CCL: SURVEY SAYS?

Weaker close-in bookings troubling

 

 

Since CCL gave guidance in late June, we haven't seen much improvement overall in 2014 pricing.  More troubling, however, is that pricing is dropping considerably for close-in bookings for Q4 2013.  Most of Q4 is already on the books so we're not so much worried about Q4 yields and earnings.  What troubles us is that weak last minute pricing could be indicative of soft demand carrying into the 2014 Wave season.  The Street is expecting Carnival to post 3.0% net yield growth (constant-currency) in 2014.  While pricing that laps Triumph will have easier comps, consensus estimates could prove aggressive. 

 

Here are some observations from our proprietary pricing survey of >12,000 itineraries.  We analyze YoY trends, as well as relative trends, which are determined by pricing compared to the last earnings/guidance date for a cruise operator i.e. CCL: 6/25

 

Caribbean

  • Close-in pricing for end of 2013 continue to worsen, relative to July's.  FQ1 2014 pricing also has deteriorated further. However, FQ2 2014 pricing has reversed course to being flat - with pricing trend unchanged.

Europe

  • Europe continues to be in status quo mode – slow and steady
    • Costa’s close-in FQ4 pricing, while slightly lower sequentially, continues to be robust YoY; early 2014 Costa pricing trend is slightly higher.
    • Cunard and Princess FQ4 pricing slipped a little relative to July but is still nicely higher YoY
    • AIDA’s FQ4 saw some discounting everywhere except Western Med in August. FY2014 pricing is relatively unchanged.

Mexico/South America/Asia  

  • Pricing is little changed relative to July
    • Mexico’s FQ4 2013 pricing for Carnival remains weak but FQ1 2014 pricing is somewhat higher YoY, led by Carnival Inspiration
    • Costa's Asia pricing continues to maintain high double digit growth

 CCL: SURVEY SAYS? - ccl2


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