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The Carnival cruise ship Sunrise is seen docked at Miami Port, in Miami, Florida, U.S., June 18, 2022. Unlike other major cruise operators, Carnival does not hedge against volatility in oil prices. The company was "not thinking" about fuel hedging at this point, CFO David Bernstein told Reuters in an interview. Instead, to reduce the fuel burn, Carnival was looking at fuel optimization technologies and enhancing itineraries, Bernstein added. CRUISE DEMAND THRIVESCruise operators have benefited from pent-up travel demand following the pandemic and travelers looking for better vacation deals.
Persons: Marco Bello, Morningstar, Jaime Katz, David Bernstein, Bernstein, Alex Brignall, Joshua Weinstein, Carnival, Juveria Tabassum, Devika Syamnath, Shweta Agarwal Organizations: Miami Port, Rivals, Cruise Lines, Royal, Reuters, Thomson Locations: Miami , Florida, U.S, Royal Caribbean, Atlantic
The Carnival cruise ship Sunrise is seen docked at Miami Port, in Miami, Florida, U.S., June 18, 2022. Still, its shares fell about 4.7% as Carnival forecast an unfavorable net impact of $130 million in the fourth quarter from higher fuel prices and unfavorable currency exchange rates. Unlike other major cruise operators, Carnival does not hedge against volatility in oil prices. Carnival posted third-quarter profit of $1.07 billion, or 79 cents per share, compared with a loss of $770 million, or 65 cents per share, a year earlier. Its quarterly revenue of $6.9 billion beat estimates of $6.69 billion, according to LSEG data, and also hit a record high.
Persons: Marco Bello, David Bernstein, Alex Brignall, Carnival, Juveria Tabassum, Devika Organizations: Miami Port, Cruise, Cruise Lines, Royal, Thomson Locations: Miami , Florida, U.S, Royal Caribbean, Atlantic
During the two years of the Covid pandemic, cruise lines lost approximately 80% of their pre-pandemic market capitalization, according to Redburn Atlantic. Strong travel demand, particularly in leisure travel, is at the core of the improved pricing outlook for the cruise industry, according to Brignall. Norwegian has faced partcular challenges thanks to its status as a high-end cruise line with an older customer base, and "more complex, longer cruise product." As a result, the company has been hurt more than other cruise lines by sailing restrictions, but Brignall expects that headwind to get better soon. Both shares have surged this year thanks to the continued recovery in leisure travel, with Carnival climbing 93% and Norwegian by 39%.
Persons: Alex Brignall, Brignall, headwind, Josh Weinstein, — CNBC's Michael Bloom Organizations: Cruise Line Locations: U.S, Norwegian, Europe
Best positioned to harness AI Some big travel industry names have already begun experimenting with AI. Wasiolek noted that the company operates as a hybrid online travel agency and metasearch model, while Booking, Expedia and Airbnb , among others, serve as online travel agencies. "The difference is the barriers to entry are higher for online travel agencies because these operators control and manage the relationships with travel suppliers on their platform, while metasearch is simply a platform that hosts online travel agency managed content and content directly from travel suppliers," Wasiolek explained. These platforms represent more direct competition to Tripadvisor than online travel agencies. But success in travel from Google could also pose problems for online travel agencies.
Persons: Wall Street's, Nick Jones, Expedia, Redburn, Alex Brignall, JMP's Jones, Dan Wasiolek, Wasiolek, metasearch, Redburn's Brignall, CNBC's, it's, Michael Bloom Organizations: JMP Securities, ChatGPT, Equity, Google, Holdings, Morningstar
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailA.I. travel booking services could compromise Google's revenue, says Redburn's Alex BrignallAlex Brignall, Redburn travel and leisure analyst, and CNBC's Steve Kovach, join 'The Exchange' to discuss the A.I. disruption of Google's travel booking services, how A.I. will fuel disintermediation, and open.AI introducing ChatGPT to the Apple App store.
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