Puerto Vallarta On Track For Another Strong Year

Puerto Vallarta On Track For Another Strong Year

Fantastic photo of Puerto Vallarta.

The Puerto Vallarta Tourism Board announced that the city has reported an increase of over 6% in hotel occupancy for the first 6 months of the year, with an average occupancy rate for January to June of close to 90% compared to 73% in 2016 and 70% in 2015.

Similarly, the Puerto Vallarta International Airport (PVR) handled 1,843,600 international passenger arrivals, in the first half of the year, 12.1% more than the same period in 2016. In addition, 189,324 passengers visited the destination while on cruise calls to the Puerto Vallarta Cruise Port, a 2% increase compared to 2016.

The Puerto Vallarta Tourism Board credits the success of its consistent and proactive promotional and communication campaign in its primary markets including as Mexico, the US and Canada as well as emerging markets in South America and Europe for the continued increase in visitor arrivals. In addition, the tourism board’s strategic PR efforts targeting specific niche markets have played a role.

Puerto Vallarta is home to the most hotels with Diamond Awards in Mexico and is also described as Mexico’s leading culinary beach destination, with more than 350 restaurants.

Carnival Boosting Fleet Capacity

Regal Princess

The world’s largest cruise ship operator Carnival Corporation & plc  said it would increase fleet capacity by nearly 10 percent from 2014 through 2016, fueled largely by the addition of four new ships across four brands in less than 18 months.

This week, Carnival Corporation is christening two new ships in the span of three days as its Princess and Costa brands host official naming ceremonies for Regal Princess and Costa Diadema, the latest new vessels to join the company’s  fleet of more than 100 ships across nine cruise brands.

Additionally, in 2015, the company’s P&O Cruises UK and AIDA brands will each debut a new ship, giving Carnival Corporation a total of four new ship additions by October of next year.

In addition, Carnival Corporation continues to expand its upgrades and refurbishments to existing ships. In 2015, the company plans upgrades or refurbishments on 17 ships across six of its brands.

The 2015 refurbishment plans include two former Holland America Line ships transferred to P&O Cruises Australia that will undergo complete refurbishment before sailing as Pacific Aria and Pacific Eden starting in November 2015.

The renovated ships will be tailored for Australian and New Zealand passengers.

Carnival Corporation’s four new fleet additions in 18 months are part of the company’s plan to introduce nine new ships across seven of its brands between 2014 and 2017.

AIDA, Carnival Cruise Lines, Costa Cruises, Holland America Line, P&O Cruises UK, Princess Cruises and Seabourn are all expected to debut new cruise ships between now and the early part of 2017.

In 2016, Carnival Cruise Lines will debut Carnival Vista, a 133,500-ton ship that will be the largest ever in its fleet — with the ship being unveiled in a sneak preview in New York in January 2015.

Holland America Line will launch its newest ship, the 99,500-ton ms Koningsdam, a new Pinnacle Class ship that can carry 2,650 passengers.

Also in 2016, AIDA will introduce a new sister ship to the 2015 AIDAprima with capacity for 3,250 passengers, while Seabourn will unveil its newest luxury ship, expected to be the biggest ever built by the brand with the ability to serve 604 passengers.

Looking forward to 2017, Princess Cruises is working with Italian shipbuilder Fincantieri to build a 143,000-ton vessel featuring the highly popular design elements introduced by the brand’s two newest ships, and sisters, the Royal Princess and sisters, the Royal Princess and Regal Princess.

CLIA: Capacity up in developing markets

By Tom Stieghorst

CLIA’s annual report on the economic contribution of the cruise industry highlights growth in less developed cruise territories, including Asia, the Australia/Pacific region and South America.

The report said these three areas recorded 20% capacity growth in 2013 and accounted for more than half the global increase in available bed days. Europe’s capacity growth slowed from 18% in 2011 to 3.5% last year.

CLIA said the number of passengers carried in 2013 by its member lines rose 3.9%, to 17.6 million (river cruises are not included in the tally).

Bed days increased 4.8% because the average cruise was longer and capacity was higher, CLIA said.

Passenger embarkations at U.S. ports fell 1.3%, to nearly 10 million, the first time in at least four years that happened. CLIA attributed the decline primarily to redeployments to markets more distant from the U.S.

Direct spending by cruise lines, passengers and crew in the U.S. crossed the $20 billion threshold, rising 2.4% to $20.1 billion in 2013. More than 80% of that was for wages, taxes, and goods and services. Passengers and crew accounted for $3.63 billion in spending.

CLIA member cruise lines in North America showed a net increase of one ship in 2013, to 178, with a combined capacity of 338,505 berths, the study said.

Australian cruisers increased 20% in 2013

By Tom Stieghorst

The number of Australians who cruised in 2013 rose 20%, outpacing every other sizable cruise market, CLIA Australasia said in a report.

Australia’s growth surpassed Germany (9%), France (9%), North America (3%) and the U.K./Ireland (1%), according to the report’s executive summary.

Last year, 833,348 Australians cruised, up from 694,062 in 2012.

More than 11.7 million passengers from the United States and Canada cruised last year, according to CLIA. But Australia’s growth means that 3.7% of its total population has been on a cruise, exceeding the 3.3% figure for North America.

CLIA Australasia projected it will reach the 1 million passenger threshold by 2016; a previous forecast targeted 2020. 

Carnival and Costa see improvement in Q1

By Jerry Limone

Carnival Cruise Lines and Costa Cruises are doing better, according to Carnival Corp.’s first-quarter financial report this week (see bottom of report), but the company’s largest brands in the U.S. and Europe still have a steep hill to climb.

How steep? CFO David Bernstein said that based on the guidance of Carnival Corp.’s competitors, those companies are at or near 2008 levels for net revenue yield, a key cruise industry metric similar to revenue per available room (RevPAR) in the hotel industry.

Conversely, Carnival Corp.’s yield is down about 11% from 2008, Bernstein said.

Delving further, Bernstein said the company took a 10% hit from the global financial crisis of 2009, gained about half of that back by 2011, but lost those gains after the Costa Concordia accident in 2012 and the much-publicized stranding of the Carnival Triumph in 2013.

“Hopefully, as our brands recover, both Carnival Cruise Lines and Costa, we can recoup, getting back to 2008 yields,” Bernstein said. “Hotel RevPARs are also back to those levels, so we have every reason to believe we can get back there, as well.”

There were good signs from Costa and Carnival in Carnival Corp.’s first quarter, the three months ended on Feb. 28. Costa’s yield was up, Carnival Corp. CEO Arnold Donald said, aided by a 50% increase in booking volume.

However, Costa’s gain was more than offset by a yield decrease for the company’s other European brands, which struggled largely due to a stagnant economy in Europe. Carnival Corp. said that net ticket yield fell 3% for all European cruise lines.

Carnival, too, had strong booking volume. Donald referenced the brand’s single-month record for bookings in January, when 565,000 people reserved space on a Carnival cruise. Attractive promotions and increased advertising spending helped make that happen.
Donald said the company will spend $600 million on advertising in 2014, a 20% increase over 2012. He said Carnival’s TV ads during the Sochi Winter Olympics and Princess’ first TV ad campaign in 10 years were vehicles to attract first-time cruisers.

But because of discounting, particularly in the Caribbean where most of Carnival Cruise Lines’ ships operate, Carnival Corp.’s yield fell 2.1% in Q1. The company forecasts that yield will fall 3% to 4% in Q2, compared with a year earlier.

The improved performance of Carnival and Costa “builds confidence that we are tracking to turn the corner beginning in the second half of 2014,” Donald said.

But until that corner is turned, discounting will continue. Donald said that increased capacity in the Caribbean industrywide puts pressure on pricing.

The company is “behind on both price and occupancy” in the Caribbean, Bernstein said, despite the Carnival brand’s record-breaking January.

The North America brands are best performing in Europe for their seasonal program, where they are “well ahead on price and occupancy,” Bernstein said.

Carnival Corp. beats expectations, reports Q1 loss

By Jerry Limone

Carnival Corp. said Tuesday that the company had a $15 million net loss for its fiscal first quarter, the three months ended Feb. 28.

The results beat the company's December guidance, thanks to ticket prices that were better than expected.

The loss compares with a $37 million net profit in the previous year’s first quarter.

Revenue was essentially flat at $3.59 billion. Carnival Corp.’s net revenue yield, a key metric for cruise companies that measures revenue generated per unit of available accommodations, fell 2.1%.

At the same time, operating expenses rose 1.9%, to $3.51 billion, driven by increased spending on advertising. Fuel prices declined 3.4%, to $654 per metric ton.

CEO Arnold Donald said first-quarter results exceeded the company’s December guidance because ticket prices were higher than expected for Carnival Cruise Lines and the company’s European cruise brands, and due to the timing of certain expenses.

Looking ahead to the second quarter, Carnival Corp. expects that net revenue yield will fall 3% to 4% compared with the prior year.

The company also anticipates an increase in net cruise costs per available lower berth day (excluding fuel) of up to 3.5% because of higher selling and administrative costs.

Port Canaveral aims big with new terminal size

By Tom Stieghorst

Port Canaveral, already one of the powerhouse cruise ports worldwide, recently said it will be adding a new terminal in the next year capable of handling “the largest cruise ships currently sailing, as well as the 6,000-passenger vessels in design.”

That phrase brought to mind the only ships capable of carrying 6,000 passengers: The Oasis-class vessels of Royal Caribbean International.

The pair make their home at Port Everglades, about 175 miles to the south. But a third copy is being built for delivery in 2016. Could one of the trio make its home at Port Canaveral?

Richard Fain, chairman and CEO of parent company Royal Caribbean Cruises Ltd.,  isn’t tipping his hand quite yet. He says too much can be made of the “6,000-passenger reference.” 

At a recent dinner aboard the Vision of the Seas, Fain said the same reference was made when the new Kai Tak passenger terminal was opened in Hong Kong harbor last year.

”Oasis has sort of become the standard when they say they’re capable of dealing with the largest ships being built,” Fain said. “So you shouldn’t read too much into that.”

The 185,000 square foot terminal at Port Canaveral will be the first modern one on the south side of the port’s ship channel. It will be adjacent to the port’s newly opened Exploration Tower, as well as the shops and restaurants on that side of the port.

“Cruise visitors will be able to walk outside the terminal to enjoy port destination options or depart from the terminal and Exploration Tower to enjoy area excursions,” said John Walsh, the port's director.

Announcements regarding tenants for the new $85 million terminal, which comes with its own 1,000-space parking garage, are expected soon, Walsh added.
 

There is another possibility, or two.  One is that the new terminal could be for Anthem of the Seas, the sister ship to Quantum of the Seas, and a class somewhat smaller than Oasis. Royal is expected to announce the home port and itineraries for the Anthem as soon as this week. 

Although speculation currently centers on Southampton, England, the Canaveral terminal is slated to open next November, in time for the spring 2015 debut of the Anthem.

Also, Disney Cruise Line is putting three of its four ships in Port Canaveral to start 2015. Disney already has a dedicated terminal at Port Canaveral, but with the Magic Kingdom only an hour away, Disney has unique needs in central Florida. Carnival Cruise Lines is also at Port Canaveral with several ships.

One way or another, Port Canaveral is on the march. It should be interesting to watch where it is going.

Royal Caribbean planning announcement on November 21

Primary tabs

Royal Caribbean UK is teasing the event with the phrase, "A date that'll be music to your ears", which seems to play on the ship's name of Anthem.

The special event will be held in London at 4:30pm local time.

There's been speculation for months that Anthem of the Seas will be based in the UK, with a cruise port schedule site tipping many off earlier this year.  Royal Caribbean has been quiet on details for Anthem of the Seas beyond it had its first steel cutting back in August.

Anthem of the Seas will be the second Quantum-class ship behind sister ship Quantum of the Seas.  She is expected to debut in the spring of 2015.