Carnival Corporation & plc, (CCL) reported record second-quarter results today.
With an adjusted net income of $489 million for Q2, which bested the $378 million for the same period last year, company president and CEO Arnold Donald sounded an understandably optimistic note on an extended earnings call with analysts this morning.
"We delivered the strongest second-quarter adjusted earnings in the history of our company," said Donald. "And, that's on top of last year's record results."
The results, said Donald reflect the efforts of more than 100,000 employees who "go above and beyond every day."
He also singled out the efforts of "hundreds of thousands of travel professional who support our brand."
Donald told financial analysts that strong demand and higher cruise prices are contributing to CCL's impressive operating performance. They're also offsetting the negative impact of fuel and currency fluctuations.
"We continue to drive revenue yield growth by increasing demand in excess of our measured capacity growth through our ongoing guest experience, marketing and public relations efforts," said Donald.
Donald noted that the second quarter of 2018 was a significant one for CCL in a number of respects. Milestones included the debut of two new vessels.
"We introduced two spectacular new ships," he said. "In March we delivered Carnival Horizon, offering Carnival Cruise Line guests even more ways to choose fun. Also, during the quarter, our ultra-luxury brand Seabourn, debuted the fifth, all-suite ship in its fleet. Seaborun Ovation provides guests with a private veranda in every luxurious suite; sophisticated décor fashioned by Adam Tihany, a new, al fresco dining venue, as well as a number of innovative programs."
Port development efforts around the globe also continue apace.
In Alaska, Holland America Group has taken a minority position in a joint venture to further strengthen ties in Skagway. The gateway to the gold rush region is a destination on 80 percent of CCL's Alaskan cruises. In Spain, the company recently opened its second new state of the art terminal in Barcelona.
"We bring more than one million cruise guests per year to Barcelona," noted Donald.
In Australia, where seven of CCL's nine brands operate, they've entered into a long-term agreement for priority berthing at the port of Brisbane. The company is also expanding and diversifying its home ports in China and throughout Asia.
"We also announced a long-term, preferential berthing agreement in Dubai. Dubai will not only serve as an attractive port of call, but will facilitate the development of source markets in the Arabian Gulf," said Donald.
During the call, the CEO also singled out a few of the accolades the company has received this quarter.
Among them, a perfect score in the Human Rights Campaign's Corporate Equality Index and a ranking as the top travel company in Corporate Responsibility Magazine 100 best corporate citizens list.
One wrinkle in the good news is the continued effect of last year's devastating Hurricane Maria. Though it is still impacting Southern Caribbean itineraries, especially from San Juan, both Donald and company CFO David Bernstein emphasized that they expect to see improving trends in the Caribbean over time.
"We're very confident about the business for the second half of the year. We always factor in that we have a hurricane season coming and things can go wrong. There is a hurricane malaise. But the Caribbean is strong," said Donald.
On an important note for agents, Donald cited the overall opportunities to grow the cruise business.
"The cruise industry represents less than two percent of all hotel rooms in the world. We enjoy significantly higher satisfaction levels than land-based alternatives. We offer a great value for money," said Donald.
He added that demographics also support a growth in cruising, from millennials to aging baby boomers.
"In North America alone, the number of people reaching retirement age goes from 48 million in 2015 to 56 million in 2020 and 74 million by 2030. Now, that's a target-rich environment for us as this segment has the time and the resources given our value proposition to sail multiple times per year. Psychographic trends also support the growth in cruises as consumers invest more in collecting experiences rather than buying things," said Arnold.
The CCL portfolio of brands includes Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia) and Costa Cruises.
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