Analysts Report Cruise Pricing Improvements over Summer

Cruise pricing was up and Caribbean demand remained strong in August; however, bookings slipped in the same month from year-long highs reached during July, according to a monthly survey of travel agents by Bank of America investment analysts.

“We believe the trend improvements reflect improving cruise fundamentals,” said BofA analyst Michael Savner in the report.

Looking at Carnival Corp. and Royal Caribbean Cruises, the two largest cruise companies and only public ones in the U.S., Savner said that cruise pricing reached a new high in August, but bookings slowed slightly after a strong July and compared to August of last year. The strong pricing results were probably led by 2008 sailings and improved close-in pricing and a lengthened booking curve, the report said.

Caribbean demand rose modestly, the report indicated, and pricing was steady. Booking curves improved, Savner wrote, for the third straight month, an improvement he related to the increase of longer cruises in the region.

The bank raised its forecast for Carnival shares, citing both improving trends and the company’s recent transaction to start a Spanish cruise line. Also, AG Edwards investment bank reported that since mid-June, Caribbean cruise pricing has maintained a positive trend.