More travelers are booking cruise vacations and paying more for the getaways, a welcome sign for an industry that's struggled to keep its cabins full, executives at Carnival Corp. said Tuesday.
In the past nine weeks, reservations for the next nine months climbed 8 percent at the company that owns the Carnival, Princess and Holland America cruise lines. But the prices passengers were paying for their cruise vacations climbed 17 percent.
That's still below where it was before carriers started slashing prices to tempt travelers to come aboard. But it's a welcome sign of recovery for the industry that's seen its per-passenger profit plunge.
"We've been surprised," said Howard Frank, the cruise line's vice chairman and chief operating officer. "We didn't expect it to come back this dramatically. Whether we can sustain these kinds of levels as we increase pricing and whether we can sustain the booking volume is the next question."
Citi Investment Research analyst Greg Badishkanian said the trends showed "positive signs."
For the first quarter, which ended Feb. 28, Carnival's profit fell 33 percent — dragged down as fuel costs soared.
But its revenue crept up, climbing 8 percent and both figures were better than expectations.
Carnival posted net income of $175 million, or 22 cents per share. During the same period last year, the company earned $260 million, or 33 cents per share.
This year's results included a one-time gain of 5 cents per share from the sale of a ship.
Revenue climbed to $3.10 billion from $2.86 billion.
Analysts surveyed by Thomson Reuters expected the Miami company to earn 14 cents per share with revenue of $3.09 billion. Those estimates typically exclude the impact of one-time items.
In the first quarter, Carnival paid nearly 80 percent more for fuel than it did during the same period in 2009. That cost the company the equivalent of 22 cents per share.
Looking ahead, Carnival executives said rising fuel prices and the weak dollar will cut into results. But they expect the company's full-year profit to be better than expected as passengers continue to pay more for tickets and it continues to cut costs.
