Here are some trends we are seeing from our pricing database at the end of September.
Given CCL’s Q4 guide down, analysts are expecting RCL to do the same. Q4 EPS estimates have been lowered from $0.28 to $0.23 after CCL’s conference call. We're keeping our Q4 estimate at $0.22 as we're seeing more weakness in North America pricing. Like CCL, RCL management will probably continue to bash Europe for all their problems but Europe only accounts for a small portion of RCL’s itineraries in Q4. However, Q1 2012 outlook looks pretty healthy, particularly in South America.
The good: Strong prices for close-in Caribbean bookings may give them a small boost for Q4.
The bad: Tough start to 1Q 2012 as Costa continues to cut prices sharply for its European itineraries and Mexico/South America itineraries struggle to maintain prices.
Tables and commentary
(We follow pricing trends relative to prices on the most recent earnings date)
Key: +/- 1-5%
Q4 2011 trends:
- Over the last month, there were substantial price cuts across the fleet particularly with Freedom of the Sea and Serenade of the Seas. In addition, pricing for Celebrity Millennium and Celebrity Silhouette remain weak.
- Pricing continues to improve on a fleetwide basis
- Legend of the Seas pricing has deteriorated significantly. But we think this has more to do marketing for close-in bookings as volume has improved in the past month.
- South America
- RCL brand outperforming Celebrity by a mile on pricing
- Pricing has surged since August
- Slightly weaker performance from Cunard and Costa
- Weaker across the board
Q1 2012 trends:
- Pricing remains steady as Oasis of the Seas and Allure of the Seas maintain pricing power
- No change from the few itineraries
- Stronger Legend of the Seas pricing
- South America
- RCL brand pricing remains very strong
- No change
- Not a good sign as Costa has sharply cut prices
- Mexico/South America
- A little weaker than a month ago