Since early January, pricing for close-in bookings has stabilized year over year but both companies stepped up discounting to fill second and third quarter sailings in Europe and Alaska, according to the brokerage's latest bookings survey.
Wachovia analyst Tim Conder said Q2 and Q3 'continue to be very challenging,' and it appears that lines are now 'aggressively' moving to fill remaining capacity 'after attempting to hold pricing as long as possible.'
He added that the price/value relationship for sailings more than 60 days out 'could be beginning to approach levels that should allow pricing to stabilize in the current economic environment.'
Wachovia's survey tracks three brands: Carnival Cruise Lines, Royal Caribbean International and Celebrity Cruises.
For those, Caribbean pricing continues to show the most general resilience, according to the survey's findings, with rates down high single digits for cruises of seven days and longer and down 8% to 12% for cruises under seven days.
European pricing is down low double digits for US-sourced sailings, and 'likely down' mid/high single digits for European-sourced business (local currency), Wachovia said. (The Carnival brand has just a few sailings in Europe this year, so the survey reflects mainly RCI/Celebrity.)
Alaska appears especially weak, Wachovia said, with pricing down 35% to 40% for the Carnival brand (one ship) and down 20% to 30% for RCI/Celebrity (six ships), hitting new lows in February.
Wachovia reduced its 2009/2010 earnings per share estimates for Carnival to $2.25/$1.98 from $2.53/$2.27 and for Royal Caribbean to $1.41/$1.11 from $1.47/$1.19 to reflect pricing erosion, relatively stable fuel costs and modest strengthening of the US dollar.