The Covid 19 pandemic has severely hit the economy inside the OECD countries and pre pandemic levels have been reached just in 2022. But what about the cruise sector?
Cruise lines are still far from pre pandemic profits and revenues. From 2010 to 2019 the cruise industry has grown steadily and cruise operators, thanks to billions of net incomes, invested heavily in order to expand their fleet, but Covid 19 caused a total collapse of the whole industry.
The financial reports issued annually by the most important cruise companies have underlined that in 2022 there was not a single one with positive results. Chart 1 describes Revenues, EBITDA and Net Income of the four biggest operators (Carnival Corporation, Royal Caribbean, Norwegian Cruise Line and MSC Cruises). Regarding EBITDA Royal Caribbean, which is actually operating the biggest vessels around the globe, is the only one with good numbers. On the other hand it’s interesting to note that the EBITDA margin of the remaining three has been close to –15%. Carnival Corporation, with a wide portfolio of different cruise lines, is still the biggest company in the world, but has reported a negative net income of –6 billions $ just in 2022.
Revenues are not performing in a better way. Chart 2 compares revenues of the past year and their pre pandemic amount (expressed in million US dollars), underlining that the industry has not recovered at all. Carnival Corp. still is the worst performer (-41%) while the other three are between –18% and –25%.
The market trend of 2018-2019 won’t be reached easily in the next years (Net Income of the sole Carnival Corp. in 2019 was close to 3 billion dollars), but will cruise companies be back to profitable activities in 2023?