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Our pricing survey shows a mixed picture

Wave Season has officially begun and there seems to be much optimism in 2013, particularly on a stronger pricing recovery in Europe.  While we’re seeing solid gains in Costa and the premium brands—Celebrity, Azamara, and Princess—in European pricing, the mass brands are discounting pretty heavily.  Investor optimism may go partially unfulfilled. 

Our proprietary pricing database tracks over 12,000 itineraries across six major geographic regions.  We analyze YoY trends as well as relative trends, determined by pricing relative to those seen near the last earnings date for a cruise operator.  Here are some highlights we’re seeing:

RCL

Caribbean:  Overall, the trend is improving in the 1st month of Wave Season.  F1Q 2013 will be down YoY due to strong Caribbean performance in F1Q 2012. Celebrity (premium) pricing is outperforming RC (mass) by a wide margin. 

Europe:  Europe just cannot get a firm footing on pricing. The relatively stronger Celebrity and Azamara brands are offsetting substantially weaker RC pricing.  The RC brand represents roughly 50% of RCL's European capacity in F2Q and F3Q.

Alaska:  With the Celebrity brand holding twice as much capacity as the RC brand, it is discouraging to see prices move significantly lower.  We estimate 2013 Alaska overall capacity to be unchanged from 2012 capacity.

Asia:  Solid pricing  

2013 EARLY WAVE SEASON PRICING - rcl234

CCL

Caribbean:  Not much movement in trend in January.  Similar to RCL, F1Q 2013 will be tough for CCL.  We’re seeing moderately higher pricing in the latter half of 2013.

Europe:  As expected, Costa is doing well, particularly in 2H 2013.  We’re seeing price increases of +20-30%.  Princess is also seeing nicely higher YoY price gains.  Cunard pricing continues to lag, a carryover from 2012.  However, while YoY pricing remains healthy, the overall price momentum since last Q has been decelerating, which doesn’t bode well for Wave Season.

Mexico:  Pricing has been pretty healthy.

Alaska:  Holland and Princess pricing has been trending lower in F3Q.  CCL guided to 24% of its capacity in Alaska in F3Q.

Asia/South America:  There is some pressure in the Asia/Australia itineraries in F2Q.  South America has held up relatively well. 

2013 EARLY WAVE SEASON PRICING - ccl345