Tourism & Cruises

Carnival stock tumbles Thursday after company says bookings and prices down for 2020

Donald Arnold, CEO for Carnival Corporation, leaves the U.S. Federal Courthouse in Miami on June 3, 2019, after pleading guilty on behalf of the cruise ship company to probation violations on environmental charges.
Donald Arnold, CEO for Carnival Corporation, leaves the U.S. Federal Courthouse in Miami on June 3, 2019, after pleading guilty on behalf of the cruise ship company to probation violations on environmental charges. mocner@miamiherald.com

Carnival Corporation stock took a tumble Thursday after the Miami-based company released its outlook for 2020.

Cruise-booking volumes and prices for the first six months of 2020 are down compared to the same time frame for this year, the company said. Carnival’s stock price dropped by 8.55% to $43.95 Thursday.

Carnival Corp. CEO Arnold Donald cited higher fuel prices, Hurricane Dorian, the Cuba cruise ban, and Brexit among the reasons for the decline.

“We always plan for some things to go wrong, and this year we have had kind of a plethora of things that has overwhelmed even our planning,” Donald said on an investor call Thursday.

Amid the slowed booking and lower pricing, Carnival Corp. announced it expects its capacity to increase 7% in 2020. Analysts on Thursday’s call asked Donald if he has considered decreasing capacity to try to lift prices and booking volume.

“We don’t sail people on old, tired ships,” he said. “We’re not afraid to scrap a ship if there is not a market that’s outside of our market to sell it to. At this point, we feel pretty confident that we are on the right path. We obviously are examining very closely every segment and every trade to see if there is additional moves we need to make.”

Late Wednesday, Carnival announced an agreement with the government of the Bahamas to expand its footprint there with a new cruise destination in Grand Bahama and a new pier in Half Moon Cay. The company estimates construction on both projects will begin next year and the cost will be around $180 million.

Other Miami-based cruise companies also saw stock-price drops Thursday, although not as dramatic as Carnival’s. Royal Caribbean Cruises, Ltd. dipped 2.49% to $106.93 and Norwegian Cruise Line Holdings, Ltd. lost 3.83% to $51.26.

Carnival Corp. is the largest cruise company in the world with more than 102 cruise ships across its nine cruise lines.

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Taylor Dolven covers the tourism industry at the Miami Herald, where she aims to tell stories about the people who work in tourism and the people who enjoy it. Previously, she worked at Vice News in Brooklyn, NY, where she won a Front Page Award from the Newswomen’s Club of NY for a national investigation of police shootings.
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