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Concordia hurts sales but Royal Caribbean bookings, rates still aheadConcordia hurts sales but Royal Caribbean bookings, rates still ahead

Costa Concordia has hurt new bookings but thanks to ‘a very robust starting position’ before the incident, Royal Caribbean’s booked load factors and pricing are still higher than at the same time a year ago, the company said today.

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

February 2, 2012

2 Min Read
Credit: Seatrade Cruise News

Royal Caribbean finished 2011 on a better than expected note and was off to ‘an excellent start’ with wave season before Costa Concordia disrupted new booking activity.

During the two weeks prior to the tragedy, bookings averaged 5% more than the same period last year and at higher prices. Booked load factors and pricing were ahead of the same time last year in all four quarters.

Royal Caribbean said there has been no material change in cancellations as a result of Concordia, but overall booking volumes from North America have fallen by low to mid-teen percentages versus same time last year for the last few weeks. In Europe, the decline has been higher, though results vary significantly by country. In aggregate other markets, including Asia/Pacific and Latin America, are down slightly.

‘For the year as a whole, notwithstanding the recent slowdown, booked load factors and pricing are still higher than they were at the same time last year. This reflects the very robust starting position the company was in before the incident,’ Royal Caribbean said.

The impact on bookings has been greatest in the first three quarters and wanes as the year progresses, however the first quarter was already more booked, making it less affected. Spring and summer sailings are showing the largest declines in new bookings, Royal Caribbean said, adding that longer-term bookings remain healthy.

Already, bookings have started to recover, particularly in North America, the company said. No significant long-term impact from Costa Concordia is expected.

Despite headwinds from economic challenges, sovereign debt issues in Europe and geopolitical uncertainties, Royal Caribbean was 'heading into a powerful 2012. The tragic events in Italy were a blow, but only for the short-term,' Royal Caribbean chairman and ceo Richard Fain said in opening today's earnings call with analysts.

The company turned in a fourth quarter profit of $36.6m, or 17 cents per share, versus $31.9m, 15 cents per share, in Q4 2010. Revenues improved to $1.8bn, up from $1.6bn.

Royal Caribbean’s 2011 profit was $607.4m, or $2.77 per share, up from $515.7m, or $2.37 per share, in 2010. Revenues improved to $7.5bn for the full year, compared to $6.8bn in 2010, as a result of capacity increases and yield improvements.

The company projects 2012 EPS in a range of $1.90 to $2.30, and first quarter EPS in a range of 10 cents to 20 cents, under the consensus forecasts of $2.94 for the year and 25 cents per share for Q1.

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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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