A rising tide raises all ships.....

This morning, Carnival Corp announced some financials for the first
quarter of 2010. A quick recap of the numbers... they reported a profit
of 22 cents a share, down from 33 cents a share from the same period
last year. However... people who follow this kind of thing were
expecting a profit of only 14 cents a share, so this kind of took them
by surprise..... and the way Wall Street reacted, it was a pleasant
surprise.

Today, Carnival Corp. stock increased 2.4 percent to $38.81, the
highest price since September 2008. It also set a 52 week high at
$39.35 The biggest cruise-line operator raised its full-year profit
forecast as ticket prices rebounded from last year’s lows.

Wow. Good for Carnival. Now take a look at how this affected the
competition.....

Royal Caribbean Cruises, the world’s second- largest cruise operator,
gained 6.9 percent to $33.61 They also set a 52 week high of $33.69 a
share.

So how could a drop in profits (compared to last year) trigger such
optimism among investors?

The meat in this meal is in the current booking trends and expectations.
Cruise sales are good.... real good. Carnival and other cruise lines
have publicly announced that fares are going up... and the numbers seem
to support that. It has been reported that in the past 9 weeks, sales
for Carnival for the rest of 2010 are up 8%... and fares are up 17%.

Sure, there are still a few really incredible last minute deals to be
found, but they are now the exception, not the norm. The $299 last
minute cruises from San Juan are still there (great deal if you can get
airfare) but if you want to cruise next Summer on the Oasis of the
Seas... be prepared to get a second job. I priced a cruise in July for
a family where the inside cabins were selling for $1549 pp..... and
availability wasn't all that great.

This week at the Sea Trade convention in Florida, execs from all cruise
lines were unanimous in saying that future booking trends are for
increased sales and higher prices. No one expects the industry to get
back to the price points of 2008 in the near future because the economy
is recovering slowly and there are a few new ships coming out that will
add to the supply... and the rising cost of fuel might have an impact on
the industry...... but it looks like the cruise lines are kind of
breathing a sigh of relief and looking forward to the future.

Me... I am cautiously optimistic on a number of fronts. Bookings for
2010 have been wonderful... MUCH better than a year ago. The really
good news is that while prices are going up, for the most part they are
still low enough so that there are some great deals out there for the
consumer.

--

George Leppla

Countryside Travel http://www.CruiseMaster.com
Blog http://cruisemaster.typepad.com/my_weblog/
Facebook http://www.facebook.com/CruiseMaster