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Carnival and Royal Caribbean lose $4.1 billion in Q3

Carnival and Royal Caribbean lose $4.1 billion  in Q3
Carnival and Royal Caribbean lose $4.1 billion in Q3
Written by Harry S. Johnson

According to its Q3 2020 earnings report, Carnival Corporation suffered a $2.9 billion loss during the period. Its revenue dropped from $6.53 billion in Q3 2019 to $31 million, a 99.5% decline for the top cruise company globally.

The second largest cruise line, Royal Caribbean had a $1.2 billion loss during the same period according to its earnings report.

Global Cruise Industry to Shrink by 72% to $7.79 Trillion

Based on the research data, Carnival had a $770 million monthly cash burn rate, compared to $250 million to $290 million for Royal Caribbean.

Moreover, according to Benzinga and Zack’s analysts’ estimates, Norwegian Cruise Lines could have an estimated 99.45% to 100% loss for the period.

Carnival’s revenue dropped by 85% in Q2 2020, going from $4.84 billion to $0.74 billion. Royal Caribbean had a 94% drop at the time, going from $2.81 billion to $0.18 billion. The biggest loser was Norwegian, dropping from $1.66 billion to $0.02 billion, a 99% drop. As of November 9, 2020, Carnival’s stock had plummeted by 72.81% year-to-date (YTD). Royal Caribbean stock at that time had sunk by 56.13% while Norwegian had dropped by 70.95%.

Though the global cruise industry has over 50 cruise lines and 270 ships, these three companies control 75% of the space. Between 2015 and 2019, the cruise industry saw a 20.5% spike in demand. In 2019, it served 30 million passengers and created 1.1 million jobs.

Prior to the pandemic, 32 million people wanted to take a cruise in 2020. According to Cruise Lines International Associations, cruise suspensions cost the US economy $25 trillion and 164,000 jobs. A report from Statista states that the global cruise line industry will suffer a 71.6% YoY drop in 2020 revenue to reach $7.79 billion.