the moment.
“Right now, we have no revenue. We have to slim down. We have to reduce overhead and we have to reduce our cash flow,” continued Donald, who is at the helm of the world’s largest cruise company, which was set to operate in 2020 with nine brands, over 100 ships and carry approximately 12.5 million guests at double occupancy according to the 2020 Cruise Industry News Annual Report.
“If we are literally sailing with no guests, there is no work for some people to do. We aren’t doing a lot of advertising right now; the work has gone away. We are taking the time now to see how we can do it smarter, better and more efficiently, so we can get even more done at a lower cost.”
Donald expects the earliest return to 2019, pre-COVID 19 capacity levels to happen in 2022.
Already, however, there are encouraging signs.
Three AIDA ships will be back in service sailing short cruises featuring all sea days and a modified onboard look and feel in August.
Phase two of that may see port calls outside of Germany, as well as more AIDA ships cruising from German homeports.
Donald said the initial bookings were very encouraging, despite no advertising from AIDA, the leading brand in the German marketplace.
“If you think about it logically, there is pent up demand for travel, and very scarce access – we’re not talking the AIDA fleet – we are talking three ships. It is logical you would think there would be strong demand given the scarcity,” Donald said.
Italy and Spain are probably the next regions to open to cruising, Donald noted, which would most likely see the Costa brand back in action as Carnival’s national brand portfolio is emerging as a key strength.
“For a period of time, those national brands, performed very, very well and for a period time, because they are national brands, they can get caught up in whatever is going on in their region and not perform as well,” noted Donald.
“Over time, we believe we have demonstrated as a company that having the portfolio of brands we have, allows us, over time, to generate great returns for shareholders.”
Without all the ships returning at once, Carnival can use supply to regulate pricing.
“Some people are concerned about demand. Honestly, in the beginning we don’t anticipate a problem. Our bookings are within the range in 2021 of what the historical range has been for each quarter,” Donald explained.
“The reality is we are not going to have all the ships come back at once. They won’t be able to. I think there is going to be a scarcity of supply for the pent-up demand there will be.”
“We can reintroduce the ships to guests at a pace that is consistent with the demand that is out there.”
Stay tuned to the Cruise Industry News website for more in a multi-part interview with Arnold Donald.
