Cruise operator Carnival Corporation raised its annual profit forecast on Tuesday and pointed to record 2027 bookings, signalling sustained demand despite geopolitical uncertainty and sending its shares up nearly 12 per cent.
The company has been benefitting from affluent travellers who continue to prioritise experiences, particularly sea voyages and bucket-list adventures, even as the ongoing Middle East conflict clouds the economic outlook.
Carnival, which is the only major US cruise line that typically does not hedge fuel, raised its full-year profit target by more than $150 million from its June forecast, helped by stronger pricing, lower operating costs and improved fuel efficiency that offset higher fuel prices.
The company now expects 2026 adjusted earnings of about $2.24 per share, up from $2.22 previously.
Carnival said it was already about half booked for 2027, with both occupancy and pricing at record levels, while bookings for 2028 were off to "an excellent start."
"Consumers are prioritising travel and experiences, even as they become more selective," said Consumer Edge analyst Michael Gunther.
Older and wealthier travellers, who make up a large share of the customer base for Princess and Holland America brands, could provide an additional boost to demand, he added.
Cruise operators, heavily dependent on fuel oil and marine gas oil, have been navigating a tougher environment as the prolonged US-Iran war has heightened concerns over potential supply disruptions.
Most cruise companies have increased ticket prices and are also offering new attractions and fun activities on a budget to attract more customers.
Shares of Royal Caribbean jumped six per cent, while those of Norwegian Cruise Line rose five per cent after Carnival beat third-quarter estimates.
Carnival reported revenue of $8.44 billion for the quarter ended August 31, compared with analysts' average estimate of $8.30 billion, according to data compiled by LSEG.
On an adjusted basis, it posted a quarterly profit of $1.43 per share, compared with analysts' average estimate of $1.36.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Shinjini Ganguli)
