MID-JANUARY 2015 WAVE PRICING SURVEY

Transcription

1 MID-JANUARY 2015 WAVE PRICING SURVEY JANUARY 26, 2015 Tdd Jrdan Felix Wang, CFA HEDGEYE.COM JANUARY 26,

2 CALL TO ACTION With il falling t a new lw last week (Brent at $48), the fuel cst tailwind cntinues fr the cruisers. At sme pint, il will stp ging dwn and investrs may have t cntend with ptentially sfter than expected cruise demand. The latest pricing survey n Wave cntinues t signal chppiness with Eurpean pricing leading the slwdwn. Our survey crrbrates recent cmmentary frm sme f ur travel agent cntacts. SUMMARY Caribbean pricing was supprted smewhat in certain areas in mid-january e.g. Carnival brand in the Eastern Caribbean. Generally, hwever, the Caribbean remained a highly prmtinal envirnment. The Eurpean picture was clearer: pricing is waning. This isn t the first time we ve warned f the risk f lwer Eurpean pricing. In mid-january, the RC brand legacy fleet shwed significant pricing declines in Eurpe in the first 3 quarters f Meanwhile, mst f CCL s ther Eurpean brands experienced pricing declines in mid-january. Nrwegian lst sme pricing mmentum in bth the Caribbean and Eurpe but it was ffset by strnger pricing frm Oceania/Regent. The new ship premiums were impressive, led by Quantum. Oasis/Allure s clse-in pricing als did well as their Q APDs was almst n par with Quantum s. Nnetheless, mst f the new ship premiums were maintained n lwer pricing acrss the bard. SURVEY METHODOLOGY We track YY and sequential pricing fr 13,500 ship itineraries spanning acrss 8 gegraphic regins. We fllw brand pricing fr the fllwing: Carnival, Ryal, Celebrity, Pullmantur, Princess, Hlland America, Csta, Cunard, Azamara, Nrwegian, AIDA, P&O Cruises UK, Oceania, and Regent. We rely n sequential pricing trends (defined as the mst recent directin f hw pricing has changed relative t pricing seen at the last time the cmpany prvided guidance) fr price pivt signals. HEDGEYE.COM JANUARY 26,

3 MID-JANUARY SURVEY PRICING PIVOTS CCL: Neutral RCL: Negative NCLH: Neutral Higher Eastern Caribbean and Alaska pricing since mid-december was ffset by weaker sequential Western Caribbean and sme Eurpean brand pricing. CCL reprted FQ4 earnings n Dec 19 th. Eurpean slwdwn: F2Q 2015 pricing fr RC brand is nw barely higher than where it was in mid-octber; the pace f deteriratin picked up in January. Fr F3Q 2015, it is lwer than mid-octber levels. YY Eurpean 2015 RC pricing remains firmly in the red. RCL reprted FQ3 earnings n Oct 23 rd and will reprt FQ4 earnings this Thursday, Jan 29 th. NCL discunted prices in the Caribbean/Eurpe in mid-january relative t bth its mid- Octber and mid-december levels, bringing 2015 YY pricing dwn t flattish levels. Hwever, Prestige made a nice recvery in January, relative t December, in all regins except Asia. NCL reprted FQ3 earnings n Oct 29 th. PIVOT HISTORY HEDGEYE.COM JANUARY 26,

4 SURVEY DETAIL REGION SPOTLIGHT: ALASKA Alaska has exhibited the strngest pricing grwth s far in 2015 as it is due t stable pricing and easy cmps. HEDGEYE.COM JANUARY 26,

5 CCL It s a mixed picture fr Carnival in the Caribbean. Eastern Caribbean pricing has imprved in mid- January while Western Caribbean cntinues t slump. Csta still has nt exhibited any pricing mmentum and cmps will be much harder as the year prgresses. Caribbean Carnival brand Eastern Caribbean sequential pricing is firmly higher fr the Carnival Brand frm FQ1-FQ3 2015, which is a gd start t the year. On a YY basis, pricing fr 1H 2015 is in the green while early Q remains 2% lwer. HEDGEYE.COM JANUARY 26,

6 Western/Suthern Caribbean - Galvestn/Ls Angeles FY2015 pricing gt wrse in January ff f already lw levels. FQ pricing decline is the largest. Sequential pricing suggests the discunting envirnment has nt abated in this part f the Caribbean. HEDGEYE.COM JANUARY 26,

7 Princess/Hlland America Bth brands pricing are mdestly lwer fr FQ1 but Princess pricing is recvering. On a YY basis, Hlland America summer 15 pricing is flattish. Eurpe Csta s verall 2015 YY pricing is nw flattish but sequential trends cntinue t wrsen particularly fr 1H HEDGEYE.COM JANUARY 26,

8 P&O Cruises UK mmentum is slwing. Summer 2015 pricing is nly slightly up YY AIDA pricing tumbled acrss the bard, bringing 1H 2015 pricing int negative territry. 2H 2015 pricing is slightly higher but the sequential pricing trend is negative All ther Eurpean itinerary pricing was mixed as weaker Hlland America pricing ffset strnger Cunard/Princess pricing Alaska Alaska has been leading the way s far in Wave 2015, mstly due t easy cmps with cmpanywide pricing up duble digits YY cmpanywide. Asia/Australia Steady pricing HEDGEYE.COM JANUARY 26,

9 Suth America Csta pricing is up while Hlland America is discunting RCL Lwer Eurpean pricing is the key cncern and the standut bservatin frm this editin f the Survey. In additin, RC s legacy fleet is having difficulty with pricing pwer in the Caribbean. Cannibalizatin f the RC brand may be playing a rle here. Elsewhere, pricing is generally slid fr RCL. Caribbean Ryal Caribbean brand RC brand s legacy fleet has been discunting pretty steadily in 2015 Celebrity brand Eurpe 1H 2015 pricing remain flattish YY but sequential trends have imprved in the last 2 mnths Ryal Caribbean brand Sequential pricing grwth cntinues t slw with F2Q 2015 pricing nw nly up 5%, frm Octber s guidance. Falling prices is even mre evident in F3Q. On a YY basis, F2Q/F3Q 2015 pricing remains significantly lwer. HEDGEYE.COM JANUARY 26,

10 Anthem f the Seas pricing slipped again in mid-january Celebrity brand Summer 2015 pricing remains firmly higher YY with stable pricing Alaska Ryal Caribbean brand Slid YY pricing grwth due t easy cmps with sequential pricing steady Celebrity brand Celebrity s summer pricing YY remain slightly lwer with sequential pricing steady HEDGEYE.COM JANUARY 26,

11 Suth America Pricing is vlatile but directinally FQ pricing has been higher NCLH A little weaker Caribbean/Eurpe in mid-january fr the Nrwegian brand is ffset by grwth frm Oceania/Regent. Caribbean Nrwegian brand 2015 YY pricing has dipped a little further int negative territry with sequential pricing deterirating HEDGEYE.COM JANUARY 26,

12 Regent/Oceania brands Eurpe Nrwegian brand Sequential pricing recvered in mid-january Sequential pricing mmentum cntinues t drp with weaker clse-in pricing YY pricing fr 1H 2015 cntinues t be in the duble digits, thugh at lwer levels then previus mnths Regent/Oceania brands Alaska 2015 pricing imprved again in mid-january Strength acrss Nrwegian brand pricing, sequentially and YY. We may see a +15% pricing imprvement fr Regent/Oceania brand pricing was als strng Hawaii Asia Hawaii Summer 2015 pricing is trending +20% YY, due t easy cmps. Insignia pricing fr its Arund the Wrld itinerary is nw -7% belw levels seen in Octber. Oceania Nautica als reduced pricing fr its Asian destinatins. NEW SHIP PRICING POWER Quantum f the Seas (RCL) Very clse-in pricing (Feb/March) fr Quantum (and Allure/Oasis) was relatively strng. Premiums cntinue t be impressive and are substantially abve average. Quantum s premium in China is currently arund 50% HEDGEYE.COM JANUARY 26,

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14 Anthem f the Seas (RCL) Anthem is generating very high premiums but has pricing tpped? As mentined befre, the discunt t Allure is attributed t custmer mix. Csta Diadema (CCL) Diadema premiums relative t its Csta peer grup has cnsistently been in the teens, althugh, pricing fr the entire Csta fleet has been declining. HEDGEYE.COM JANUARY 26,

15 P&O Britannia (CCL) Britannia pricing averaged premiums near 25% althugh APDs have fallen recently AIDAprima (CCL) AIDAprima will be in Dubai fr the winter seasn. Cmpared with that f the ther AIDA ships cruising arund Eurpe, AIDAprima premiums have been flattish. HEDGEYE.COM JANUARY 26,

16 CONCLUSION Slwer Eurpean pricing will be the key risk fr net yields in S far, ur Survey has nt signaled any imprvement in that area fr CCL and NCLH. Fr RCL, the Survey is pinting t sme deteriratin in Eurpe. Weaker Wave pricing here in January is a cause fr cncern fr the stcks and will be increasingly s when fuel stabilizes. HEDGEYE.COM JANUARY 26,

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