Carnival: China ‘Easier Environment’ with Less Capacity
Published in: Cruise News
“Clearly with less capacity in China going forward it creates an easier environment to operate in,” said Arnold Donald, CEO of Carnival Corporation, speaking on the company’s third quarter earnings call.
With competitors making adjustments or exiting the market entirely, Carnival remains committed to China with Costa Crociere, as the Italian brand will debut its new purpose-built Costa Venezia in Shanghai next summer.
“So as we look ahead to next year, we have less capacity in the first half of the year, more capacity in the second half of the year,” Donald continued. “But China continues to be accretive for us. We continue with the same policy we had all along that as long as overall is accretive, we will have ships there if they are not accretive we move them out and right now is still relatively small part of our total. But it’s doing well because it is accretive.”
David Bernstein, CFO and chief accounting officer, noted that the company’s overall net ticket yield increase was also driven in part by positive gains in the Chinese cruise market.
“So, we have seen some favorable trends in the last two quarters, and as a result of all the things we’ve been doing with the travel distributors and all the changes we’ve been making in China. So, we feel very good about the market and its direction,” Bernstein said.
Donald noted that China would eventually become a significant fly-cruise market, while the domestic market was still on track to become a key cruise market.
“And we are still very proud of our relationship with CSSC (China State Shipbuilding Corporation) as we move towards ultimately putting our joint venture into the market and sailing ships,” Donald said, noting the two newbuilds the company will introduce in China in 2023 and 2024 for a yet-to-be named domestic brand in partnership with CSSC.