Carnival Cruise Line to Operate Full Ships this Summer at 110 Percent Occupancy

Carnival Cruise Line to Operate Full Ships this Summer at 110 Percent Occupancy

With its full fleet sailing as of May, Carnival Cruise Line is helping lead the comeback for Carnival Corporation.

The brand is expected to operate at 110 per cent occupancy for the all-important summer season, according to Arnold Donald, president and CEO of Carnival Corporation.

“Carnival Cruise Line, our largest brand, achieved consistently positive adjusted EBITDA beginning in March. Carnival Cruise Line also became our first brand to sail its entire fleet in May and is expecting occupancy to approach 110 per cent during our third quarter,” he said.

Donald, on the company’s second-quarter and business update call, noted these “close-to-home” cruises, where guests perceive far less friction travelling than going abroad.

With a strong North American cruise market, Carnival is pivoting to add more capacity in the form of two redeployed Costa Cruises vessels under the Costa by Carnival umbrella. The Costa Venezia will sail from New York starting in 2023 while the Costa Firenze will homeport in California beginning in 2024.

Carnival: 3.8 Percent of Capacity Was Set to Call in Russia

Carnival: 3.8 Percent of Capacity Was Set to Call in Russia

Carnival Corporation had 3.8 per cent of its 2022 cruise capacity calling on Russian ports before Russia's invasion of Ukraine, leading the company to cancel and replace calls to Russian ports.

"We have decided to totally withdraw from Russia and have found attractive alternatives," said President and CEO Arnold Donald, speaking on the company's first-quarter earnings call.

"That said, Saint Petersburg was a marquee port for us. And while there have been times where we were unable to offer certain itineraries, in this instance, the close end nature of the deployment change does lead to some regional disruption in recent booking patterns."

Donald admitted the war had added some volatility to Carnival's business and had impacted consumer confidence.

"With 50 years under our belt, we have successfully managed through a plethora of headwinds like spikes in fuel prices, the Gulf War, Arab Spring, September 11, Ebola, Zika, SARS, MERS and more," Donald said. "And once again, the mobility of ships continues to be an asset. Time and time again, we have seen guests travel through challenges. In fact, Carnival Cruise Line turned 50 this month and recently enjoyed its three best weeks of bookings since resuming operations."

Carnival Corporation Provides Business Update, Q1 Earnings

Carnival Corporation Provides Business Update, Q1 Earnings

Carnival Corporation has provided its first-quarter 2022 business update.

Highlights: 

• U.S. GAAP net loss of $1.9 billion and an adjusted net loss of $1.9 billion for the first quarter of 2022.
• First-quarter 2022 ended with $7.2 billion of liquidity, including cash, short-term investments and borrowings available under the company's revolving credit facility.
• For the cruise segments, revenue per passenger cruise day ("PCD") for the first quarter of 2022 increased approximately 7.5% compared to a strong 2019. This increase was driven by exceptionally strong onboard and other revenue.
• As of March 22, 2022, 75% of the company's capacity had resumed guest cruise operations.
• The company expects to have each brand's full fleet back in guest cruise operations for its respective summer season where it historically generates the largest share of its operating income.
• The company believes monthly adjusted EBITDA will turn positive at the beginning of its summer season.
• Since the middle of January, the company has seen an improving trend in weekly booking volumes for future sailings. Recent weekly booking volumes have been higher than at any point since the restart of guest cruise operations.
• The company announced that three additional ships are expected to leave the fleet in 2022 in connection with its ongoing fleet optimization strategy. In total, this represents the planned removal of 22 smaller-less efficient ships since the beginning of the pause in guest cruise operations.
• Building on the company's strong governance framework and its continued commitment to sustainability, the Board of Directors appointed the company's President and Chief Executive Officer Arnold Donald to the role of Chief Climate Officer.

First Quarter 2022 Results and Statistical Information

• For the cruise segments, revenue per PCD for the first quarter of 2022 increased approximately 7.5% compared to a strong 2019. This increase was driven by exceptionally strong onboard and other revenue.
• During the first quarter of 2022, as a result of the Omicron variant, the company experienced an impact on bookings for its near-term sailings, including higher cancellations resulting from an increase in pre-travel positive test results, challenges in the availability of timely pre-travel tests and the disruption Omicron caused on society overall during this time. Therefore, occupancy in the first quarter of 2022 was 54%, a 20% increase in guests carried over the prior quarter.
• Available lower berth days ("ALBD") for the first quarter of 2022 were 13 million, which represents 60% of total fleet capacity, increasing from 47% in the fourth quarter of 2021.

Carnival Corporation & plc President, Chief Executive Officer and Chief Climate Officer Arnold Donald noted: "Despite the impact of Omicron, guests carried grew by nearly 20 per cent in the first quarter compared to the prior quarter, while simultaneously increasing revenue per passenger cruise day and driving an improvement in adjusted EBITDA. We expect monthly adjusted EBITDA to turn positive by the beginning of our summer season as we build occupancy and return more ships to service."

Donald added: "We believe we have positioned the company well to withstand volatility on our path to profitability and have been working hard to resume operations as a stronger and more sustainable operating company, to maximize cash generation and to deliver double-digit returns on invested capital over time."

Despite the impact resulting from the Omicron variant during the first quarter, the company's adjusted EBITDA (see non-GAAP Financial Measures) improved due to its ongoing resumption of guest cruise operations. The company believes that adjusted EBITDA will continue to improve with the ongoing resumption of guest cruise operations and continues to expect improvement in occupancy throughout 2022 until it returns to historical levels in 2023. The company believes monthly adjusted EBITDA will turn positive at the beginning of its summer season.

The company ended the first quarter of 2022 with $7.2 billion of liquidity, including cash, short-term investments and borrowings available under the revolving credit facility. The company invested $400 million in capital expenditures (net of export credit facilities) during the first quarter of 2022, which included the delivery of three of the four larger-more efficient ships expected to be delivered in 2022. In addition, the Company repaid $500 million of debt principal and incurred $400 million of interest expense, net during the quarter.

Carnival Corporation & plc Chief Financial Officer David Bernstein noted, "We ended the first quarter of 2022 with $7.2 billion of liquidity. Looking forward, we believe we remain well-positioned given our liquidity and the continued improvement expected in adjusted EBITDA, along with the expected build in customer deposits, as we progress toward resuming full fleet operations."

Resumption of Guest Cruise Operations

Donald said: "Since resuming guest cruise operations, we delivered more than 2.2 million exceptional vacations while achieving historically high guest satisfaction scores. With 75 per cent of our capacity having resumed guest cruise operations, we are well on our way back to full cruise operations and we are planning to return the balance of the fleet by our summer seasons. Achieving these operational milestones while facing headwinds including Delta and Omicron variants and changing regulations and protocols —particularly at our scale— makes the efforts of our team, ship and shore, all the more impressive."

Donald continued, "In addition, we furthered our fleet optimization efforts by taking delivery of three larger-more efficient ships during the quarter, Costa Toscana and AIDAcosma, the company's fifth and sixth ships powered by LNG and Discovery Princess. We also announced the removal of another three smaller-less efficient ships, bringing the total to 22 ships, significantly reducing our rate of capacity growth. Upon returning to full operations, nearly 25 per cent of our capacity will consist of newly delivered ships, which we believe will expedite our return to profitability and improve our return on invested capital."

As of March 22, 2022, 75% of the company's capacity had resumed guest cruise operations as part of its ongoing return to service. The company's enhanced COVID-19 protocols have helped it become among the safest forms of socializing and travel, with far lower incidence rates than on land. The company expects to have each brand's full fleet back in guest cruise operations for its respective summer season where it historically generates the largest share of its operating income.

Upon returning to full cruise operations, the company's ongoing fleet optimization strategy combined with its LNG efforts and other innovative initiatives to drive energy efficiency is forecasted to deliver a 10% reduction in fuel consumption per ALBD and a 9% reduction in carbon emissions per ALBD on an annualized basis compared to 2019.

While the company will benefit from the removal of smaller-less efficient ships and the delivery of larger-more efficient ships, the company expects adjusted cruise costs excluding fuel per ALBD (see Non-GAAP Financial Measures) for the full year 2022, to be significantly higher than 2019. This is driven by a portion of its fleet being in pause status for part of the year, restart related expenses, an increase in the number of dry-dock days, the cost of maintaining enhanced health and safety protocols and inflation. The company anticipates that many of these costs and expenses will end in 2022 and will not reoccur in 2023. Additionally, the company expects to see a significant improvement in adjusted cruise costs excluding fuel per ALBD from the first half of 2022 to the second half of 2022 with a low double-digit increase for the full year 2022 compared to 2019.

The ongoing resumption of the company's guest cruise operations and the increased uncertainty given the current invasion of Ukraine, including its effect on the price of fuel, are collectively having a material impact on its business, including the company's liquidity, financial position and results of operations. The company continues to expect a net loss for the second quarter of 2022 on both a U.S. GAAP and adjusted basis. However, the company expects a profit for the third quarter of 2022. For the full year of 2022, the company expects a net loss.

Update on Bookings

Donald added: "Given the recent strengthening in booking volumes coupled with the closer-in booking patterns, we expect an extended wave season. In fact, we gained occupancy even in the month of March with fleetwide occupancy nearing 70 per cent and several sailings already exceeding 100 per cent."

Since the middle of January, the company has seen an improving trend in weekly booking volumes for future sailings. Recent weekly booking volumes have been higher than at any point since the restart of guest cruise operations. 

During the first quarter, the company increased its booked occupancy position for the second half of 2022, albeit not at the same pace as a typical wave season due to the Omicron variant. As a result, cumulative advance bookings for the second half of 2022 are at the lower end of the historical range. However, the company believes it is well situated with its current second half 2022 booked position given the recent improvements in booking volumes and its continued expectation that occupancy will build throughout 2022 and return to historical levels in 2023. Normalized for bundled packages, prices on bookings for the second half of 2022 continue to be higher, with or without future cruise credits ("FCCs"), as compared to 2019 sailings. 

Cumulative advanced bookings for the first half of 2023 continues to be both at the higher end of the historical range and at higher prices, with or without FCCs, normalized for bundled packages, as compared to 2019 sailings. (Due to the ongoing resumption of guest cruise operations, the company's current booking trends will be compared to booking trends for 2019 sailings.)

Total customer deposits increased to $3.7 billion as of February 28, 2022, from $3.5 billion as of November 30, 2021.

First Carnival China Newbuild Cruise Ship Floats Out

The first Carnival China Cruise Shipping newbuild was floated out last week at Shanghai Waigaoqiao Shipbuilding Co., Ltd., a subsidiary of China State Shipbuilding Corporation (CSSC).

"We at Carnival are committed to supporting to CSSC and our joint venture CSSC Carnival which is the foundation of Carnival's China strategy," said Arnold Donald, CEO of Carnival Corporation, in a video address celebrating the float out of hull 1508.

"We are committed to building CSSC Carnival into a successful and fully functioning Chinese-flagged cruise company," Donald continued. 

The ship is one of two on order for Carnival's joint venture brand with CSSC, where Carnival is a minority partner. The brand will serve the domestic Chinese market and has already taken ownership of Costa Atlantica and Costa Mediterranea.

The new ship touched water for the first time in Shanghai, and will now move to an interior fit-out stage before her delivery in 2023. A sister ship will follow in 2024; there is an option for four additional ships on the contract.

The new builds are on the Carnival Vista-class platform, with CSSC working in partnership with Fincantieri. 

Royal Caribbean CEO Fain Takes Home $12 Million for 2020

Royal Caribbean Group Chairman and CEO Richard Fain saw total compensation of just over $12 million for the fiscal year 2020, according to a company SEC filing.

Fain saw his base salary cut by nearly 50 per cent, but made up for it with $11 million in stock awards.

Other company executives also had a good year, with CFO Jason Liberty seeing total compensation of $5.6 million, up from 2019.

Royal Caribbean International President and CEO Michael Bayley earned $7.4 million, also up from 2019.

The SEC filing noted that executives did forgo portions of their base salaries

The company said it wants to establish a mix of compensation components, including fixed and variable pay and short- and long-term incentives, that encourages "focus on both the short- and long-term interests of the company and its shareholders."

Of note, Carnival Corporation CEO Arnold Donald took home $11 million and Norwegian Cruise Line Holdings CEO Frank Del Rio saw compensation of $36.4 million.

Royal Caribbean Group Compensation Table:

Name and Principal Position	Fiscal Year	Salary ($)	Stock Awards ($)	One-Time Stock Awards	Non-Equity Incentive Plan Compensation	Change in Pension Value and NQDC Earnings	All Other Compensation	Total ($)
Richard D. Fain Chairman/CEO	2020	$645,000	$11,171,146		$3,042,000*	$154,879	$112,478	$12,083,503*
	2019	$1,276,923	$8,699,024		$4,006,080	$189,347	$187,545	$14,358,919
	2018	$1,100,000	$7,664,567		$3,500,000		$157,949	$12,422,715
	2017	$1,100,000	$7,661,433		$4,327,400	$99,493	$155,087	$13,343,413
	2016	$1,092,308	$6,441,770		$2,740,222		$131,384	$10,405,684
	2015	$1,038,462	$5,803,644		$2,426,667		$119,796	$9,388,569
	2014	$1,000,000	$3,673,186	$4,923,759	$2,246,222	$56,611	$114,100	$12,013,878
	2013	$1,000,000	$3,371,587		$2,083,629	$250,089	$127,858	$6,833,163
Jason T. Liberty CFO	2020	$818,798	$3,228,563		$1,411,938	$89,503	$100,429	$5,649,231
	2019	$788,462	$2,621,510		$1,731,002	$91,472	$113,674	$5,424,004
	2018	$788,462	$2,136,947		$1,685,523		$140,932	$4,751,864
	2017	$692,308	$1,700,547	$2,792,203	$1,521,533	$57,849	$125,806	$6,890,246
	2016	$592,308	$1,127,080		$798,217	$21,980	$88,478	$2,628,062
	2015	$511,538	$765,923		$655.175		$66,801	$1,999,437
	2014	$444,231	$519,248	$716.111	$508.197	$6,393	$79,563	$2,273,743
	2013	$380,019	$373,728		$364.324	$25,741	$77,676	$1,221,488
Michael W. Bayley President/CEO RCI	2020	$866,346	$4,943,887		$1,435,000	$74,355	$116,244	$7,435,832
	2019	$941,923​	$4,061,696		$1,803,361	$110,1190	$140,711	$7,057,881
	2018	$870,769	$3,086,742		$1,577,143		$187,432	$5,722,086
	2017	$792,308	$2,834,275	$2,792,203	$1,519,461	$121,223	$135,123	$8,194,593
	2016	$696,154	$1,784,470		$938,428	$11,630	$107,334	$3,866,773
	2015	$675,000	$1,436,142		$986,229		$115,934	$3,213,305
	2014	$598,846	$944,096	$1,909,604	$861,000	$15,897	$79,207	$4,408,650
	2013	$575,00	$770,630		$658,891	$67,786	$101,625	$2,173,932
Lisa Lutoff-Perlo President/CEO Celebrity	2020	$710,558	$2,719,084		$1,092,650	$130,177	$96,854	$4,749,323
	2019	$770,769	$2,278,490		$1,098,258	$140,211	$142,114	$4,429,842
	2018	$688,462	$1,786,762		$1,228,438		$136,520	$3,840,202
	2017	$596,154	$1,558,865	$1,861,505	$1,072,083	$64,609	$123,701	$5,276,917
	2016	$546,154	$1,033,167		$639,532		$92,045	$2,310,898
Harri Kulovaara EVP Maritime	2020	$803,846	$1,483,167		$830,250	$81,764	$107,746	$3,606,773
	2019	$761,923	$1,139,243		$870,446	$98,382	$102,335	$3,422,329
	2018	$692,308	$893,480	$924,236	$764,728		$109,262	$3,844,014

*Declined Non-Equity Incentive Plan Compensation of $3,042,000

Carnival CEO Donald 'Very Disappointed' in CDC Guidance

Carnival Corporation CEO Arnold Donald said he was "very disappointed" in the CDC's guidance released last week on the company's business update call on Tuesday morning.

Donald mentioned the company has 30 ships in U.S. waters that have achieved "green status" per CDC guidelines, and that the company was continuing to work with the agency and current administration to find practical approaches to resume cruising in a way that is in the best interest of public health.

He said he aimed to have all nine Carnival Corp. brands sailing this summer and that ships will come back on a staggered basis with occupancy rates ramping up over time.

Donald noted an acceleration of booking trends globally, with an AIDA ship sailing the Canaries and restarts set in the UK and Italy shortly.

Donald was also quick to note 59 of 90 of the company's ships were outside of the Conditional Sail Order, and restarts were being worked on in Asia and Australia.

Carnival CEO Sells Company Stock

Arnold Donald, president and CEO of Carnival Corporation, sold 62,639 company shares on Tuesday at a price of $21.12 for proceeds of $1,322,935, according to an SEC filing. 

While the timing was less than ideal as the company remains out of service, the transaction was relatively routine.

Donald sold Carnival shares in mid-January in 2020, although at a much higher per-share price before the onset of the COVID-19 pandemic.

Carnival: Optimistic For Restart in the U.S. By Year’s End

“At this time, we have every reason to be optimistic we will be sailing in the U.S. before year’s end,” said Arnold Donald, president and CEO of Carnival Corporation, on today’s third-quarter earnings call.

The company’s Costa Cruises brand has already returned to service with two ships in the Mediterranean, soon to be joined by a third ship, the Costa Smeralda, according to Donald. They are sailing weeklong cruises from different Italian homeports. The sister brand, AIDA, is set to launch service later this month, also in the Mediterranean, with German passengers.

Donald explained that the ships are sailing with lower occupancy levels enabling the cruise lines to test and assess their health and safety protocols.

With national brands, Donald said Carnival is ideally positioned for a phased-in return to service, as each brand can be restarted independently, and in most cases with ready access to drive-to markets.

Also, with a small percentage of the fleet entering service, for now, he said, there will be less reliance on new-to-cruise, compared to all previous growth cycles that required the brands to tap more new passengers.

In addition, as Carnival is disposing of some 18 older ships and right-sizing its shoreside organization, Donald said a leaner and more efficient company would emerge.

“All initiatives going forward will be focused on maximizing cash generation and creating shareholder value. The delivery schedules of new ships have been stretched out and there is only one new ship on order for 2024 and one for 2025. This will further reduce our capital expenditures and allow us to repay debt,” he added.

Added David Bernstein, CFO and chief accounting officer: “We are focused on assets that are cash generative, so we can pay down debt, rebuild our balance sheet and get back to investment-grade rating.

“We are working through a number of different financial scenarios, but there is a lot of uncertainty involved so it is difficult to give (financial) guidance. (However), we expect over time to build occupancy up to generate positive cash flow and reduce the cash burn. The start-up occupancy level is less than 50 per cent. Over time, once we know we have things right, we will increase occupancy, while keeping social distancing in mind as well.”

Bernstein noted that the break-even point ranges from 30 to 50 per cent occupancy for different ships.

Costa Ready to Restart Cruise Operations This Weekend

Costa Cruises is scheduled to restart sailing in Italy this Sunday, Sept. 6.

Carnival's Italian brand will be followed by Germany-based AIDA Cruises scheduled to resume on Nov. 1.

The brands will begin in a gradual, phased-in manner with six initial ships and limited itineraries, becoming the first two of Carnival's nine brands to resume operations.

"Our highest responsibilities and top priorities are always compliance, protecting the environment, and the health, safety and well-being of our guests, the communities we visit and our crew," said Arnold Donald, CEO of Carnival Corporation. "We are engaged with a large number of medical experts and scientists around the world, and they are providing us with extremely valuable insight that we are using to develop new and enhanced protocols that are in the best interest of our guests, crew and overall public health. In areas of the world where community spread is largely mitigated and authorities are supportive of a gradual return to service over time, we look forward to again welcoming guests onboard.

The initial cruises will take place with adjusted passenger capacity and enhanced health protocols developed with government and health authorities to follow shoreside mitigation guidelines, the company said. 

Costa Cruises is restarting sailing with two initial ships departing from Italian ports beginning Sept. 6.

The Costa Deliziosa will offer weekly cruises from Trieste on Sept. 6, 13, 20 and 27, visiting five destinations in southern Italy, including Bari and Brindisi in Puglia, Corigliano-Rossano in Calabria, and Siracusa and Catania in Sicily.

The Costa Diadema will follow on Sept. 19 from Genoa, calling at Italian ports in the western Mediterranean, including Civitavecchia/Rome, Naples, Palermo, Cagliari and La Spezia.

The one-week itineraries are being reserved exclusively for Italian guests.

AIDA Cruises will resume its cruise operations with two of its ships, sailing from the Canary Islands in November 2020, followed by an additional two ships departing from the western Mediterranean and the United Arab Emirates beginning in December 2020.

The first of the brand's cruises are set to begin Nov. 1, with seven-day voyages to and departures from Las Palmas, Gran Canaria, with AIDAmar, followed by sailings from Las Palmas and Santa Cruz de Tenerife with AIDAperla on Nov. 7. In December, AIDA Cruises will resume sailing operations in the Western Mediterranean with AIDAstella departing on seven-day cruises from Palma, Mallorca, beginning Dec. 12. Additionally, AIDAprima will offer seven-day cruises from Dubai starting Dec. 11 and from Abu Dhabi beginning Dec. 15.

In working with global and national health authorities and medical experts, Costa Cruises and AIDA Cruises have developed a comprehensive set of health and hygiene protocols to help facilitate a safe, healthy return to cruise vacations, according to a press release.

Carnival Corporation to Begin Cruises in Phases

Carnival Cruise iconic Funnel.

Carnival Corp said on Friday it was planning to resume operations in a phased manner and would operate with a smaller fleet on its return, months after suspending trips due to the COVID-19 pandemic.

The company’s shares, that have lost more than two-thirds of their value this year, rose as much as 11% to $16.12 in morning trading.

The world’s largest cruise operator said it has reduced capital expenditures by more than $5 billion over the next 18 months and raised a couple more billions to navigate through the virus outbreak.

The cruise business has been one of the worst-hit after several ships, including some owned by Carnival’s Princess Cruises, became coronavirus hotspots.

To survive through the pandemic, cruise operators have raised billions through various means, even pledging ships and private islands.

Carnival alone, raised over $10 billion through a series of financing transactions since voyages were paused, enough to withstand another full year in a zero-revenue scenario, Chief Executive Officer Arnold Donald said on a conference call.

As it restarts voyages, the company expects future capacity to be moderated, while some ships could be removed and new deliveries would be delayed, Carnival added.

“We are also reorganizing the company to emerge stronger, leaner and more efficient,” Donald said.

“Even when we return to full-scale operations, we don’t expect to return to the same staffing requirements as we are addressing our work streams to work in a more efficient manner.”

The 13 ships expected to leave the fleet represent a nearly 9% reduction in current capacity, and the company expects only five of the nine ships originally scheduled for delivery to be delivered.

On Thursday, Carnival said it would resume voyages run by its German cruise line AIDA next month. (Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva and Shounak Dasgupta)

(c) Copyright Thomson Reuters 2020.

Carnival Corp. CEO: Demand should be 'more than adequate' at the restart

Carnival Corp. expects demand to be "more than adequate to fill ships in a staggered restart," said CEO Arnold Donald during a business update call with analysts.

Donald said he was not concerned about achieving this without substantial bookings from the new-to-cruise market, because two-thirds of its global guests, 8 million each year, are repeat cruisers. He said Carnival Corp. has an active database of nearly 40 million past guests, and the average frequency of cruisers to repeat is every two to three years. 

"Clearly cruise will not come back all at once," Donald said. "We intend to resume with a small percentage of the fleet, which inherently makes us less reliant on new-to-cruise in the early days."

As opposed to other down cycles, the limited capacity will help achieve stronger pricing when cruising initially resumes.  

"Historically we had only two levers to pull in a down cycle: occupancy and rate," Donald said. "In this environment, we'll have a third: capacity."

Donald said Carnival is very encouraged by the booking patterns it is seeing. He said that this week, when it announced that Aida Cruises would resume service in Germany in August, it had over 1,000 bookings in one day, "taking up a significant portion of the first sailings and on a very short notice period."

He said forward bookings include not only a number of future cruise credits (FCCs) but "substantial new bookings and even new-to-cruise bookings, which given the current state of the environment in the world is really a good testament to how strong a vacation experience and value cruising really is."

When asked if brands that were more badly tarnished by the media attention on cruise ship outbreaks in the early days of the pandemic, such as Princess, were being disproportionately affected in terms of consumers' preference, Donald said the line is "trending with all the other brands in the industry."

In fact, he said that none of the brands in the industry had reached what he called "the trough" of 2012 or 2013 when a number of negative, high-profile incidents. such as the engine room fire on the Carnival Triumph and the sinking of the Costa Concordia, rocked the cruise industry and Carnival Corp. specifically.

"None of the brands in the industry, ours or others, have gone to the low levels that we experienced at that time," he said. "The trough in this period has been higher than the trough in that period.

"So there is a lot of pent-up demand, a lot of latent demand," he continued. "That doesn't mean we don't have work to do once we start cruising with much larger volumes of capacity to attract new to cruise. Of course, we will have work to do, but right now the brands are strong, the bookings are encouraging, and with the staggered start we're going to have in the resumption of cruising, there should be plenty of pent-up, latent demand with previous cruisegoers to fill the ships."

Donald also said that having national brands in its portfolio is "clearly an asset" in this situation because as nations reintroduce social gathering and cruising, they are "most likely initially to restrict reactivation to their own residents exclusively." 

 
P&O Iona waiting for delivery.

Carnival's German brand sources 95% from Germany; P&O UK is 98% British-sourced; Costa Europe is 80% continental Europe-sourced; P&O Australia is more than 99% sourced from Australia and New Zealand, and Carnival Cruise Line is 92% U.S.-sourced, Donald said.

"We are very well positioned," Donald said. "Additionally, the fact that these brands are characterized by ready access, with the drive-to market and prevalence of shorter duration cruises, strengthens the possibility for success in today's environment."

Donald said that in general, longer cruises such as world cruises are not booking as well as shorter ones, which he said makes sense given the uncertainty of whether ports are open or closed in different regions.

For the second quarter, which ended May 31, Carnival reported a loss of $2.4 billion on revenue of $740 million,  compared with $451 million in net income on $4.8 billion in revenue during the same period in 2019.

2021 bookings  

As of June 21, Carnival reported that approximately half of the guests on cancelled cruises requested cash refunds. The company also said that despite substantially reduced marketing and selling spend, it continues to see new 2021 bookings.

During the first three weeks in June, almost 60% of 2021 bookings were new bookings, Carnival said, with the remaining booking volumes from guests applying FCCs to specific future cruises.

Advanced 2021 bookings are currently within historical ranges at prices that are down in the low- to the mid-single-digits range, which included the negative yield impact of FCCs and onboard credits applied.

Carnival said the majority of its customer deposits of $2.6 billion are in FCCs, and $121 million in third-quarter sailings and $353 million in fourth-quarter sailings.

August cruise resumption played down by Carnival Corporation chief

August cruise resumption played down by Carnival Corporation chief

Hopes of an August 1 restart of Carnival Cruise Line sailings have been played down by the boss of the company’s parent company.

Carnival Corporation president and chief executive Arnold Donald described the fallout from Covid-19 as “devastating”.

Ships would only sail when “it will be no greater risk, or even lower risk, than other forms of social gathering”.

Carnival Cruise Line announced a month ago plans to resume services from three US ports from the beginning of August at a time when other operations were being cancelled.

But Donald told The Telegraph that the August 1 date should not be taken as concrete as the situation is “constantly evolving and changing”.

He said: “Those we didn’t cancel [was] in hope that we would be able to cruise at that time and the ships would be positioned properly to honour the cruise, so on and so forth.

“We’re not trying to predict when we’ll open up but we’re hopeful that we’ll be able to. But it’s obviously dependent on what’s in the best interest of public health, not about the cruise but about broad social gathering… if people are in restaurants, hotels, airport terminals and subway stations, if a social gathering is happening, then it’s a condition for the cruise.

“But if we’re still in a state of highly constrained social gathering then it’s not the right situation. So we’ll see where society is at that point.

“We’re aware that people are anxious to get their economies going again, people are definitely anxious to cruise.

“We continue to get bookings and so on. So we’re anxious to go, too. But we only want to do it when the time is right so I think that there is a broader societal metric that we have to look at – we can’t just look wholly at cruise.”

His comments follow UK brand P&O Cruises further cancelling sailings until mid-October.

Donald added: “Our highest responsibility and our top priorities are, and they remain, compliance, environmental protection and the health and safety and wellbeing of our guests, our crew and the people and the places we go,” he said.

“So I want people to know that we will do everything to make certain that they are not taking a far greater risk by being on a cruise than other forms of social gathering – we don’t want that, we’re not going to let that happen. It will be no greater risk or even lower risk than other forms of social gathering.”

Looking forward, he said: “I don’t think there will be any issue filling the ships initially because the reality is that there’s not going to be that many ships and that many itineraries, [and] there will be plenty of people wanting to cruise.

“Over time, we’re going to eventually need to get back to where we were which was attracting people who haven’t cruised before.

“That job has been made, short-term, more difficult because people who haven’t cruised are hearing lots of stories and read stuff in the news, and now in their mind, they have another reason not to cruise.

“We’re going to have to, over time, chip away at whatever myth they happen to hold about a cruise, and help them see that that’s not the case.”

Carnival chief Arnold Donald reveals the personal impact of racism

Carnival chief Arnold Donald reveals the personal impact of racism

Carnival Corporation chief Arnold Donald has added his voice to the Black Lives Matter movement following the death of George Floyd in Minneapolis.

He revealed his own experiences of racism while growing up in the segregated South of the US.

Writing to employees of the world’s largest cruise company, Donald said: “I have been hesitant to join in with the many executives who have issued communique knowing that any words are far too inadequate in the face of the events that have occurred in the US over the past several days.

“We have painfully witnessed the tragic deaths of George Floyd, Ahmaud Arbery, Breonna Taylor, and others, followed by frustrated, passionate protestors exercising their rights of freedom of speech, unfortunately, followed by vandalism and looting perpetrated by a few – all in the context of a higher than normal level of pent up tension and anxiety exacerbated by the global pandemic, stay at home, shelter in place, loss of jobs and income, and an uncertain future.

“Clearly these are not the best of times.”

He added: “So what can we do? And I ask what can I do? Not just words but actions that, in my own small way, help us to a brighter day? Racism is real. Not just here in the US but around the world.

“Injustice and brutality are real. They’ve been with us forever despite many efforts to eradicate both.”

Donald revealed that be witnessed and suffered injustices while growing up.

He said: “I have a family member with Bipolar Disorder and at times when elevated, can come across as belligerent, at perennial risk as a young black adult of finding himself in a bad situation that could lead to severe or even fatal consequences.

“And I have family members who are in law enforcement and put their lives on the line every day. I’m certain that many of you have similar circumstances.

“I make certain that my bipolar family member is introduced to the law enforcement officers in the communities that he is in. I make certain that they see him as a human being, as a complete person, albeit one with the unique challenge of suffering from bipolar disorder.

“I make certain that I remind my law enforcement family members to remember their purpose and their training – all of their training. And of course, out of love and concern for them, I hope they don’t hesitate when they face a truly threatening situation.”

Donald added: “In the hope of catalysing even the smallest of change, I share with my neighbours and my professional colleagues the incidents of racial profiling and biased accusations that my family members and I have experienced on far too many occasions.

“And through the greatest platform that I have available to me to effect change, as CEO of this corporation, I want to provide the support and the motivation for us to build on our foundation of being the greatest travel and leisure company in the world, bringing millions of people together every year of all nationalities, ethnicities, backgrounds and experiences so they can joyfully discover what they have in common and learn to celebrate their differences, rather than fear them – while at the same time providing an economic multiplier that contributes to a higher quality of life through the power of inclusion.”

He concluded: ”Despite these times, and despite what seems to be far too tedious and far too slow progress, collectively we are capable of powerful change for the better and I have no doubt that if we double down on our efforts and stay the course, together we will create a brighter future.

“The only way through is forward.”

Carnival Corporation to ‘fully co-operate’ with a congressional inquiry

Carnival Corporation to ‘fully co-operate’ with a congressional inquiry

Carnival Corporation has said it will fully co-operate with the US House Committee on Transportation and Infrastructure after it opened an inquiry into the company’s handling of the coronavirus crisis.

Bloomberg reported on Friday that letters had been sent to Carnival chief executive Arnold Donald, the US Coast Guard and the Centers for Disease Control and Prevention asking for internal documents and correspondence relating to outbreaks onboard its ships.

The letter asked Carnival to clarify its plan for improvement in the areas of public health and passenger safety which it said: “has not been seen up to this point”.

It also said the cruise giant appeared to be “still trying to sell this cruise line fantasy and ignoring the public health threat”.

A statement from Carnival said it was reviewing the letter and would fully co-operate with the committee.

The statement said: “Our goal is the same as the committee’s goal, to protect the health, safety and well-being of our guests and crew, along with compliance and environmental protection.”

In a call with journalists on April 16, Donald refuted suggestions the cruise industry was slow to react to the outbreak of coronavirus.

And he argued that cruise was one of the best-placed sectors of travel to cope with anticipated stricter health and safety protocols in the future.

He said: “The cruise industry put a pause on the cruise before anybody else did. Before hotels or restaurants and other places of social gathering.

“Cruise ships are not the cause. Neither are they the reason for the spread.”

Carnival Corp ‘still excited’ about Iona despite launch delay

Carnival Corp ‘still excited’ about Iona despite launch delay

Carnival Corporation is “still excited” about new P&O Cruises ship Iona, despite its launch being delayed by the coronavirus crisis. The cruise giant also confirmed it was engaged in conversations with shipyards about potential delays and cancellations.

Chief executive Arnold Donald said: “This virus has been devastating for the travel and tourism industry. Most of the newbuild timelines will be delayed. Most of the yards are closed or don’t have workers.

“Beyond that, we are working with the yards to look at schedules and decide should any of the ships be cancelled or pushed out further.”

Commenting on Iona, which was due to enter service in May but has been delayed due to the lockdown, Donald said: “We need to make sure the ship gets finished. But we are still excited about her and the level of bookings that she had.

“Iona will be finished and at some point, when the world is ready, she will be sailing. We don’t know exactly when, but over time we will have a great cruise industry again. We are going to have to build it back.”

Carnival Corp boss denies sector was slow to react to coronavirus

Carnival Corp boss denies sector was slow to react to coronavirus

Carnival Corporation boss Arnold Donald has refuted suggestions the cruise industry was “slow” to react to the outbreak of coronavirus.

He argued that cruise is actually one of the best-placed sectors of travel to cope with anticipated stricter health and safety protocols in the future.

The chief executive of the nine-brand cruising giant said: “The cruise industry put a pause on the cruise before anybody else did. Before hotels or restaurants and other places of social gathering.

“Cruise ships are not the cause. Neither are they the reason for the spread.”

Commenting on the outbreak onboard Diamond Princess which was held in quarantine off Yokohama by Japanese authorities, Donald said: “This was an evolving situation. There was very little knowledge early on, in February and early March.

“But we did exactly what we were told to do. We co-operated fully with the Japanese Ministry of Health. They decided to hold the ship and put a quarantine in place, so we complied with that and at the same time, we tried to make it as comfortable as possible for our passengers and crew.”

And he added: “If you listen to our guests on Diamond or Grand Princess, you’ll hear lots of plaudits for our crew and our corporation. Our guests feel strongly that we did our best.”

Asked if he blamed authorities of the destinations and ports that wouldn’t allow ships with confirmed cased of Covid-19 to disembark passengers, Donald said: “I won’t sit and judge anybody at the moment. We all need to focus on helping.

“There were certain situations where we had ships with people on board that needed medical attention – not even Covid-19 related – that couldn’t get it in a timely manner they would have normally. That was unfortunate. There’s no question that happened and we tried to give assistance where we could. But I will not judge.”

Donald concluded: “So people say we were slow, but we were first [to suspend operations] – before all the other social gathering venues.”

And he added that cruise was well-placed for the future when stricter health and safety protocols are expected to be introduced across the travel industry.

“I don’t think there’s anything unique to this that particularly ascribable to cruise alone. In fact, in many ways, a cruise is better set up to handle this than society in general,” said Donald.

“We already do isolation, deep cleaning, hold medical records, do temperature scanning, use hand sanitizers and promote regular hand-washing. We also document a lot of passenger information. So we’re uniquely suited in some ways.

“Airport terminals? Not so much. Subways? Not so much. Hotels? Restaurants? Not so much,” he said.

But he added: “Covid-19 has its own epidemiology. Whatever the medical experts deem is necessary to deal with it in the future, we will cooperate and implement.”