Carnival Corp. is sailing out of wave season with advance bookings galore, higher prices year-over-year, and booming business for its core Caribbean and European sailings, according to its quarterly earnings report released today.
The one big headache is China, which also happens to be a key growth area for the company.
Cruise operators including Carnival have been changing itineraries for China-based ships to remove South Korean ports amid tensions over the deployment in Seoul of a U.S. missile defense system. The disruptions came earlier this month after China told travel agencies to stop selling tours to South Korea, a popular spot for Chinese travelers to visit.
Instead, ships are adding additional ports in Japan or spending extra time at sea. The timing is especially tricky for Carnival’s Princess Cruises brand, which is about to start sailing a new ship built especially for Chinese cruisers.
Carnival Corp. president and CEO Arnold Donald said the company already has a strong foundation and leading presence in the region, and is pushing forward with its development strategy despite the restrictions on Korea, which are expected to last through the year.
“In any event, it’s early,” Donald said Tuesday during an earnings call to discuss first-quarter results. “We have disruptions often around the world.”
Bookings in China are still outpacing last year’s numbers, according to chief financial officer David Bernstein.
“This is an evolving market and it’s a [business-to-business] market and so the next month or two we’ll learn a lot more and we’ll be able to provide more information as we move forward,” Bernstein said.
If necessary, Donald said the company could make additional itinerary changes or work to further develop a strategy to fly Chinese passengers to other locations, where they would embark on cruises.
“We think China’s still going to be the largest cruise market in the world, cruising is in their five-years plan,…