Felicia Hendrix, Barclays' U.S. leisure analyst, detailed the findings from her proprietary "Survey of the Seas" publication, which tracked over 125 itineraries across North American cruise brands and conversations with industry experts.
The survey functions as a "directional tool for identifying inflection points in cruise prices as opposed to estimating absolute changes in company level net yields on a quarterly basis."
Here are the analyst's main points:
Key Takeaways
1. Pricing Strength Winners: Of all the brands tracked, Carnival Corp CCL showed the strongest increases in year over year pricing. Royal Caribbean Cruises Ltd RCL and Norwegian Cruise Line Holdings Ltd NCLH saw improved pricing as well, but to "a lesser extent."
Overall, pricing continues to "strengthen" across most brands, giving the analyst increased confidence that the guided 3–4 percent net yield growth for 2015 provided by several cruise operators should be "easily achievable."
However, the analyst pointed that it is still "very early" in the booking window, and the cruise companies use a variety of different tactics to base load.
5. Booking Changes: Sequential changes over the third-quarter booking window improved one point from August's survey results, while fourth-quarter sequential prices were unchanged. 6. Average Pricing By Region: Finally, by region, third quarter average pricing rose by double-digits year-over-year in Alaska, in the Bahamas and in the Caribbean, while average European prices (North America sources) are lower by 8 percent year-over-year.Price Target Changes
Shares of Carnival remain Equal Weight rated with a price target raised to $53 from a previous $48.
Shares of Norwegian remain Overweight rated with a price target raised to $71 from a previous $67.
Shares of Royal Caribbean remain Overweight rated with a price target raised to $107 from a previous $98.
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