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UBS: Pricing ticks up, though brand performance variesUBS: Pricing ticks up, though brand performance varies

UBS Investment Research found another 30-basis-point sequential uptick in cruise pricing last week which analyst Robin Farley said could suggest the Costa Concordia impact may not be as negative as originally feared.

Anne Kalosh, Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

January 31, 2012

2 Min Read
Credit: Seatrade Cruise News

Ticket prices since the start of the year have continued to strengthen the most for Celebrity, Holland America and Royal Caribbean, with Carnival brand pricing down slightly this week though still flattish since the start of the year, according to the UBS Cruise Tracker, which follows more than 7,000 sailings. Cunard pricing is currently about 1% down since Jan. 1.

UBS data indicate Costa pricing could be flattish since the start of the year but the brokerage cautioned pricing may not yet reflect volume changes since the Concordia accident.

Price changes are lagging indicators of volume changes, and it’s likely that cruise lines would not discount prices immediately after the accident because the immediate decline would be expected to be temporary, Farley told investors in a note.

The slight upticks for some brands are encouraging, she added.

In a filing on Monday, Carnival indicated a mid-teens decline in booking volumes for brands excluding Costa in the first 10 days after the accident, with the decline bottoming out on Jan. 16.

In a price survey separate from its Cruise Tracker, UBS found Caribbean fares have been moderately up for the last month, with another uptick last week. Alaska pricing is also moderately up since the start of the year, with an uptick last week. UBS said its checks indicate Mediterranean pricing is unchanged since November’s downward pricing adjustment.

Looking to Royal Caribbean’s fourth quarter earnings report on Thursday, UBS said the three weeks of booking activity since the Costa Concordia incident could give some incremental visibility on sales volumes.

‘While we note that booking volumes could be somewhat negatively impacted in the initial period after the Concordia accident, a positive trend in volume recovery since the initial declines would be a positive indicator,’ Farley said.

Though Royal Caribbean has historically provided full year guidance in its Q4 calls, UBS told investors it would ‘not be surprised to hear a conservative initial expectation on Thursday, with management perhaps suggesting positive yields for 2012 but not quantifying the magnitude until a later date.’

About the Author

Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

Anne Kalosh covers global stories, reporting both breaking and in-depth news on cruising's significant people, places, ships and trends. A sought-after expert on cruising, she has moderated conferences around the world, including the high-profile State of the Industry panel at Seatrade Cruise Global. She created and led the acclaimed itinerary-planning case study for Seatrade's cruise master classes held at Cambridge and Oxford universities. She has been the cruise columnist for AFAR.com, and her freelance stories have appeared in a wide range of publications, from The New York Times to The Miami Herald.

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