Josh Weinstein
President, Chief Executive Officer and Chief Climate Officer at Carnival Co. &
Good morning. This is Josh Weinstein. Welcome to our Third Quarter 2023 Earnings Call. I'm joined today by our Chair, Micky Arison; our Chief Financial Officer, David Bernstein; and our Senior Vice President of Investor Relations, Beth Roberts.
Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the cautionary statement in today's press release. Another quarter and another set of milestones and records. This quarter, we reached net income well in excess of $1 billion and EBITDA well over $2 billion. We also achieved revenue, adjusted EBITDA and adjusted net income that all exceeded the high end of our June guidance range with constant currency adjusted cruise costs in line with expectations.
Furthermore, customer deposits and booking volumes both important forward indicators hit record levels for the third quarter. Thanks to the efforts of our amazing team, ship and shore, we exceeded the midpoint of our adjusted net income guidance by $175 million this quarter. The outperformance was driven by strength in demand for our brands with both our North American and European segments equally outperforming expectations. The result was yields that were higher than anticipated that exceeded 2019's strong levels and that reached an all-time high.
On the European front, occupancy came in better than anticipated for Costa and AIDA with both brands hitting 119% occupancy in all. [Phonetic]. Not to be outdone, P&O Cruises achieved its highest occupancy in over a decade despite a 40% capacity increase from 2019. And as for pricing, our third quarter per diems were 5 points higher than 2019, also hitting record levels and more than overcoming the absence of St. Petersburg, which was among our highest yielding itineraries and weighted to the third quarter. Normalizing for this impact, we estimate per diem growth would have been up about 7 points, which is consistent with each of the first two quarters and our upwardly revised fourth quarter guidance, which David will elaborate on.
Essentially, we've consistently been delivering pricing, well in excess of 2019 levels, while closing the occupancy gap by 11 points over the course of the year. Continued strength in demand has allowed us to take-up our expectations for full year per diems by a full point. This is a meaningful accomplishment given how much of fiscal 2023 was already behind us. At the same time, we're working to stay within our narrowed cost guidance range, while managing down interest expense as we accelerate our deleveraging plan. The higher revenue alone more than offset the recent spike in fuel prices, which is currently forecasted to step-up by 20% heading into our fourth quarter.
I would note that while we have experienced volatility in fuel prices before, there's only been one other period in the last 15 years that our fuel price has reached this level. In this case, changes in fuel prices and FX rates combined are $130 million drag compared to June guidance and mask much of our significant underlying business improvements that is delivering an additional $200 million-plus to the bottom-line for the second half of the year. As a result, we still expect our 2023 adjusted EBITDA to be $4.1 billion or more, which is well within our prior guidance range, and we are raising our net income expectations for the year.
As I've done in the past, to give you a sense of how we're faring operationally without noise from fuel price or currency rates and without the benefit of increased capacity, I'll share our EBITDA per ALBD progress holding fuel price and currency constant to 2019 levels. We reached 59% of 2019's levels in the first quarter, 73% in the second quarter, 90% in the third quarter, which was better than the 85% we expected, and we are striving to hit 2019 levels in the fourth quarter. Of course, in reality, we're not ignoring the impact fuel is having on our business. In fact, it's been a focus for years.
We continue to work aggressively to manage fuel costs the best way possible by consuming less. Heading into 2023, we already had the most fuel-efficient fleet of our public peers by a wide margin and we're looking to widen that gap. We're on track to achieve a step change reduction in fuel usage and results in carbon intensity in 2023 with fuel consumption per ALBD nearly 16% lower than 2019, even better than the 15% we had anticipated. I know this is stating the obvious, but not only is this effort benefiting our bottom-line by hundreds of millions of dollars, it's also better for the environment and something we'll keep pushing on for 2024 and beyond.
Speaking of '24, I'm still pleased with our revenue trajectory heading into next year. Our brands have been working aggressively to build a strong base of business as we position for further revenue yield improvement next year. We're now significantly ahead of same time last year by about 10 points and well ahead of where we were in 2019. In fact, we already have less inventory remaining for sale than same time last year, despite 5% more capacity and sailing with occupancy at historical levels.
Our book position is as far out as we've ever seen it with our European brands booking cruise now essentially back to 2019 levels and our North American brands exceeding historical highs. And importantly, we've been able to achieve this 10 point occupancy advantage at higher ticket prices versus same time last year. By all accounts, it's a great start to 2024. While we see no signs of demand slowing for our brands, at some point, booking volumes for 2024 will recede as we simply run out of inventory to sell.
Now we appreciate there are heightened concerns around the state of the consumer as of late. But the fact is, we just haven't seen it in our bookings or our results. And we believe consumers are continuing to prioritize spending and experiences over material goods. And the vacation value we offer will continue to resonate with those seeking more for their vacation dollars. As you know, we have been leaning into that message given the unprecedented and unwarranted value to land-based vacation alternatives.
Further, our revenue base is recurring with over half our guests being repeat cruisers. It's visible with well over 50% of the next 12 months booked at any given time and it's predictable with 40% of our onboard revenues now pulled forward by pre-cruise sales, which is an 11 point increase over 2019. How is all this trending by region? Well, North America consistently remained strong with Carnival Cruise Line, our highest returning brands continuing to outperform. Accordingly and due to our portfolio optimization efforts, two-thirds of our capacity growth next year is weighted to Carnival Cruise Line.
And while our European brands were on a delayed trajectory for reasons we've discussed at length, they are world class brands in fantastic markets that we are dedicated to for the long-term. So it is incredibly gratifying to see them progressing so nicely and now keeping pace with the improving trends we've seen for our North American brand. In fact, in Q3, each of our Continental European brands, AIDA and Costa, delivered higher yields in 2019, again overcoming the outsized [Technical Issue] from the absence of calls [Technical Issue].
And finally, there's Australia. I am pleased to say that with the recent lifting of protocols in Australia, like the U.S., they too saw spike in bookings in response to the great news. Our demand generation efforts are clearly working across all regions, as you can see in our results, our forward guidance, our book position and our booking trends.
We are also seeing other positive forward indicators that suggest we're continuing to generate healthy demand. First time cruisers reached 170% of prior year levels in the third quarter. In fact, we've taken well over 2.5 million guests on their very first cruise so far this year. Web visits are running at 135% of 2019 levels, paid search is at 150% and natural search is at 185%. Suffice it to say, all are consistently running at multiples of our capacity growth. The effects of our myriad of commercial enhancement activities will compound over time and our ongoing investments in advertising and lead generation should keep that funnel of demand building.
We're also creating excitement around our new ships and new destinations. This quarter, we welcomed our second ultra-luxury expedition ship, Seabourn Pursuit. Pursuit marries the same yacht-like small ship experience Seabourn guests have come to expect with an unparalleled range of expedition activities and expert 24-person expedition team and unique features like custom-built submarines. We are looking forward to showing her off later today at her inaugural stuff in Miami. And we are about to embark on a drumbeat of news around our new destination in Grand Bahama Celebration Key expected in the second half of 2025.
Just yesterday, Carnival Cruise Line announced the opening of hundreds of sailings to Celebration Key ultimately across 18 different ships departing from eight different home ports. You'll have to stay-tuned for more details on this amazing destination and a fantastic experiences our guests can expect. But what I can say today is that not only will Celebration Key deliver Carnival's patented brands of fun, its strategic location close to so many of our home ports is also designed to advance our fuel and carbon reduction efforts. It's truly a win-win-win for the environment, for our guests and for our guests and for our great hosts, the people of the Bahamas.
Turning to the balance sheet. We have been actively managing down our debt and reducing interest expense. With improving performance, positive cash flow and $5.7 billion of liquidity, we anticipate ending the year with debt just under $31 billion, already over $4 billion off the peak and counting. I'll take the opportunity to remind those naysayers that as we stated six months ago, this debt reduction happened without issuing incremental equity. That said, we recognized we still have a ways to go to reach investment-grade leverage metrics in 2026.
The strong demand we're seeing certainly builds confidence in our return to meaningful free cash flow generation and our reduced newbuild pipeline should amplify that opportunity. Once again, I attribute the outperformance this quarter to our greatest assets, our people, our shipboard team members who are consistently exceeding our guests' expectations, our shoreside team that support the ships, generate strong demand and attract new to cruise guests along with our travel agent partners, and of course, support from all of you, our investors, our loyal guests and our many other stakeholders.
I think I can speak on behalf of all 160,000 team members when I say that it is a privilege to work at a company whose purpose and mission is to deliver unforgettable happiness to our guests by providing them with extraordinary cruise vacations, while honoring the integrity of every ocean we sail, place we visit and life we touch. It motivates us to do our jobs well and responsibly and will help us keep our strong momentum as we head into 2024.
With that, I'll turn the call over to David.
