The tourism industry is reportedly witnessing a remarkable resurgence, particularly in the cruise sector. As travelers return in a post-COVID era, there's a noticeable surge in cruise ticket prices.
Top cruise companies, including Carnival Corp CCL and Royal Caribbean Cruises Ltd RCL, have set their ticket prices even higher than those observed before the pandemic.
Moreover, there's speculation of further hikes, despite these companies already reaching pre-pandemic profits, according to a CNBC report.
The report cited data sourced from Cruise Critic, a cruise reviewing platform under the umbrella of Tripadvisor Inc TRIP, which disclosed that the average rate for a five-night Caribbean cruise this December stands at $736. This reflects a 37% increase from last year and an astounding 43% rise compared to 2019, the year before the pandemic hit the cruise sector hard.
In a recent conversation with Wall Street analysts, Carnival's CEO, Josh Weinstein, highlighted the company's thriving performance. The third-quarter net revenue for each passenger per day reached an unprecedented level. Bookings, too, have skyrocketed, propelling both cruise occupancy and revenue beyond those seen in 2019.
Given the escalating costs in labor, food, and fuel, Carnival executives during the call underlined their advantageous position to further elevate prices by 2024.
Although Carnival refrained from commenting explicitly about their upcoming pricing strategies, a spokesperson shared with CNBC that their offerings present a 25% to 50% added value over similar land-based vacations.
Royal Caribbean CEO, Jason Liberty, expressed similar sentiments during a post-earnings call in July, hinting at potential price escalations in response to the booming demand.
The report quoted Aaron Saunders, a senior editor at Cruise Critic, who said part of the price surge is the comparison to high airfares.
While in a pre-pandemic world, last-minute bookings meant cheaper deals to secure a cabin, with the recent trend, prices are likely to rise as the vacation date nears, noted Truist Securities analyst Patrick Scholes, as per the report.
Price Action: CCL shares are trading higher by 3.15% at $13.09 on the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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