RCL “YOUTUBE”

While we don’t have a specific stock call on RCL into tomorrow’s earnings, we thought we’d “Youtube” RCL’s commentary last quarter and CCL’s commentary from their earnings call last month.

RCL Q3 “YOUTUBE”

  • “The booking environment remains fairly consistent and relatively stable.”
  • “We are also seeing more pronounced seasonality than is the norm and we are giving the upside that we enjoyed in the third quarter back in the fourth.”
  • “The recent news have been full of reports that the economy is rebounding or is about to be rebounding but we have not seen any evidence of that in our bookings to date.”
  • “We have seen some early signs of a possibly expanding booking curve but it is still quite contracted by normal standards. We also have several new products in emerging markets and since these products tend to be shorter in duration and closer to the guest’s home, they also tend to have a closer in booking pattern.”
  • “Looking out to the summer of 2010, we are encouraged by the early peak season demand. On the other hand, we continue to see slow demand for Mexican Riviera cruises and demand out of Spain and the State of Florida is weaker due to their more difficult economies.”
  • “For the fourth quarter of this year and the first two quarters of 2010, our cumulative booked load factors are still running behind this same time last year but we are seeing a rapid recovery and with new bookings running more than 40% ahead of last year since mid-September, we expect to see higher book load factors in all quarters before year-end.”
  • “Peak season was better than we expected but it now appears that the traditionally weaker fourth quarter will be worse than we had previously thought. Our holiday sailings have required more discounting than we anticipated and our low season Caribbean cruises are being hurt by Florida’s weaker economy.”
  • “In aggregate, our forecast range is still quite wide but we do believe we have better yields -- we will have better yields in the first quarter of 2010 than we did in 2009, driven by the performance of our newest vessels and avoidance of the type of dramatic discounting we experienced last year.”
  • “Overall for 2009 we expect to source 40% of our company’s total business from outside the United States and then more than 40% in 2010. Although the winter season is upon us, we still have limited visibility to the performance of our products that depends more on sourcing of non-U.S. customers. It does appear that Rhapsody of the Seas in Australia/New Zealand will enjoy improved year-over year performance. For our products in Asia, Dubai, Brazil, and Panama, it is too early to tell.”
  • “For the first quarter and the full year, we are expecting both will have higher yields in the corresponding period in ’09”
  • “Bookings that we are experiencing today would be proportionately equal to slightly higher on a capacity adjusted basis to what we were seeing back in ’07 and ’08. I would lean toward higher because we have more of a load factor deficit than we did back in ’07 and ’08, given the contracted booking window.”
  • Oasis Commentary: “Bookings remain strong and she continues to command the lead pricing in the category.”
  • “It’s been fairly steady. It’s better than it was at the beginning of the year but I want to be very reluctant to say that we saw a dramatic shift in the way the consumer is spending money on board.”

 

CCL FQ4 “YOUTUBE”

  • “Ticket prices came in $0.01 better on slightly stronger-than-anticipated closing pricing.”
  • “Net onboard and other yields in our European brands were down less than in our North American brands, a trend similar to the experience in net ticket revenue yields. For the first time this year, we saw an increase in two of the onboard revenue categories: Shops and photo. The rest of the major categories were down, but for the most part, it was an improving trend from the prior two quarters.”
  • “ With continued strength and booking patterns during the last 13 weeks, occupancies on a capacity adjusted basis for the first nine months of 2010 are now at approximately the same levels as last year. Booking volumes during this past quarter for North American and European brands covering the first three quarters of 2010 are each up over 40% versus the easier comparisons to last year. But these bookings are also strong on an absolute basis. Actually, on absolute basis, these are the strongest bookings we have seen in our history.”
  • “We have seen more demand and have been able to move pricing higher in certain trades. Our U.S. premium brands are showing increasing pricing strength, which is a significant reversal from 2009. This also suggests that with the strengthening of the U.S. economy and the rise in the equity markets that the higher-end customer is feeling better about taking their vacations, and the superior value of cruise vacations is driving a lot of business our way.”
  • “Breaking the recent 13-week booking pattern down by markets for North American brands, other than for Mexican Riviera cruises, pricing for all other itineraries are up year-over-year, with particular strength in Europe cruises for spring and summer of 2010. Also, long and exotic cruise pricing is nicely up year over year, a nice reversal from last year.”
  • “Given the continuing strength in bookings, which has resulted in occupancies catching up with last year, we are now expecting North American brand revenue yields will be higher by 2% to 3% for the entire year 2010.” 
  • “With the recent strength of European brand bookings, we are expecting European yields for all of 2010 to be slightly lower on a local currency basis and higher on a current dollar basis.”
  • 2010 guidance: “I think if you look at our first quarter guidance, we were down in the 3% to 4% range. I think that the catch up -- by the time we catch up with all that in the second, we will gradually improve yields year-over-year. Second quarter will be better obviously than the first quarter. The third quarter will be better than the second quarter”
  • “In terms of bookings for 2010 in terms of  percent of the cabins that are currently filled is very consistent with our historical figures from '05, '06 and '07. Yes, they may be below the historically-strong numbers of '08, but they really are now back to the '05, '06, '07 levels.”
  • “Historically, in the fourth quarter, we do see a reduction in the overall booking curve, but this quarter, we didn't see as big of a reduction as we normally, so you can say we saw a little bit of an improvement in the booking curve as well.”
  • “Our projections for next year include relatively flat onboard for 2010, holding at these levels in the third and fourth quarter.”
  • “Everywhere is doing better with two glaring exceptions: The Mexican Riviera and Brazil. Other than that, I think, generally, Caribbean, Europe, Australia, Asia, they're all doing a little bit better.”
  • “I think, if there's been any leading indicator to wave, it's been how fourth quarter bookings have been, and they've been very encouraging. So we're pretty optimistic about wave.”