It hasn't been exactly smooth sailing at Carnival (NYSE: CCL ) these days. The world's largest cruise-ship operator is struggling as it battles an unfortunate string of reputation-bashing incidents on its vessels since early last year. If you want to go on a cruise, you're probably not alone if Carnival is at the bottom of your list.
However, consumer disdain for the brand at the moment is just one of many reasons to actually consider booking your next cruise on Carnival -- and booking it now. Let's go over a few of the reasons for landlubbers to board sooner rather than later.
1. A desperate Carnival is a promotional Carnival
From last year's fatal Costa Concordia accident off the Tuscan coast to several less tragic but extremely embarrassing incidents on Carnival ships closer to home this year, it's clear that the market is down on the brand these days.
Carnival owns plenty of brands, including Costa, Cunard, and Princess, but it's the namesake brand that's taking most of the venom. As you can imagine, this is creating some pretty good bargains right now.
Carnival took a hit after posting disappointing quarterly results on Tuesday. A key component in its weakness is that bookings for Carnival sailings are running lower, and at lower price points than a year ago. In other words, the Costa Concordia may have scared away potential passengers this year, but Carnival's misfortunes this year continue to weigh on demand.
That's bad news for Carnival, but that's great news for you.
"During the past few months, Carnival Cruise Lines has seen a steady improvement in brand perception among U.S. consumers based on national market research data," Carnival's CEO is quoted as saying in Tuesday's financial release.
Don't buy it. Bookings continue to be weak, and Carnival is forecasting declining revenue yields in the near term.
2. Carnival has made improvements to its fleet
As the Carnival Triumph and Carnival Dream cut sailings short this year -- and cancelled several upcoming outings -- the boats went to the shipyard for some improvements. Carnival is spending $300 million on its Carnival-branded ships alone to improve their fire, operating, and power capabilities. It's spending at least that much on the rest of its fleet.
If there's any company that knows that it can't disappoint passengers these days, it would be Carnival. It's spending a lot of dough to make sure that these things either won't happen again or to greatly reduce the chance of cutting another trip short. Yes, its heavily leveraged balance sheet is making this a big gamble, but it's a necessary one. Carnival knows its reputation will only get worse if another vessel loses power in an engine fire.
3. Markdowns won't last forever
Yes, Carnival's walking the plank these days, but does anyone remember when the Norwalk virus -- or Norovirus -- caused gastric illnesses across the industry a few years ago? Bookings took a hit across most cruise lines, but the industry eventually bounced back.
There's no reason to believe Carnival won't rebound again. Time will help, and not because images of overflowing toilets on the Carnival Triumph or irate passengers forced off of the Carnival Dream early will go away. Instead, positive experiences will accumulate. Carnival's gutsy 110% guarantee -- where it will refund any passenger and send him or her home for free within 24 hours of a sailing -- will eventually add up into satisfied customers who want to book with Carnival again.
You've heard of "buy low, sell high" on Wall Street? This is definitely a "book low" situation right here.
4. The competition isn't hurting -- or discounting
Carnival has been perhaps unfairly categorized as the Wal-Mart of cruise lines. It's the biggest. It's often the cheapest. It attracts a lot of first-time passengers who eventually move up to sail with smaller rivals NCL (NYSE: NCL ) and Royal Caribbean (NYSE: RCL ) .
NCL and Royal Caribbean aren't suffering from the Carnival fallout. Even with Carnival marking down its berths, the competition isn't facing the same kind of headwinds. If anything, NCL and Royal Caribbean are benefiting from vacationers who are seeking out alternatives to Carnival.
You can certainly book a sailing with NCL or Royal Caribbean. They're great. However, right now they're not as hungry for your business as Carnival, and you can see it in what they're charging.
5. Seasonally speaking, now is the time to book your next summer cruise
If you have your eyes set on an Alaskan cruise or seeing Europe next summer, now is a great time to book. Cruise lines offer early-bird discounts typically six to 12 months out, giving passengers better rates than they will get a few months later.
Now, there is something to be said about last-minute fares. Ships that still have too many vacancies in the weeks leading up to a sailing may mark the cabins down aggressively. There are plenty of cruise regulars who thrive by snagging late bargains a month or two before a sailing. However, that often also limits the selection of where they go, or the berths that are still available.
Even if you're eyeing a Caribbean cruise this winter or spring, sooner is often better than later unless you really want to gamble on what's available two months out.
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