February 03, 2009 | Comments 0

Royal Caribbean’s Profit Plunges

At the start of the Wave Season, we saw major cruise lines dishing out some great deals in an effort to boost sales and profit for 2009. Royal Caribbean has been in the forefront of this battle, but so far none of their strategies seem to work as the company continues to monitor the season’s ticket sales. The discounts aren’t enough to lure in passengers, who have no money to spend on vacations.

Richard Farin, Royal Caribbean’s CEO, said that they “expect even more challenges in 2009” based on the sales during the last quarter of 2008. The downturn started way back in September of 2008 until the end of the year.

Analysts from Wall Street are deeply alarmed at the troubles Royal Caribbean is now facing. The major cruise line has been reported to ordering a number of ships which will be delivered within the next couple of years. Royal Caribbean owes billions of dollars alone for these ships, and analysts wonder how the company will be available to fulfill their obligations with the decline in profits.

Farin is still hopeful though, because ticket sales are beginning to stabilize as bookings continue to come in. With the magnitude of discounts, credits and other perks, the company expects a change of trend before the wave season ends. Hopeful as they are, Royal Caribbean is still expected to lose tens of millions of dollars during the first quarter of 2009.

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