The slow road to recovery



The cruise industry remains on the road to recovery from all the freak incidents this year.  And their not exactly driving in the fast lane.  As CCL CEO Micky Arison reported yesterday in their annual shareholder meeting, March bookings ex Costa were up 3% in the five weeks to April 1 but pricing dropped 5% in the same period.  Meanwhile, Costa bookings in Europe were down "not as deeply" in the past few weeks as the face-ripping 75-80% drop after the Concordia incident.  Costa European pricing was still down by double-digits in the five-week period.    


Our March cruise pricing matrix below confirms these trends as cruise pricing continues to slack in 2012. 


Pricing Trends

  • Watch out for a double-whammy this summer.  While the Street continues to focus on lower prices in Europe, we are concerned of further pricing weakness in Alaska.  Alaska will have a particularly tough year given difficult comps.  Early April data shows deterioration in pricing for Alaska summer itineraries, which will hurt CCL more than RCL as CCL is more exposed to the region.  
  • The consumer wins.  Remember when Carnival CEO Arison said during the March conference call that consumers should quit waiting for lower prices in the Mediterranean?  Well, Costa finally relented on its fixed pricing and slashed prices 20-40% across the fleet.  RCL’s European fleet followed suit with +30% cuts across most of its ships.
  • Luxury continues to struggle.  Celebrity and Princess haven’t stopped dropping prices. Princess has been more aggressive in its pricing strategy.
  • Any good news? CCL’s Caribbean FQ2 bookings were solid.  South America/South Pacific FQ4 pricing was strong for RCL, which is a good sign since that region has the biggest presence during that quarter.




+/-           1-5%

++/--      5-10%

+++/---    >10%


(Prices are tracked relative to those on most recent company guidance)









Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more