Migrant crisis could hit profits, Carnival says

Monday, 23 Sep, 2015 0

Carnival Cruises posted better-than-expected third-quarter results but warned that its end of year profits could be hit by several factors, including the migrant crisis in Europe.

The world’s biggest cruise line is also struggling with the effects of the strong dollar and the weak global economy.

However, CEO Arnold Donald said strong demand during the third quarter led to higher occupancy on its ships, increased onboard spending and higher fares in some markets.

"We feel great about the quarter," Donald said during an earnings call with analysts on Tuesday. "We feel very good about the business and the momentum."

Although revenue from ticket sales fell 2.4%to $3.63 billion, onboard spending rose 1.7% to $1.1 billion. Net profits were up from $1.2 billion to $1.4 billion.

Fleetwide cruise bookings for the first half of 2016 are running nearly 20% up on the same time last year but at lower prices

"All brands continue to do well despite the challenges," Donald said. Looking ahead to 2016, he said the company’s cruise brands have less inventory remaining for the first half of the year.

However, he warned that geopolitical issues, including the migrant crisis, could pose a challenge to pricing in Europe. He said travel from continental Europe had been hardest hit by a ‘macro-economic malaise’ together with rising tensions over the refugee situation.

The cruise line forecast final quarter earnings of 36 to 40 cents per share, below the 46 cents analysts were expecting on average

TravelMole Editorial Team

Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.

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