The world's largest cruise shipowner Carnival Corporation - is also the debt-laden parent company of major cruise company brands like CCL-Carnival, HAL-Holland America, and Princess. During a conference call with Wall Street analysts on December 21st, Josh Weinstein (the Corporation's CEO) suggested they will not be ordering many new ships with deliveries over the rest of the decade.
The cruise giant could soon go an entire year without unveiling a single newbuild across any of its brands, which is something that has never happened in its recent history.
During the call, which came after the cruise company reported yet another billion-dollar-plus loss for the most recent quarter, Weinstein said they did not expect any new ships in 2026 and anticipated just one or two newbuilds each year for several years thereafter.
Carnival's pipeline of new ships on order is already running thin. The company has just 5 ships on order for its 9 brands, all ordered before the COVID crisis brought about a sharp downturn in cruising.
The company has a single ship on order for 2025, a newbuild for Princess.
Weinstein noted that was their lowest order book in decades.
The shift comes as Carnival Corporation works towards paying down the massive debt it took on to survive the last 3 years when cruising ground to a halt due to the crisis and revenue at lines plummeted.
On December 21st, the company reported a total debt at US$34.55 billion, up from less than US$12 billion at the start of 2020. For context, Carnival made ~US$2.9 billion in profits in its last good year (2019).
As Carnival returns to profitability over the coming years, the corporation plans to channel much of its cash flow towards paying down the debt in lieu of capital spending on things like new cruise ships, Weinstein suggested.
The company is also cutting spending on all sorts of other things, from fuel use to around-the-clock pizza on ships.
Weinstein said they had actively managed down their spending by US$500+ million during 2022, and had taken a hard look at 2023 and beyond and reshaped investment spending by US$300 million annually for a cumulative reduction of US$1.7 billion.