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Carnival's Recovery: Selling Lots of Drinks and More Cheap Cruises

Carnival's Recovery: Selling Lots of Drinks and More Cheap Cruises
Photograph by UIG via Getty Images

All the low fares for Caribbean voyages appear to be paying at least one dividend for the largest cruise operator. Bargain hunters aboard Carnival’s ships have been springing for more of those tropical cocktails with tiny umbrellas—and those drinks aren’t cheap.

Carnival noted that on-board spending jumped 10 percent in the most recent quarter, compared with that of the same period last year, part of a strong financial performance that spurred the company to raise its profit forecast for 2014. The results speak to a recovery for the Carnival brand that’s “probably a little faster than we had any right to believe it would be, but at the same time it’s not nearly fast enough for all of us,” Chief Executive Officer Arnold Donald said on a conference call with analysts. He was responding to a question about the rebound of the company’s namesake brand after a disastrous 2013 in which the Carnival Triumph suffered a fire and was stranded in the Gulf of Mexico. “We’re pleased with it,” Donald added, “but at the same time, we’re not satisfied.”