RSSRoyal Caribbean Sees 4th Qtr Profit … But also Weakness in the Caribbean Market
Royal Caribbean, do you want the good news or the bad news first? Good news for Royal Caribbean was that they saw 4th quarter profits as compared to 2005. The bad news is that the Caribbean market is less than encouraging and sluggish at best.
Sluggishness in the Caribbean has been offset by good performance in Alaska and Europe, a scenario also faced by Royal Caribbean’s chief competitor, Carnival Corp., the world’s largest cruise group.
Richard D. Fain, Royal Caribbean’s chairman and CEO, said bookings were “less than encouraging” for the “wave season” – the busiest reservation period of the year for the cruise industry, when many people plan summer vacations.
Hovorka said sluggishness with Caribbean tourism is being seen throughout the leisure industry.
“There’s a broader weakness in discretionary spending for consumers” in the Caribbean, which is seen as an entry level cruise market, Hovorka said. (Bradenton Herald)
What is causing the poor performance in the Caribbean market in the cruise line industry? Other sectors of the cruise lines are performing well. Royal Caribbean has had its share of “missing” passenger incidents; however, it would appear the Caribbean market is being targeted as sluggish. Could a safety issue perception be spreading with regards to the Caribbean that is making people think differently when buy a vacation?
Joe Hovorka, an analyst with Raymond James & Associates, said the stock likely was falling because of a continued weakness in the Caribbean market that has lasted more than a year. (NJ Star Ledger)
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6 Responses to “Royal Caribbean Sees 4th Qtr Profit … But also Weakness in the Caribbean Market”
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The Caribbean islands have really degenerated. They used to be so beautiful, lovely water and beaches… But anymore, the poor sanitation, tourist trap mentality, and crime, have just turned people off! Some of those islands have become nothing more that slums surrounded by blue water. They need to be cleaned up if they are going to survive as a tourist destination!
micah, you are so correct. Like the bahamas if you leave the hotel area, they will tell you you are on your own…crazy. I havent gone back there. also like Aruba. You can go missing there and never get JUSTICE. They just dont care.
AGREED!
You reap what you sow Royal Caribbean.
The problem is a very simple one – offer – berths available on ships is way over what the demand is despite the growth. This is evident on high discounted cruise fares on slow sailing periods of the year October through December and January through Spring Break. The problem will only get worst with the additional new huge ships being launched this year and in the following years.
The problem is a simple one — offer — number of berths available on the ships far exceeds the demand during certain periods of the year. First and last quarters are always money loosers or at best break-even for most cruise lines. The situation will only get worst in the next two to three years with all the new Bigger Ships being launched by all cruise lines…