So much for land lubbing. Carnival (NYSE:CCL) said today it sees full speed ahead for its first quarter, as January brought a spike in bookings for its cruise vacations. Carnival raised its guidance, and the stock inched up about 1%. However, a recent news story could still indicate choppy seas ahead.
Today, Carnival said that since the beginning of January, bookings have been 59% higher than they were last year. Net revenue yields are seen rising 5% to 7%, as compared to the original call for 2% to 4%. The company ratcheted up its first-quarter earnings guidance to $0.21 to $0.22 per share, compared to the previous $0.17 to $0.20 per-share range.
The stars seemed aligned for cruise companies like Carnival and Royal Caribbean (NYSE:RCL). This year, there's no rumbling of war in Iraq, and consumer mood is much sunnier. We've all heard much about a public that's been building up some pent-up demand for a good vacation, and that's been lifting the entire travel industry.
Meanwhile, industry proponents point out the value in a cruise vacation, with its flat rate for venue, lodging, entertainment, and food. As far as growth goes, the cruise concept as a vacation alternative is still young. According to the Cruise Line International Association, only 15% of Americans have gone on a cruise. Among Europeans, that figure's less than 4%.
Though Carnival's recent earnings and today's heartening news imply that things are looking up, there could be dark clouds in the offing. Last week, Rick Munarriz wrote on a recent bout with norovirus on the Carnival cruise ship Celebration (needless to say, those stricken guests weren't celebrating).
Rick's right, and February and March bookings after this latest incident should be telling. If people get it in their head that there's a danger to the fun of cruises, they may not sign up. So keep watching for signs that the news of the Norwalk-like illness is anything other than a brief spell of seasickness.
Are you thinking about vacating your day-in and day-out grind for sunny skies and rolling oceans? Trying to decide between a cruise, a road trip, or a flight to a distant locale? Talk it over with other Fools on the Best Travel Spots/Tips discussion board, or check out the Fool's Travel Center.
Alyce Lomax does not own shares of any of the companies mentioned.
