Of Course, Carnival Makes Money From Selling Cruises -- but 35% of Its Revenue Comes From Somewhere You Might Not Expect
After trudging through nearly two years of restricted travel during the pandemic, cruise ship operator Carnival Corporation (NYSE: CCL)(NYSE: CUK) just capped off its fiscal 2023 by setting some company records. As of Nov. 30, the company had customer deposits of $6.4 billion, a fourth-quarter record and 25% higher than its previous record.
Indeed, record Q4 deposits point to a strong cruising season ahead in 2024, which is obviously good for Carnival. The company generated 58% and 65% of its revenue from selling cruise tickets in its fiscal 2022 and 2023, respectively.
The fuller Carnival can pack its ships with people, the better -- this business has very high fixed costs. The cost to power the ships and the cost of the ships themselves are largely the same whether they sail at 10% capacity or 100% capacity. Filling them up, therefore, allows the company to leverage these high fixed costs and turn a higher profit.
Source Fool.com