Occupancy in the second quarter was 69%, up from 54% in the previous quarter. Customer deposits, in turn, increased $1.4 billion to $5.1 billion as of May 31, up from $3.7 billion at the end of February.
As of Friday, 91% of the company’s capacity was in guest cruise operation, while booking volumes for future sailings in the second quarter were nearly double booking volumes during the first quarter. Five of Carnival’s nine brands now have their entire fleet back in guest cruise operations.
“It is reinforcing to see continued strength in demand with our guests overcoming far more restrictive protocols than broader society and travel at large, leading to a near doubling of booking volumes since last quarter with near-term bookings even outpacing 2019,” said Arnold Donald, current chief executive. “We were encouraged by close-in demand and remain focused on optimizing occupancy while preserving long term pricing.”
Carnival anticipates an improvement in adjusted cruise costs excluding fuel from the first half of 2022 to the second half of 2022.
The company added that the Covid-19 pandemic, inflation, and higher fuel prices were having a “material impact” on the company’s business, and that it expected to report a net loss for the third quarter of 2022 and the fiscal year. Carnival believes adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, will improve with ongoing cruise operations until it returns to historical levels in 2023. The company expects positive adjusted Ebitda for the third quarter of 2022.
Carnival also reaffirmed its commitment to its previously announced succession plan. Starting Aug. 1, Donald will be appointed as vice chair of the board, while Josh Weinstein, current chief operations officer, will assume the role of chief executive.
Carnival stock was up 10% to $10.62 on Friday. But the shares have lost 47% over the last year, battered over concerns that a potential recession could curb consumer demand for cruises.
While the travel industry as a whole took a hit during the pandemic, cruise lines absorbed a significant amount of the pain. Even as travel has recovered, cruises have been slower to follow, given rising fuel and cost inflation in addition to Covid-19 restrictions that have precluded unvaccinated travelers from cruising.
Carnival’s second-quarter results may encourage investors that the slump may be coming to an end soon. Indeed, some analysts have been optimistic that a strong summer session could be a boon to cruise companies.
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