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Good morning, everyone. And welcome to our business update conference call. I'm Arnold Donald, President and CEO of Carnival Corporation and PLC. Today I'm joined telephonically by our Chairman, Micky Arison, as well as David Bernstein, our Chief Financial Officer, and Beth Roberts, Senior Vice President, Investor Relations.
Thank you all for joining us this morning. Now, before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today's press release. We are absolutely thrilled to be back doing what we do best; delivering amazing, memorable vacation experiences to our guests.
Our team members are overjoyed to be back on board, and it shows, our guests are having a phenomenal time, our onboard revenues per guest are off the charts, and our net promoter scores have been exceptionally strong. I've had the pleasure of visiting a number of ships in recent weeks both here in the U.S. and abroad, and I can tell you, the ships look spectacular and the crew has an amazing energy.
There's such an incredible spirit onboard. Our protocols have been working well, beginning with a seamless embarkation experience and have enabled us to build occupancy levels at a significant pace as we return more ships to service.
Our brands executed extremely well in this initial phase of our return to service, particularly given significant restrictions on international travel, hampering our ability to offer our normal content-rich deployment options, as well as the operating requirements in certain jurisdictions that limit our normally high occupancy levels. Our itinerary planners came up with creative deployment alternatives.
Our marketing department made them accessible with little investment. Our Yield Managers price them appropriately to achieve occupancy targets very wholesome, and coupled them with bundled packages to drive exceptionally strong revenue onboard.
And despite all the additional protocols, our crew delivered an amazing guest experience, the combination of which enabled us to deliver cruise vacations at scale while producing significant cash from these restricted voyages. Now, while we normally don't disclose this level of information, we try to find a way to give you a sense of why we're viewing the restart as hugely successful beyond the enthusiasm of our guests and crew, and the unprecedented net promoter scores.
It became complicated because most of our voyages, while cash-flow positive, are programs that cannot be compared to 2019, and in most cases would normally be priced lower than the 2019 alternatives. So for example, in the UK, we were only able to offer scenic cruises without any ports of call, and that's our version of a staycation, which were not comparable in ticket prices to peak season Mediterranean or Baltic sailings offered in the summer of 2019.
That said, even with occupancy limitations, these cruises generated cash route stakeholders. They supported a return for our workforce, and they successfully served [Indiscernible], resulting in high satisfaction levels.
Now at Carnival Cruise Line, where we were able to offer more comparable itineraries to 2019, our revenue per diems were up 20% compared to 2019, and that's inclusive of the impact of incentives from previous cancellations, and that's despite the quote and nature of the bookings. In fact, Carnival Cruise Lines restarted more shifts out of the U.S. than any other cruise brand, and still achieve occupancy above 70%, all of which combined to generate an even greater cash contribution.
Clearly, Carnival Cruise Line is a brand that continues to outperform. While the Delta variant and its corresponding effect on consumer confidence has certainly created a myriad of operating challenges for us to navigate the near term, and has left us some bookings volatility in August, to date, it has not had a significant impact on our ultimate plans to return our full fleet to guest operations in the spring of 2022.
On our last quarterly business update, we said that we expected the environment to remain dynamic and it certainly has. Of course, agility has been a key strength of ours over the last 18 months, and we continue to aggressively manage, to optimize, given this ever-changing landscape.
In fact, while by design we're not yet at 100% occupancy, we have individual sailings with over 4,000 guests. To date, we have carried over 0.5 million guests this year already. And on any given day, we are now successfully carrying around 50,000 guests, and expect that number to continue to rise as we introduce more capacity and as we increase occupancy over the coming months.
The Delta variant has clearly impacted our protocols, which will continue to evolve based on the local environment. In markets like the U.S. where case counts are higher, we've taken swift actions to reinforce our already strong protocol, such as additional testing requirements, and indoor mask requirements, with all U.S. sailings operating under the CDC's vaccination requirements.
Our protocols go above and beyond the terms of the conditional sale order and are much more rigorous than comparable land-based alternatives. Again, our highest responsibility, and therefore, our top priority, is always compliance, environmental protection, and the health, safety, and well-being of everyone: our guests, the people in the communities we touch and serve, and, of course, our Carnival family, our team members shipboard and shore side.
The Delta variance has also created some disruption in our supply chain, impacted the timing of opening for some destinations, and created a heightened level of uncertainty that has been reflected in the broader travel sector and in our own booking trends. We quickly adjusted our deployment to push out the start date on a few select voyages, with some of our more exotic winter deployments, like our popular world cruises, we rebooked guests to our 2023 departures.
Effectively, we've managed our near-term capacity to optimize the current environment just as we indicated we would. The modifications we've made to the pace of the rollout of our fleet will optimize our cash position in the near term. Looking forward, we continue to work towards resuming full operations in the spring, in time for our important summer season where we make the line share of our operating profit.
Of course, we have ample liquidity to see us move to full operations, and we continue with a prudent focus on cash management to ensure we have flexibility under a multitude of scenarios. The current environment, while choppy, has improved dramatically since last summer, and it should improve even further by next summer if the current trend of vaccine rollout and advancements in therapies continues.
For instance, in markets like the UK where vaccination rates are already higher, consumer confidence remains strong, and we are seeing strong momentum. So far, we've announced the resumption of the guest cruise operations worth 71 shifts through next spring, and that's across 8 of our 9 brands.
We're evaluating the remaining shifts through next spring with a continued focus on maximizing future cash flow while delivering a great guest experience in a way that serves the best interests of public health. Importantly, even at this very early stage of our rollout, our ships are generating positive cash flow.
Based on our current rollout, we expect cash from operations for the whole Company to turn positive at some point early next year. Looking forward, we believe we have the potential to generate higher EBITDA in 2023 compared to 2019, given, despite our modest growth rate, additional capacity in our improved cost structure.
As further insight into booking trends, we are well-positioned to build on our solid book position and intentionally constrained capacity for the remainder of 2021 and into the first half of 2022. With the existing demand and limited capacity, we are focused on maintaining price. Even recently with heightened uncertainty from the Delta variant affecting travel decisions broadly, we continue to maintain price.
We have also opened bookings earlier for cruises in 2023, and we're achieving those early bookings with strong demand and good prices. And based on that success, we begun to launch 2024 sailings even earlier.
In fact, these efforts contributed to the $630 million increase in guests deposits. Our long-term guest deposits, and that's deposits on bookings beyond 12 months, are 3 times historical levels, driven, in part, by our proactive efforts to open more inventory for sale in all the years. Now, we expect debt deposits to continue to grow through the restart as we return more ships to service and as we build occupancy levels.
Again, these favorable trends continue despite dramatically reduced advertising expense. We continue to focus our efforts on lower-cost channels, like direct marketing to our sizable past guest database of over 40 million guests, and earn media as we build on our multiple new ship launches and restart new flow.
Of course, and most importantly, we are delivering on our guest experience. word-of-mouth remains the number one reason people take their first cruise. And as I mentioned, our net promoter scores are well above historical levels across our shifts that have returned to service so far.
During the quarter, we furthered our strong track record of responsibly managing the Balance Sheet. We completed two refinancing transactions, among other efforts, resulting in a meaningful reduction in annual interest expense. We have many more opportunities for refinancing ahead and are working through them at an aggressive pace.
Also, importantly, we have continued to make advancements in our sustainability efforts. Last week, we published our 11th annual sustainability report, sustainable from Ship-to-Shore, which can be found on our sustainability website www.carnivalsustainability.com. In the report, we build on the achievement of our 2020 goal by sharing more details on our 2030 goals and our 2050 aspiration.
The report sheds additional light on the 6 focus areas that will guide our long-term sustainability vision, including: climate action, circular economy, that's wage reduction, sustainable tourism, health and well-being, diversity, equity and inclusion, and biodiversity and conservation. Now, these areas align with United Nations sustainable development goals.
Climate action is a top sustainability focus areas. We are committed to decarbonization. And we aspire to be carbon neutral by 2050. As we have previously share, despite 25% capacity growth since that time, our absolute carbon emissions peaked in 2011 and will remain below those levels.
We are working towards transitioning our energy needs to alternative fuels and investing in new low-carbon technology. Now because of the pause and guest cruise operations, the 2020 sustainability performance measures are not comparable to prior-year data.
That there, there is a lot of valuable information on the progress we've made in our sustainability journey, despite what was an incredibly challenging year. We were clearly among the most impacted companies by COVID-19 and I'm very proud of all we've accomplished collectively, to sustain our organization through these challenging times, including all we did for our loyal guests, all we did for our other many stakeholders, and all we did for each other within our Carnival family.
In many regards, I believe our collective response to the pandemic is strong testimony to the sustainability of our Company. For that, I again, express my deepest appreciation to our Carnival team members, both shipboard and shore side, who consistently went above and beyond.
I'm very humbled by the dedication I've seen these past 18 months. Of course, we couldn't have done it without the overwhelming support from all of you who are listening in on this call, all of our stakeholders. So once again, thank you to our valued guests.
Thank you to our travel agent partners. Thank you to all the many communities and governments that facilitated getting out crews vaccinated. Thank you to our suppliers and our other many stakeholders. And, of course, thank you to our investors, for your continued confidence in us and for your ongoing support.
We continue to move forward in a very positive way. Throughout the pause we've been proactively managing to resume operations, as an even stronger operating confidence. Our strategic decision to accelerate the exit of 19 shifts, left us with a more efficient and effectively. And it's lowered our capacity growth to roughly 2.5% compounded annually from 2019 through 2025, and that's down from 4.5% pre-COVID.
We've opportunistically rebalanced our portfolio through the ship access, as well as our future ship transfer, any modifications to our new-build schedule to optimize our asset allocation, maximize cash generation, and improve our return on invested capital. While capacity growth is constrained, we will benefit from an exciting roster of new ships spread across our brands, enabling us to capitalize on the pent-up demand and drive even more enthusiasm and excitement around our restart plan.
And we will achieve a structural benefit to unit costs in 2023 as we introduce these new larger and more efficient ships, coupled with the 19 ships leaving the fleet, which were among our least efficient. With the aggressive actions we've already taken, optimizing our portfolio and reducing capacity, we are well-positioned to capitalize on pent-up demand and to emerge a leaner, more efficient Company, reinforcing our global industry-leading position.
We have secured sufficient liquidity to see us through to full operations. Once we return to full operations, our cash flow will be the primary driver to return to investment grade credit over time, creating greater shareholder value. Again, thank you for your support and we can't wait to welcome everyone back on board. With that I'll turn the call over to David.
Thank you, Arnold. I'll start today with a review of our guest cruise operations, along with our third-quarter monthly average cash burn rate. Then I'll provide an update on booking trends, and finish up with some insights into our refinancing activity. Turning to guest cruise operations, it feels so great to be talking about operations again.
We started the quarter with just 5 ships in service. During the third quarter, we successfully restarted ships across 8 of our brands. We ended the quarter with 35% of our feet capacity in service. Our plans call for another 27 ships to restart guest cruise operations during the fourth quarter in the month of December.
So on new year's day, we anticipate celebrating with 55 ships or nearly 65% of our fleet capacity back in service. For the third quarter, occupancy was 54% across the ships and service. Our brands executed extremely well. Occupancy did improve month to month through the quarter, and in the month of August, occupancy reached 59%, from 39% in June, and 51% in July.
Occupancy for our North American brands reflects our approach of vaccinated cruises, which for the time being does limit the number of families with children under 12 that can sail with us. Occupancy for our European brands reflects capacity restrictions, such as social distancing requirements for our Continental European brands, and the founds in-person cap per sailing for some of the quarters in the UK.
For the full third quarter, our North American brand s occupancy was 68%, while for our European brand, occupancy was 47%. Revenue per passenger cruise day, the third quarter 2021, increased compared to a strong 2019, despite the current constraints on itinerary offerings which did not include many of the higher-yielding destination-rich itineraries offered in 2019.
As Arnold indicated, our guests are having a phenomenal time, and our net promoter scores have been incredibly strong. As always, happy guests seem to translate into improved onboard revenue. Our onboard and other revenue per diems were up significantly in the Third quarter 2021 versus the third quarter of 2019, in part due to the bundled packages, as well as on-board credits utilized by guests from cruises canceled during the pause.
We had great growth in onboard and other per diems on both sides of the Atlantic. Increases in bar, casino, shops, spa, and internet lead the way on-board. Over the past two years, we have offered and our guests have chosen more and more bundle package options. In the end, we will see the benefit of these bundle packages in onboard and other revenue as we did during the third quarter 2021.
As a result of these bundle packages, the line between passenger ticket revenue and onboard revenue seems to be blurring. For accounting purposes, we allocate the total price paid by the guests between the two categories. Therefore, the best way to judge our performance is by reference to our total cruise revenue metrics.
As we previously guided, the ships in service during the third quarter were in fact cash flow positive. They generated nearly $90 million of ship-level cash contribution. This was achieved with only a 2-month U.S.-based restart during the third quarter, as our North American brand began guest cruise operations in early July.
We expect the ship-level cash contribution to grow over time as more ships return to service and as we build on our occupancy percentages. For those of you who are modeling our future results, I did want to point out that due to the cost of a portion of our fleet being in pause status during the first half of 2022, restart-related expenses and the cost of maintaining enhanced health and safety protocols, we are projecting ship operating expenses in 2022 per Available Lower Berth Day, or per ALBD as it is more commonly called, to be higher than 2019 despite the benefit we get from the 19 smaller, less efficient ships leaving the fleet.
Remember, that because a portions of fleet will be in pause status during the first half, we are spreading costs over less ALBDs. We do anticipate that most of these costs and expenses will end with 2022 and will not reoccur in fiscal 2023. Now let's look at a monthly average cash burn rate.
For the third quarter 2021 our cash burn rate was $510 million per month, which was better than our previous guidance, and was in line with the 500 million per month for the first half of 2021. The improvement versus our guidance was due to the timing of capital expenditures, which are now likely to occur in the fourth quarter, and some other small working capital changes.
With the timing of certain capital expenditures now shifting to the fourth quarter, the Company expects its monthly average cash burn rate for the fourth quarter to be higher than the monthly average rates for the first nine months of the year. Other good news positive factors impacting the fourth quarter are restart expenditures to support not only the 22 ships that will restart during the fourth quarter, but also the additional ships that will restart in the first quarter of 2022, along with a significant increase in dry dock days during the fourth quarter, driven by the restart schedule.
All these expenditures have been anticipated and given the announced restarts, many of them are now occurring in the fourth quarter. Also during the fourth quarter, we're forecasting positive cash flow from the 50 ships that will have guest cruise operations during the quarter. And ALBD s for the fourth quarter are expected to be 10.3 million, which is approximately 47% of our total fleet capacity.
Now, turning to booking trends, our booking volumes for the all future cruises during the third quarter 2021 were higher than booking volumes during the first quarter. That trend continued over the first couple of months of the third quarter, such that we expected the third quarter would end at higher booking levels than the second quarter, but we didn't manage to achieve that because of the lower booking volumes in the month of August when the Delta variant impacted travel and leisure bookings generally.
The impact on bookings in August was mostly seen on near-term sailing. However, the impact quickly stabilized in the month of August, and in recent weeks, we have started to see a welcome uptick in booking volumes. Accumulative advanced book position for the second half of 2022 is ahead of a very strong 2019, and is at a new historical high.
Pricing on our second half 2022 book position, is higher than pricing on bookings, at the same time for 2019 sailings driven in part by the bundled pricing strategy for a number of our brands, but excluding the dilutive impact of future cruise credits or more commonly known as FCCs. If we were to include the dilutive impact of future cruise credit, pricing on our second half 2022 book position is now in line with pricing at the same time for 2019 sailings.
This improved position is a result of positive pricing trends we have seen during the third quarter. This is a great achievement given pricing on bookings for 2019 sailings is a tough comparison, as that was the high watermark for historical yields. Finally, I will finish up with some insights into our refinancing activity.
We are focused on pursuing refinancing opportunities to extend maturities and reduce interest expense. Today, through our debt management efforts, we have reduced our future annual interest expense by over $250 million per year. And we have completed cumulative debt principal payment extensions of approximately $4 billion, improving our future liquidity position.
The $4 billion extension results from three things. First, the July refinancing of 50% of our first-lien notes for $2 billion. Second, the completion of the European debt holiday amendments, which deferred 1.7 billion of principal payments.
The deferred principal payments will instead be made over a 5-year period, beginning in April 2022. And third, the extension of $300 million bilateral loan with one of our banking partners. As we look forward, given how supportive the debt capital market investors and commercial banks have been, we will be pursuing additional refinancing opportunities to meaningfully reduce our interest expense, and extend our maturities over time. And now, I'll turn the call back over to Arnold.
Thanks, David. Operator, please open the call for questions.
Thank you. [Operator Instructions] One moment, please, for the 1st question. And our 1st question is from the line of Steven Wieczynski with Stifel. Please, go ahead.
Hey, guys. Good morning. Good morning, Arnold. Good morning, David.
Good morning Steve
So Arnold, in your prepared remarks, you -- I think I heard this right. But you talked about how you're expecting 2023's, EBITDA should be higher than 2019's EBITDA. And I -- look, I understand there's new net capacity in there that's going to help drive part of that EBITDA. But can you also help us maybe think about at a higher level what some of your longer-term assumptions are in order to get to that EBITDA level meaning, how are you guys thinking about whether it's the pricing environment, load factors, anything else you would point out that could bridge that gap?
Sure, I'll make some comments, and then give David a chance as well. By '23, again, if things continue to trend the way they're going, we should have the full fleet out. We'll have, as you mentioned, additional capacity with these exciting new ships, more efficient. We've got some cost infrastructure improvements.
We're coming out leaner and with better cost structure. We're more efficient on the ships, both from a fuel standpoint, as well as an operating standpoint. In addition to that, we expect to be back at occupancy levels more comparable to historical or potentially even better, given the fact that while there will be some capacity growth at that point in the industry, is going to be well below the capacity growth that would've occurred absent the pandemic. Go ahead, David, any additional comments?
Yeah. I just point out a few things. So the 19 ships -- between the 19 ships that left the fleet, which Arnold indicated are smaller, less efficient ships, and all the new capacity coming in, we certainly have a much richer cabin mix onboard the vessels is I think we had indicated the cabin -- the balcony cabin mix was about 6% higher, so that does give us the opportunity to generate more revenue.
The combination of the ships we said before, those leaving the fleet and the new builds, give us a unit costs that the ship operating level of 4% reduction on the fuel consumption, just the change in the fleet that I described is 3%. In total, it is at 10% capacity increase, net of the ships that left the fleet.
So with all of the pent-up demand and all of the things -- the revenue management things, the bundle packages that we're offering, which is driving on-board revenue, and everything else we're doing, we feel, as Arnold said, that we have the opportunity for stronger EBITDA in 2023 compared to 2019.
Okay, great. That's great color. Thanks, guys. And then second question. As we start to think about 2022, is there any way for you to help us think about how '22 is sold at this point? I guess what I'm trying to understand is, how much of your capacity is actually available for sale at this point? And then, how do you think about opening up more capacity for '22 without ultimately impacting your pricing ability?
Go ahead, David.
Yeah. No, happy to. So for all intents and purposes, I think in most cases, we have announced the restart date for 71 ships out of the 95 that will be in the fleet in the spring of 2022. But even though ships where we have not announced the restart date, in most cases, we have cleared the inventory for the dates that we don't expect to sail, and we are only selling, at this point, the dates that we do anticipate sailing.
We just have not made the formal announcement on the remaining 24 ships, but those will be forthcoming in the days and weeks ahead. So what is out there today? More or less, give or take, there may be some changes a little bit on the margin, but more or less what's out there today is what we're selling. We talked about the back half of the year being at a new historical high in terms of the book position, and we were very pleased with that.
People are booking further out and so we're seeing the benefit of that. The first half of the year, the only reason we didn't give a detailed year-over-year comparison of '22 versus '19 is because it is a bit of an apples and oranges comparison. While we are very pleased and look at the first half of the year and for the voyages that we're selling, we feel they're at the high end of the historical booking curve.
The reason for the apples and oranges comparison is, in the first half we're not running most of the world cruises and all the long exotic voyages. And they tend to book much further out because they're much longer. So if we gave you the numbers, it would be an apples and oranges comparison. But it is fair to say that we feel very comfortable with the pricing and the book position for the first half of 2022.
But --
And Steve as I said in the prepared comments too, we will have -- or we're planning to have the full fleet going on time for the summer season where we make the bulk of our profit. So for the second half of '22, we're looking to be at full force. Go ahead [Indiscernible]. You had an add-on comment?
David, if you just -- 47% of our capacity will be sailing in the fourth quarter. We end the calendar year, we said, with nearly 65% of our capacity, so during the first half of the year, we're going to go from somewhere around 60% on December 1st up to 100% at the end of the first half. So you can begin to see that the first half of the year is going to be somewhere in between that, depending on the exact ramp-up of the capacity.
But to be clear, so if -- I'm going to make this up. So let's take the Carnival conquest. I'm going to make a ship up here. For the second half of next -- let's look at the second half of next year. Are you selling 100% of that capacity today or are you still holding back some of that capacity because you don't want to try to get up to that a 100% level? And hopefully, that makes sense.
No, we're not for future voyages out there because, obviously, we're nowhere near selling out yet. Obviously, if we did, we would've underpriced it. We're not restricting the capacity that we're selling for the back half of 2022. There's no reason to.
Got you. Thanks. Thank you, guys. Appreciate it. Thanks for the color.
All right. Stay safe, man.
Our next question is from the line of Robin Farley with UBS. Please, go ahead.
Great. Thank you. I wanted to clarify your commentary on the expenses. I know you mentioned some expenses next year, obviously, would not be recurring the capacity out of service, the restart costs, and then maybe a piece, if it is, would be the enhanced protocols. If you looked at only the period where everything is operating, and so, you -- the restart expense would not be in there, and the burn of ships out of service.
For that period forward, and then I guess this would also mean for 2023, is it fair to say that your expense per passenger cruise day would be below 2019 levels when you exclude those onetime restart costs?
Well, so --
We're in good -- go ahead, David, it's okay. Go ahead.
So when you exclude all of those costs and looking to 2023, I mean, we had indicated that the benefit of the change in fleet was on the ship operating expenses with 4% per ALBD. We also have found deficiency shoreside as well, and so there are cost deficiencies that we have. We're also -- as the whole world is, we are seeing some inflation.
We're working hard to mitigate all of that inflation. We don't see it nearly as much as people in the U.S. in terms of the labor, given our employment base comes from nearly 150 countries around the world onboard our ships, so we have a much more of an opportunity there.
And so we're working hard, but I'd be hesitant to give guidance on 2023 cost structure. I think it just fair to say, to give you all the pieces that are out there, and then we'll give guidance as we get closer.
Okay. That's helpful too. Would you venture whether for 2022 whether the shore side efficiencies would offset the inflation and enhanced protocols just for '22 if you exclude the -- if you get past through the restart expenses?
I'd be hesitant to give guidance at this point. Clearly, the shore-side efficiencies will flow through, and since we're still working through all of the details relating to and sourcing and making changes and mitigating some of the inflationary costs, I'd be hesitant to give guidance, but you can be sure that we've got people focused on those items to optimize the situation.
Okay. [Indiscernible] helpful. Thank you. And then my other question is just to clarify the commentary on price for next year. If we're just looking at the second half when it's a little more comparable and then you said excluding the future cruise credit discounts that pricing is about in line with 2019 levels, I just wanted to make sure I understood when you gave your earlier commentary about how -- there is more bundling now.
So more of what is being booked now for second half compared to 2019 has more of some of the onboard expense in the ticket price because of the bundling, if I'm understanding your comments right. And so, I guess I just want to clarify, when you are seeing price in line with 2019, if that you have -- that's after you've allocated sell of the bundled ticket price to onboard or -- I don't know -- Sorry, I guess I'm just trying to think about how comfortable --
Yeah, we've tried to normalize it and do some level of allocation to be an apples-to-apples comparison.
Okay. Perfect. Thank you very much. Thanks.
Thanks, Robin.
Our next question is from the line of Ben Chaiken with Credit Suisse. Please, go ahead.
Hey, how's the going?
Good morning, Ben.
Good morning. Hey, at risk of getting overly granular, but I'll try anyway. If you think about the profitability of the ships coming online in your new capacity over the next couple of years, so whenever next two or three years, and then compare that to the remaining legacy fleet, obviously, excluding the 19 disposed of ships, is there any way to ballpark compare those two sets of assets, whether its margins, EBITDA, revenue premiums? Like that's something that's anecdotally talked about an industry, but -- If that didn't make sense, I can try differently or we can take it offline.
No, we have rules of thumb about the overall benefit of a new ship relative to the fleet. Dave, you might want to quote the [Indiscernible].
From a cost perspective, if you just look at the unit costs for a -- the -- our new ships coming in, they tend to be 15% to 25% lower on a unit basis than the existing fleet. And from a fuel consumption perspective, we're talking more like 25% to 35% more fuel-efficient on a unit basis. so we do see the enhanced profitability.
And when you start adding in, of course, the better cabin mix, the more opportunity for on-board revenue because there's more public space in the larger ships. So all of that does bode well for an improved return on the new ships versus the existing fleet.
Okay, cool. That makes sense. I appreciate it.
[Indiscernible] Come in.
Our next question is from the line of Jaime Katz with Morningstar. Please go ahead.
Good morning. Thanks for taking my question.
Good morning, Jamie.
Good morning. Starting to be deployed, do you have a little bit more visibility on CapEx demands over the next year or 2 that you'd be willing to share with us? I mean, I know we have the cash burn, but it would be helpful to hear the difference between CapEx and OpEx going forward.
Yeah, we can share with you our CapEx projections without a doubt. So looking at 2022, and I will give you the two pieces of CapEx, the non - newbuild CapEx, we're projecting about a billion and a half and the new build is 4.5 billion. So it's about 6 billion in total. Keep in mind, remember that most of the new build is financed with the export credits that are already committed.
In 2023, the non - newbuild we're forecasting about -- also about a billion-and-a-half, and the new build is 2.7 billion for a total of 4.2. So we are expecting an increase in CapEx in '22 and '23 from where we are today in '21, but we're not expecting to go back. Pre -COVID, we had probably indicated a steady-state CapEx of, call it, 2 billion non-new build CapEx. And we do believe we'll probably get back there at some point in the future, but in the next 2 years, our best guess at this point is about a billion-and-a-half.
Okay. And then, just going back to Robin's question on bundling, I'm curious whether you guys are thinking that the bundling behavior or something that's more secular. So over time, it's going to remain that the pricing component is less important than it was historically, and that the onboard component is more important than it was historically. And I'm not sure if there's anything to read into that, but I don't know if it's a new secular trends or transitory.
Yeah, again, I think we have 9 brands. A lot of variability across the brands. And so, we -- bundling has been around a while. It's not a new thing. But there has been a more recent trend that guests seem to prefer to have certain aspects of their experience bundled. And so, there has been an increase in some aspects of that. Whether that's an ongoing trend, probably, but we're going to stay flexible and dynamic and give the guests what they want.
And I think, one of the benefits I can add to it, Arnold, what are the benefits of the bundle package? It gives the consumer choice. And any choices you give the consumer creates hopefully more demand and better pricing in the long run.
But keep in mind that when somebody bundles, when somebody pays for their drink package and their Internet ahead of time, well, first of all that, of course, benefits the agent because they get a commission on the whole package. So definitely does make the travel agents happy. But when the people get on board, they really have a fresh wallet. And because they've already paid for certain items, so they have a fresh wallet, they're starting over again.
And we believe that, with the fresh wallet, it does incentivize more on-board spend in total. So we would expect our onboards to be higher in the long run as a result of the bundling. And we did see it in the third quarter. The onboard and other per diems were up significantly compared to 2019. And so some of that is the fresh wallet of people getting on board.
Thank you, that's helpful.
Thank you.
Our next question is from the line of Assia Georgieva with Infinity Research. Please, go ahead.
Good morning, guys. I think you have been doing a great job, and probably very happy to be so busy with restart. So congratulations.
Thanks, Assia.
My question is related -- Again, Arnold, I think what you've done has been fantastic, and good luck through the end of the year. My question was a little more in terms of sourcing and destinations. With the ships going back to warmer climates, including the Caribbean during the winter months, do you find any difficulties in terms of getting international passengers, especially from Europe with more stringent entry requirements into the U.S.?
And secondly, Australia seems to continue to be a wild card, even though it's a small market, relatively speaking, in terms of the capacity you have there, but it's also a somewhat important market during winter.
Yes, Australia is an important market for certain and the travel restrictions absolutely play a part in terms of what we can do with occupancy, ultimately. Now, the encouraging sign is things continue to loosen up, things continue to improve. You can see in the UK where there's good momentum.
They're further ahead on vaccinations, etc. You're seeing the U.S. recently made an announcement that you fully aware of letting travelers from Europe come in and starting in November. But all of those things in near term are impacting us for certain, and they will continue to evolve. Eventually, Australia will open.
Well, we'll be very excited about that and ready to take full advantage of it and our team over there is working, booking cruises going forward and so on in anticipation that eventually they will open. But the world is just processing itself through this pandemic. And as we said, and as I said in the remarks earlier, the prepared remarks, it's choppy, but there's movements forward.
And the most important thing is that there is pent-up demand. People are very interested in the cruise experience, not just repeat cruise-goers, but we're seeing lots of new-to-brand and new cruisers booking. And so that's a very positive sign. But we do have to get to the point, and we will get there, where it's kind of back to some kind of a normal where people are free to travel.
And if I can just add --
If I -- yes?
Let me add some --
Go ahead, David.
In terms of your question about Europeans traveling to the U.S. for the Caribbean winter season, Keep in mind we have multiple brands. And our European brands essentially are homeporting in other places in the Caribbean. I don't remember everything home port. I mean, P&O in the UK I think homeports out of Barbados, and [Indiscernible] and other places in the Caribbean.
They choose home ports where there's great airlift from their home countries. So most of the Europeans who are coming to the Caribbean are going on our European brands and going somewhere in the Caribbean to embark on their vessel. The North American brands, which are sailing out of The U.S., the overwhelming majority of their guests are probably North American sailing on the board ships in the wintertime.
Travel restrictions are easing, people are starting to be able to come, I won't repeat everything that you probably already know but it's not as big of an issue for us as given the structure of where people start their cruises.
I think the comporting point that you've made is great and I should have thought about that. In the second question, your yield management guys are probably working very hard because now they have even more levers to work with.
So in addition to trying not to underprice, and yet reaching occupancy levels we're -- at the shipboard level at least, we're getting a cash benefit. Has there been any change, any restrictions in terms of occupancy or is it more a continuation of what you've been doing for decades trying to get the best price?
We've intentionally restricted occupancy for a host of reasons, some related and -- because again, with the brands all over the place in terms of jurisdictions. Some just to be a compliance in some cases, others to give a ramp-up to -- because we have new protocols, we have to get the crew experience with it and experience with the guests to make sure we work on any quirks.
And some in artifact of the compliance measures, whether its fiscal business or other requirements. And so at this point, yes, there's been intentional constraint. But as we said, where we have normal cruises in the Caribbean, vaccinated cruises but Carnival brand has been at 70% occupancy, which is fantastic given the number of ships they had and the protocols. And again, we intentionally tapped that.
As we begin to open up more, obviously, the yield management folks will have to sharpen their -- I was going to say pencils, but they don't use pencils anymore. Sharpen their keyboards more and go to work on it. But we have good momentum; is very disciplined. We have managed the timing of restart some ships, thinking through these matters. And so, is a very proactive, and today, well-managed, re-launch. Given often the opportunity to have strengthen pricing going forward.
The whole process is obviously well above my pay grade, so I still use pencils. Thank you for taking my questions, and do not hire me in yield management. Not good enough for that anymore. Thank you, guys. Good luck.
Thank you, Assia.
Our next question is from the line of Brandt Montour with JPMorgan, please go ahead.
Hey, good morning, everybody. Thanks for taking my questions.
Good morning, Brandt.
So David -- good morning. David, I was wondering if you could maybe give us your view on how bookings cadence progressed throughout Delta, but just focused on sailings for the second half of '22. And then if there was a wobble at all, how did the industry respond to that in terms of pricing?
Yes. So as I said in my prepared remarks, the impact in August of the Delta variant on bookings is really much more of a near-term phenomenon in terms of call it the next six months, maybe nine months of bookings. The further out you go, it is really hard to even spot or distinguish a Delta variant trend in the booking patterns so that the second half remained strong and throughout the month of August.
And in terms of pricing, I think Arnold said this in his prepared remarks. We all believed that the Delta variant, people would -- we would get past this, and so our view was to maintain price and to make sure that we optimized revenue in the long run, not just bookings during the month of August, we still have plenty of time since we're ahead.
We still have plenty of time to fill the ships to the occupancy levels we're targeting for both the fourth quarter and for the first half of 2022. So we are holding price and we're in a good position.
Excellent, thanks for that. And then as a follow-up, I know you're targeting cash flow from operations break-even sometime early in '22, and I know that you didn't give a specific month on that which we can appreciate. I'm just curious, what are you assuming in that for customer deposit inflows, if anything, or it might still be elevated at that time, and so just curious what's baked in for that.
Yeah, customer deposits at the end of the third quarter were 3.1 million. The last two quarters, they did increase. Our expectation is that they will continue to increase. Of course, in a steady-state environment, remember that the overwhelming majority of the customer deposits at any point in time are the final payments for the next three months of cruises.
So as the capacity for the next three months continues to build towards the 100% next spring, you should see an increase in customer deposits over time as we continue to get more and more final payments. Keep in mind, like for the fourth quarter, we only have 47% of the capacity in service.
So there is only half of probably the final payments that you would see come next May. so you will continue to see an increase driven by that factor, and that should be a positive cash flow inflow to us over that time frame.
Okay, but maybe to ask a different way, do you need elevated customer deposit inflows to break even on cash flow from operations in the first half of next year?
EBITDA will also break even in the early part of 2022. So I'll give you that hopefully answers your question.
Yeah. That's helpful.
Right. In a much more direct way.
All right, great. Thanks, guys and best of luck.
Thank you.
Our next question is from the line of Steven Grambling with Goldman Sachs, please go ahead.
Hey, thanks for taking the questions. Could you just talk about the pricing and booking dynamics between what you saw on Carnival versus maybe some of the other brands, specifically looking at second half of '22 as itineraries normalize? Did you see any difference more recently in close-in bookings that may inform how that trajectory could evolve?
I will say, to begin with, we see strength across the brand, the portfolio. And that's very encouraging to us. But go ahead, David, with any specific comments you might want to make.
For the back half of '22, as I was going to say, all of the brands are strong, things are going well. It's all the -- we're getting back to a normalized comparison of full itinerary -- a full breadth of itineraries across the whole fleet. And so, we feel very good about that. As I said, the back half of 2022 was at a historical high, and we saw great trends in all brands and in both sides of the Atlantic, so there's nothing particular to note there.
Closer in, some of that is just a function of itineraries and marketplaces but we are seeing good occupancy across all the brands. I gave you the occupancy figures for the third quarter. Clearly the European brands had more capacity restrictions in the third quarter. The UK restrictions go away, but the continental Europe social distancing restrictions remained at least for a part of the quarter.
So I -- there's nothing worth noting. I think we're seeing good comparisons and good booking trends across all the brands. There are small differences, but some of that also has to do with itinerary length between the different brands in the marketplaces.
We'll take one last question, Operator. I'm sorry, go ahead. This will be the last question. Go ahead.
I may have missed this, but I was wondering if you had any way you can quantify the potential sustained structural cost increases that you have from some of the health actions. And as you mentioned, there's some supply chain disruption. So I'm wondering if you can help frame the level of inflation you may be seeing whether it's in labor or commodities. Thanks.
Real quick, I'll make a general comment. I think from a sustainable cost standpoint, a lot of the protocols, the start-up costs, of course, will go away. A lot of protocol costs will also go away because over time, the protocols won't be required. Once we get to a point where it's only protocol costs, those are in the hundreds of thousands versus per ship versus millions of dollars per ship or whatever. And again, we suspect that those will reduce overtime as well. David?
Yeah, I agree with Arnold, and I will tell you I'm reluctant at this point to try to peg this because there's so many moving parts and variables in so many things we're working on that when we get closer, we'll have much better clarity. But there's a lot of opportunity out there for us, and you can be sure we're working hard to maximize those opportunities in every way, with every supplier and every item we source, as well as the labor and other things.
So we'll give you more guidance as time goes on. But just recognize we are clearly focused on this on an ongoing basis.
And thank you, everyone. We really appreciate your support and ongoing interest and we're very excited to be having the results we're having at this point. Thank you so much.
Thank you, everyone, have a good day.
That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.