Where Carnival Corp. saved more and spent more in 2012

By Tom Stieghorst

Carnival Corp., and Carnival Cruise Lines in particular, hang their hats on cost control. So it is instructive to take a look at where Carnival saved the most money in fiscal 2012.

According to Carnival’s profit and loss statement issued last week, it saved $169 million on commissions, transportation and other costs.  That’s triple what it saved on tour operations ($50 million) and ten times what it saved on other shipping operations ($14 million).

Carnival paid $2.46 billion in commission and transportation in 2011, and $2.29 billion in 2012, a 6.9% decline.  Tour expenses fell 24.5%, to $154 million. Other shipping operations were flat, dropping 0.6%.

All other expenses rose, including payroll, up 1.1%; onboard expense, up 10.3%; and fuel, up 6.8%.  The biggest absolute increase in cost was for fuel, an additional $188 million.

It is always hard to sort out how much commission payments change from looking at the financial statements, because they are lumped in with air fares and other transportation costs. And looking at one year’s data, even if it is the most recent, doesn’t show a trend over time.

It may be worth noting, however, that the same expense line for commissions and transportation at the cruise industry’s other big publicly traded company, Royal Caribbean Cruises Ltd., shows a $10 million increase through the first nine months of 2012.

For travel agents, that’s a comparison that bears watching in the year ahead.