The 30 Carnival Corp. ships currently in US waters and one en route (Mardi Gras) are working toward permission to sail stateside in 2021, with the rest of the fleet to operate elsewhere, CFO David Bernstein said during Monday's business update.
Committed to US approval process
'We want the freedom to be able to sail anywhere,' President and CEO Arnold Donald said, underscoring the commitment to the US approval process.
Timing of the test cruises is a 'work in process,' as he put it. Beyond the first phase of the US Centers for Disease Control and Prevention's Framework for Conditional Sailing — crew testing and establishing capacity for future passenger testing — CDC still has not issued additional technical guidelines for further phases.
However, Donald said Carnival is 'on track to be able to do whatever we need to do in a very timely manner' to be able to resume cruising.
He didn't see the change in the US administration as impacting the conversation with CDC. (President Elect Joe Biden has appointed a new CDC director.)
An aggressive target?
'We are working toward having all of our ships back in service by the end of the year,' Donald told analysts. When Stifel's Steven Wieczynski suggested that may seem 'aggressive to some,' the Carnival chief restated: 'We hope to have all our ships operational in 2021.'
The development of low-cost testing, the continued advent of therapies and the pace of the distribution of vaccines will influence the pace of recovery, he added.
There's been 'no dramatic change' in bookings since vaccines were approved, and Donald doesn't see any brands positioned better than others as far as vaccines go.
As for requiring crew, passengers or both to be vaccinated, he indicated it's too early to say. Carnival is monitoring the vaccine development and in dialogue with CDC and other bodies around the world, but vaccine distribution remains an issue. 'So we'll make a determination as things evolve,' he said.
At Dec. 20, cumulative advance bookings for the second half of 2021 are within the historical range, while bookings for the first half of 2022 are ahead of a 'very strong' 2019. Directionally, comparable pricing for the second half of 2021 and early 2022 is down 1% versus 2019, a 'high-water mark' for pricing.
However, Bernstein noted it's hard to compare apples to apples, since more bundled packages are now being sold and the benefit of part of that pricing will flow into the on-board revenue column.
60% of Q4 bookings were new cash
Sixty percent of bookings taken in the fourth quarter of 2020 for fiscal 2021 cruises were new bookings, with the remainder made using future cruise credits, a five-point improvement over Q3.
Plus, more than 45% of the 2021 bookings are from customers new to brand, versus 55% from brand loyalists, a figure Bernstein said is just a little higher than the norm.
'We haven't experienced any demand challenge'
'We haven't experienced any demand challenge,' Donald said, adding that 'Overall, demand is robust.' With the exception of Costa Asia, which books much closer in than other brands, there's not a major difference in demand across brands.
Bernstein said there's good demand for itineraries in the Caribbean, Europe and Australia and for world cruises and described demand as 'broad-based and across all the brands.'