Andrea Zelinski
The Q3 earnings season is nearly upon us, and analysts who study the cruise industry are getting chatty about expectations.
Carnival Corp. will be the first of the Big Three to offer details about how it performed in the quarter when the company reports Q3 earnings next Monday. Carnival is the first in the lineup because its quarter ended on Aug. 31, about a month before Royal Caribbean Group and Norwegian Cruise Line Holdings wrap up theirs. Their reports will likely be made public in October or early November.
One travel industry analyst is expecting Carnival Corp. to raise its full-year guidance for the second time this year. Continued strong close-in demand, pricing and onboard spending would likely be responsible for increasing that guidance, Steven Wieczynski said in his latest cruise report.
"We get the sense booking patterns remain healthy and believe CCL hasn't witnessed any deterioration in their onboard customer spending patterns," Wieczynski said in his report published Friday.
If Carnival Corp. does raise its guidance, this will be the second quarter in a row that it has done so.
Demand continued to be strong this year, Carnival Corp. CEO Josh Weinstein said during the Q2 earnings call. The company's booked position for the rest of 2024 was the best on record for price, and occupancy and the booking curve in North America was the longest it had ever been, he said.
Another analyst has recently pointed to the potential for growth across the cruise industry. As I wrote last week, analyst Robin Farley of UBS said that several cruise companies had raised their guidance this year at the same time some hotels had reduced theirs. It made her curious about the growth potential for the cruise industry compared to its competitors in hotels and reports. Farley's conclusion: There's room for growth in cruising.
Another bit of chatter among analysts about cruise industry performance is coming from Cleveland Research, which regularly surveys travel advisors, large agencies and cruise officials.
In its September survey, the firm found nearly half (48%) of respondents said bookings tracked ahead of expectations. That's higher than the July survey when 40% of respondents said cruise bookings were ahead of expectations. Price growth appeared to be a bigger contributor to this growth rather than volume, according to the report.
This strength in bookings reported by advisors is something of a surprise. August and September are typically slower seasons for selling cruises compared with, say, Wave. There's also a distracting U.S. election happening; cruise lines increased their advertised prices in July to comply with a California law targeting junk fees; and there were plenty of hurricanes and tropical storms in the news.
Yet, bookings persisted, travel advisors said. As I prepare to hear from Carnival Corp. next week, it'll be fascinating to hear how strong business is, and if it is strong enough to raise its guidance again.