Fares for a winter cruise higher than a year ago

By Gene Sloan
September 25, 2010

Looking for a deal on a winter cruise? Here's the good news: Fares for Caribbean voyages are down from where they were a year ago.

The bad news? Fares for winter sailings in just about every other region of the world are up notably.

That's the word this week from Howard Frank, vice chairman of industry giant Carnival Corp., the parent company of more than half a dozen lines including Carnival, Princess, Holland America and The Yachts of Seabourn.

"With the exception of Caribbean itineraries, pricing for North American brand bookings during (the upcoming) 13 week period is significantly higher than a year ago," Frank told Wall Street analysts Tuesday during a conference call to discuss third quarter earnings.

Frank says fares for winter cruises in the Caribbean are lower largely as a result of significant increases in capacity in the region, which has seen the arrival of a number of major new ships including Norwegian Cruise Line's Norwegian Epic. Industrywide capacity in the Caribbean for the first quarter of 2011 will be 15% ahead of a year ago, he notes.

"The impact of the lower Caribbean pricing will be felt more significantly in the first quarter, when our Caribbean capacity is greatest, and to a lesser extent in the second quarter when Caribbean capacity is reduced," Frank adds.

Overall, Frank says bookings for the company's North American-focused cruise lines have been strong over the past quarter.

Frank's comments on pricing Tuesday came as Carnival Corp. reported better than expected earnings for the third quarter of 2010, citing a combination of better than expected revenue and lower than expected costs.

The company said it earned $1.3 billion, or $1.62 per diluted share, on revenues of $4.4 billion during the quarter. That compares to net income of $1.1 billion, or $1.33 per share, during the same quarter a year ago.

"Despite ongoing economic concerns, cruise ticket prices remained strong close to sailing, rewarding consumers that booked early," Carnival Corp. chairman and CEO Micky Arison noted in a statement accompanying the earnings announcement. "Our North American brands experienced a significant rebound in peak season revenue yields, increasing more than 10% over weak 2009 comparisons."

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