Carnival Provides Update on Strong Bookings and Red Sea Changes

In a significant update, Carnival Corporation reveals an impressive surge in bookings for 2024, alongside proactive changes to itineraries in the Red Sea region. However, the changes could impact the company’s financial growth.

Unprecedented Booking Momentum

Carnival Corporation, the world’s largest cruise operator, has reported an exceptional start to the year, with booking volumes reaching all-time highs. The company has experienced robust booking momentum since November, surpassing previous records.

The final quarter of 2023 set a remarkable precedent for Carnival, with historic booking highs noted during key sales periods like Black Friday and Cyber Monday. Impressively, total customer deposits soared to a fourth-quarter record of $6.4 billion, a 25% increase from the previous record in November 2022.

The final quarter also came as Carnival Cruise Line introduced its newest ship, Carnival Jubilee. The 183,521-gross-ton, 6,500-passenger ship based in Galveston, Texas, embarked on her inaugural cruise on December 23, 2023.

As 2024 progresses, Carnival’s booking trajectory continues its upward climb. Nearly two-thirds of the company’s 2024 occupancy has already been secured, and the first half of 2024 is nearly fully booked.

This trend positions Carnival Corporation for substantial growth. The company expects to return to historical occupancy levels and achieve a growth of over 30% compared to 2023.

Red Sea Itinerary Adjustments

However, in response to the escalating tensions in the Red Sea and surrounding areas, Carnival has decided to reroute itineraries for 12 ships across seven brands, including Costa Cruises, P&O Cruises, Seabourn, and AIDA Cruises.

These adjustments significantly impact key voyages, including those of Costa Deliziosa and P&O Cruises’ Arcadia, which were originally scheduled to navigate through the Suez Canal and the Red Sea on World Tour itineraries. Furthermore, Carnival Corporation’s AIDA Cruises has announced the cancellation of several spring 2024 voyages. This decision affects several ships in its fleet, namely AIDAbella, AIDAblu, and AIDAprima.

In addition, Seabourn’s Encore is making revisions to its Arabian itineraries. This change particularly affects two fully-booked cruises set for departure in March and April 2024.

Carnival’s assessment of the situation led to a regulatory filing that stated, “We believe that the instability in the Red Sea region currently impacting shipping could have an impact on our results of operations.” 

The company expects the rerouting to affect its earnings per share by $0.07 to $0.08 for the full year of 2024, with a significant concentration of this impact in the second quarter.

Strong Outlook Amidst Challenges

Despite these challenges, Carnival Corporation maintains a positive outlook. The record levels of bookings for 2024 are expected to offset the financial impacts of the Red Sea itinerary changes, contributing significantly to the company’s performance for the year.

Read Also: Carnival Surges with Record Bookings, Signaling a Bright Future

Completing this operational success is Carnival’s strong financial position. The company strategically redeemed $571 million in second-priority senior secured notes due 2027. This action eliminates all remaining second-lien debt, marking a significant step toward financial stability.

Rising Tensions Changing Cruise Itineraries

The Red Sea’s escalating geopolitical strife, mainly due to Houthi rebels in Yemen, has disrupted a key maritime route connecting the Mediterranean Sea with the Indian Ocean.

This instability has affected commerce flow between Asia and Europe, and despite military interventions by U.S. and British forces, the impact on maritime operations continues to spread to cruise lines.

The situation has compelled other cruise lines to similarly adjust their itineraries. MSC Cruises rerouted MSC Poesia and cancelled three grand voyages scheduled for April. Silversea’s Silver Moon also cancelled sailings in the region.