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Carnival Cruise Line names two ships to Chinese market

  • Written by Teijo Niemelä

Carnival Cruise Line, the largest brand under Carnival Corporation & plc, has announced an initial commitment of two ships to the China market beginning with Carnival Miracle in spring 2017 followed by Carnival Splendor in spring 2018. Both ships will be based in China year round.

Carnival Miracle and Carnival Splendor will offer the memorable, high quality vacation experience Carnival is known for featuring exceptional service and hospitality in a fun and friendly atmosphere. "Carnival is the world's most popular cruise line and our style of cruising appeals to guests of all ages and particularly families," said Christine Duffy, president of Carnival Cruise Line. "We attract more than 4.5 million guests a year and, as the family cruise leader, we also carry more than 700,000 children each year. Multi-generational families also choose to vacation with Carnival more than any other cruise brand. We look forward to bringing our one-of-a-kind, exceptionally popular cruise experience to the Chinese market."

Duffy also noted that Carnival's highly differentiated cruise experience offers a very interactive and participatory style of vacation that brings together the guests and well-trained and motivated onboard team members. "The team brings this experience to life for our guests on every cruise with a high level of respect, service and hospitality. We know this will resonate very well with our Chinese guests and allow us to exceed their expectations," Duffy stated.

Carnival is the worldwide leader in providing cruises of three to five days and this extensive experience in shorter duration cruises will be invaluable in providing Chinese guests with a truly memorable vacation experience. Specific details on the company's China itineraries will be announced at a later time.

Carnival Miracle is a notably spacious ship given its size and more limited guest capacity (2,124 guests) and has a guest to crew ratio of nearly two to one. This allows the ship to uniquely offer outstanding guest service in a very spacious and comfortable environment. The ship offers a variety of popular features including more than 60 percent of accommodations featuring a private balcony.

There are also four swimming pools with a magrodome over the main pool area which provides excellent views and an expansive outdoor area to enjoy a wide variety of activities and entertainment in all weather conditions. Carnival Miracle's two promenade decks offer multiple types of locations for gathering with friends and family, playing games or enjoying a host of other exciting activities and entertainment options.

Extensive enhancements were added earlier this year with the addition of the RedFrog Pub which features a uniquely Caribbean atmosphere with music and entertainment options from this popular tropical region. The Alchemy Bar was added, as well, and skilled bartenders create custom drinks with unique fresh ingredients based on guests' individual tastes and preferences.

Carnival Miracle offers multiple dedicated facilities for children, including an expansive water park. The highly trained staff ensure that the younger cruisers are well cared for and entertained with fun activities throughout the cruise. For the adults, Serenity is a private and comfortable outdoor area restricted to guests age 18 and older. The ship also features an outstanding steakhouse, offering exceptional cuts of dry aged beef and top quality seafood, along with spectacular views. Several areas of the ship, including the casino, shopping and dining offerings will be enhanced prior to the start of China service to cater to Asian tastes.

Carnival Splendor, which enters the China market in 2018, is a larger vessel which carries just over 3,000 passengers and boasts a wide variety of features including an array of outstanding dining, entertainment and other guest-pleasing options. That ship also has four swimming pools, one of which can be covered by a glass magrodome, seven whirlpools, a Serenity area and a variety of dedicated facilities for children in different age groups.

Carnival will be establishing operations in China in partnership with sister company Costa Asia, which has operated in the Chinese market for the past nine years. "Given the combined experience of Costa Asia, along with other sister companies either already in the market, such as Princess Cruises, or entering the market, such as AIDA, the collective scale of Carnival Corporation's Asia operations is unparalleled and enables us to tap into an immense network of resources and expertise as we launch our China program," said Duffy.

Reservations for voyages on Carnival Miracle are expected to open in 2016.

Pullmantur to abandon Latin America focus and revert to Spain

  • Written by Kari Reinikainen

Pullmantur the Latin America and Spain focused brand in the Royal Caribbean Cruises, Ltd. (RCCL) group, will refocus on Spain again instead of Latin America due to challenges in the last named market, RCCL said in a statement.

“In past quarters, management has acknowledged the weakness in the economies of Latin America, and the impact of this weakness on Pullmantur. Unfortunately, the economic outlook in Latin America has deteriorated further in recent months and, as a result, the brand is re-focusing on its core market of Spain.

Pullmantur has a fleet of five ships that all built in the late 1980s to early 1990s. The company was originaly Spanish owned and it focused mainly on the Spanish market, until the outbreak of the financial crisis in that country earlier this decade encouraged the management look at the Latin American markets as the key. RCCl today unveiled a $399.3 million impairment charge against the Pullmantur brand and its ships.

RCCL raises 2015 EPS forecast to $4.80 per share

  • Written by Kari Reinikainen

Royal Caribbean Cruises, Ltd. (RCCL), the world’s second largest cruise shipping company, says it has raised its 2015 earnings per share (EPS) forecast to $4.80 per share from an earlier forecast of $4.65 to $4.70.

"As we have reiterated throughout the year, we remain ahead on both pricing and volume versus same time last year," said Jason T. Liberty, chief financial officer. "While Latin America is stressing yields in the fourth quarter, strong year-over-year pricing in the Caribbean, and the addition of capacity in China, will solidify this fourth quarter as the best in our company's history."

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2015 Adjusted EPS to be approximately $4.80 per share.

The company is experiencing good early booking trends for 2016. Booked load factors and APDs are higher than same time last year and the booking window has extended.

 Management is excited by the 2016 introduction of Harmony of the Seas starting in Europe next summer and adding Ovation of the Seas to its Chinese platform to take advantage of the strong reception this class of ships has received there.

While still early in the booking cycle, the view for 2016 is encouraging, and the company expects another year of solid yield and earnings growth.

"As we turn the corner into 2016 we have our sights firmly set on our 2017 Double-Double targets," said Richard D. Fain, chairman and chief executive officer. "Next year represents a positive step on that journey."

RCCL reports fall in third quarter, nine month profit on Pullmantur charge

  • Written by Kari Reinikainen

Royal Caribbean Cruises, Ltd (RCCL), the world’s second largest cruise shipping group, has reported a fall in third quarter and nine months net result on a heavy impairment charge of its Pullmantur brand.

Group net profit fell to $228.8 million in third quarter to $490.2 million, while revenues rose to $2.52 billion from $2.38 billion. The company booked impairment charges of $399.3 million related to Pullmantur, its Spain and Latin America focused brand and its assets.

In the first nine months of the year, the profit fell to $458.9 million from $654.4 million, while revenues rose to $6.39 billion from $6.26 billion.

“Net Yields on a Constant-Currency basis increased 5.1% during the quarter, approximately 130 basis points better than the mid-point of previous guidance. Close-in Caribbean and European demand and strong performance in Asia more than off-set further weakness in Latin America,” the company said in a statement.

“Onboard Revenue Yield increased 10% mainly driven by strong retail and beverage sales and demand for VOOM, the fastest internet at sea,” RCCL said. Year-over-year, the company has made a number of structural changes which are driving a stronger fourth quarter. The growth of the Asia-Pacific region, including Quantum of the Seas sailing in China, boosts earnings in the typically lighter shoulder season.

The addition of new capacity, with Anthem of the Seas joining the fleet, efforts to drive incremental Onboard Revenue, and a continued focus on cost efficiencies also contribute to a stronger end of the year.

RCCL books $400 million impairment charge against Pullmantur and its fleet

  • Written by Kari Reinikainen

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has booked a $400 million impairment charge against the assets and brand name of Pullmantur, its Spain and Latin America focused brand.

“The Company conducts an analysis of the carrying value of its assets on a regular basis. In past quarters, management has acknowledged the weakness in the economies of Latin America, and the impact of this weakness on Pullmantur. Unfortunately, the economic outlook in Latin America has deteriorated further in recent months and, as a result, the brand is re-focusing on its core market of Spain. These factors triggered the company to record a non-cash impairment charge of $399.3 million, primarily related to its goodwill, its trademark and trade names and a reduction in the carrying value of select vessels in the Pullmantur fleet,” the company said in a statement, it said, adding that this eliminates all intangibles at Pullmantur.

 “As the company right-sizes the brand, restructuring and related charges of approximately $5 to $10 million associated with the new strategy will be booked in future quarters. In addition, as previously anticipated, we will be eliminating the two-month reporting lag for the Pullmantur brand,” RCCL said.

This will start in the first quarter of 2016, and is expected to be immaterial to the company's results. All the adjustments will be excluded from our key metrics for transparency and comparability purposes. "The right-sizing of the Pullmantur fleet will better balance supply with demand for the brand in the Spanish market," said Richard D. Fain, chairman and chief executive officer. "These changes should put Pullmantur on a more successful course for the future."

CBR 2/2015 contents

CBR 1/2015 contents

CBR 3/2014 contents