Cruise operator Carnival lifts 2024 profit forecast on record demand

(Reuters) -Carnival Corp raised its annual profit forecast on Wednesday, betting on record demand for cruise vacations as well as higher prices.

Cruise companies are now experiencing an all-time high booking rates as travelers switch to cheaper sea-borne experiences over expensive land-based alternatives such as booking hotels or flights, allowing operators to hike prices.

However, U.S.-listed shares of the company, which owns the Cunard and Holland America Line cruise lines, reversed course and were last down about 3% in early trading. They have risen about 94% in the last 12 months.

“This has been a fantastic start to the year,” CEO Josh Weinstein said in a statement.

“We delivered another strong quarter that outperformed guidance on every measure, while concluding a monumental wave season that achieved all-time high booking volumes at considerably higher prices.”

The company’s first-quarter revenue rose to $5.41 billion, roughly in line with analysts’ expectations, according to LSEG data.

Bookings for the rest of 2024 remain the best year on record with total customer deposits reaching a first-quarter all-time high of $7 billion, the company said.

To attract more bookings, firms also offered special deals and discounts during the all-important wave season – between January and March – on their tickets and itineraries for the year.

In January, Carnival said that the first half of 2024 was almost fully booked, adding that strong demand trends during the year were expected to offset the impact it was seeing due to re-routing of ships in the Red Sea region.

The cruise operator now expects adjusted profit per share of 98 cents in 2024, compared with its prior forecast of 93 cents. Analysts on average were expecting a profit of $1 per share, according to LSEG data.

(Reporting by Granth Vanaik in Bengaluru; Editing by Sriraj Kalluvila)