Cutbacks Working; Revenue Down but Profits Up 40%

[Maleeni]

http://www.bizjournals.com/stlouis/blog/2016/03/carnival-ups-arnold-donald-s-bonus-by-18.html

[Davey Wavey]

Sorry it wasn't cutbacks that did it. Of the approximately $1 billion in lower operating costs, about $88 million was potentially from cutbacks. About $875 million was from lower fuel costs.

[golfb4cruzing]

I'm pretty sure it was those chocolates:D

[bassmaster150]

http://www.bizjournals.com/stlouis/blog/2016/03/carnival-ups-arnold-donald-s-bonus-by-18.html

 

Not sure exactly what point you are trying to make here.....I mean is Carnival a business...and if not, what are they? A business is supposed to make money (otherwise known as profit), and if they don' t do that, then what happens? Let me know your thoughts.

[SMSACE6]

I'm pretty sure it was those chocolates:D

 

Nah...it was all those free drinks they don't have to give the gold vufps at the past guest party anymore.:p

Edited March 7, 2016 by SMSACE6

[sprint180]

Nope, think it was the chocolate!

[Podna's]

Nah...it was all those free drinks they don't have to give the gold vufps at the past guest party anymore.:p

 

 

Just think how great 2016's numbers are going to be with that huge unaffordable $1 increase in water. [emoji57]

[Hobbsey]

Not sure exactly what point you are trying to make here.....I mean is Carnival a business...and if not, what are they? A business is supposed to make money (otherwise known as profit), and if they don' t do that, then what happens? Let me know your thoughts.

 

You are correct of course. However, excessive profit taking while degrading ones product can have negative effects over time in product reputation and customer loyalty. A smart business decision would be to take those increased reserves and upgrade the product.

 

I do see Carnival taking those profits and driving them back into the product. Witness the very aggressive upgrading program going on now on the older tonnage and the impressive features of the new builds. I do think that they could further enhance the on-board experience by either reducing the price of the all inclusive packages or making them more flexible (individual rather than cabin based and/or making them available mid cruise rather than making them mandatory for the whole cruise).

 

I also would like to see them use revenue to upgrade their pre-cruise on-board reservations systems so that guest could pre-reserve Any time dining spots, spa treatment times, etc...

[cherbear4000]

The only cutback that I really cared about was the past guest party. I really think they should bring that back for gold's or at least split gold off into 2 categories and invite the higher level gold's to the party. Carnival made $1.76 Billion in profit last year so they can give me my free drinks and appetizers for an hour.

[BigB0882]

I am shocked that revenue is down. I thought cruising was extremely popular right now and that cruises were selling better than ever, thus the increase in prices for cruises lately and the promise from so many lines to not reduce fares last minute. Is that not actually happening? Or are the ships sailing full but people are spending less on board than they used to?

[Cruise, J.D.]

I am shocked that revenue is down. I thought cruising was extremely popular right now and that cruises were selling better than ever, thus the increase in prices for cruises lately and the promise from so many lines to not reduce fares last minute. Is that not actually happening? Or are the ships sailing full but people are spending less on board than they used to?

 

The reporting periods end in November. The 2015 revenue numbers were only slightly below the 2014 revenue numbers. Ticket revenue was lower in 2015, but onboard spending and excursion spending were higher.

[stevenr597]

Not sure exactly what point you are trying to make here.....I mean is Carnival a business...and if not, what are they? A business is supposed to make money (otherwise known as profit), and if they don' t do that, then what happens? Let me know your thoughts.

 

Certainly as a business, Carnival should make profits. The question is how to make such profits. One can increase services, giving more for the value and hopefully this will cause individuals to want to come back. Another means is to cut service, knowing that you will have less well paying customers wanting to come back, and hope that the decrease in operating costs will more than make up for the loss of valuable customers.

 

In most, if not all, cases, cutting overhead and losing customers is not the way to go. Perhaps Carnival will be different.

[crewsweeper]

I am shocked that revenue is down. I thought cruising was extremely popular right now and that cruises were selling better than ever, thus the increase in prices for cruises lately and the promise from so many lines to not reduce fares last minute. Is that not actually happening? Or are the ships sailing full but people are spending less on board than they used to?

 

Remember this is all of Carnival Corp's cruise lines. And while to us the $$$ look like a lot it's only 1% below 2014. And folks it's the fuel costs, not the cutbacks, driving the lower expenses. Plus, despite all "The Bern's" ranting and finger shaking, profits are good. They aren't "greed". They typically get plowed back into the company or distributed to shareholders (like your pension funds and 401k funds).

[Harrier1961]

The only cutback that I really cared about was the past guest party. I really think they should bring that back for gold's or at least split gold off into 2 categories and invite the higher level gold's to the party. Carnival made $1.76 Billion in profit last year so they can give me my free drinks and appetizers for an hour.

 

What exactly do you mean by "higher level gold"?

Where do you draw the line?

Those with 50+ nights?

If so, why that line?

 

How do you determine who is higher or lower level of the same color?

 

Andy

[BIGA961]

Remember this is all of Carnival Corp's cruise lines. And while to us the $$$ look like a lot it's only 1% below 2014. And folks it's the fuel costs, not the cutbacks, driving the lower expenses. Plus, despite all "The Bern's" ranting and finger shaking, profits are good. They aren't "greed". They typically get plowed back into the company or distributed to shareholders (like your pension funds and 401k funds).

 

True story!

[MsVulcan]

How do you determine who is higher or lower level of the same color?

 

Maybe some are gold plated? :D

[BenjiRodney]

You are correct of course. However, excessive profit taking while degrading ones product can have negative effects over time in product reputation and customer loyalty. A smart business decision would be to take those increased reserves and upgrade the product.

 

I do see Carnival taking those profits and driving them back into the product. Witness the very aggressive upgrading program going on now on the older tonnage and the impressive features of the new builds. I do think that they could further enhance the on-board experience by either reducing the price of the all inclusive packages or making them more flexible (individual rather than cabin based and/or making them available mid cruise rather than making them mandatory for the whole cruise).

 

I also would like to see them use revenue to upgrade their pre-cruise on-board reservations systems so that guest could pre-reserve Any time dining spots, spa treatment times, etc...

 

You can pick the day and time for spa treatments in advance.

 

You can request reservations in advance for all the Steakhouse, and Italian eateries.

[Je Souhaite]

Sorry it wasn't cutbacks that did it. Of the approximately $1 billion in lower operating costs, about $88 million was potentially from cutbacks. About $875 million was from lower fuel costs.

 

That seems disingenuous at best. Oil prices go up and there's a threat of a fuel surcharge to the customer.

 

Oil prices go down and the savings doesn't get passed to the customer. It goes to company profits.

 

Now lets root for some other business to benefit from lower oil costs, like our local gas stations. Keep the retails inflated, and let them get some additional profit. I mean, they are in business to make money.

[crusinpsychRN]

He's eating all the lobster for the shorter cruises and the chocolates.

[Hobbsey]

You can pick the day and time for spa treatments in advance.

 

You can request reservations in advance for all the Steakhouse, and Italian eateries.

 

Thanks Benji, I just went to the Carnival booking page and saw that Spa can be reserved in advance, apologies.

 

I still would like them to get the Any Time dining upgraded so we can book in advance rather than waiting at the door of the MDR. I prefer a 7PM dinner time and would make it easier on their planning by making that reservation months in advance in exchange for not having to risk a long wait.

[Hobbsey]

That seems disingenuous at best. Oil prices go up and there's a threat of a fuel surcharge to the customer.

 

Oil prices go down and the savings doesn't get passed to the customer. It goes to company profits.

 

Now lets root for some other business to benefit from lower oil costs, like our local gas stations. Keep the retails inflated, and let them get some additional profit. I mean, they are in business to make money.

 

LOL, Filling Stations are in a completely different competitive market.

[Hog Rider]

http://www.bizjournals.com/stlouis/blog/2016/03/carnival-ups-arnold-donald-s-bonus-by-18.html

 

The profit is up due to FTTFers.

[MCFTJCH2V]

Just think of the extra profit when they start taking in all those extra $$ charging for juice, once included in your fare.

[freagan]

People need to learn the difference between Carnival Corporation and Carnival Cruise Line. :rolleyes:

[chengkp75]

Profits being up 40% doesn't really mean much. What is significant in a financial report is return on investment. One year, I could make a dollar profit for every $1000 invested, and the next year make $2/$1000 invested. Profit is up 100%, but I could make a better return rate investing my money someplace else.

Edited March 8, 2016 by chengkp75