Good morning, everyone, and welcome to our business update conference call. I'm Arnold Donald, President and CEO of Carnival Corporation & 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 guests 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 is such an incredible spirit on board. 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 priced them appropriately to achieve occupancy targets very close in and coupled them with bundled packages to drive exceptionally strong revenue on board. 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 tried 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 could not be compared to 2019, and in most cases would normally be priced lower than the 2019 alternatives.
For example, in the U.K., we're only able to offer scenic cruises without any ports of call. That's our version of a staycation, which were not comparable in ticket prices to peak season Mediterranean or Baltic sailing offered in the summer of 2019. That said, even with occupancy limitations, these cruises generated cash for our stakeholders. They supported a return for our workforce, and they successfully served guests, resulting in high satisfaction levels. 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 close-in nature of the bookings.
In fact, Carnival Cruise Line restarted more ships out of the United States than any other cruise brand and still achieved 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 led to some booking volatility in August, to date, it has not had a significant impact on our ultimate plan 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 half a million guests this year already. 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 protocols, such as additional testing requirements and indoor mask requirements, with all U.S. sailings operating under the CDC vaccination requirements. Our protocols go above and beyond the terms of the Conditional Sailing 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 shoreside. The Delta variant 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. For 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 roll 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 lion's share of our operating profit. Of course, we have ample liquidity to see us through 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 U.K., 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 for 71 ships through next spring, and that's across eight of our nine brands. We're evaluating the remaining ships 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 interest 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 a solid book position and intentionally constrained capacity for the remainder of 2021 and into the H1 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've also opened booking earlier for cruises and 2023. We're achieving those early bookings with strong demand and good prices.
Based on that success, we've begun to launch 2024 sailings even earlier. In fact, these efforts contributed to the $630 million increase in guest deposits. Our long-term guest deposits, and that's deposits on bookings beyond 12 months, are 3x historical levels, driven in part by our proactive efforts to open more inventory for sale in outer years. Now, we expect guest 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 earned media, as we build on our multiple new ship launches and restart news 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. As I mentioned, our Net Promoter Scores are well above historical levels across our ships 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. 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 goals by sharing more details on our 2030 goals and our 2050 aspirations.
The report sheds additional light on the six focus areas that will guide our long-term sustainability vision, including Climate Action, Circular Economy, that's waste reduction, Sustainable Tourism, Health and Well-Being, Diversity, Equity and Inclusion, and Biodiversity and Conservation. These areas align with the United Nations Sustainable Development Goals. Climate Action is a top sustainability focus area. We are committed to decarbonization, and we aspire to be carbon neutral by 2050. As we have previously shared, despite 25% capacity growth since that time, our absolute carbon emissions peaked in 2011 and will remain below those levels. We are working toward transitioning our energy needs to alternative fuels and investing in new low-carbon technology. Because of the pause in guest cruise operations, the 2020 sustainability performance measures are not comparable to prior year data.
That said, 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 shoreside, who consistently went above and beyond. I am 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. 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 our crews vaccinated. Thank you to our suppliers and our other many stakeholders. 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 company.
Our strategic decision to accelerate the exit of 19 ships left us with a more efficient and effective fleet, 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 exits as well as a future ship transfer and a modification 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.
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 operation. Once we return to full operation, 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 Q3 monthly average cash burn rate. 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 five ships in service. During the Q3 , we successfully restarted ships across eight of our brands. We ended the quarter with 35% of our fleet capacity in service. Our plans call for another 27 ships to restart guest cruise operations during the Q4 and the month of December. On New Year's Day, we anticipate celebrating with 55 ships, or nearly 65% of our fleet capacity back in service. For the Q3 , occupancy was 54% across the ships in service.
Our brands executed extremely well. Occupancy did improve month-to-month through the quarter. 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 1,000-person cap per sailing for some of the quarter in the U.K. For the full Q3 , our North American brands occupancy was 68%. For our European brands, occupancy was 47%. Revenue per passenger cruise day for the Q3 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 Q3 2021 versus the Q3 2019, in part due to the bundled packages as well as onboard 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, shop, spa, and internet led the way onboard. Over the past two years, we have offered, and our guests have chosen, more and more bundled package options. In the end, we will see the benefit of these bundled packages in onboard and other revenue, as we did during the Q3 2021.
As a result of these bundled 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 guest 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 Q3 were in fact cash flow positive. They generated nearly $90 million of ship-level cash contribution. This was achieved with only a two -month U.S.-based restart during the Q3 as our North American brands 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 H1 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 portion of the fleet will be in pause status during the H1 , 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 our monthly average cash burn rate.
For the Q3 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 H1 of 2021. The improvement versus our guidance was due to the timing of capital expenditures, which are now likely to occur in the Q4 , and some other small working capital changes. With the timing of certain capital expenditures now shifting to the Q4 , the company expects its monthly average cash burn rate for the Q4 to be higher than the monthly average rate for the first nine months of the year.
Other good news positive factors impacting the Q4 are restart expenditures to support not only the 22 ships that will restart during the Q4 , but also the additional ships that will restart in the Q1 of 2022, along with a significant increase in dry dock days during the Q4 , driven by the restart schedule. All these expenditures have been anticipated, and given the announced restarts, many of them are now occurring in the Q4 . During the Q4 , we are forecasting positive cash flow from the 50 ships that will have guest cruise operations during the quarter, and ALBDs for the Q4 are expected to be 10.3 million, which is approximately 47% of our total fleet capacity. Turning to booking trends.
Our booking volumes for the all future cruises during the Q3 2021 were higher than booking volumes during the Q1 . That trend continued over the first couple of months of the Q3 , such that we expected the Q3 would end at higher booking levels than the Q2 . We didn't manage to achieve that because of 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 sailings. 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.
Our cumulative advanced book position for the H2 of 2022 is ahead of a very strong 2019 and is at a new historical high. Pricing on our H2 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 Credits, pricing on our H2 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 Q3 . This is a great achievement, given pricing on bookings for 2019 sailings is a tough comparison, as that was the high watermark for historical yield.
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. To date, 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 five-year period beginning in April 2022. Third, the extension of a $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. Now I'll turn the call back over to Arnold.
Thanks, David. Operator, please open the call for questions.
Thank you. At this time, if you would like to register for a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and would like to withdraw your registration, please press the one followed by the three. If you're using a speakerphone, please lift your handset before entering your request. Once again, to register for a question, please press the one followed by the four. One moment, please, for the first question. Our first question is from the line of Steven Wieczynski with Stifel. Please go ahead.
Yeah. Hey, guys. Good morning. Good morning, Arnold. Good morning, David.
Good morning, Steven.
Hope you are doing well. Arnold, in your prepared remarks, I think I heard this right, but you talked about how you're expecting 2023's EBITDA should be higher than 2019's EBITDA. Look, I understand there's new net capacity in there that's going to help drive part of that EBITDA. 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 kind of bridge that gap?
Sure. I'll make some comments and then give David a chance as well. By 2023, 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, it's going to be well below the capacity growth that would have occurred absent the pandemic. Go ahead, David, any additional comments?
Yeah. I'd just point out a few things. 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 on board the vessels. I think we had indicated the balcony cabin mix was about 6 percentage points higher. 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 cost at 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 a 10% capacity increase net of the ships that left the fleet.
With all of the pent-up demand and all of the things, the revenue management things the bundled 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. Second question, as we start to think about 2022, is there any way for you to help us think about how 2022 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 you think about opening up more capacity for 2022 without ultimately impacting your pricing ability.
So-
Go ahead, David.
Yeah, no, happy to. 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. Even those 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. Those will be forthcoming in the days and weeks ahead. 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. We were very pleased with that. People are booking further out, we're seeing the benefit of that. The H1 of the year, the only reason we didn't give a detailed year-over-year comparison of 2022 versus 2019 is because it is a bit of an apples and oranges comparison. While we are very pleased and look at the H1 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 H1 , we're not running most of the world cruises and all the long exotic voyages. They tend to book much further out because they're much longer.
If we gave you the numbers, it would be an apples and oranges comparison. It is fair to say that we feel very comfortable with the pricing and the book position for the H1 of 2022.
Steven, as I said in the prepared comments too, we're planning to have the full fleet going in time for the summer season where we make the bulk of our profits. For the H2 of 2022, we're looking to being at full course. Go ahead, you had an add-on comment?
Steve, 47% of our capacity will be sailing in the Q4 . We end the calendar year, we said, with nearly 65% of our capacity. During the H1 of the year, we're going to go from somewhere around 60% on December 1st up to 100% at the end of the H1 . You can begin to see that the H1 of the year is going to be somewhere in between that, depending on the exact ramp-up of the capacity.
To be clear, I'm going to make this up. Let's take the Carnival Conquest. I'm going to make a ship up here. Let's look at the H2 of next year. Are you selling 100% of that capacity today, or are you still kind of holding back some of that capacity because you don't want to try to get up to that 100% level? Hopefully that makes sense.
Yeah, no, we're not for future voyages out there because obviously we're nowhere near selling out yet. Obviously, if we did, we would have underpriced it. We're not restricting the capacity that we're selling for the back half of 2022. There's no reason to.
Okay. Got you.
There's no reason to then, yeah.
Thank you, guys.
Thank you.
Appreciate it. Thanks for the color.
All right. Stay safe now.
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 the piece that is would be the enhanced protocols. If you looked at only the period where everything is operating, and so 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 sort of one-time restart costs?
Well.
Where I get. Oh, go ahead, David. It's okay, go ahead.
When you exclude all of those costs and looking to 2023, we had indicated that the benefit of the change in fleet was on the ship operating expenses was 4% per ALBD. We also have found efficiency shoreside as well. There are cost efficiencies that we have. 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 on board our ships, so we have a much more of an opportunity there. We're working hard, but I'd be hesitant to give guidance on 2023 cost structure.
I think it's 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. Would you venture whether for 2022, whether the shoreside efficiencies would offset the inflation and enhanced protocols just for 2022, if you get past the restart expenses?
Yeah, I'd be hesitant to give guidance at this point. Clearly, the shoreside efficiencies will flow through. 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. You can be sure that we've got people focused on those items to optimize the situation.
Okay. No, great. Helpful. Thank you. My other question is just to clarify the commentary on price for next year. If we're just looking at theH2 when it's a little more comparable, 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. More of what is being booked now for H2 compared to 2019 has more of sort of some of the onboard expense, right? Kind of in the ticket price because of the bundling, if I'm understanding your comments right.
I guess I just want to clarify when you are seeing price in line with 2019, is that after you've allocated some of the bundled ticket price to onboard, or sorry, I guess I'm just trying to think about how comparable?
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 Benjamin Chaiken with Credit Suisse. Please go ahead.
Hey, how's it going?
Good morning, Ben.
Good morning. Hey, at risk of getting overly granular, but I'll try it anyway. If you think about the profitability of the ships coming online in your new capacity over the next two years, so whatever, 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 it's margins, EBITDA, revenue premiums? Like that's something that's anecdotally talked about in the industry. If that didn't make sense, I can try it differently, or we can take it offline.
No, we have rules of thumb about the overall benefit of new ships relative to the fleet. Maybe you might want to quote the general statistics that we use. Yeah.
From a cost perspective, if you just look at the unit cost for our new ships coming in, they tend to be 15%-25% lower on a unit basis than the existing fleet. From a fuel consumptions perspective, we're talking more like 25%-35% more fuel efficient on a unit basis. We do see the enhanced profitability. When you start adding in, of course, the better cabin mix, the more opportunity for onboard revenue because there's more public space in the larger ships. 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.
That's all for me.
Our next question is from the line of Jaime Katz with Morningstar. Please go ahead.
Good morning. Thanks for taking my questions.
Morning, Jaime.
As the ships are starting to be deployed, do you guys have a little bit more visibility on CapEx demands over the next year or two that you'd be willing to share with us? I know we have the cash burn. It would be helpful to hear the difference between maybe CapEx and OpEx going forward.
Yeah. We can share with you our CapEx projections without a doubt. Looking at 2022, and I'll give you the two pieces of CapEx. The non-new build CapEx, we're projecting about $1.5 billion, 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-new build, we're forecasting also about $1.5 billion, and the new build is $2.7 billion, for a total of $4.2 billion. We are expecting an increase in CapEx in 2022 and 2023 from where we are today in 2021. We're not expecting to go back. Pre-COVID, we had probably indicated a sort of a steady state CapEx of, call it $2 billion, non-new build CapEx.
We do believe we'll probably get back there at some point in the future. In the next two years, our best guess at this point is about a $1.5 billion .
Okay. Just going back to Robin's question on bundling, I'm curious whether you guys are thinking that the bundling behavior is 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. I'm not sure if there's anything to read into that, but I don't know if it's a new secular trend or transitory.
Yeah. Again, I think we have nine brands. There's a lot of variability across the brands. Bundling has been around a while. It's not a new thing. There has been a more recent trend, that guests seem to prefer to have certain aspects of their experience bundled. 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-
Go ahead.
one of the benefits I can add to it, Arnold. One of the benefits of the bundle package, it gives the consumer a choice, and any choices you give the consumer creates hopefully more demand and better pricing in the long run. 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. Definitely does make the travel agents happy. When the people get on board, they really have a fresh wallet. Because they've already paid for certain items, so they have a fresh wallet, they're starting over again. We believe that with the fresh wallet, it does incentivize more onboard spend in total.
We would expect our onboards to be higher in the long run as a result of the bundling. We did see it in the Q3 . The onboard and other per diems were up significantly compared to 2019. 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.
Hi. Good morning, guys. I think you have been doing a great job and probably very happy to be so busy with restart. Congratulations.
Thank you.
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.? 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, 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 U.K. where there's good momentum, they're further ahead on vaccinations, et cetera. You're seeing the U.S. recently made an announcement that you're fully aware of, letting travelers from Europe come in starting in November. All of those things in near term are impacting us for certain, they will continue to evolve. Eventually Australia will open. We'll be very excited about that ready to take full advantage of it. Our team over there is working on booking cruises going forward and so on in anticipation that eventually they will open.
The world is just processing itself through this pandemic, as we said, as I said in the remarks earlier, the prepared remarks, it's choppy, but there's movements forward. The most important thing is that there is pent-up demand. People are very interested in the cruise experience, not just repeat cruise tourists, but we're seeing lots of new-to-brand and new cruisers booking. That's a very positive sign. 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.
If I can just add.
If I Yeah.
Yeah, let me add-
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. Our European brands essentially are home porting in other places in the Caribbean. I don't remember every single home port. I mean, P&O in the U.K., I think home ports out of Barbados, and Costa, and AIDA, and other places in the Caribbean. They choose home ports where there's great airlift from their home countries. 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 Americans sailing on 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. It's not as big of an issue for us as given the structure of where people start their cruises.
I think the home porting point that you've made is great, and I should have thought about that. Second question, your yield management guys are probably working very hard because now they have even more levers to work with. In addition to trying not to underprice and yet reaching occupancy levels to where, at a 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, the brands are all over the place in terms of jurisdictions. Some just to be in compliance, in some cases. Others to give a ramp-up because we have new protocols, we have to get the crew experienced with it and experienced with the guests to make sure we work out any quirks. Some, an artifact of the compliance measures, whether it's physical distancing or other requirements. At this point, yes, there's been intentional constraint. As we said, where we have normal cruises in the Caribbean, it's vaccinated cruises. Carnival brand has been at 70% occupancy, which is fantastic given the number of ships they had and the protocols, and we intentionally capped 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 nobody uses pencils anymore. Sharpen their keyboards more and go to work on it. We have good momentum. It's very disciplined. We have managed the timing of restarts of some ships, thinking through these matters, it's a very proactive and to-date well-managed relaunch, giving us an opportunity to have strengthened pricing going forward.
Well, the whole process is obviously well above my pay grade, so I still use pencils. Thank you for taking my questions. Do not hire me in yield management. Not good enough for that anymore. Thank you, guys. Good luck.
Thank you, Assia. Thanks.
Our next question is from the line of Brandt Montour with J.P. Morgan. Please go ahead.
Hey, good morning, everybody. Thanks for taking my questions.
Good morning, Brandt.
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 H2 of 2022. If there was a wobble at all, how did the industry respond to that in terms of pricing?
Yeah. As I said in my prepared remarks, the impact in August of the Delta variant on bookings was 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. The H2 remained strong and throughout the month of August. In terms of pricing, I think Arnold said this in his notes, in his prepared remarks. We all believed that the Delta variant, we would get past this. 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 Q4 and for the H1 of 2022. We are holding price and we're in a good position.
Excellent. Thanks for that. As a follow-up, I know you're targeting cash flow from operations breakeven sometime early in 2022, 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, it might still be elevated at that time? Just curious what's baked in for that?
Well, customer deposits at the end of the Q3 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. 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 you continue to get more and more final payments. Keep in mind, like for the Q4 , we only have 47% of the capacity in service. There's only half of probably the final payments that you would see come next May.
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, maybe to ask a different way, do you need elevated customer deposit inflows to break even on cash flow from operations in the H1 of next year?
EBITDA will also break even in the early part of 2022. I give you that, hopefully answers your question.
Yeah, that's helpful.
correct, 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 Stephen 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 H2 of 2022 as itineraries normalize? Did you see any difference more recently in close-in bookings that may inform how that trajectory could evolve?
I would say, to begin with, we see strength across the brand, the portfolio, and that's very encouraging to us. Go ahead, David, with any specific comments you might want to make.
For the back half of 2022, as Arnold said, all the brands are strong. Things are going well. We're getting back to sort of a normalized comparison of a full breadth of itineraries across the whole fleet. We feel very good about that. As I said, the back half of 2022 was at a historical high. We saw great trends in all brands and on both sides of the Atlantic. 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 and across all the brands. I gave you the occupancy figures for the Q3 . Clearly, the European brands had more capacity restrictions in the Q3 . The U.K. restrictions go away, but the Continental Europe social distancing restrictions remain, at least for part of the quarter.
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. Yeah, 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 kind of sustained structural cost increases that you have from some of the health actions. As you mentioned, there's some supply chain disruption. I'm wondering if you can help frame kind of the level of inflation you may be seeing, whether it's in labor or commodities. Thanks.
Yeah, real quickly, I'll make a general comment. I think from a sustainable cost standpoint, a lot of the protocols, the startup 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 of dollars, versus per ship, versus millions of dollars per ship or whatever. Again, we suspect that those will reduce over time as well. David?
Yeah, I agree with Arnold. I will tell you, I'm reluctant at this point to try to peg this because there's so many moving parts and variables and so many things we're working on that when we get closer, we'll have much better clarity. There's a lot of opportunity out there for us. 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. We'll give you more guidance as time goes on. Just recognize we are clearly focused on this on an ongoing basis.
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.
That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.