Carnival is zeroing in on first-time cruisers: Travel Weekly

Carnival Corp. is beefing up advertising spending and zeroing in on new cruisers as it gears up for the 2023 Wave season, executives said on a call with investors Friday. 

Prior to the pandemic, about one-third of Carnival Corp. guests had been first-time cruisers, with advertising and word of mouth as the biggest levers to attract those guests, said Josh Weinstein, Carnival Corp.’s CEO.

Although the company is now carrying a higher proportion of past guests, he said Carnival Corp. is seeing improving trends for booking new cruisers and “will increase awareness and actively target those new recruits.” 

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Between the company’s nine brands, Carnival Corp. carried more guests in this year’s third quarter than it had in all of 2021, said Weinstein. Occupancy across the brands was 84% in the quarter, up from 69% in Q2. In August, occupancy reached 90%. 

A passenger volume increase bodes well for past guests to share their experiences by word of mouth, he said. 

“We have been building back our army of advocates who leave ships spreading the word about the unparalleled vacation experiences we build every day in and day out,” Weinstein said.

The company saw a meaningful acceleration in booking volume in August after announcing it would drop pre-voyage Covid testing and vaccination requirements. That’s a trend Royal Caribbean Group and travel agents also reported. In Carnival Corp.’s case, booking volume is now running “considerably higher” than in 2019.  

Carnival Corp. made a decision to curtail its advertising spending during the pandemic. But when the company did advertise, ads were targeted at loyal guests. Up until last March, Carnival Corp. spent less money on advertising over the previous two years of the pandemic than it had in all of 2019. 

This year, the company has spent more money on advertising in Q2 and Q3 than had in all of 2019, said Weinstein. 
This higher advertising spending is meant to drive revenue for 2023 as the company plans for a more traditional Wave season in the first three months of the year. 

“We have volume, but we want to get volume plus price and fill the ships at good pricing, and we need to be doing more to accomplish that,” he said. “It’s not just for the moment and filling the ship for the next quarter. It’s setting the groundwork for awareness and consideration, and ultimately making that booking decision [over the next two-and-a-half years],” he said.

Cumulative advanced bookings for Q4 are below historical ranges at lower prices, much of that due to future cruise credits. Pricing for 2023 booked business is at “considerably” higher levels than in 2019, with bookings slightly above historical ranges, said David Bernstein, Carnival Corp.’s CFO.

Noting that booking volume and prices for Q4 are below historical ranges but looking up for 2023, Truist Securities analyst Patrick Scholes said Carnival’s outlook is improving but “painfully slowly.”

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