Carnival Corporation & plc (CCL) 20 Jun 192019 Q2 Earnings call transcript

Greetings, and welcome to the Second Quarter 2019 Earnings Conference Call. [Operator Instructions]. And as a reminder, this conference is being recorded, Thursday, June 20, 2019.

I'd now like to turn it over to Mr. Arnold Donald, President and CEO of Carnival Corporation. ahead. go Please

Good Quarter Keith. and to welcome Thank Earnings morning, Conference Second XXXX Call. our you, everyone,

As Keith Senior joined said, Carnival I'm Officer; as Arnold Donald, President Chief our Investor PLC, Micky as Financial today Relations. David Chairman, Bernstein, Corporation Beth and and I President, our am Roberts, by and Arison well Vice & CEO of

joining I want morning. to thank us you this all for

refer remarks you I please the Therefore, note on our this begin, of forward-looking. call before in Now I statement some must to cautionary release. today's be will that press

and with this given initial that we Vista, call information this we the disruption Now that morning's wanted well that $X.XX with From our in guidance. vessel to that as we the quickly as XXXX, disappointed because as our returns $X.XX, was today decided unfolded to Obviously, that and announcement capable growth deliver the wanted business this move over to time, impact we're for deliver to week for the committed are disappointed our information to the Carnival provide to provide as possible. we we limited to the not that is acknowledge guidance. of change in year reduction in earnings would and guidance are we rates the and in we to

invested year from currency. per in $X.XX adjusted share higher despite midpoint on last in to quarter by March only consistently the of commitment $X.XX than share per return $X.XX, than our over deliver delivered drag per fuel $X.XX a the that's steadfast growth have share of and guidance lower remain we earnings and we However, growth and foundation, time. earnings double-digit second capital We and

repairs from to repair of For impact that's a the have given per full combination unavailable damaged to dry canceled sailings, unusual approximately otherwise mentioned, voyage as nature Bahama of the would have dock the in I and share, itineraries, of $X.XX have financial where and related a $X.XX modified Grand occurred. Carnival Vista to expected, disruptions Shipyard, are the year,

in updating lower sourced our partially Cuba guidance. off to brands point lower the $X.XX the European yield headwinds $X.XX range, impacted $X.XX second $X.XX fuel share previously at and change travel full-year our $X.XX that time per to half resulting to $X.XX, the earnings the the to year from Continental we're disruptions; Now guidance estimated $X.XX offset and ongoing U.S. by to represents revenue That's March our $X.XX yields now consumption adjusted a of since Government's share $X.XX on to currency per $X.XX guidance. cost prior due which in share earnings reduction primarily favorable from policy due voyage by for to in of our and per X.X share; fuel changes per

Government's close have the just approximately impact changes U.S. deployment $X.XX travel very change we make to I to as of The policy financial as per share, in. for to mentioned Cuba $X.XX, has

significant strong provide the ports these among six based itineraries highest-rated that yield disappointing able destinations which with guest While and the the our sailings attractive experiences well vacation we regulatory at booked destination were had we to premiums, and was our were are on experienced guests operate as alternative adjust to in own utilizing change demand our Caribbean, feedback.

of select disruptive a and is and change industry-wide a to number led options. regulatory the of suddenness concentration of lower-yield deployment capacity has to the However,

As focused always, on remain discipline. pricing we

and which geopolitical brands been facing our have impacted headwinds, performance macroeconomic Now, this operating has Continental year. heightened European

contracting this Our pressure market travel growing on general growth these but in prices put outpace ticket has markets travel continued a year. to has into

to hold double tour operator booking grown digits German behind that been cruise in this significantly running year, In while price brand our able environment. has trends Germany, land-based been but have not

headwinds, portfolio. our brand, despite Now, among these in AIDA, has returns highest German the our

capital. been Europe, a vest Southern a heightened further in have competition now, at rates, France economic a given Southern geopolitical destinations low had resort from North path years double-digit disruptions, the along and reopening ongoing environment environment Europe, by significantly multiple deterioration of land-based encountered toward particularly recession, while in this the the what already executing with Africa. year, we on had challenging in in was further been for the in yellow increased Prior experiencing to Italy environment compounded Italy return In the Costa resulting challenging Turkey economic despite invested environment,

return than starting capital, last base. the a doubled In five Costa in albeit lower years, from invested fact, on more

gained Now path fuel newbuilds the ships. and on given double-digit inherent return capital are a by of efficiencies efficiencies the the cost new scale our very to of important greater invested and part

Now delivery Europe among is ship still of years, fleet. we've in ship returning new over not Costa in ships in taken entire our a that and for five highest the

agreement recent double-digit sell venture from or XXXX, ships Costa growth return further joint on performance, to to in events, year. evaluating an as growth China our We our We're not I invested capital earnings Clearly, performing, to opportunities optimize we mentioned, we rate exacerbated by accelerating are next have into and demand capacity. that two rightsizing in target. at also the future entered including

in some drive to evaluated. items aggressively and out as Now our in of we still action of process and working have beyond action results being enhance being to are the some these plan rolled are XXXX been

benefit and a expect highlight I'll that few we XXXX to beyond. Now,

guidance the Included for year in increase back to further containment in the voyage half of and for in cost the and While the we focused XXXX. the us our cost disruptions, of position we investment demand impact creation planned our we are a maintaining on aside remain year. is from guidance gave

cost that in However, increase is areas. other by offset advertising savings in

out multiple onboard the and experience continue rolled guest Medallion promote including ships by have Now designed of to brands, to XX we Princess across XXXX. we roll Ocean enhance for to applications to and out sales, end the Princess, expect

more earnings program over capital demand to on for invested fuel XX% growth as cost newbuild average time. to they and to approximately XX% XX% ongoing return we on and our are efficient cruising. our also further And only before, course, not create efficient, Of more roughly is mentioned help in the integral to XX% newbuilds

And demand to major we and have reinvest continue course, next fleet of existing projects drive more the to planned refurbishment in year.

both For recently brand, pricing And the investment and a our volumes Carnival we've up Carnival strong Carnival yield off renamed start double Sunrise double-digit double-digit on digits. Sunshine. return to and premiums garnered the for for with booking reintroduced we're

And of zero-based our planning are On comes cost process. XXXX leveraging from also project containment the we natural from that increased capacity we've now planning initiated positioning for cost of side, advantage take newbuilds. XXXX the to beginning the

is the estimated money this to afforded leverage in return economies or our especially million invest, to annually higher an Now earn be and which industry-leading to addition investment. our by afraid opportunity scale drive capacity $XX scale not That spend of on we more greater have growth. said, a to to will efforts our and we at demand

our very cruise brands. portfolio remain confident of We in

our Over remain to travel similar our and had well our cumulative we capacity millennial even in and market years, we industry. good continue the confident have retirees the the prices continue on positioned from past underpenetrated to X Europe. in believe take broader at growth, and an because the stronger EA We segment than yield growing Continental overindexes can brands generation, NAA global outperform we segment acceleration with of cruise. industry for an to overall globally cruise to operate We're which grow advantage demand travel growth

to land-based value and comparable land-based the levels satisfaction prices at same time, a than at And alternatives cruising generates higher alternatives.

are the we the So headwinds over And in five of constrained, operational an operate our are over the and full, shipyards, improvement. to the the we've mobility that past demonstrated assets years, us is optimize allows demand capacity environment every strong deliver ability headwinds industry overcome the and to multiple There are year. so time. ships

hampered been Now earnings will on double-digit have our confident in this year, and events, mitigate. we with taking hard invested of time, growth we're which capital. complements worked to that people our over return by growth continue remain a deliver growth significant We to actions has

the turn to call over And David. like now I'd to

Arnold. you, Thank

Before today some for my results, a of revenue, on up color additional update current metrics an our back note prices cost I'll in then quarter and unless our second of half constant with XXXX all ticket currency June the references XXXX of with booking trends I will be provide summary otherwise start on I'll finish begin, please to and stated. XXXX guidance.

net unfavorable from partially in fuel favorability costs timing quarters. was Arnold the guidance. second offset impact of net $X.XX As Both the the quarter X cruise favorability expenses $X.XX our The our by the adjusted $X.XX and of things, to March fuel driven price currency. for was indicated, due substantially net without favorable $X.XX was EPS revenue improvement were items midpoint between by and cruise this in $X.XX, of above of

at prior look quarter versus results year. second our let's Now operating the

Our capacity increased X.X%.

more brands, our brands, as X.X%, while more known known North commonly our was Asia as Our segment, and our almost Australia segment, America up commonly EA NAA was and XX%. Europe up

revenue Our total were up X.X%. net yields

two essentially apart break let's ticket components revenue net flat. to of Now Net were yields. yields

by the costs, in our price X% the and X.X%. lower increased net less the was $X.XX from driven EA were higher slightly prior dock revenue of Net than down brands dry summary, EPS other during Our quarter $X.XX brands impact NAA onboard were than yields expense net of dry year higher the quarter Caribbean, being yield lower up $X.XX unfavorable Atlantic. and and more currency. with dock with costing X%, sides the on almost both improvements increases benefits by driven offset depreciation and adjusted the second our while days by yields fuel In

booking half are at for last in the bookings XXXX back line year with of that time, trends. in are At occupancy prior to of on advanced slightly point XXXX Turning year. prices ahead cumulative this the

year's the on our are bookings the Cumulative year lower for prices, cumulative EA driven nicely Now the higher XXXX. lower in book brands European program, for down slightly at than prices Caribbean pricing Europe. drill bookings into let's record brand Continental NAA advance sourcing seasonal in occupancy and prior brands on behind year while are Cumulative last by driven higher on our the EA is occupancy for position Alaska pricing. well and by again the in than slightly price, ahead our advanced prior

term anticipated inventory for than during volumes strong our the the same of the Given quarter, in the for second pricing March remaining prior less was we our guidance sale the booking year, better which on position the year. quarter, the back second to guidance had half be of included primarily revenue at book with the these approximately up full forecasting driven of on booking expectations net light yields year remaining are In brands, price EA approximately we March our trends X%. versus inventory. our Therefore, have lowered we flat of by end

down offset or now in flat Yield third guidance be quarter quarter, fourth now both our yield expect brands, versus year, we for to brands. the forecasting are which by do NAA is is be prior being slightly yields improvement decline to quarters our yield in EA forecasted while We lower. our in

full X%, which For than to year, expect the be to were impacted on recent in yield brands more Cuba. restrictions we travel increases our the up now NAA by

for EA in year, in brands expect by more to sourcing be full brand our our declines While the we driven now yield Continental Europe. X% EA than

let provide The while fuel and our movements impact you $X.XX. which by currency price us benefit guidance. driven net color $X.XX will XXXX with some cost now So lower on currency us $X.XX, of me is will June prices, fuel additional favorable

slightly without fuel is as of disruptions versus costs net ALBD to approximately per Our increased be a X.X% result up expected cruise voyage and X.X%. of guidance guidance March full now the year

And Arnold. now, back the to call I'll over turn

the Okay. for Keith, questions. ready we're

Robin And Farley question the Instructions]. line from first from of is [Operator the UBS.

love ask I issues to would of Couple about.

going and in U.K. much is, I comments, too insight us demand Brexit, opening a wonder you little And about Costa's German the on in say you've and about given could talked what's just into of market? give you market, if that didn't bit First your with market the

I David despite better First it of would don't a any There of better. know would has add all, to overall good number color? that, market be additional been but a for if reasons has The Brexit. U.K. morning, Robin. like been

No.

summed but It has have would It been you think okay for are overall I Brexit, it certainly doing had in better up. had the an it we impact. been U.K. not

-- the wonder helpful. on well it I of XXXX in other could if that markets of books, XXXX pressure last kind give -- an was has what's but Is you commentary Great. Okay. about the also what's insight? Costa's is and impacting the line, some this how price That's Germany. release, but was in talk on increasing the could that about comment then ahead in that in in months you about in like bookings on there coming the really XXXX? words, three if also And incrementally XXXX, sounds In that terms

fill and Yes. details. then some start I'll I'll in let David with

still I but it XXXX into for changes in of Europe, be think going a environment couple us. will there a challenging is

of the German not First the case in market all, be had this we and but significant the just increase us not that XXXX. will industry, in year,

also for and well introduce will so Continental capacity case. five new so very booking that years, she going David, And you not significant efficiencies the next stuff, this have a a into It the Europe. have is and comments? of got year XXXX ship. ship that far. increase number any is year, double-digit Costa, positive is the new over So in then will Smeralda, This in be first we

Yes.

the very booking similarities our booking in with the overall in They comments the of of a So, we half and clearly stronger XXXX. for so go made the quarter, there trends for trends are time and the just the overall as extend during it were second in brands. so NAA some year. and the brands quarter there is economic early are on we we lot clearly into seeing left headwinds XXXX, our is XXXX through the back EA But process, beyond

a similar, while XXXX operating to our And you seems brands into I in environment going the on. the that build different conditions is gives we're us own know and within as mentioned, basis

Steve of Your next line the Stifel. from from Wieczynski is question

stayed guess, I guess around getting when in you I'm Alaska. Alaska back March, some much reduction about what ask to the that at wanted I and you intensified Europe, you here I has your is, question yield of look that neutral revised I guidance, guys here know I is, well? or that was And Continental I -- pretty guess said pressure called think at is specifically, out we guess has related most but as other maybe to markets,

North them. doing And a I guidance David the America our brands give well again say, we would general in included details what had overall, and guidance. to I'll on you so comment, with let regards are

the we XX have had Alaska. much that record current I the than Yes. in my said indicated lower last is previously in pretty that consistent on prepared with its which pricing well was levels remarks what had Alaska in books we year, ships

We the industry in Alaska of double the Lloyd of over rest have than ships more number in the ships.

very a is we this and lower Alaska the but yielding with pleased to to for continue seeing it's and seeing very well are market us, work in the improve high-yielding results Alaska as upon but growth So, indicated hard with very we for us. we we'll still year, capacity performing pricing, very before, well, It's -- we're are that. had

the though where total amount and we can even revenue, you going we and have we And -- a excursions. get Alaska, just capacity to in to you yield et Alaska, don't has tour of business that memory, in certain other your the refresh complication guests for have do additional of tour the to things have a rooms cetera, resorts necessarily onboard number once to increase

that's but Alaska strong, level profitable, another So complication, is is of is growing.

assume I or that probably weakens on guidance today that you, basically out I David, customer kind And is from from you're does European does for but today? to of seeing you status current add put guess guess, that, -- your sourced levels updated what quo to this stays

plan we We understand and guess. with really voyage-by-voyage environment to and our say that you're into a our is overall the try reasonable to and go country-by-country hard voyage-by-voyage generally best best believe come did getting to up sourcing because detail. It's now economic

I'm for sure there allowed do question, last is I think is, but And if Okay. not, you I or I guess, am me not today. Micky to this said,

And surprised if the were with can So eventual are I what you could meetings I Washington were us maybe a given situation? I was it you dealings like? like those some at you And officials. have ask help around Micky, somewhat sounds outcome there, might if direct if had understand the Cuba, he guess, wondering of question him

think outcome, to comment was I surprised don't definitely for at appropriate it's I the but meetings. me on

question from Wolfe Jared is from Research. Shojaian The next

Arnold, supply on you Europe. touched in the environment

reduce said do in you growth to Can you what need are you versus Germany. think is XXXX? for tell year supply those capacity? all the of year this double-digit not us guys I growth just lines, along Germany, you you industry seeing next Europe, And think what in

be Continental the in but your double uniformly. be here, for probably. these going in every think rightsizing every answer beyond into are know source part said this year the that will so -- individually ours at the I in in destination market, next latter would looking was market. any year much higher question especially up event, David you on growth digits And it Southern But And Europe market, looking than as it I you for Europe. Europe, of every always first we percentage industry, details and overall we'll looks at obviously,

can I have the all seeing for don't I -- XXXX. we answering increase in But overall know numbers part Alaska. increase when our for question, XXXX, in X.X% do your growth in us. XXXX in of And XX% for corporation. all, in to go very brand-by-brand, hard but total, and XX% are I expect first you the capacity the in the capacity it's we we different. the is us and answer that And in see So for capacity industry China question, X% numbers whole have Europe, for your of only

if And increase you total capacity the at this year? look

Europe. in X.X% was it us, For

Europe. Continental

industry looking EA the X% for a source supply deployment. to comparable to market -- next From the market really Jared's perspective, growth we in growth year point supply the compares segment the at this Jared European not year. and it are rate source the what think I was question

If up XX%, mid-single double ship you and down P&O is -- the XX% ship new with again, includes mostly -- at is new is Continental is look and reflection digits, that from Costa of single is slightly sorry, is AIDA year. is digits. Costa the is digit, down Europe, Cunard up up it this low up to Asia, high Asia with

of So that would be Europe. all

look -- for at is If this answers up the was as to line AIDA sorry, you this, focus we frankly year. want the didn't AIDA, you if capacity you, double-digit but growth have bottom

XX%.

be XX%. was newbuild. X% will XX% year. was X% or almost next with -- there be but or not the with within Almost year, And existing they was not something this up -- hardware -- won't it new ship Costa up with that

we'll Costa, will Smeralda, be is forth. year up brings and it be efficiencies Next and on but newbuild so in -- in with the which so

have different will capacity there increase year year. others will they well the as Germany So experiencing brands be was increase a next not capacity dynamic this from in and

look the said we're things try And of hasn't is in Europe focused the brands growing in So ourselves when things that of so and so performance at forth. will course, to and all Having into to other you if adjustment, still changed the a to improve yield addition demand creating to better primarily do we've this and that much on with those on, those focused number that, even earnings Europe. AIDA they there. on going overall primarily situation all that environment we're be markets in a conversation going been in from

do what invested focus focus Costa a still in opportunity base to So well. to have have that and going on we and the AIDA we on, return and want growth we is opportunity good have forward earnings to as capital, which with on an

am information not saw mean, check unpacked and decent the you it you back capacity a I in said, go But same amount a to what seems everything still the on. XXXX. I'll transcript understanding degree of growth if There's maybe there's there. like I of Okay. lot in XXXX, as

in have this besides, player a more environment I you mitigate more challenged, obviously marketing so supply bit do mean, largest to coming you And here now, I can or XXXX, on out I just and, whatnot? mean, is the that as the if if what capacity you do can right guess, little better? out understand I industry, mean maybe help why in take come not some me

of AIDA all, we I first would say, return one is brands have. highest the of that

provide us it's while had an accretive story, us hardware us give this new and us the have is the opportunity, I new they're it overall a return existing And hardware, is getting hardware again, as there, capacity new did a story, to mentioned, not Costa an generation. be deliver. earnings and for increase may year, so is and and with performance financial not yield an it with it going helping vessel,

still will looking to adjustments. July be all will see be this need but not, We though, of overall we make at capacity feel looking to we that at capacity overall if some with other we

one XXXX. unit And just costs, for years. Arnold, thinking benefits reasonable I in ex next the growth really bit fuel, years. for few Is NCC of about of of that quick scale guess, down guys it? you few last me. conclude your I is are how and XXXX be leveraging to should in kind next am these constant talking Is about currency, more and that each supply talked it Okay. you little cost for of, you one a the beginning year first

and demand? reduction to But either so and to be cost I or the have that -- gives it that's it unit be worthwhile unit us The line invested the reinvest that think the drive to assessing. definitely goes absolutely, to is increase, the bottom opportunity with reductions. capacity create cost the to evaluating for should is, trade-off yield. opportunity will question is And

from is question line next Wedbush. of the Hardiman James from The

is Europe the time get or worse just clarify So previous guidance do just you last that to better? on would did your since assume reported understand, think it I'm just to getting Europe, trying you

to when go things of this And think, lot with in we even half year a give we now factor whole again, and I guidance, guidance, happen. we things. a have

wrong of assuming even to within in half year. go guidance, some second the are things going the so are this we And

know if And of look and though had what moving just happening but what's asking were we but complements many just holistically We've because happened the a of you But us. where had issues to where challenge you guys overcome worry one -- there's it I you kind had you're Europe, parts. years, yield around. is was year, past, about complements things overwhelm able now -- events. other year and them them moves about other over the so at in time this in and the think Caribbean markets we've China and we stuff right the

So weaker yes, every than get appeared at things things some some Europe get it is -- stronger, But definitely things again, year. that time. weaker

it this us whether look it and look capital. in chasing, Europe, drive we're and so that invested will us we changes, see we're And towards elevated on help to if need make ahead case, making we changes look the return be at happens and already accommodate to to and other and growth double-digit is what have to earnings at which

that. to add I'd So

the of remarks explain think we tried prepared and to surprised the that needed the levels my we I at second during quarter. in were I bookings that of sort prices

the we're about economic as creating something is the are could the stimulus So Europe. environment they to ECB to you the really, seeing and seeing we're is seeing more demand say, similar what talking in it's help environment

took and in of quarter. -- why So it a we surprise we this our bit guidance that a reflected that's was

my then question And Cuba. Okay. second on was

Cuba there secondarily, secondary figure disruption mean, any out that how other ripple other pricing it flows on out, maybe Cuba initially figure I you that trying of an then much replaced that the figure to big I'm out not if So was you get how just with, words, much to has of a trying the I'm next number $X.XX ban, to as to fact on have rebooking? And into the begin of even with effect year? Cuba? of to the but weren't it's In all stops that versus going impact $X.XX, the just ships a and premium are consequences trying -- Cuba stops? get to travel

And into itinerary complex at Yes, adapt the that the the thank therefore, Cuba is is have see is next off are it already companies to you. gone didn't what islands. ships Again, can And -- stopping it to The and generate. plans reality question, the Having higher-yielding year. Caribbean. said others off us was foreseeable so will and the add that, future Caribbean for already table. like for they

be because so it percent will itinerary ways with will Caribbean the knows next while we potentially the is come if of to And capacity year creative of more the can't effect, whatever. percent revenue who fact entirely. out less what yields certain overall That a the and generate those may onboard of some up -- it's or be ships move

very impact this it Cuba. and yes, the Yields could a So market even strong of been year. with put has occupancy I but market are pressure, been a some additional strong the Caribbean very up, is up. mean, has it

a in lot to short-term. the disruption that $X.XX the from cancellations the was mind keep in of $X.XX So

said, Cuba increase we can't our what they the Arnold impact short when we is that dynamic year be To to mind short sailing year, started less anticipate half to their there's keep add in was that also had -- Next on this demand, build year capacity. year and have a of Cuba competitors but impact. books did hard the bookings one capacity lot to so a potential full that a it without cruise the versus may

predict to So in they'll the short back going capacity we versus will do the cruises. others what and long market keep can't if really

be things the is this of watching one so closely. very And we'll

said it looks -- looking good. but XXXX, right that, and to it's build a But manage having into bookings early, Caribbean now. are that's the into very early deep I looking mean strong,

we question? your answer Did we I want just addressed make it. to

I Yes. really it. appreciate That answer. was a perfect

next The is Felicia Barclays. from of the Hendrix from question line

subject of, challenge picture's call, So question, to how other so the many, have been is a you I all -- issue than brands. different sense issue, the wondering tomorrow are have in kind and structure what specific time. vulnerability to thought to, kind I not least, given is country-specific examining And moving remove kind is a of at probably with it's are Costa their so to an many am mean like with really competitors like have entrenched shift what I strategy, that But AIDA you successful understand your be in with and strategy on was you I there you that there. sourcing Arnold, so economy, will global just the change of and bigger but about their it I what brands, you entrenched you have? each just company with that. I if going of wondering, in know today and any over you your the And your strategy could brands would an

looked you at on model more less. it's any the some could capital, model benefit cases, invested a some part because is, the return model, better, But given financial in reality the time year, of last business. our metrics, the slightly five common performed over or not, has in look things, all years, just comparably, the managing but We've like at in cases,

is of dependence impact others, what so example, our was year, on from players. of Cuba, because we less on less is For this total our the business other Cuba actually an while impact, it had than than portfolio

We they have Europe than in do. more activity

us to So dramatic it is Europe in the them. for than impact more is

place approach we move the capacity growth in modest This things those we're portfolio than can next over deliver and proof the the delivers. of feel in a model last it's other. a strongly the year, the overall years, pudding. look better it's it be as we the the several build over has model delivered five portfolio, a so portfolio to in first the coming the But prepping and years. And year, had overall for plans But any around, but brands was and and given one will going slightly

brands Yes. not regional want I want national portfolio do do of that competitors they're we we the results they And and brands. well to in our very that But consolidated types out, we and in point of have results brands global do point get just into as within some also long do as run time from out indicated, have the to their They're perspective. because have of portfolio. equity from our variety strong an the Arnold over treated

on story make yield know, and as makes but more capital, you chasing it we're complicated. does more story end, It complicated. in But the return the yield earnings our the invested absolutely guys

Yes.

that some points actually see I --- AIDA, country-specific from the of in some world it are are just what that challenges those is like of to anyway but it, something... just seeing, understood you think too, brands other seeing so, not the

clear. guys point like would make AIDA, on out though. would out like just We to you AIDA it point I to to on to

challenge I yield some overall we and earnings. a we said, higher-performing that's And the year revised is as AIDA growing that stuff, have. it's this yield of While brands one

think the and very going so taking are that the in just taking Go sorry, the forward, going I am dynamics team brand ahead, the along actions and confident performance. we're about you And is we're I to were... it future, with enhance overall, that

is you you there on what comments quo That's Alaska for your said interpreted status as helpful, it -- on have might so that eventually, getting thank is worse. is to is Alaska, interpretation? your No, people it Is yes, a -- you. just or in Alaska clarify, helpful. That's

Alaska No. -- or anything. I wouldn't getting David? ahead, Go is worse not

small are I'd brands. I was in call little mean, mean there guidance restriction puts brands But I NAA than -- No. and takes. in travel NAA the the the and of okay, that, only prior the was two disruption versus Cuba. voyage Other a it our Yes. puts the to and really takes a things bunch out

just then on up you I your was think so that, And Perfect. said X%. Okay. onboard, that

nice year hard to though you're trend throughout not seeing the even to a extent predict? Can you there surprising how that the expect about you what and to that, just So it's that's that's talk positive.

Yes.

remarks, the onboard guidance. in is So We in indicated those continue to those year works, sides expect revenue, which the we both prepared things the we see lot which in got in type as we balance to should and of did I hopefully as do better improve my see yield of what other in Atlantic. numbers the move increases on And we or -- we forward. included a are increases at the

The Fargo. the of Wells Tim next from Conder question with is line

-- the the happened then two side on a of there seeing want all to and the you to and follow year, seen your have tour amount you're how in -- said, significant that on we But are, even didn't yet capacity, competitors Thank One for a your understand to little rates negative thing the they grow same grows, that tour and onboard going do degree so though did that's really I as as able lower not you on add that you're pressure ticket limited the been you're up price, being is, yield. color it's last Alaska. on mix did capacity not Alaska. the the --

if were it you little if maybe some a XX to would I Alaska do differently, question months, So guess, there. that we had is bit XX issues do things again, there rewound to you executional one in

-- well competitors comment don't but on mean, market for Alaska, you I segment I a won't us. very growth destination know ships very, in Alaska, in for any that, our Alaska. we're tell Yes. we can us, I a on about I about wish the make growth doing Alaska us. is have XX

we so there in a is And problem Alaska. don't feel

money land doing But with we're not are drag. Any other that associated they're well comments, a rooms look the so play we're you're changes, hotel and Now Alaska. mix trying some guests, come yes, making on getting yields that just can the still come when and that, total lower beyond and things at but yield in track be things the all if David? we're into those yield growing, incremental at they on of additional that the overall to you tours, a other

rest I'll combined, more compared to thing the the the us our only than new is is the of we ships competitors. The mix year-over-year add in dramatically have just to needle Lloyd to it difficult since so Yes. adding X ships high-yielding industry move for or Alaska X by

Right.

short-term, it's and but called press the out Maybe mostly the, last how are XX especially guess, over to you I China Fair. in seemed here the your from Europe X% focus seeing China them, on what your months granted just but "festivities" you and the over days you six given total are seeing, China, fallout okay. Europe. in shift to there things only release, capacity, call Okay, you let's or transpired, geopolitically X%, all outlook? basically then China, last the any then business in preamble, your

Overall, chain is business the had is doing increases better better. we've yield and and

go So ahead, David.

Yes.

referring the the may the be and booking world and is A comments really what the NAA think our you're because we break somebody it just segments, both have into I EA, and E interpreted E. to to two the was

just the Continental And it's E. actually the of Europe part

Exactly.

Okay.

before. you fairly is there little been XX island days. view Really stable last the over So to a said in U.K. that's the the your west, as

Yes.

Correct.

of Sachs. The Stephen from next question is from line Goldman Grambling the

As growth with a being a cited slowed few follow-up portfolio-wide capacity, the the ROIC announced opening the your over years on in to question targets to double-digit had earlier of as part key you Jared's past capacity newbuild tandem remarks somewhat and ROIC. path

portfolio-wide perhaps we next in you just on years? through over new comment of thought a are the can growth on locked So process looked ship your deletions your how as on basis, out us couple walk orders versus

Okay.

new more just ships, you to of terms efficient, they build efficient. are they're newbuilds, fuel economies In more efficient, always are because more they get scale, of cost you're going

goes. when quickly going to lower-performing depends are question that how the vessels? So on how is you divest And to it comes capacity the market

the accelerate invested a in the those new wrong return ships challenges reduction lower-yielding then ships on demand ships, to and on So market persistence if go fill capacity place because giving But are creating we are you ships. new your we see double-digit capital. would the to

relatively and thinking what on fleet? broader what So there with to how maybe Vista, as new relative ships that's happened should the ship, we follow-up happened a a be about other new

significant high-performing modified which it of why we all, is very the of guests weeks a to few in had have a fact their right a little -- care itineraries our given to cancellation the disruptive impact of we and kind where is plan. take was Vista way, from vacation of First some ship, of bit

So very ship. mechanical this reduce the speed that of high-performing issue a is ship, the

forces issue, the But reducing reduced the Some in speed the repaired. itineraries wasn't the mechanical speed of speed just issue ship. safety change the got of ship, it and a that get to you reducing a

with so equipment. ships that equipment other unique addressing that of not not just involved. have in issues with ships equipment And and manufacturer there ours, the other the particular on it's Vista, the that on been particular And have other obviously front other same with to being but companies, it other is ships, we're piece of

so unavailable the which have had to very taking Shipyard, into longer the return the to a we an might but dock it AIDAprima on quickly was dry little alternatives able by other taken, have and and service. fix dock find some did year, issue dry it the it ship a Grand Bahama Unfortunately, we We at dry to otherwise magnified had that the than have and with to last were take it's close it dock impact.

a potential the be be potential So that to to ships, other could is there you're impact another just is so impact? that at part citing it or Vista, in as specific clear, you're the looking

Vista. is -- to specific essentially It's No.

next from Curtis Instinet. with the is The Harry question of line

And of XXXX? 'XX? the for days Can mentioned number sense from trying you outlook the just you is the the of any then dry of, XXXX there I in sailings? Arnold, give given meaningful your plan. get a is refurbishment how is dock us different a on to difference, likely am impact sense what

of dry leaving So dock the just the go ahead. unplanned, out it,

Yes.

'XX, The days. we And to it's number So had going for in XXX is little be for essentially XXX a same 'XX. XXXX, days. higher,

Okay.

meaningful particularly not then? So

Right.

achieving mentioned time objective growth. Okay. double-digit Arnold, earnings over you of And then, your

on be XXXX? have achieve to is the and that an particularly it intuition to give the going sense in your you capacity that in does XXXX, had you're able increases Given your -- double-digit we're to in impact pricing that markets that globally likely growth see the

giving not we that XXXX. here for But We're guidance clearly, objective. working early. towards it's Again, will be

to do growth, objective, need achieve capacity of pricing you think? to 'XX kind order to you next that you would X% to in have So year, how power -- if just growth get double-digit in earnings broad much strokes

what with that address. Depending the would savings do we cost

The improvement? is X% Obviously, yield you as fleet get with driving you beyond we'll can that. yield as yes answer and could. be above little there So

on the past, and earnings effect invested capital. And is there beyond of growth past, that in to shown the matrices the cost we've deliver be Obviously, return we've double-digit to so all to versus just yield. we're can shown the that increase in the and working going combination you investors capability drive

give drive will to growth. math just a and growth, you And earnings cost the X% a behind will capacity X% earnings a top growth X% growth X% X% reduction yield of a on drive that,

Capacity.

with matter, marketing costs up of practical a X% in capacity capacity as the But anticipation industry growth. year, dials pretty significantly that growth next typically

capacity for seem decline would that given have remote, costs pretty the that the amount year is net is -- a to it that cruise marketing your of to next opportunity higher fair? you're spend, So to ahead in me get of with going

a bottom you, reality have line to given guidance to to that definitely you kind is given scale certain again, reach frequency the put in continue you're end, not and amount heavily with the invest lot in and We'll the already of reality, And you capacity improvement practical have, either et cetera. see. We we have here. will to the of But we cost growth, But have of available reinvest. is, to promotion, We're messaging, that to or invest. whatnot. the and a chasing

demand on our in in always paid more increase you message, How reason et of You mail on. digital PR effecting leveraging how media the have to you versus direct don't sources then because cetera. of media the versus messaging versus and what's ramp and scale bias scale, people, proportionally -- to our up you need. used on And effective

that dynamics with of expect lot being invest. We're to capacity some to the have we're effective. the at of focused capacity not more afraid from cost you cost of time, the we And increase. opportunity. a increase, there's improvements and So level But same harvest on there

Research. question line Assia is next the The from with Infinity Georgieva of

have this so pressure competitive terms most of years XX industry, it of Is probably of of that role. additions? we has Alaska for of to a time. In fair be got following so you -- questions. my played this in Alaska, In one the thank some to Couple much say informative calls, capacity the spending that

or getting the to to think new absolutely companies a -- more are it return there's go Again, of chasing the been Alaska sound got will to makes there other Alaska earnings to fact from I having I and more not ships that and on tone cruise anything weak don't Alaska the in that's think it yield like case. we're capital. role. and that's But you've dynamics. invested just is something, the to try play questions, just going end,

strong have is to higher love would yields we do to Alaska, work while Alaska, a that, market. Alaska so going very And in higher, to even we're

as Italy, a had any et recession and Europe, Southern specific issue through be as really ago, to seems And we mean Germany, I Europe opposed follow-up a going to cetera. Spain of Brexit, kind is opposed years switching there to gears major problem you're as Greece, to macroeconomic that seeing?

And of isn't So -- of closer booking shape. for to we terms upside there Europe passenger early in poor that such QX? it's market be of the from in opportunity, QX there kind end given really could shouldn't be sourcing part that and

what that's our given work now. you time in what's best our to more a challenging. Southern guidance We're certainly going point of periods and have challenging It to at to time, even at this in we've beat what projection we guidance. included environment facing been in some for And gets Europe. But try has is it we're

hope All right. so it it has I better out far. than works

to going work better, and to work you. thank We're you. out Thank hard

question line from the Montour JPMorgan. of next from Brandt is The

about Dominican Just quickly haven't talked from Republic, we me, that. so really

annual guys of capacity? consumers Have the exposure you terms cost you due headlines in the type market any is there? from recent stiffness to what the of curious, for seen that Just to

there, any couple our incidents a isolated to noticed what's read. we haven't which happened going what been of DR result as on from a any all So impact hotels in of bookings the of I've have

was wonderful and spent fact, last son in a DR a had the overall so week, there week vacation. And in my

about a then And to quick, hear. Alaska I ton. talked we know great That's

the industry relief that what's guys, you read year next you of growth, early there will think for kind get For the capacity for there? and any there? Is

little... Sorry, was your a question

Alaska in it or to capacity any is is going relief? flat? Is down question The be there up, next year,

us It industry but for year, up industry. don't We yet, was this it's the XX% have the X%. up of more and are half than we

line Blair. The Zackfia the next is from Sharon with William question of

of if question follow-up guess, at and to but wondering give it so onboard be passenger last I brighter but on over I I settling clearly, spot, years. sort bringing Europe, you from in end spending of kind or a if than lower out in a discounting just the mean wanted some I arrows pace it's it helpful. you've that's few a impact the so that am pulled growing on around could that's would any is many pace -- lower that less, Robin's the us yields. of you're seeing context of quiver it's has

Yes.

in if quarter. So yields guidance second results. went We you we we and in changes guidance itinerary some in approximately back had quarter that similar December, gave the that actually the to included the the second that seasonality were up X% affected to

as anticipated increases the and it, second slightly third quarter. year. we fourth I do being, in higher call the we quarter And the of So expect lowest the said increase before,

discounting follow-up And Europe you yields in to to the flowing onboard through any from that, impact just are on there? seeing so

on we're sides onboard revenue impact Atlantic, both So Europe. in not are Continental in the our of and said, seeing any onboard we significant increases cases, revenue Europe, both seeing I as on in

question line Farley the of from from next The is Robin UBS.

have I a question. back, follow-up circling Just

Robin. back, Welcome

in again. got Yes, thanks. See, line but I

just I I that some challenges repositioned. of some of said, the Just are fact of ships Cuba the not the know Cuba, port, may in and the or maybe older the size easily smaller year. -- just as you there no given about next plans guess be thinking on there for ships Cuba,

relations guess, of... is your kind wait for I wait wanted to change Is something a of different to kind there next the on, in view out with year view maybe a kind that so of the year and get get that to a I a year, put have if Cuba. would do you just And administration, through of in them see

No.

welcome open certain thing. ships But travel have of that concentrate, is our for That is, versus second are our hardware to have. ships look, obvious, our thing that's cruise the Cuba that think, whenever again. we change type didn't first We Cuba I we other. we

America core of ships. Having our fleet, so Carnival as of our So our it's it's core our and case Caribbean core fleet, Seabourn of in the in normal that, clearly, I fleet, would the Holland ready Caribbean with said, and Cuba. the ports the the at other best in the are Cuba along draw. of Carnival, a they as ships said stop was

draw a wanted You introduces don't have now work go were yields to pricing. an But to clearly, causes it on. we good and as that definitely getting capacity at overwhelming factor it to anything. fill shift Cuba, ships a or so the guests to it harder But us and see who was lifted to

Only Caribbean I comment been strong other will is has that Robin the make very, very overall.

We're But questions. over little know to it two more we time. destination strong of market. couple more that in late, take Keith. want questions, don't but you or a minute a so So of happen, I couple started happened We'll one

Okay. Wolfe follow-up from a The is next Jared Shojaian one from Research.

Just quick one housekeeping, too. real

normally But think release, XX-Qs. and I growth over in how year? you're years to capacity, D&A any about this D&A on the CapEx. you us the how in I about it then didn't and CapEx Just few guidance and your next for think give see thinking tell capacity can you

-- 'XX, X.X%. it down. in $X.X depreciation and year. and up, in go and they billion 'XX is X.X%; for for are is $X.X and billion for billion but the $X.X it's year X.X%; is for next 'XX. roughly is 'XX, billion year, numbers. growth for CapEx 'XX, can't X.X%; in for year in growth Capacity Those was this 'XX is $X.X the it million $X.XX They will $XXX Interest come billion

removed for booked you Great, position you're release of or you, on that's position just Beth. think that's you then it are the coming And if same you strong? your in hardware fleet, on is called just Thank neutralize Costa you the have I not if hardware, for that as very your leaving and XXXX selling for in you new couple then out ships, helpful. booked hardware old XXXX, a

mix it's I But new So difficult. haven't ship, is given size, an tiny. for done the very we very time mix I taken will every tell actually that a that analysis analysis. mean, overall you do I our --

the am I a it's impact as well. bookings on assuming so And tiny very

seen strength one talk but Caribbean just your and if the any last just this, I one. I can you of competitors? talked a mean, know missed just seeing, that little Great. bit? activity And but I any apologize from have you're then you about that the I about you promotional

see we promotion And activity do lines ramp-up been activity other Well, I promotional we related well. and occasionally as yes, with the all doing the some in from we've But price answer to that ours cruise holding seen we time of and, will promotional that. be, guess, guess ship? to well would a Cuba I the have. Have

question, One Keith. more

from is Assia one a The next Georgieva from follow-up Infinity Research.

at to you managed thank you, Thank again. and Carnival. Keith, in team I sneak the

the be at Or Would choice, hypothetical, take you what at to opportunity? terms say, if we're had wait-and-see "Well, can end." stance? of jump back a would looking Cuba, you a So tomorrow, willing the you go administration you in let's says,

No. will Absolutely. Whenever we absolutely we go can go to Cuba. back back to Cuba,

experience micro of locals there to great terms them, for of a more it guests. the but broadly for is Cuban-Americans then the impact driver who family, citizens for the in there's the a Cuban for a lots economy want And Americans. for connect with So individual for Cuba. big Obviously, of

our would opportunity. we and we welcome had So experiences great We guest that go back. absolutely for

correct, $XXX calculations direct imagine cruise X.X the over lost year, probably that roughly? rough three of about the $X half for worth it's would companies and I it's second this million based Yes. economic to probably impact, billion impact major on year, of

lost significant right you we a Cuba, it. no kept very long. impact economic everyone. there's you much All a It's for know I little about question thank

having we're all disappointed Just disappointed mitigate With working know Vista, our with guidance, situation. that. are teams to to very that again revise the while hard

a of earnings. last obviously and double-digit considering you much. we're We're year's the that We -- we the beat generating working some actions importantly, and of on. and very earnings hard are with we return still cash we'll taking so objective strong eventually foundation record still be on to we're more growing at are our actions well invested and take to But great capital and double-digit positioned of subset time. over those, take growth Thank double-digit return confident we'll for feel

you you now for disconnect today. can conference We the call participation, your conclude your and lines. does thank That for