Cruise ship operators Carnival Corp. and Royal Caribbean Cruises Ltd. continue to be crimped by weak demand for trips in Europe and the Caribbean, according to a survey of travel agents by Raymond James analysts.
Raymond James said in a note Monday that the European cruise region looks to be the weakest area. The region is likely to continue underperforming through year's end compared with other areas, the investment firm said. The dollar's recent weakness compared with the euro and higher air fares are among the factors considered to have reduced U.S. consumers' demand for European cruises, Raymond James analyst Joseph Hovorka said in a note. Cruise passengers frequently have to take planes to connect with ships and to return home. European cruises tend to be more expensive than those in other areas.
Recent social unrest and protests in Europe also were cited by some travel agents polled, Hovorka noted.
In light of the economic tension in Europe and continuing protests, Raymond James is skeptical about cruise demand rebounding in the Mediterranean region until the end of the year. And consumers' economic anxiety is holding down cruise demand, Hovorka wrote in a note.
The recession gave a hard hit to both Carnival and Royal Caribbean, depressing demand, and they cut prices in response. Carnival and Royal Caribbean, both based in Miami, are the world's largest and second-largest cruise ship operators, respectively.
THE STOCKS: Carnival shares fell $1.74, or 5.2 percent, to $31.78 in afternoon trading, while Royal Caribbean shares dropped $1.29, or 5.1 percent, to $23.93, amid a plunge in the broader market that pushed the Standard & Poor's 500 index down 1.6 percent to 1,196.
Source: forbes.com
Raymond James said in a note Monday that the European cruise region looks to be the weakest area. The region is likely to continue underperforming through year's end compared with other areas, the investment firm said. The dollar's recent weakness compared with the euro and higher air fares are among the factors considered to have reduced U.S. consumers' demand for European cruises, Raymond James analyst Joseph Hovorka said in a note. Cruise passengers frequently have to take planes to connect with ships and to return home. European cruises tend to be more expensive than those in other areas.
Recent social unrest and protests in Europe also were cited by some travel agents polled, Hovorka noted.
In light of the economic tension in Europe and continuing protests, Raymond James is skeptical about cruise demand rebounding in the Mediterranean region until the end of the year. And consumers' economic anxiety is holding down cruise demand, Hovorka wrote in a note.
The recession gave a hard hit to both Carnival and Royal Caribbean, depressing demand, and they cut prices in response. Carnival and Royal Caribbean, both based in Miami, are the world's largest and second-largest cruise ship operators, respectively.
THE STOCKS: Carnival shares fell $1.74, or 5.2 percent, to $31.78 in afternoon trading, while Royal Caribbean shares dropped $1.29, or 5.1 percent, to $23.93, amid a plunge in the broader market that pushed the Standard & Poor's 500 index down 1.6 percent to 1,196.
Source: forbes.com
