Carnival, a leading cruise company, has indicated its ships are unlikely to navigate through the Red Sea for the remainder of this year and possibly into early 2025 due to ongoing conflicts in the crucial maritime corridor.
Despite expectations for 2024 to set new records in cruise tourism, Carnival and its competitor, Royal Caribbean, are proceeding with caution.
This cautious approach comes in light of disruptions caused by attacks from Iranian-supported Houthi militants affecting traffic through the Suez Canal, a vital link for maritime travel between Asia and Europe.
The company has adjusted its earnings forecast for 2024, now anticipating a 9 cents per share impact due to the detour of its vessels, an increase from the previously projected 7-8 cents in January.
David Bernstein, the CFO of Carnival, shared with Reuters that the decision reflects the ongoing uncertainties in the region, although no definitive plans have been finalized.
Earlier in January, the Miami-headquartered firm had already modified the routes of 12 ships from seven of its brands until May in response to the Houthi group’s intensified assaults on Israeli vessels or those heading to Israel, purportedly in support of the Palestinian cause.
Carnival is set to provide detailed directions in November, marking the beginning of its fiscal year, which will include rerouting five ships from three of its brands.
Meanwhile, Royal Caribbean cancelled two Red Sea trips in January, and MSC Cruises, based in Switzerland and Italy, called off three journeys planned for April from South Africa and the UAE to Europe.
Nevertheless, Carnival is optimistic, having upgraded its yearly earnings outlook on Wednesday, fueled by a surge in demand for cruise holidays, particularly among first-timers. This announcement led to a 0.9% increase in its stock price on Wednesday.
