Morgan Stanley Says Cruise Demand Remains Robust; Forecast / Leverage Risk Remains Elevated

In a continuation of the solid demand reported during the year's peak booking period, March sounds like a solid month for cruise bookings, Morgan Stanley analyst Jamie Rollo said.
The analyst noted that various agents mention bookings gained by double-digit percentage versus 2019, a lengthening booking window, and customer preference for trading up to more premium products.
Consumer perception of the economic outlook is also said to be improving, after a blip post SVB, and pent-up demand to travel remains high.
Some agents mention that cruises now offer better value given the high number of amenities included, and also caution that weaker close-in pricing might suggest that later-2023 pricing may not stick.
The guidance provided by major cruise liners, including Carnival Corp CCL, Norwegian Cruise Line Holdings Ltd NCLH and Royal Caribbean Cruises Ltd RCL, are all weaker than other travel cohorts, the analyst said.
The analyst added that RCL had outperformed both CCL and NCLH in Q4 and guidance by a widening degree.
The analyst noted cruise bookings are up, and consumers want to travel after three long years and are willing to spend money.
Cruise bookings have been surging during "waveseason," the annual period from January to mid-March when many travelers plan and book their cruises for the year ahead.
The analyst's relative preference remains RCL and remains Underweight on CCL and NCLH.
Price Action: RCL shares are down 2.74% at $62.05 on the last check Wednesday.
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