Like so many other companies relying on live attendance to generate sales, Carnival (LSE:CCL) (NYSE:CCL) has struggled to manage through COVID-19. With the Centers for Disease Control (CDC) warning against cruises, the industry will most likely remain quite challenged for the near future.

Recently, the ailing cruise company offered us preliminary data on its fiscal third quarter (June-August 2020) performance. Here we explore that report and gauge if brighter days could be ahead for Carnival.

A cruise ship

Image source: Getty Images.

How Carnival is coping with the pandemic

In the third quarter, Carnival posted an average monthly cash burn of $770 million -- understandable when a business is barred from operating. For the fourth quarter, however, Carnival expects monthly cash burn to moderate slightly to $530 million.

To cope with these tough times, the company has raised nearly $12.5 billion via a mixture of secured and unsecured notes, as well as equity offerings since the crisis began. Thanks to the financing, Carnival has $8.2 billion in cash and equivalents to cover costs amid COVID-induced cruise shutdowns. The fundraising moves come with heavy interest expenses and some equity dilution, but were vital to get Carnival through turbulent times.

Things have been looking up for the global cruise company. In October, "Costa" -- one of Carnival's nine Cruise line brands -- resumed operations in Italy with restrictions in capacity. This month, its "AIDA" brand in Germany also resumed some sailings. While it's a small step toward the company's normalization and recovery, it's a significant step nonetheless.

There are further signs of improvement on the radar. The company's bookings for the second half of 2021 are actually running ahead of its historical bookings curve. Reservations for the latter part of 2021 look stronger than they were in 2018 looking out to 2019.

Pricing is also holding up surprisingly well. Compared to pre-pandemic rates, 2021 pricing is down just "mid-single digit percentages" after accounting for future cruise credits, or FCC, from previously cancelled cruises.  While prices should go up year over year in a perfect world, this muted decline is quite encouraging amid the global health crisis we are dealing with. It's feasible to think that an approved vaccine or better therapies for COVID-19 can boost demand trends further.

Considering the circumstances, there seems to be a reasonably strong interest to go on a Carnival cruise some time in the future.

An ideal niche within travel

Fortunately for Carnival, its portfolio features several regional businesses, and most of it customers are in a sense "locals" who are familiar with their regional cruises. That means the company relies less on international travel than most entertainment and travel organizations, such as Wynn Resorts, for example. While COVID-19 continues to hit air travel, Carnival's reliance on local guests is ideal for taking advantage of regional regulations on when to open up.

Furthermore, Carnival caters solely to leisure travel. While a corporation can substitute business trips with an online conferences and electronic signatures, there aren't any worthy substitutes to leisure travel. Nothing beats a quality vacation with people you care about, and that likely won't change once COVID is finally a distant memory.

The pandemic has undeniably been a tough pill to swallow for Carnival. Successful -- albeit expensive -- cash raises has ensured the company's existence through COVID-19, and whenever we finally overcome these haunting times, demand is clearly there. The waters will be choppy for the next several months, but it could be smoother sailing for Carnival in the years ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.