By Jonathan Levin and Christopher Palmeri (Bloomberg) — Carnival Corp. customers are skittish about booking a cruise, even if it’s for next year — and even if the prices are lower.
In the first two weeks of March, bookings for 2021 cruises were “considerably” worse than a year earlier, Carnival said in a regulatory filing on Friday. And bookings for the rest of 2020 are “meaningfully lower,” despite major price cuts.
The outlook suggests the cruise industry will have a tough time bouncing back from its coronavirus shutdown. Carnival, the world’s largest cruise company, halted new sailings in mid-March after a series of outbreaks at sea raised concern about the safety of the voyages. Since then, it has been a struggle to get some ships back to port because local authorities are worried about passengers spreading Covid-19.
Carnival still has thousands passengers on ships at sea, according to the company, but plans to get them home by the end of April.
Carnival says it’s had seven ships with Covid-19 cases. Two vessels, Costa Magica and Costa Favolosa, are currently working with the U.S. Coast Guard on medical evacuations near Miami.
The company also expects to face delays in ship deliveries as a result of Covid-19’s effect on shipyards, potentially affecting the 16 cruise ships it expected to take delivery on through 2025.
The company said it had $4.7 billion in current customer deposits as of Feb. 29. During its pause in operations, Carnival predicts it will have to give cash refunds “for a substantial portion of the balance.”
But there may be a promising sign for the company: In the first two weeks of March, about 45% of guests seeking compensation accepted future credit instead of demanding cash.
© 2019 Bloomberg L.PUpdated: April 14, 2020 (Originally published April 3, 2020)
This article contains reporting from Bloomberg, published under license.
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