Carnival sees higher revenue and bookings as cruise line seeks profitability

Carnival Corp. released its second quarter financial update on Friday, June 24 with generally positive news for the cruise line. The company said revenue increased 50% and bookings doubled since the first quarter.

Although Carnival Corp. posted a net loss of $1.9 billion for the quarter, the cruise line reports that it turned cash positive in April 2022 on continued sequential improvements in bookings. The company ended the second quarter with positive cash flow, although revenue fell short of the cruise line’s expectations.

Customer booking deposits rose from $3.7 billion to $5.1 billion, signaling more positive news for the cruise line. With booking volumes nearly doubling, Carnival Corp. recorded its best quarterly booking performance since the start of the pandemic.

The cruise line also said bookings for the second half of 2022 even surpassed 2019 booking levels.

Carnival Corp. also reports that 91% of the company’s capacity is in guest operations, as the cruise line has aggressively ramped up operations. Of the cruise line’s nine brands, five have resumed operating their entire fleet.

The occupancy rate reached 69% in the second quarter for the cruise line, which represents an increase from the occupancy rate of 54% in the first quarter. Carnival Corp. expects to reach 110% occupancy in the third quarter, meaning most ships will be sailing with third and fourth occupancy.

The cruise line also reports that onboard guest spending has increased significantly, even compared to the strong pre-pandemic spending trends of 2019.

Pandemic and operational challenges

Even as Covid-19 continues to circulate through society, the cruise line credits its onboard policies and health protocols with enabling cruise travel to become “one of the safest forms of socializing and travel, with much lower incidence rates than on land”.

With the impact of the pandemic lingering, Carnival Corp expects a net loss for the third quarter and forecasts an overall net loss for the year. The cruise line cites inflation, rising fuel costs and the lingering effects of the pandemic as operational challenges that are having a significant impact on the cruise line’s business; in turn, this has an impact on the financial position, liquidity and operations.

Like most companies in the travel industry, Carnival Corp. says the cruise line is working to make meaningful progress to improve its staffing issues.

Even still, the cruise line is looking to the future for accelerated profitability, as a quarter of Carnival’s sailing capacity will be made up of newly delivered cruise ships. Coupled with the fact that society is becoming more comfortable dealing with Covid-19, Carnival Corp. expects to see continued growing demand for cruising.

The company’s largest brand, Carnival Cruise Line, returned its entire fleet to service in May. It was the first major cruise line to return its entire fleet to service.