Carnival Corporation CEO: We expect to have 50% of our fleet sailing by the end of 2021

Carnival Corporation CEO Arnold Donald joins Yahoo Finance Live to discuss the travel recovery, onboard spending, COVID-19 protocols, and the outlook for the cruise industry.

Video Transcript

- Carnival corporation is out on the high seas once more for vacation goers looking for some fun after almost two years of enduring the pandemic. Let's check in on what the company has in store for next year with Carnival Corp's long time CEO Arnold Donald. Arnold, always nice to see you. Thanks for taking some time. I know your schedule is very busy. Give us the state of play on the company. How many ships do you have in the waters? And what is the capacity look like on them?

ARNOLD DONALD: Well, good morning to you, Brian. And I trust that you're doing well, you're looking good. So in terms of number of ships, as we said, we're about to have a business update next week. So we're between updates. But as we said in the last update, we expected to have you roughly 50% of our fleet back sailing by the end of this year. And a number of those ships are sailing and nearly full occupancy. It varies around the world because there are different protocols and different constraints and so on. But there's robust demand.

- And Arl, talk to us a little bit about what you're seeing in spending onboard. There is just this tremendous pent-up demand. We didn't see it in the retail sales report today, and that's fine. But we're seeing consumers come out here and spend a good bit. What are you seeing on the ships?

ARNOLD DONALD: We're seeing the same thing on the ships-- onboard spending at an all time high. Frankly, onboard spending went up every year in an almost 50-year history except one. But this year, it really is on an individual basis as the spending is very robust. And so we're very pleased with that. And we continue to try to listen to our guests and make sure we make available to them what they're interested in.

- I know you've put a major effort, Arnold, in protocols, safety protocols, on the ships. What do they look like right now? Are masks being required? Is testing required? Take us through it.

ARNOLD DONALD: Well, as you know, Brian, we have nine world leading brands sailing around the world. And there are lots of different protocols and stuff driven by our highest responsibility and top priority compliance, environmental protection, health, safety, and well-being for everyone. And compliance is right up there. And so there's different compliance requirements.

Here in the US, we're sailing under what the CDC will call vaccinated cruises. That's at least 95% plus of the guests are vaccinated. Our crew are vaccinated. And then we test. We do require a test according to the CDC guidelines again in the US 48 hours prior to boarding. Then we have additional medical screening and additional medical protocols on board for isolation and event someone develops symptoms, et cetera.

But we sailed hundreds of thousands of guests now. We've had very few cases of COVID on board. And in fact, we've had no incidents of significant propagation of COVID on board, even when there have been the isolated individual cases.

- So you see these protocols as sticking around for some time?

ARNOLD DONALD: We'll see. They constantly evolve. They change all the time. In the US, we've been a few months now with the protocols. But even around the country, there can be different because states have different protocols from one state to the next. But generally speaking, there will probably be protocols because there continues to be the presence of COVID. Happily, it appears that the severity of the impact of COVID cases is declining in general in terms of hospitalizations or worse and our long-term effects. And that bodes well for all of us. So the sooner we learn to live with this and not have serious lasting impacts from people contracting the virus, the better off we're all going to be.

- We've seen some pickup in lockdowns over in Europe, and Carnival is a major player in Europe. Have you had to change where your ships sail because of these lockdowns?

ARNOLD DONALD: And that's the constantly evolving situation. We've had to change itineraries throughout the period. As you might recall, Brian, we started sailing even before vaccines were introduced sailing safely with protocols that were implemented over in Europe. But of course, those protocols have changed as different circumstances have evolved. In some cases, they become less restrictive. Right now, with some of the concern around the new variants, they seem to have temporarily become a little more restrictive. But again, we've been sailing consistently, safely with the best interests of public health and forefront.

- Is this one of the biggest challenges just to your recovery, and even the recovery of the industry, how do you regain public trust in taking a cruise?

ARNOLD DONALD: We have robust demand for cruise. We have so many cruisers who repeat every year. And we only have so many ships. I mentioned, the last business update, we said, we would have about 50% of our fleet back. And so the demand hasn't been the big issue. The issue has been much more around regulatory and getting destinations to the place where they are comfortable and then getting guests comfortable with the protocols required for those destinations.

But in terms of trust, I think people know the long history of the cruise industry have had to deal with viruses before Ebola, SARS, Zika, on and on and on, MERS, et cetera, SARS and MERS. And so we've had to deal with these viruses in the past. We have robust medical screening and robust medical care on board, and people know.

And right now, we probably in the cruise industry have the most effective in terms of preventing COVID from coming on board and then mitigating spread for those few cases where it might end up on board than any other travel sector because we do-- people are vaccinated. They are being tested. And we do that every cruise, pre-cruise, and then we have testing as required and stuff on board as well.

- All right. We'll leave it there for right now. Carnival Corp's long-time CEO Arnold Donald, good to see you. Good to see what you're doing there. We'll check back with you soon.