How much debt does a Carnival cruise have?

Carnival Cruise Debt: A Surge Amidst Pandemic Challenges

Carnival Corporation, one of the world’s largest cruise operators, has faced a substantial increase in debt over the past few years, particularly during the COVID-19 pandemic.

As of 2019, Carnival’s debt stood at a relatively moderate $11.5 billion. However, by 2022, that figure had skyrocketed to $34.5 billion, representing a staggering growth of approximately triple the original amount.

This significant increase in debt can be attributed to two primary factors:

1. Investments in New Ships: Carnival has made substantial investments in expanding its fleet with new and state-of-the-art cruise ships. These vessels require significant capital expenditure, which contributed to the company’s rising debt.

2. Pandemic-Era Operating Expenses: The COVID-19 pandemic dealt a severe blow to the cruise industry, leading to widespread cancellations and suspension of operations. Carnival, like other cruise companies, incurred substantial expenses related to on-hold operations, crew repatriation, and other pandemic-mitigation measures.

The company’s ability to service its debt has also been impacted by the pandemic. With cruise operations suspended or significantly curtailed, Carnival’s revenue streams dwindled, making it more challenging to generate cash flow for debt repayment.

To address its debt burden, Carnival has taken several steps, including:

• Suspending dividend payments
• Raising capital through debt offerings
• Reducing operating expenses
• Selling older and less profitable ships

Despite these efforts, Carnival’s debt-to-equity ratio remains high, raising concerns among investors and analysts. The company is expected to continue facing challenges in managing its debt while navigating the post-pandemic recovery of the cruise industry.