Travel & leisure (AO) | Demand is not broken, but the summer margin for error has narrowed

Research evidence excerpt

Travel & leisure (AO) | Demand is not broken, but the summer margin for error has narrowed

Connecting the dots

Release date: 24 June 2026

Julien Richer, CFA

Equity Research Analyst

+33 1 70 39 74 98

Travel & leisure jricher@keplercheuvreux.com

Europe

Demand is not broken, but the summer margin for error has narrowed

Key points:

Carnival fell c. 5% despite a solid Q2 beat with EPS and EBITDA topping guidance, but upside was mainly cost-driven, while FY

yields were cut 100bps and Q3 looked softer overall.

Sector read across is cautious for Mediterranean flight-dependent leisure with geopolitical uncertainty, expensive airfares and

late booking softness suggesting inbound demand is more fragile than local demand this summer overall.

Demand is not cracking (reassuring), but more event-sensitive and destination-specific. We confirm our conservative view on

lodging and keep Accor as Buy within coverage (regional exposure, valuation, cash return potential).

Carnival’s share price decreased by c. 5% yesterday despite a decent Q2 print. The company beat Q2 guidance, with adjusted EPS

of USD0.41 versus USD0.34 guided and adjusted EBITDA of USD1.58bn versus USD1.48bn. The upside was mainly cost-led, not

demand-led, as management said roughly USD0.05 of the USD0.07 EPS beat came from cost discipline, while only USD0.01 came

from revenue/yields.

The real disappointment was the forward commentary. Carnival cut its FY26 net yield guidance by 100bps, from +2.75% to

+1.75% in constant currency, while normalised yield guidance moved from +3.25% to +2.25%. Q3 net yields are now guided to

only +1.2%, despite Q3 being the most Europe-heavy quarter in the deployment mix (40%+ in Europe in Q3 vs 30%+ in Q2 or Q4),

with meaningful exposure to the Mediterranean and broader Europe.