Moody’s Sets US Cruise Industry’s Outlook at Stable
The outlook for the US lodging and cruise industry has been revised to stable from positive reflecting the expectation that adjusted EBITDA growth will slow in 2017, according to Moody’s rating agency.
In full-year 2016, adjusted EBITDA is expected to grow 8% to 10%, and 4% to 6% in 2017 for the 18 companies Moody’s rates.
Through June 2016, lodging and cruise EBITDA increased 14% and is attributable to the strength of the cruise companies which have experienced robust earnings due to capacity expansion and low fuel prices.
Cruise line EBITDA growth is also anticipated to slow in 2017, however, overall growth will remain healthy and outperform lodging. The cruise industry has benefited from 10 ocean ship launches in 2016 as well as low fuel prices which will accelerate EBITDA growth to 14 to 15% in 2016.
“We estimate that the ocean cruise capacity for Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line will increase 2.5% in 2017 following a 6.4% increase in 2016. In addition, there will be less incremental benefit from lower fuel prices and foreign currency translation will continue to weigh on earnings,” Moody’s Senior Vice President, Margaret Taylor, said.