Omicron begins to eat into Carnival demand, but profit still expected by 2022

While the emergence of the new Omicron variant of COVID-19 has not impacted demand for cruises in 2022 and 2023, Carnival Corporation said that it had affected bookings in the short-term, during its fourth quarter 2021 business update.

Carnival Corporation reported an adjusted net loss of $2.0 billion for the fourth quarter of 2021 and said that it expects to achieve profitability by the second half of 2022, despite the emergence of Omicron.

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According to the company, which controls around 45% of the global cruise market, booking volumes during December have seen an initial impact for near-term sailings due to Omicron, but overall volumes for the fourth quarter of 2021 were higher than the previous quarter.

In addition, cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices, with or without future cruise credits.

“Booking volumes continue to build for the remainder of 2022 and well into 2023 and we are achieving those early bookings with strong demand and pricing,” said Arnold Donald, President & CEO of Carnival Corporation.

Total customer deposits increased $360 million to $3.5 billion as of November 30th, 2021 from $3.1 billion as of August 31st, 2021. For the third consecutive quarter, the company saw an increase in customer deposits.

“Our cash from operations turned positive in the month of November, and we expect consistently positive cash flow beginning in the second quarter of 2022 as additional ships resume guest cruise operations,” he added.

Carnival Corporation has now put 50 ships back into operation across its nine cruise brands, and has carried over 1.2 million guests, with plans to have the full fleet back in operation in the spring of 2022.

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This is despite the emergence of Omicron, which has caused uncertainty and disruption for the wider travel industry, and forced some cruise lines to alter itineraries or cancel cruises altogether.

The cancelled cruises have been limited to South Africa, where the new variant was first reported.

Norwegian Cruise Line cancelled its planned season in the country, while MSC Cruises has temporarily suspended cruises due to an outbreak aboard its Durban-based ship MSC Orchestra.

MSC Cruises has also cancelled its Northern Europe sailings for MSC Magnifica from December 19th, 2021, through January 14th, 2022 due to changing travel restrictions along European itineraries due to Omicron.