Rising fuel prices drove down Carnival Cruise Line’s profits in the last quarter, even as its Alaska business remained strong, the company reported Tuesday.
Carnival is the parent company to Princess Cruises and Holland America Lines, as well as sailing ships under its own name. It is by far the largest cruise line operating in Alaska.
For the quarter ended Nov. 30, which includes the tail end of the popular summer cruise season, Carnival reported its revenue rose by half a billion dollars, to $3.7 billion.
That increase came from both higher ticket prices and more available capacity, but profits dropped as expenses, especially fuel, rose as well.
During the quarter, profits were $217 million, down from $248 million in the same quarter of 2010, as its fuel expense rose by $170 million, or 40 percent.
The company said its net revenue yields, the amount of profit it makes per ticket, rose in Alaska, where it had 24 percent of its capacity, as well as in the Caribbean and New England and trans-Atlantic routes.
European routes struggled, Carnival Corp. executives told industry analysts Tuesday.
The company’s occupancy levels — the number of passenger cabins filled — declined in Europe but stayed steady in Alaska and the Caribbean.
Carnival ships’ capacity rose a bit in Alaska as it “tweaked the itineraries” to bring more people to the state, said Carnival Chairman and CEO Micky Arison.
The European market, struggling with a debt crisis, was difficult during the quarter, he said.
That even included fewer Americans traveling to Europe, possibly put off by the crisis.
“Although you wouldn’t think it would affect their vacation decisions, I think the psychology of the consumer today is that there is a greater concern,” said Howard Frank, Carnival’s vice chairman and chief operating officer.
Carnival ended the year with profits of just over $1.9 billion, down a bit from last year. That’s despite fuel costs that rose by more than half a billion dollars during the year.
• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.
Comments (8)
Add commentThe other expense...
...they forgot to mention was the campaign 'donation' to Parnell. Buying local politicians is just part of their business model.
Comment
Naysayers can revise facts as they want but Carnival said they would increase sales to Alaska if the head tax was made easier (and Constitutional) and now that has happened. Everybody benefits because more visitors means more taxes paid; not only the head tax but municipal sales taxes, property taxes on tourism property, and yes, even federal income tax (which Alaska gets back in spades). And don't forget the jobs for Alaskans these cruise ships represent. I only wish city government could be trusted on their word in the way that we clearly can trust this private firm.
I thank those elected officials who proposed and supported the head tax reduction. Juneau acts as if all this money comes out of thin air and is an entitlement but had we listened to the naysayers there would now be less wealth for everyone. BTW, I have absolutely no financial or personal interest in the tourism industry of any kind nor have I ever had, but I know my taxes would be even higher if not for these cruise ships bringing paying customers to Alaska.
Arab Spring Was Cruise Disaster
The decision to switch Alaska-bound ships to Europe over the last few years was a debacle - and had nothing to do with head taxes. Now the ships are heading back to North America, to safe, lucrative ports like those in Alaska.
The choice between cruise ports like Juneau and Skagway, compared to Cairo and Tunis, is clear. Passenger safety and satisfaction are the paramount issues, not a $25 tax reduction.
I couldn't be happier that in
I couldn't be happier that in spite of Chip's best efforts, we're getting more ships back and more people visiting Juneau. Rev up those city tours!
I know when I go on vacation,
I know when I go on vacation, especially on a several-thousand dollar cruise, the main criteria I use to determine where I'm going is whether they'll charge me a head tax or not.
I wish people like glacierdogs were capable of emotions like "shame" (for not knowing what he's talking about but still having an opinion) and "guilt" (for reinforcing bad ideas).
why all or nothing?
Just like the tax relief to the oil companies, its huge amounts or nothing. Why couldn't they have just cut the head tax, to say $5 or $10 dollars. Still income to buy say, bathrooms in Skagway, but add some profit to cruise lines to keep them here.
@Banditrider: don't be
@Banditrider: don't be absurd. Cruise ship lines pass on the cost of the head tax to their customers. They absorb little, if any, of it.
You guys and your cutting taxes and thinking it'll increase revenue. Your idea is based off of Arthur Laffer's Laffer Curve, which if you've ever bothered to look at it, puts the ideal tax rate well above what it is now.
Thanks Chip for continuing to
Thanks Chip for continuing to tell the truth. Somebody has to.