Carnival Corporation CCL seems to be betting big on the Australian market. The company recently introduced two new ships – Pacific Aria and Pacific Eden – under the P&O Cruises Australia brand.
With the addition of Pacific Aria and Pacific Eden, P&O Cruises Australia would have five ships operating from eight ports in Australia, New Zealand and Singapore throughout the year. The company also hosted a celebration at the famous Sydney Harbour and a social media naming ceremony.
Over the past decade, Carnival’s presence in Australia has grown rapidly with its local fleet increasing from two to nine ships (including the two recently announced) under three brands – P&O Cruises, Princess Cruises and Carnival Cruise Line.
P&O Cruises plans to add another ship, Pacific Explorer, to its fleet in the coming months. A ship currently sailing under the Princess Cruises brand and known as Dawn Princess is also expected to enter the P&O Australia fleet in May 2017 and sail from Sydney during the inaugural season.
Australia boasts a rapidly developing cruise market with passenger numbers growing roughly by an average of 20% in each of the past five years and crossing the one million mark in 2014. A stable economy and growing middle class with high disposable income make Australia an attractive bet for Carnival. In fact, the cruise company is looking to mitigate the economic headwinds it is facing in the European markets by deploying more ships to the fast growing Asian shores.
Apart from Australia, the Asia Pacific region is steadily emerging as a major revenue generating market for cruise companies like Carnival and Royal Caribbean Cruises Ltd. RCL that are planning to tap into this demand through significant investments.
Carnival currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same sector are Vail Resorts Inc. MTN and HomeAway, Inc. AWAY, both carrying a Zacks Rank #2 (Buy).
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