Market Currents
Though Carnival (CCL -1.3%) has a track record of bouncing back from mishaps with its cruise...
-
Friday, February 22, 11:45 AM ETThough Carnival (CCL -1.3%) has a track record of bouncing back from mishaps with its cruise ships, it might not be smooth sailing this time around with the stranded Triumph escapade catching the eye of Senator Jay Rockefeller. The politician wants to know the cost to the government of responding to cruise incidents in what could be the first step to force overseas operators such as Carnival and Royal Caribbean (RCL -0.4%) to pay higher levies for conducting business in the U.S.
Other date
Latest Consumer Articles
This news story has 1 comment:
*Heavier discounting for the summer season. All else equal, consumers will opt for Princess / Norwegian / Royal Caribbean; CCL will need to discount to fill boats.
*Lower ancillary revenues. The most price-sensitive cruisers will stick with CCL and/or be attracted by their discounts, leading to lower per-passenger spend on board.
*Permanently higher costs of business due to regulatory action
*Higher fuel costs; even when passed on to the consumer, it will hit cruisers' "vacation budget" and lead to lower spend on-board.
*Still generous valuation (21 P/E, 1.8 P/S) for a company facing strong headwinds.
*Continued fallout from payroll tax increase and economic uncertainty (which will hit CCL customers harder than their competitors' customers).
I like CCL long-term, but it's still got further to fall in the short-term before I'm willing to go long.