A positive frecast?
Cruise lines are struggling with the oceans of debt that they took on to survive the pandemic — and tackling the higher costs produced by inflation — but the three major companies that bring ships to Alaska are being encouraged by robust demand.
The latest cruise executive to voice this view was Josh Weinstein, president and CEO of the Carnival Corporation that operates the Carnival, Princess, Holland America and Seabourn brands in Alaska.
During a conference call Monday with investors about the corporation’s first-quarter results, Weinstein said that the “wave season” (typically the first three months of the calendar year, which usually produced a high volume of cruise travel bookings) has been “phenomenal.”
“It started early with record Black Friday booking volumes and has continued to build,” Weinstein said, according to a call transcript from SeekingAlpha. “We achieved our highest ever quarterly booking volumes in our company's history, and we actually had our best weekly booking volume for this wave the last week in February. And the good news is that strength in bookings has continued into March, supporting our revenue expectations for the remainder of the year.”
Weinstein’s remarks about bookings across the corporation’s brands followed those made in early February by Jason Liberty, CEO of the Royal Caribbean Group that brings the Royal Caribbean, Celebrity and Silversea brands to Alaska.
“Bookings outpaced 2019 levels by a very wide margin throughout the fourth quarter with particularly strong trends during Cyber Weekend,” Liberty told investors during the firm’s fourth-quarter earnings call. “We expected a strong wave season, but what we are currently experiencing has exceeded all expectations even when considering our capacity growth. ... The seven biggest booking weeks in our company's history all occurred since our last earnings call. Our commercial apparatus is full speed ahead, and all channels are delivering quality demand above 2019 levels.”
And Norwegian Cruise Line Holdings, in announcing its fourth quarter 2022 earnings in late February, said it expects to be sailing at 19% more capacity than it did during pre-pandemic 2019. Bookings look to be on track to fill that capacity.
“Since we last spoke in November, we have been pleased to see positive booking momentum continue, including a very strong wave season that likely started two months earlier than usual,” NCLH President and CEO Frank Del Rio told investors during a Feb. 28 conference call transcribed by The Motley Fool. “In fact, November was a record-breaking month for Norwegian Cruise Line as they celebrate a record day, record week, and record month of sales boosted by Black Friday and Cyber Monday holiday push. Subsequently, in January, a strong start to traditional wave led the line of setting another record-booking month.”
Carnival’s Weinstein on Monday summed up that corporation’s forward view.
“We are still experiencing a record wave season, which started early, gained strength and has extended later into the year,” he said. “We expect these favorable trends to continue based on the traction we're making to our ongoing effort to drive demand globally.”
It should be noted that the executives’ remarks were overviews across the companies’ brands and global operations rather than Alaska-specific.
However, for the CEOs of the three major cruise operators in the Alaska market to highlight this type of broad demand suggests that Alaska could be returning to passenger volumes seen before the pandemic — if not higher, based on an expectation of overall increased capacity operating in Alaska during the 2023 season.
And, because cruise lines work hard to extract passenger revenues beyond just the cruise fare, what they’re seeing from customer behavior in general also reflects well on the potential type of season Alaska might see in 2023.
Royal Caribbean’s Liberty noted that “there has been a lot of talk about the state of the consumer, so I want to share what we are seeing from daily interactions with consumers who are either booking their dream vacations or who are currently sailing on one of our amazing ships.
“Overall, we continue to see robust demand from financially healthy, highly engaged consumers that are excited to sail on our brands,” Liberty said.
All of the above provides a clue about what the 2023 cruise season will bring to Alaska. But, as we’ve seen in recent years, circumstances can change quickly. Counting passengers and passenger-related dollars before they arrive on shore isn’t prudent.
Still, there are positive signs from the cruise lines. And with the first ship arriving on April 20, it won’t be long before we begin seeing what robust demand during the wave season actually produces at the Ketchikan docks.