·      However, solid bookings coming in for 2022

Cruise ship operator, Carnival Corp. is reporting losses of US$2.8 billion in the third quarter of  2021, as the negative effects of the nearly one year shut down of operations, as a result of COVID-19, takes hold.

Carnival reports that after write-downs its adjusted loss was $1.99 billion in the third quarter, which ended August. 31. However, things are looking up for Carnival, which is headquartered in Miami but incorporated in Panama.

Shares in the company rose yesterday after the cruise line operator said bookings for the second half of next year are running ahead of 2019 levels. Carnival shares rose 3% to close at $25.44.

Glimmer of home for the industry

Cruise line investors are looking for any glimmer of hope for the industry that has been battered by the pandemic, resulting in nearly all vessels being grounded. However, the short-term outlook remains grim.

Carnival reports that the rise in U.S. COVID-19 cases from the delta variant is hurting sales this summer.

Its main rivals Royal Caribbean and Norwegian Cruise Line have also seen summer sales plummeting even though the reported virus cases are trending slightly lower now.

Carnival explains that the average ship was only 59% full in August, which was an improvement from 39% in June noting that voyages generated enough revenue to cover cash costs. Carnival CEO Arnold Donald said in an interview with David Koenig, AP Business Writer: “We reported a significant loss, so we haven’t recovered yet, obviously, but as we look ahead we see brighter days…If things continue to trend the way they are (with COVID-19 cases), we should see positive cash flow as we get our fleet sailing broadly again.”

Fewer passengers but they are spending more

Carnival said while there were fewer passengers, they spent 20% more on board than before the pandemic with Donald pointing out that there could be several explanations. 

“People haven’t been able to cruise, maybe not even travel for a while, so they are in a mood to spend more because they haven’t had a chance to in a while,” the Carnival CEO said in conclusion.

Eight of Carnival’s nine cruise lines including Carnival, Princess and Holland America have resumed sailing with reduced schedules. The company said it expects more than half of its fleet to be operating by the end of October and the full fleet by next summer.

The cruise industry has been among the hardest hit by the pandemic. The big three cruise companies are incorporated outside the U.S. and they did not receive the same kind of federal relief that was granted to airlines. With revenue at rock-bottom levels, the companies have borrowed billions to avoid sinking.