WEBVTT - Carnival CEO Josh Weinstein Talks Earnings, 2025 Travel Outlook

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. It is so great

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<v Speaker 1>to have back with us. Josh Weinstein. He's president, CEO,

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<v Speaker 1>and chief Climate Officer of Carnival Corporation. Their brands, you

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<v Speaker 1>know them, their namesake, of course, Carnival, Princess, Holland America, Seaborn,

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<v Speaker 1>many more. He joins us right now, Josh does from

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<v Speaker 1>Carnival's headquarters in Miami. Josh, good to have you here

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<v Speaker 1>with us. Happy holidays.

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<v Speaker 2>How are you?

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<v Speaker 3>Thanks for having me at Happy holidays, Carol, Tim nice

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<v Speaker 3>to be here, Thank you.

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<v Speaker 2>Hey.

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<v Speaker 1>Listen, last time we talked in September after earnings, we

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<v Speaker 1>highlighted that nearly I think half of your bookings were

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<v Speaker 1>done so at record ticket prices. Now some two thirds

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<v Speaker 1>of twenty twenty five have been booked. Tell us about

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<v Speaker 1>those bookings. Are they also at record prices?

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<v Speaker 2>Yeah, they are.

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<v Speaker 3>You know our book position as well as we did

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<v Speaker 3>this past year. If you look at where we are

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<v Speaker 3>today versus same time last year, we are hire in occupancy,

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<v Speaker 3>higher in prices. As a matter of fact, it's historical

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<v Speaker 3>levels for both for each of the four quarters for

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<v Speaker 3>twenty twenty five. So, as I heard you saying before,

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<v Speaker 3>I came on. The demand for our cruises is pretty.

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<v Speaker 4>Phenomenal typically this time of year, Josh, how much of

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<v Speaker 4>the following year is booked? How different is this than

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<v Speaker 4>historical averages.

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<v Speaker 3>We don't give that out for various competitive reasons, but

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<v Speaker 3>I'd say it's nicely it's nicely higher.

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<v Speaker 2>To give you a sense of the momentum.

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<v Speaker 3>You know, if you think about what was our booking activity,

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<v Speaker 3>how much activity did we generate in the last quarter,

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<v Speaker 3>So from the period of September through the end of November,

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<v Speaker 3>that beat last year, even though we had less to sell.

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<v Speaker 2>So we sold more.

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<v Speaker 3>For twenty twenty five, and we sold it at higher

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<v Speaker 3>prices versus the same time last year, And at the

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<v Speaker 3>same time, we set a record for booking activity for

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<v Speaker 3>the following year out so in this case twenty twenty six.

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<v Speaker 3>So things are moving really positively across the board. And

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<v Speaker 3>the great thing is this is broad based. So when

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<v Speaker 3>we look back at twenty twenty four and we look

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<v Speaker 3>at our portfolio of world class brands, we were actually

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<v Speaker 3>higher mid single digit to mid teens percentage wise in

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<v Speaker 3>our yields, in the revenue we generate for person per

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<v Speaker 3>day across all of our major brands, all of our

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<v Speaker 3>major trades. So it's really gratifying the team, our global

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<v Speaker 3>team has done a phenomenal job and really a shout

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<v Speaker 3>out to each and every one of them from doing

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<v Speaker 3>what they do.

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<v Speaker 1>Okay, this maybe sounds a little bit stupid, but why

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<v Speaker 1>do you think this is happening? I mean, and I'm

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<v Speaker 1>just curious what is it? Tell us a little bit

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<v Speaker 1>about it and remind us, because you do have a

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<v Speaker 1>portfolio of brands and it reaches across different consumers, if

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<v Speaker 1>you will, of your brand, So give us an idea

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<v Speaker 1>of why you think you are still seeing kind of

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<v Speaker 1>record bookings.

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<v Speaker 3>Will need an hour, right, I mean, there's so many reasons.

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<v Speaker 3>The principle and I remember I remember being on with

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<v Speaker 3>you a year ago and talking about what we'll call

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<v Speaker 3>the price to experience ratio, and the price to experience

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<v Speaker 3>ratio of a cruise versus the price and what you

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<v Speaker 3>pay for a land based alternative is nuts, right, I mean,

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<v Speaker 3>the value that you get from a cruise for what

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<v Speaker 3>we provide is night and day to what you can

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<v Speaker 3>get on land. And people are recognizing that, and so

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<v Speaker 3>we are catching a net much wider into the general

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<v Speaker 3>population for people who will now consider cruising as a

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<v Speaker 3>vacation alternative, people who have never cruised before. As a

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<v Speaker 3>matter of fact, in twenty twenty four we had over

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<v Speaker 3>ten percent more new to cruise than we did the

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<v Speaker 3>prior year, So becoming more mainstream, breaking down myths, and

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<v Speaker 3>that value gap is real. So we can still increase

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<v Speaker 3>our pricing as we've been doing the last few years

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<v Speaker 3>and be an incredible value. And I tell you there's

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<v Speaker 3>so many things that our teams are doing better and

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<v Speaker 3>better every single day, from how we manage the revenue curve,

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<v Speaker 3>the yield curve between the time we launched two and

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<v Speaker 3>a half years in advance to the time we sail.

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<v Speaker 2>Our marketing is amazing.

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<v Speaker 3>Our brands doing a better better job of creative marketing,

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<v Speaker 3>getting in the consideration set and then performance marketing and

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<v Speaker 3>make sure we close the deal and get the booking,

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<v Speaker 3>you name it. We could talk about it all day,

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<v Speaker 3>but everything is moving in a positive direction.

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<v Speaker 4>Josh, forgive me. We have some breaking news, so I

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<v Speaker 4>want to jump in with that. Speaker Johnson says the

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<v Speaker 4>House to vote on a funding bill today. He said,

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<v Speaker 4>vote on a government funding the House. He says that

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<v Speaker 4>the agreement has been reached on government funding, and he

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<v Speaker 4>says there will be no government shutdown once again, Johnson saying,

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<v Speaker 4>Speaker Johnson saying that agreement has been reached on government

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<v Speaker 4>funding and there will be no government shutdown.

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<v Speaker 1>You know, I got to say, Josh, there's so much

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<v Speaker 1>coming at us, and so many individuals and leaders CEOs

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<v Speaker 1>that we talked to say, you know what, we're kind

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<v Speaker 1>of holding off until we get an idea clear picture

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<v Speaker 1>of what happens in twenty twenty five. You are obviously optimistic.

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<v Speaker 1>You see numbers and data in real time in terms

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<v Speaker 1>of bookings, But I am curious about the upcoming White House.

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<v Speaker 1>Is it good, bad, or neutral for your business?

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<v Speaker 3>You know, we had a great relationship with the Trump

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<v Speaker 3>administration the first time around. We had great relationship with

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<v Speaker 3>the Biden team, and I expected that that great relationship

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<v Speaker 3>we'll pick up with President Trump again. So you know,

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<v Speaker 3>our job is to deliver amazing vacation experiences to millions

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<v Speaker 3>of guests.

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<v Speaker 2>A year around the world.

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<v Speaker 3>That is what we do, and we do it very well,

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<v Speaker 3>and every single year there is something right because we

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<v Speaker 3>are global and the macro economy and the geopolitics are

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<v Speaker 3>what they are when I was with you a year ago. Today,

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<v Speaker 3>we didn't have Red Sea on the radar screen. The

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<v Speaker 3>Baltimore Bridge hadn't collapsed, you know, hurricanes hadn't done the

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<v Speaker 3>damage that they did in the United States, government elections

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<v Speaker 3>getting thrown for a loop in Europe like the UK

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<v Speaker 3>and now Germany.

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<v Speaker 2>None of that was on the radar screen.

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<v Speaker 3>And we outperformed our December guidance by seven hundred million dollars.

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<v Speaker 3>Our job is to deliver no matter what the world

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<v Speaker 3>might bring, and we'll continue to do that.

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<v Speaker 1>So I do wonder when you look at twenty two

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<v Speaker 1>twenty five, what macroeconomic factors, what geopolitical factors concern you

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<v Speaker 1>the most? Josh, you know when you think about the

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<v Speaker 1>company's twenty twenty five performance potential? Oh man, you know, sorry,

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<v Speaker 1>I'm asking you, Chris.

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<v Speaker 3>Yeah, that's all right. I'm not going to single anything out.

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<v Speaker 3>I mean, like I said, our job is to deliver.

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<v Speaker 3>We deal with whatever the world might bring.

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<v Speaker 2>We are nimble.

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<v Speaker 3>Our team is amazing at reacting as they need to.

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<v Speaker 3>But more importantly, we are proactively doing what we need

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<v Speaker 3>to do to position our ships with our guests the

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<v Speaker 3>right way and delivering onboard so the world of turn

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<v Speaker 3>crises will come and go and people will keep cruising.

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<v Speaker 4>You've been President's CEO Chief Climate Officer since August of

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<v Speaker 4>twenty twenty two, so you've been in this position for

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<v Speaker 4>a couple of years. Relative to the last couple of years,

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<v Speaker 4>how would you describe the health of the American consumer

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<v Speaker 4>right now? Same, better, worse.

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<v Speaker 2>We're just seeing continued positive momentum.

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<v Speaker 3>So I think it's hard to say anything, but it's

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<v Speaker 3>just as good now as it has been for the

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<v Speaker 3>last few years for us, in particular, given the record

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<v Speaker 3>yields that we're just coming off of and we're building

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<v Speaker 3>on top of that.

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<v Speaker 2>And you've got to remember we're a global company.

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<v Speaker 3>So yes, the United States is the biggest cruise market

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<v Speaker 3>by far, and we're doing incredibly well in the United States,

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<v Speaker 3>but we are also the biggest in the United Kingdom,

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<v Speaker 3>the biggest in Germany, second biggest thing in Italy, second

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<v Speaker 3>biggest in Spain, Brazil. So we have an incredible global presence.

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<v Speaker 3>And the fact is economic cycles come and go, prises

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<v Speaker 3>come and go, macroeconomics will flow different times in different

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<v Speaker 3>places around the world. So our portfolio approach of being

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<v Speaker 3>in these phenomenal markets really serves as a great hedge

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<v Speaker 3>for us because things will come in their cycles and

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<v Speaker 3>leave their cycles at different times.

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<v Speaker 4>So, of those geographic markets that you mentioned, even those

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<v Speaker 4>that you didn't mention, where you do operate, where you

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<v Speaker 4>do play, where are you most bullish?

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<v Speaker 2>Oh? Where am I not? You?

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<v Speaker 3>You know, if you think about cruising right and you

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<v Speaker 3>think about our brands, we're about a third of the market.

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<v Speaker 3>Let's just say, in broad terms, if you take the

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<v Speaker 3>whole cruise market and you put it into a bucket

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<v Speaker 3>with all of the vacation alternatives at the same time,

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<v Speaker 3>we're about two to three percent of the overall vacation market.

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<v Speaker 3>And so how can you not be bullish when we

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<v Speaker 3>are so underpenetrated as a global industry. I mean, it

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<v Speaker 3>is remarkable what inroads we can make by just getting

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<v Speaker 3>people who have never cruised before to consider cruising. And

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<v Speaker 3>I'll tell you what, I don't know a Disney's strategy

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<v Speaker 3>anymore than anybody else does from the outside, But I

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<v Speaker 3>do know that they talked them awful lot lately about

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<v Speaker 3>reducing the investment in their land because they want to

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<v Speaker 3>build more investment into cruise and double the size of

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<v Speaker 3>their fleet. I think that is very, very telling, and

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<v Speaker 3>I think it's a brilliant idea.

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<v Speaker 1>Okay, and you guys have invested in your fleet. And

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<v Speaker 1>I'm also curious about you know, when I did a

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<v Speaker 1>deep dive on the company and I got off at

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<v Speaker 1>Grand Turk, you guys have a port there, and I

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<v Speaker 1>am curious about these offshore destinations for Carnival travelers. How

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<v Speaker 1>significant is the July twenty twenty five opening of your

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<v Speaker 1>Celebration Key private island destination to the companies full your

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<v Speaker 1>revenue out look, I am curious about how this moves

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<v Speaker 1>the financial needle, these offshore ports that are yours. You

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<v Speaker 1>know that you guys highlight.

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<v Speaker 3>Yeah, absolutely, They're a critical piece of our strategy. So

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<v Speaker 3>even today without Celebration Key, we've got six jewels in

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<v Speaker 3>and around the Caribbean, and we carry We took about

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<v Speaker 3>six and a half million guests to one of our

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<v Speaker 3>destinations in that geography. That's about equal to the rest

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<v Speaker 3>of the industry combined with theirs. On top of this,

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<v Speaker 3>we've got Celebration Key, which is going to be a

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<v Speaker 3>phenomenal guest experience built from the ground up for Carnival

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<v Speaker 3>Cruise Line. And their idea of fun and just a

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<v Speaker 3>wonderful guest experience on board, and there's a lot that

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<v Speaker 3>we can go into, but it's going to be phenomenal.

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<v Speaker 2>Now.

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<v Speaker 3>With respect to twenty twenty five, it's really not that

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<v Speaker 3>much of an impact because we don't open until July

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<v Speaker 3>with a handful of cruises and then we build up.

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<v Speaker 3>So for the corporation overall, it's only about five percent

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<v Speaker 3>of our itineraries in twenty five we'll touch Celebration Key.

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<v Speaker 3>That ratchets up to about fifteen percent when we get

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<v Speaker 3>to twenty twenty six. On top of this, we've announced

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<v Speaker 3>that we're doing some major investment in one of our

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<v Speaker 3>other existing destinations, traditionally known as Half Moon Key and

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<v Speaker 3>rebranded relax Away at half Moon Key, because it's a

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<v Speaker 3>different vibe than Celebration Key. It is a beautiful tropical paradise,

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<v Speaker 3>white sand beaches, and what we want you to do

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<v Speaker 3>there is lean into the beauty and the pristiness of

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<v Speaker 3>that location and the crystal blue waters and relax and

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<v Speaker 3>enjoy yourself and unwind.

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<v Speaker 2>And we're going to be able to.

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<v Speaker 3>Marry these two types of experiences on the same itinerary,

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<v Speaker 3>so you get the idyllic and the ultimate beach days

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<v Speaker 3>across those portfolios.

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<v Speaker 2>Well.

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<v Speaker 1>Listen, great to check in with you. You and investors

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<v Speaker 1>are certainly respecting the optimism that you have put out,

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<v Speaker 1>certainly in earnings and then on your call with analysts.

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<v Speaker 1>I'm so glad we could get some time with you. Josh.

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<v Speaker 1>Happy holidays to you and your family, and look forward

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<v Speaker 1>to talking to you in the new year. Josh Weinstein Folks, President, CEO,

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<v Speaker 1>and Chief Climate Officer of Carnival Corporation, joining us from

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<v Speaker 1>Miami